EXHIBIT 10.84
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THIRD AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
dated as of March 15, 2002
among
KILROY REALTY, L.P.
JPMORGAN CHASE BANK,
as Bank and as Administrative Agent for the Banks,
J.P. MORGAN SECURITIES INC.,
as Lead Arranger and Sole Bookrunner,
COMMERZBANK AG, FIRST UNION NATIONAL BANK, and
FLEET NATIONAL BANK,
as Syndication Agents,
BANK ONE, N.A. and DRESDNER BANK AG, NEW YORK
AND GRAND CAYMAN BRANCHES
as Co-Documentation Agents
and
THE BANKS LISTED HEREIN
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THIRD AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
THIRD AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT dated as of
March 15, 2002, among KILROY REALTY, L.P. (the "Borrower"), JPMORGAN CHASE BANK,
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as Bank and as Administrative Agent for the Banks ("Administrative Agent"), J.P.
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MORGAN SECURITIES INC., as Lead Arranger and Sole Bookrunner, COMMERZBANK AG,
FIRST UNION NATIONAL BANK and FLEET NATIONAL BANK, as Syndication Agents, BANK
ONE, N.A. and DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN BRANCHES, as
Co-Documentation Agents and the BANKS listed on the signature pages hereof (the
"Banks").
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W I T N E S S E T H:
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WHEREAS, the Borrower, the Administrative Agent's
predecessor-in-interest by merger and certain of the Banks entered into a
Revolving Credit Agreement, dated as of February 24, 1998, which was amended and
restated in its entirety by that certain Amended and Restated Revolving Credit
Agreement, dated as of October 9, 1998, and by that certain Second Amended and
Restated Revolving Credit Agreement, dated as of November 8, 1999 (as heretofore
amended, the "Existing Credit Agreement"); and
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WHEREAS, the parties hereto have agreed to amend and restate the terms
and conditions contained in the Existing Credit Agreement in their entirety as
hereinafter set forth.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
I. The Existing Credit Agreement is hereby modified so that all of
the terms and conditions of the aforesaid Existing Credit Agreement shall be
restated in their entirety as set forth herein, and the Borrower agrees to
comply with and be subject to all of the terms, covenants and conditions of this
Agreement.
II. This Agreement shall be binding upon and inure to the benefit of
the parties hereto, and their respective successors and assigns, and shall be
deemed to be effective as of the date hereof.
III. Any reference in the Notes, any other Loan Document or any other
document executed in connection with this Agreement to the Existing Credit
Agreement shall be deemed to refer to this Agreement.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section I.1. Definitions. The following terms, as used herein, have
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the following meanings:
"Absolute Rate Auction" means a solicitation of Money Market Quotes
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setting forth Money Market Absolute Rates pursuant to Section 2.3.
"Adjusted London Interbank Offered Rate" has the meaning set forth in
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Section 2.7(b).
"Adjustment Date" shall mean the date that the Borrower receives an
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Investment Grade Rating for its unsecured senior long term indebtedness from at
least two (2) Rating Agencies, at least one (1) of which shall be either S&P or
Moody's.
"Administrative Agent" means JPMorgan Chase Bank in its capacity as
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administrative agent for the Banks hereunder, and its successors in such
capacity.
"Administrative Questionnaire" means, with respect to each Bank, an
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administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent (with a copy to the Borrower) duly
completed by such Bank.
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"Agreement" means this Third Amended and Restated Revolving Credit
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Agreement, as the same may from time to time hereafter be modified, supplemented
or amended.
"Annual EBITDA" means, measured as of the last day of each calendar
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quarter, an amount derived from (i) total revenues relating to all Real Property
Assets of the Borrower, the General Partner and their Consolidated Subsidiaries
or to the Borrower's or the General Partner's interest in Minority Holdings for
the previous four consecutive calendar quarters including the quarter then
ended, on an accrual basis with adjustments for the straight-lining of rents,
plus (ii) interest and other income of the Borrower, the General Partner and
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their Consolidated Subsidiaries, including, without limitation, real estate
service revenues, for such period, less (iii) total operating expenses and other
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expenses relating to such Real Property Assets and to the Borrower's and the
General Partner's interest in Minority Holdings for such period (other than
interest, taxes, depreciation, amortization, and other non-cash items), less
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(iv) total corporate operating expenses (including general overhead expenses)
and other expenses of the Borrower, the General Partner, their Consolidated
Subsidiaries and the Borrower's and the General Partner's interest in Minority
Holdings (other than interest, taxes, depreciation, amortization and other
non-cash items), for such period.
"Applicable Interest Rate" means the lesser of (x) the rate at which
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the interest rate applicable to any floating rate Debt could be fixed, at the
time of calculation, by the Borrower entering into an unsecured interest rate
swap agreement (or, if such rate is incapable of being fixed by entering into an
unsecured interest rate swap agreement at the time of calculation, a reasonably
determined fixed rate equivalent), and (y) the rate at which the interest rate
applicable to such floating rate Debt is actually capped, at the time of
calculation, if the Borrower has entered into an interest rate cap agreement
with respect thereto or if the documentation for such Debt contains a cap.
"Applicable Lending Office" means, with respect to any Bank, (i) in
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the case of its Base Rate Loans, its Domestic Lending Office, (ii) in the case
of its Euro-Dollar Loans, its Euro-Dollar Lending Office, and (iii) in the case
of its Money Market Loans, its Money Market Lending Office.
"Applicable Margin" means, prior to the Adjustment Date, with respect
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to each Euro-Dollar Loan, the respective percentages per annum determined, at
any time,
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based on the range into which the Total Debt Ratio then falls, in accordance
with the table set forth below:
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Total Debt Ratio Applicable Margin for Euro-Dollar Loans (% per
annum)
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less than 25% 1.125%
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equal to or greater than 25% but less than 35% 1.25%
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equal to or greater than 35% but less than 45% 1.375%
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equal to or greater than 45% but less than 50% 1.50%
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equal to or greater than 50% but less than 55% 1.75%
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From and after the Adjustment Date, the Applicable Margin with respect to each
Euro-Dollar Loan shall mean the respective percentages per annum determined, at
any time, based on the range into which the Borrower's Credit Rating (if any)
then falls, in accordance with the table set forth below. Any change in the
Borrower's Credit Rating shall be effective immediately as of the date on which
any of the Rating Agencies announces a change in the Borrower's Credit Rating or
the date on which the Borrower (or, as applicable, the General Partner) has no
credit rating, whichever is applicable. In the event that the Borrower (or, as
applicable, the General Partner) receives two (2) credit ratings that are not
equivalent, the Applicable Margin shall be determined by the lower of such two
(2) credit ratings. In the event that Borrower (or, as applicable, the General
Partner) receives more than two (2) credit ratings and such credit ratings are
not equivalent, the Applicable Margin shall be determined by the lower of the
two (2) highest ratings, provided that each of said two (2) highest ratings
shall be Investment Grade Ratings and at least one of which shall be an
Investment Grade Rating from S&P or Moody's. In the event that such two ratings
are more than one rating apart, the Applicable Margin will be determined based
on the rating which is one rating above the lower of the two ratings.
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Borrower's Credit Rating (S&P/Moody's Ratings) Applicable Margin for Euro-Dollar Loans (% per
annum)
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BBB+/Baa1 1.00%
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BBB/Baa2 (or better) 1.10%
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BBB-/Baa3 1.20%
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Less than Investment Grade Rating 1.675%
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"Assignee" has the meaning set forth in Section 9.6(c).
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"Bank" means each bank listed on the signature pages hereof, each
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Assignee which becomes a Bank pursuant to Section 9.6(c), and their respective
successors and each Designated Lender; provided, however, that the term "Bank"
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shall exclude each Designated Lender when used in reference to a Committed Loan,
the Commitments or terms relating to the Committed Loans and the Commitments and
shall further exclude each Designated Lender for all other purposes hereunder
except that any Designated Lender which funds a Money Market Loan shall, subject
to Section 9.6(d), have the rights (including the rights given to a Bank
contained in Section 9.3 and otherwise in Article 9) and obligations of a Bank
associated with holding such Money Market Loan.
"Bank Due Diligence Package" has the meaning provided in Section 3.3.
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"Bankruptcy Code" means Title 11 of the United States Code, entitled
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"Bankruptcy", as amended from time to time, and any successor statute or
statutes.
"Base Rate" means, for any day, a rate per annum equal to the higher
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of (i) the Prime Rate for such day and (ii) the sum of the Federal Funds Rate
plus .50%.
"Base Rate Borrowing" means a Borrowing comprised of Base Rate Loans.
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"Base Rate Loan" means a Committed Loan to be made by a Bank as a Base
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Rate Loan in accordance with the applicable Notice of Borrowing or pursuant to
Article VIII.
"Benefit Arrangement" means at any time an employee benefit plan
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within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Borrower" means Kilroy Realty, L.P. and its successors.
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"Borrower's Credit Rating" means the rating assigned by the Rating
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Agencies to the General Partner's or the Borrower's senior unsecured long term
indebtedness.
"Borrowing" has the meaning set forth in Section 1.3.
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"Capital Expenditures" means, for any period, the sum of all
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expenditures (whether paid in cash or accrued as a liability) by the Borrower
which are capitalized on the consolidated balance sheet of the Borrower in
conformity with GAAP, but less (i) all expenditures made with respect to the
acquisition by the Borrower and its Consolidated Subsidiaries of any interest in
real property within nine months after the date such interest in real property
is acquired and (ii) capital expenditures made from the proceeds of insurance or
condemnation awards (or payments in lieu thereof) or indemnity payments received
during such period by Borrower or any of its Consolidated Subsidiaries from
third parties.
"Cash or Cash Equivalents" means (i) cash, (ii) direct obligations of
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the United States Government, including, without limitation, treasury bills,
notes and bonds, (iii) interest bearing or discounted obligations of Federal
agencies and Government sponsored entities or pools of such instruments offered
by banks rated AA or better by S&P or Aa2 by Moody's and dealers, including,
without limitation, Federal Home Loan Mortgage Corporation participation sale
certificates, Government National Mortgage Association modified pass-through
certificates, Federal National Mortgage Association bonds and notes, Federal
Farm Credit System securities, (iv) time deposits, domestic and Eurodollar
certificates of deposit, bankers acceptances, commercial paper rated at least
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A-1 by S&P and P-1 by Moody's, and/or guaranteed by an Aa rating by Moody's, an
AA rating by S&P, or better rated credit, floating rate notes, other money
market instruments and letters of credit each issued by banks which have a
long-term debt rating of at least AA by S&P or Aa2 by Moody's, (v) obligations
of domestic corporations, including, without limitation, commercial paper,
bonds, debentures, and loan participations, each of which is rated at least AA
by S&P, and/or Aa2 by Moody's, and/or unconditionally guaranteed by an AA rating
by S&P, an Aa2 rating by Moody's, or better rated credit, (vi) obligations
issued by states and local governments or their agencies, rated at least MIG-1
by Moody's and/or SP-1 by S&P and/or guaranteed by an irrevocable letter of
credit of a bank with a long-term debt rating of at least AA by S&P or Aa2 by
Moody's, (vii) repurchase agreements with major banks and primary government
securities dealers fully secured by U.S. Government or agency collateral equal
to or exceeding the principal amount on a daily basis and held in safekeeping,
(viii) real estate loan pool participations, guaranteed by an entity with an AA
rating given by S&P or an Aa2 rating given by Moody's, or better rated credit,
and (ix) shares of any mutual fund that has its assets primarily invested in the
types of investments referred to in clauses (i) through (v).
"Chase" means JPMorgan Chase Bank, in its individual capacity.
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"Closing Date" has the meaning set forth in Section 3.1.
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"Co-Documentation Agents" means Bank One, N.A. and Dresdner Bank AG,
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New York and Grand Cayman Branches, in their respective capacities as
co-documentation agents for the Banks, and their successors in such capacity.
"Commitment" means, with respect to each Bank, the amount committed by
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such Bank pursuant to this Agreement with respect to any Loans, as such amount
may be reduced from time to time pursuant to Sections 2.9 and 2.10.
"Committed Loan" means a Loan made by a Bank pursuant to Section 2.1;
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provided that, if any such Loan or loans (or portions thereof) are combined or
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subdivided pursuant to a Notice of Interest Rate Election, the term "Committed
Loan" shall refer to the combined principal amount resulting from such
combination or to each of the separate principal amounts resulting from such
subdivision, as the case may be.
"Completion of Construction" means the issuance of a temporary or
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permanent certificate of occupancy for the improvements under construction,
permitting the use and occupancy thereof for their regular intended uses.
"Consolidated Subsidiary" means, at any date, any Subsidiary or other
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entity which is consolidated with the Borrower in accordance with GAAP.
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"Consolidated Tangible Net Worth" means at any date the consolidated
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stockholders' equity of the Borrower (determined on a book basis), less its
consolidated Intangible Assets, all determined as of such date. For purposes of
this definition "Intangible Assets" means with respect to any such intangible
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assets, the amount (to the extent reflected in determining such consolidated
stockholders' equity) of (i) all write-ups subsequent to December 31, 1997 in
the book value of any asset owned by the Borrower or a Consolidated Subsidiary
and (ii) goodwill, patents, trademarks, service marks, trade names, anticipated
future benefit of tax loss carry forwards, copyrights, organization or
developmental expenses and other intangible assets.
"Contingent Obligation" as to any Person means, without duplication,
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(i) any guaranty of the principal of the Debt of any other Person, (ii) any
contingent obligation of such Person required to be shown on such Person's
balance sheet in accordance with GAAP, and (iii) any obligation required to be
disclosed in the footnotes to such Person's financial statements, guaranteeing
partially or in whole any non-recourse Debt, lease, dividend or other
obligation, exclusive of contractual indemnities (including, without limitation,
any indemnity or price-adjustment provision relating to the purchase or sale of
securities or other assets) and guarantees of non-monetary obligations (other
than guarantees of completion) which have not yet been called on or quantified,
of such Person or of any other Person. The amount of any Contingent Obligation
described in clause (iii) shall be deemed to be (a) with respect to a guaranty
of interest or interest and principal, or operating income guaranty, the sum of
all payments required to be made thereunder (which in the case of an operating
income guaranty shall be deemed to be equal to the debt service for the note
secured thereby), calculated at the Applicable Interest Rate, through (i) in the
case of an interest or interest and principal guaranty, the stated date of
maturity of the obligation (and commencing on the date interest could first be
payable thereunder), or (ii) in the case of an operating income guaranty, the
date through which such guaranty will remain in effect, and (b) with respect to
all guarantees not covered by the preceding clause (a), an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
guaranty is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder) as recorded on the balance sheet and on the footnotes to the
most recent financial statements of the Borrower required to be delivered
pursuant to Section 4.4 hereof. Notwithstanding anything contained herein to the
contrary, guarantees of completion shall not be deemed to be Contingent
Obligations unless and until a claim for payment or performance has been made
thereunder, at which time any such guaranty of completion shall be deemed to be
a Contingent Obligation in an amount equal to any such claim. Subject to the
preceding sentence, (i) in the case of a joint and several guaranty given by
such Person and another Person (but only to the extent such guaranty is
recourse, directly or indirectly to the
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Borrower), the amount of the guaranty shall be deemed to be 100% thereof unless
and only to the extent that such other Person has delivered Cash or Cash
Equivalents to secure all or any part of such Person's guaranteed obligations,
(ii) in the case of joint and several guarantees given by a Person in whom the
Borrower owns an interest (which guarantees are non-recourse to the Borrower),
to the extent the guarantees, in the aggregate, exceed 15% of total real estate
investments of such Person, the amount in excess of 15% shall be deemed to be a
Contingent Obligation of the Borrower, and (iii) in the case of a guaranty
(whether or not joint and several) of an obligation otherwise constituting Debt
of such Person, the amount of such guaranty shall be deemed to be only that
amount in excess of the amount of the obligation constituting Debt of such
Person. Notwithstanding anything contained herein to the contrary, "Contingent
Obligations" shall not be deemed to include guarantees of Unused Commitments or
of construction loans to the extent the same have not been drawn.
"Debt" of any Person (including Minority Holdings) means, without
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duplication, (A) as shown on such Person's consolidated balance sheet (i) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or any asset and, (ii) all indebtedness of such Person
evidenced by a note, bond, debenture or similar instrument (whether or not
disbursed in full in the case of a construction loan), (B) the face amount of
all letters of credit issued for the account of such Person and, without
duplication, all unreimbursed amounts drawn thereunder, (C) all Contingent
Obligations of such Person, (D) all payment obligations of such Person under any
interest rate protection agreement (including, without limitation, any interest
rate swaps, caps, floors, collars and similar agreements) or other hedging
agreements and currency swaps and foreign exchange contracts or similar
agreements, which were not entered into specifically in connection with Debt set
forth in clauses (A), (B) or (C) hereof. For purposes of this Agreement, Debt
(other than Contingent Obligations) of the Borrower shall be deemed to include
only the Borrower's pro rata share (such share being based upon the Borrower's
percentage ownership interest as shown on the Borrower's annual audited
financial statements) of the Debt of any Person in which the Borrower, directly
or indirectly, owns an interest, provided that such Debt is nonrecourse, both
directly and indirectly, to the Borrower.
"Default" means any condition or event which constitutes an Event of
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Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
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"Designated Lender" means a special purpose corporation that (i) shall
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have become a party to this Agreement pursuant to Section 9.6(d), and (ii) is
not otherwise a Bank.
"Designated Lender Notes" means promissory notes of the Borrower,
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substantially in the form of Exhibit A-1 hereto, evidencing the obligation of
the Borrower to repay Money Market Loans made by Designated Lenders, and
"Designated Lender Note" means any one of such promissory notes issued under
Section 9.6(d) hereof.
"Designating Lender" shall have the meaning set forth in Section
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9.6(d) hereof.
"Designation Agreement" means a designation agreement in substantially
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the form of Exhibit H attached hereto, entered into by a Bank and a Designated
Lender and accepted by the Administrative Agent.
"Dollar" and "$" mean dollars which are the lawful money of the United
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States.
"Domestic Business Day" means any day except a Saturday, Sunday or
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other day on which commercial banks in New York City and Los Angeles are
authorized by law to close.
"Domestic Lending Office" means, as to each Bank, its office located
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within the United States at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its Domestic
Lending Office) or such other office within the United States as such Bank may
hereafter designate as its Domestic Lending Office by notice to the Borrower and
the Administrative Agent; provided that no Bank shall be permitted to change its
Domestic Lending Office if as a result of such change either (i) pursuant to the
provisions of Section 8.1 or Section 8.2, Borrower would be unable to maintain
any Loans as Euro-Dollar Loans; or (ii) Borrower would be required to make any
payment to such Bank pursuant to the provisions of Section 8.3 or Section 8.4.
"Due Diligence Package" has the meaning provided in Section 3.3.
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"Environmental Affiliate" means any partnership, or joint venture,
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trust or corporation in which an equity interest is owned by the Borrower,
either directly or indirectly.
"Environmental Approvals" means any permit, license, approval, ruling,
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variance, exemption or other authorization required under applicable
Environmental Laws by a court or governmental agency having jurisdiction.
"Environmental Claim" means, with respect to any Person, any notice,
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claim, demand or similar communication (written or oral) by any other Person
alleging potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damage, property damage, personal
injuries, fines or penalties arising out of, based on or resulting from (i) the
presence, or release into the environment, of any Material of Environmental
Concern at any location, whether or not owned by such Person or (ii)
circumstances forming the basis of any violation, or alleged violation, of any
Environmental Law, in each case as to which could reasonably be expected to have
a Material Adverse Effect.
"Environmental Laws" means any and all federal, state, local and
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foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
the environment, the effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, Material of Environmental
Concern or hazardous wastes into the environment including, without limitation,
ambient air, surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, Material of Environmental
Concern or hazardous wastes or the clean-up or other remediation thereof.
"Environmental Report" has the meaning set forth in Section 4.7.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended, or any successor statute.
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"ERISA Group" means the Borrower, any Subsidiary and all members of a
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controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"Euro-Dollar Borrowing" has the meaning set forth in Section 1.3.
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"Euro-Dollar Business Day" means any Domestic Business Day on which
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commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office,
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branch or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of such
Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice
to the Borrower and the Administrative Agent; provided that no Bank shall be
permitted to change its Euro-Dollar Lending Office if as a result of such change
either (i) pursuant to the provisions of Section 8.1 or Section 8.2, Borrower
would be unable to maintain any Loans as Euro-Dollar Loans; or (ii) Borrower
would be required make any payment to such Bank pursuant to the provisions of
Sections 8.3 or Section 8.4.
"Euro-Dollar Loan" means a Committed Loan to be made by a Bank as a
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Loan bearing interest at the Adjusted London Interbank Offered Rate in
accordance with the applicable Notice of Committed Borrowing or Notice of
Interest Rate Election.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section
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2.7(b).
"Event of Default" has the meaning set forth in Section 6.1.
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"Federal Funds Rate" means, for any day, the rate per annum (rounded
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upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal
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Reserve Bank of New York on the Domestic Business Day next succeeding such day;
provided that (i) if such day is not a Domestic Business Day, the Federal Funds
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Rate for such day shall be such rate on such transactions on the next preceding
Domestic Business Day as so published on the next succeeding Domestic Business
Day, and (ii) if no such rate is so published on such next succeeding Domestic
Business Day, the Federal Funds Rate for such day shall be the average of the
rates, quoted to Chase from at least three federal funds brokers of recognized
standing selected by the Administrative Agent, on such day on such transactions
as determined by the Administrative Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
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Reserve System as constituted from time to time.
"Fee Letter" shall mean the letter agreement, dated as of January 17,
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2002, among the Borrower, J.P. Morgan Securities Inc. and JPMorgan Chase Bank
relating to certain fees payable in connection with the transactions
contemplated hereby, and all amendments and modifications thereto.
"FFO" means "funds from operations," defined to mean net income (or
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loss) (computed in accordance with GAAP), excluding gains (or losses) from debt
restructurings and sales of properties, plus depreciation and amortization,
after adjustments for Minority Holdings. Adjustments for Minority Holdings will
be calculated to reflect FFO on the same basis as above.
"Financeable Ground Lease" means either (x) a ground lease reasonably
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satisfactory to the Required Banks, or (y) a ground lease which provides (i) for
a remaining term of not less than 25 years (including options and renewals),
(ii) that the ground lease will not be terminated until any leasehold mortgagee
shall have received notice of a default and has had a reasonable opportunity to
cure the same or complete foreclosure, and has failed to do so, (iii) for a new
lease on substantially the same terms to any leasehold mortgagee recognized
under such ground lease as tenant if the ground lease is terminated for any
reason, (iv) for non-merger of the fee and leasehold estates, and (v)
transferability of the tenant's interest under the ground lease, subject only to
the landlord's reasonable approval. Notwithstanding the foregoing, it is hereby
agreed that the ground lease with respect to the Real Property Asset commonly
known as "Kilroy Airport Center, Long Beach, California", shall be deemed to be
a "Financeable Ground Lease".
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"Fitch" means Fitch, Inc. or any successor thereto.
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"FMV Cap Rate" means 9%.
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"Fronting Bank" shall mean Chase or such other Bank which Borrower is
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notified by the Administrative Agent may be a Fronting Bank and which is
designated by Borrower in its Notice of Borrowing as the Bank which shall issue
a Letter of Credit with respect to such Notice of Borrowing.
"GAAP" means generally accepted accounting principles in the United
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States recognized as such in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
Board or in such other statements by such other entity as may be approved by a
significant segment of the accounting profession within the United States, which
are applicable to the circumstances as of the date of determination.
"General Partner" means Kilroy Realty Corporation, a Maryland
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corporation.
"Governmental Authority" means any Federal, state or local government
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or any other political subdivision thereof or agency exercising executive,
legislative, judicial, regulatory or administrative functions having
jurisdiction over the Borrower or any Mortgaged Property.
"Group of Loans" means, at any time, a group of Loans consisting of
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(i) all Committed Loans which are Base Rate Loans at such time, or (ii) all
Committed Loans which are Euro-Dollar Loans having the same Interest Period at
such time; provided that, if a Loan of any particular Bank is converted to or
--------
made as a Base Rate Loan pursuant to Section 8.2 or 8.4, such Loan shall be
included in the same Group or Groups of Loans from time to time as it would have
been in if it had not been so converted or made.
"Guaranty" means the Third Amended and Restated Guaranty of Payment,
--------
of even date herewith, made by the General Partner.
"Indemnitee" has the meaning set forth in Section 9.3(b).
----------
14
"Interest Period" means: (i) with respect to each Euro-Dollar
---------------
Borrowing, the period commencing on the date of such Committed Borrowing or of
any Notice of Interest Election with respect to such Committed Borrowing and
ending one, two, three or, if available from all of the Banks, six months
thereafter, as the Borrower may elect in the applicable Notice of Committed
Borrowing or Notice of Interest Election; provided that:
--------
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Euro-Dollar Business Day of a
calendar month; and.
(c) any Interest Period which would otherwise end after the
Maturity Date shall end on the Maturity Date.
(ii) with respect to each Base Rate Borrowing, the period commencing
on the date of such Committed Borrowing or Notice of Interest Rate Election and
ending 30 days thereafter; provided that any Interest Period which would
--------
otherwise end on a day which is not a Euro-Dollar Business Day shall be extended
to the next succeeding Euro-Dollar Business Day; and provided that any Interest
Period which would otherwise end after the Maturity Date shall end on the
Maturity Date.
(iii) with respect to each Money Market LIBOR Loan, the period
commencing on the date of borrowing specified in the applicable Notice of
Borrowing and ending one, two, three or, if available from all applicable Banks,
six months thereafter, as the Borrower may elect in the applicable Notice of
Money Market Borrowing in accordance with Section 2.3; provided that:
--------
15
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month;
(c) if any Interest Period includes a date on which a payment of
principal of Loans is required to be made under Section 2.10 but does not
end on such date, then (i) the principal amount (if any) of each Money
Market LIBOR Loan required to be repaid on such date and (ii) the remainder
(if any) of each such Money Market LIBOR Loan shall have an Interest Period
determined as set forth above; and
(d) any Interest Period which would otherwise end after the
Maturity Date shall end on the Maturity Date.
(iv) with respect to each Money Market Absolute Rate Loan, the period
commencing on the date of borrowing specified in the applicable Notice of
Borrowing and ending such number of days thereafter (but not less than 14 days
nor more than 180 days) as the Borrower may elect in accordance with Section
2.3; provided that:
--------
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day;
(b) if any Interest Period includes a date on which a payment of
principal of Loans is required to be made under Section 2.10 but does not
end on such date, then (i) the principal amount (if any) of each Money
Market Absolute Rate Loan required to be repaid on such date and (ii) the
remainder (if any) of each such Money Market Absolute Rate Loan shall have
an Interest Period determined as set forth above; and
16
(c) any Interest Period which would otherwise end after the
Maturity Date shall end on the Maturity Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
---------------------
amended, or any successor statute.
"Investment Grade Rating" means a rating for a Person's senior
-----------------------
long-term unsecured debt, or if no such rating has been issued, a "shadow"
rating, of BBB- or better from S&P, and a rating or "shadow" rating of Baa3 or
better from Moody's or a rating or "shadow" rating equivalent to the foregoing
from Fitch. Any such "shadow" rating shall be evidenced by a letter from the
applicable Rating Agency or by such other evidence as may be reasonably
acceptable to the Administrative Agent (as to any such other evidence, the
Administrative Agent shall present the same to, and discuss the same with, the
Banks).
"Lead Arranger" shall mean J.P. Morgan Securities Inc. in its capacity
-------------
as lead arranger, and its successors in such capacity.
"Letter(s) of Credit" has the meaning provided in Section 2.2(b).
-------------------
"Letter of Credit Collateral" has the meaning provided in Section 6.4.
---------------------------
"Letter of Credit Collateral Account" has the meaning provided in
-----------------------------------
Section 6.4.
"Letter of Credit Documents" has the meaning provided in Section 2.17.
--------------------------
"Letter of Credit Usage" means at any time the sum of (i) the
----------------------
aggregate maximum amount available to be drawn under the Letters of Credit then
outstanding, assuming compliance with all requirements for drawing referred to
therein, and (ii) the aggregate amount of the Borrower's unpaid obligations
under this Agreement in respect of the Letters of Credit.
17
"LIBOR Auction" means a solicitation of Money Market Quotes setting
-------------
forth Money Market Margins based on the London Interbank Offered Rate pursuant
to Section 2.3.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
----
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement, each of
the Borrower and any Subsidiary shall be deemed to own subject to a Lien any
asset which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.
"Loan" means a Base Rate Loan, a Euro-Dollar Loan or a Money Market
----
Loan and "Loans" means Base Rate Loans, Euro-Dollar Loans or Money Market Loans
-----
or any combination of the foregoing.
"Loan Amount" means Four Hundred Twenty-Five Million and 00/100
-----------
Dollars ($425,000,000); provided, however, that the Borrower shall have the
-------- -------
right to increase the Loan Amount to up to Five Hundred Million and 00/100
Dollars ($500,000,000) at any time prior to the date which is two (2) years
following the Closing Date, provided that one or more Banks increase their
respective Commitments, in their sole discretion, it being understood that no
Bank shall have the obligation to increase its Commitment notwithstanding that
any other Bank or Banks shall have elected to do so, to achieve such increased
Loan Amount.
"Loan Documents" means this Agreement, the Notes, the Guaranty, the
--------------
Letter(s) of Credit, the Letter of Credit Documents and any related documents.
"London Interbank Offered Rate" has the meaning set forth in Section
-----------------------------
2.7(b).
"Margin Stock" shall have the meaning provided such term in Regulation
------------
U, Regulation T and Regulation X of the Federal Reserve Board.
"Material Adverse Effect" means a material adverse effect upon (i) the
-----------------------
business, operations, properties or assets of the Borrower or (ii) the ability
of the
18
Borrower to perform its obligations hereunder in all material respects,
including to pay interest and principal.
"Material Lease" means, with respect to any Real Property Asset, any
--------------
lease, underletting, concession agreement or license affecting such Real
Property Asset, which represents more than 15% of the gross leasable area of
such Real Property Asset.
"Material of Environmental Concern" means and includes pollutants,
---------------------------------
contaminants, hazardous wastes, and toxic, radioactive, caustic or otherwise
hazardous substances, including petroleum, its derivatives, by-products and
other hydrocarbons, or any substance having any constituent elements displaying
any of the foregoing characteristics.
"Material Plan" means at any time a Plan having aggregate Unfunded
-------------
Liabilities in excess of $5,000,000.
"Maturity Date" has the meaning set forth in Section 2.9.
-------------
"Minority Holdings" means partnerships, limited liability companies
-----------------
and corporations held or owned by the Borrower which are not consolidated with
the Borrower on its financial statements.
"Money Market Absolute Rate" has the meaning set forth in Section
--------------------------
2.3(d)(ii)(4).
"Money Market Absolute Rate Loan" means a Loan to be made by a Bank
-------------------------------
pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank, its Domestic
---------------------------
Lending Office or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Money Market Lending Office by notice to the Borrower
and the Administrative Agent; provided that any Bank may from time to time by
--------
notice to the Borrower and the Administrative Agent designate separate Money
Market Lending Offices for its Money Market LIBOR Loans, on the one hand, and
its Money Market Absolute Rate Loans, on the other hand, in which case all
references herein to the Money
19
Market Lending Office of such Bank shall be deemed to refer to either or both of
such offices, as the context may require.
"Money Market LIBOR Loan" means a Loan to be made by a Bank pursuant
-----------------------
to a LIBOR Auction (including such a loan bearing interest at the Base Rate
pursuant to Section 2.3).
"Money Market Loan" means a Money Market LIBOR Loan or a Money Market
-----------------
Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in Section
-------------------
2.3(d)(ii)(3).
"Money Market Quote" means an offer by a Bank to make a Money Market
------------------
Loan in accordance with Section 2.3.
"Moody's" means Moody's Investors Service, Inc. or any successor
-------
thereto.
"Multiemployer Plan" means at any time an employee pension benefit
------------------
plan within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group is then making or accruing an obligation to make contributions
or has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group during
such five year period.
"Net Offering Proceeds" means all cash received by the Borrower or the
---------------------
General Partner as a result of the sale of common shares of beneficial interest,
preferred shares of beneficial interest (including perpetual preferred),
partnership interests, limited liability company interests, or other ownership
or equity interests in the Borrower or the General Partner (or evidence of
indebtedness of the Borrower or the General Partner convertible into any of the
foregoing) less customary costs and discounts of issuance paid by the Borrower
----
or the General Partner, as the case may be.
"Net Operating Cash Flow" means, with respect to any Real Property
-----------------------
Asset, the Property Income, calculated on an annualized basis, for the period
during which such Real Property Asset shall have been owned by the Borrower, the
General Partner or any of their Subsidiaries, less Property Expenses, calculated
on an estimated,
20
pro forma (i.e., the results for the period during which such Real Property
Asset shall have been owned shall be annualized, with appropriate adjustments
for items of income and expense which are not earned or incurred in equal
monthly amounts) basis.
"New Acquisition" shall mean any Real Property Asset acquired
---------------
after the date hereof.
"Non-Recourse Debt" means Debt of the Borrower or the General
-----------------
Partner on a consolidated basis for which the right of recovery of the obligee
thereof is limited to recourse against the Real Property Assets securing such
Debt (subject to such limited exceptions to the non-recourse nature of such Debt
such as fraud, misappropriation, misapplication and environmental indemnities,
as are usual and customary in like transactions at the time of the incurrence of
such Debt).
"Notes" means, collectively, the promissory notes of the
-----
Borrower, each substantially in the form of Exhibit A hereto, evidencing the
obligation of the Borrower to repay the Loans, together with any Designated
Lender Notes, and "Note" means any one of such promissory notes issued
----
hereunder.
"Notice of Borrowing" means a Notice of Committed Borrowing or
-------------------
a Notice of Money Market Borrowing.
"Notice of Committed Borrowing" has the meaning set forth in
-----------------------------
Section 2.2.
"Notice of Interest Election" has the meaning set forth in
---------------------------
Section 2.15(a).
"Notice of Money Market Borrowing" has the meaning set forth
--------------------------------
in Section 2.3(f).
"Obligations" means all obligations, liabilities and
-----------
indebtedness of every nature of the Borrower from time to time owing to any Bank
under or in connection with this Agreement or any other Loan Document,
including, without limitation, (i) the outstanding principal amount of the
Committed Loans at such time, plus (ii) the Letter of Credit Usage at such time,
plus (iii) the outstanding principal amount of any Money Market Loans at such
time.
21
"Outstanding Balance" means the sum of (i) the aggregate
-------------------
outstanding and unpaid principal balance of all Loans and (ii) the Letter of
Credit Usage.
"Parent" means, with respect to any Bank, any Person
------
controlling such Bank.
"Participant" has the meaning set forth in Section 9.6(b).
-----------
"PBGC" means the Pension Benefit Guaranty Corporation or any
----
entity succeeding to any or all of its functions under ERISA.
"Permitted Liens" means (a) Liens in favor of the Borrower or
---------------
the General Partner on all or any part of the assets of Subsidiaries of the
Borrower or the General Partner, as applicable, provided that (i) the Debt to
which such Lien relates is held by the Borrower, (ii) such Debt is not otherwise
pledged or encumbered, and (iii) no more than 5% of the Unencumbered Asset Pool
Properties Value may be subject to any such Liens; (b) Liens to secure the
performance of statutory obligations, surety or appeal bonds, performance bonds,
completion bonds, government contracts or other obligations of a like nature,
including Liens in connection with workers' compensation, unemployment insurance
and other types of statutory obligations or to secure the performance of
tenders, bids, leases, contracts (other than for the repayment of Debt) and
other similar obligations incurred in the ordinary course of business; (c) Liens
for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
promptly instituted and diligently concluded; provided, that any reserve or
other appropriate provision as shall be required in conformity with GAAP shall
have been made therefor; (d) Liens on property of the Borrower, the General
Partner or any Subsidiary thereof in favor of the Federal or any state
government to secure certain payments pursuant to any contract, statute or
regulation; (e) easements (including, without limitation, reciprocal easement
agreements and utility agreements), rights of way, covenants, consents,
reservations, encroachments, variations and zoning and other restrictions,
charges or encumbrances (whether or not recorded), which do not interfere
materially with the ordinary conduct of the business of the Borrower, the
General Partner or any Subsidiary thereof and which do not materially detract
from the value of the property to which they attach or materially impair the use
thereof by the Borrower, the General Partner or any Subsidiary thereof; (f)
statutory Liens of carriers, warehousemen, mechanics, suppliers, materialmen,
repairmen or other Liens
22
imposed by law and arising in the ordinary course of business, for sums due and
payable which are not then past due (or which, if past due, are being contested
in good faith and with respect to which adequate reserves are being maintained
to the extent required by GAAP); (g) Liens not otherwise permitted by this
definition and incurred in the ordinary course of business of any or all of the
Borrower, the General Partner or any Subsidiary thereof with respect to
obligations which do not exceed $500,000 in principal amount in the aggregate at
any one time outstanding; and (h) the interests of lessees and lessors under
leases of real or personal property made in the ordinary course of business
which would not have a Material Adverse Effect.
"Person" means an individual, a corporation, a partnership, a
------
limited liability company, an association, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"Plan" means at any time an employee pension benefit plan
----
(other than a Multiemployer Plan) which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Internal
Revenue Code and either (i) is maintained, or contributed to, by any member of
the ERISA Group for employees of any member of the ERISA Group or (ii) has at
any time within the preceding five years been maintained, or contributed to, by
any Person which was at such time a member of the ERISA Group for employees of
any Person which was at such time a member of the ERISA Group.
"Prime Rate" means the rate of interest publicly announced by
----------
Chase in New York City from time to time as its Prime Rate.
"Pro-Forma Debt Service" means, for any calendar quarter, the
----------------------
greater of (x) the interest actually payable on the Loans and all other
Unsecured Debt, and (y) the amount of debt service payments determined by
applying a 30-year mortgage style amortization schedule to the Loans and such
other Unsecured Debt outstanding as of the last day of such calendar quarter,
using an interest rate equal to the Treasury Rate plus 1.75%.
"Property Expenses" means, when used with respect to any Real
-----------------
Property Asset, the costs of operating and maintaining such Real Property Asset
which are the responsibility of the owner thereof and that are not paid directly
by the tenant thereof, including, without limitation, taxes, insurance, repairs
and maintenance, but provided that
23
if such tenant is more than 60 days in arrears in the payment of base or fixed
rent, then such costs will also constitute "Property Expenses", but excluding
depreciation, amortization and interest costs.
"Property Income" means, when used with respect to any Real
---------------
Property Asset, cash rents and other cash revenues received in the ordinary
course therefrom, including, without limitation, revenues from any parking
leases and lease termination fees amortized over the remaining term of the lease
for which such termination fee was received (other than pre-paid rents and
revenues and security deposits except to the extent applied in satisfaction of
tenants' obligations for rent).
"Qualified Development Properties" means any Real Property
--------------------------------
Assets which are 100% owned in fee (or leasehold pursuant to a Financeable
Ground Lease) by the Borrower, the General Partner or any of their Consolidated
Subsidiaries and which are not subject to any Lien (other than Permitted Liens),
and which are under construction and which, in accordance with GAAP, have not
yet been placed into service, provided, however, that if 66.67% or more of the
net rentable area of any Qualified Development Property has not been leased to
tenants other than tenants that are affiliates of the Borrower on or before the
earlier to occur of (x) the date which is six (6) months after the Completion of
Construction thereof, and (y) the eighteen month anniversary of the commencement
of construction thereof, then the same will cease to be a Qualified Development
Property.
"Qualified Leased Development Properties" means any Real
---------------------------------------
Property Assets which are 100% owned in fee (or leasehold pursuant to a
Financeable Ground Lease) by the Borrower, the General Partner or any of their
Consolidated Subsidiaries and which are not subject to any Lien (other than
Permitted Liens), and which are under construction and, in accordance with GAAP,
have not yet been placed into service, and of which, as of any date of
determination, 66.67% or more of the net rentable area of such Real Property
Asset has been leased to tenants other than tenants that are affiliates of the
Borrower.
"Quotation Date" has the meaning set forth in Section 2.7(b).
--------------
"Rating Agencies" means, collectively, S&P, Moody's and Fitch.
---------------
24
"Real Property Assets" means as of any time, the real property
--------------------
assets owned directly or indirectly by the Borrower at such time, and "Real
----
Property Asset" means any one of them.
- --------------
"Recourse Debt" shall mean Debt of the Borrower, the General
-------------
Partner or any Consolidated Subsidiary that is not Non-Recourse Debt.
"Reference Bank" means the principal London offices of Chase.
--------------
"Regulation T" means Regulation T of the Board of Governors of
------------
the Federal Reserve System, as in effect from time to time.
"Regulation U" means Regulation U of the Board of Governors of
------------
the Federal Reserve System, as in effect from time to time.
"Regulation X" means Regulation X of the Board of Governors of
------------
the Federal Reserve System, as in effect from time to time.
"Release" means any release, spill, emission, leaking,
-------
pumping, pouring, dumping, emptying, deposit, discharge, leaching or migration.
"Required Banks" means, at any time, Banks having at least
--------------
two-thirds (i.e., 66 2/3%) of the aggregate amount of the Commitments or, if the
Commitments shall have been terminated, holding Notes evidencing at least
two-thirds (i.e., 66 2/3%) of the aggregate unpaid principal amount of the
Loans; provided, however, that no Bank which is in breach of Section 2.4 shall
be permitted to vote on any matter requiring the vote of the Required Banks and
for purposes of determining the Required Banks the Commitment of such Bank or
the unpaid principal amount of Loan evidenced by Notes held by such Bank, as
applicable, shall not be counted.
"Requirements" means all present and future laws, statutes,
------------
codes, ordinances, orders, judgments, decrees, injunctions, rules, regulations
and requirements of every Governmental Authority having jurisdiction over any
Mortgaged Property and all restrictive covenants applicable to any Mortgaged
Property.
"S&P" means Standard & Poor's Ratings Service, a division of
---
The McGraw-Hill Companies, Inc., or any successor thereto.
25
"Secured Debt" means all Debt secured by a Lien on real
------------
property.
"Separate Parcel" means a Real Estate Asset that is a single,
---------------
legally subdivided, separately zoned parcel that can be legally transferred or
conveyed separate and distinct from any other Real Estate Asset without benefit
of any other Real Estate Asset.
"Sole Bookrunner" shall mean J.P. Morgan Securities Inc. in
---------------
its capacity as sole bookrunner, and its successors in such capacity.
"Solvent" means, with respect to any Person, that the fair
-------
saleable value of such Person's assets exceeds the Debts of such Person.
"Subsidiary" means any corporation or other entity of which
----------
securities or other ownership interests representing either (i) ordinary voting
power to elect a majority of the board of directors or other persons performing
similar functions or (ii) a majority of the economic interest therein, are at
the time directly or indirectly owned by the Borrower.
"Syndication Agents" means Commerzbank AG, First Union
------------------
National Bank and Fleet National Bank, in their respective capacities as
syndication agents for the Banks, and their successors in such capacity.
"Telerate Page 3740 or Page 3750" has the meaning set forth in
-------------------------------
Section 2.7(b).
"Term" has the meaning set forth in Section 2.9.
----
"Total Asset Value" means, the sum of (w) with respect to
-----------------
those Real Property Assets owned for at least the two previous consecutive
quarters, the quotient of (i) Annual EBITDA with respect thereto for the
previous four (4) consecutive quarters (or, if owned for only two or three
quarters, the Annual EBITDA for such period, annualized), including the quarter
then ended, but less reserves for Capital Expenditures of (A) $0.30 per square
foot per annum for each Real Property Asset that is an office property, and (B)
$0.15 per square foot per annum for each Real Property Asset that is an
26
industrial property, divided by (ii) the FMV Cap Rate, (x) with respect to those
Real Property Assets owned for less than the two previous consecutive quarters,
the lesser of (i) the quotient of Net Operating Cash Flow applicable to each
such Real Property Asset, calculated on an annualized basis, based upon (A) the
actual amount of Net Operating Cash Flow for the period of the Borrower's, the
General Partner's or their Subsidiary's ownership of such Real Property Asset,
less replacement reserves of (1) $.30 per square foot per annum for each such
Unencumbered Asset Pool Property which is an office building and (2) $.15 per
square foot per annum for each such Unencumbered Asset Pool Property which is an
industrial building, divided by (B) the FMV Cap Rate, and (ii) the purchase
price actually paid by the Borrower, the General Partner or any of their
Subsidiaries (as applicable) for such Real Property, (y) with respect to
Qualified Development Properties and, without duplication, Qualified Leased
Development Properties, 40% of the book value thereof, and (z) Cash or Cash
Equivalents of the Borrower, the General Partner and their Subsidiaries as of
the date of determination.
"Total Debt Ratio" means the ratio, as of the date of determination,
----------------
of (i) the sum of (x) the Total Liabilities of the Borrower, the General Partner
and their Consolidated Subsidiaries and (y) the Borrower's and the General
Partner's pro rata share of the Total Liabilities of any Minority Holdings of
the Borrower or the General Partner to (ii) Total Asset Value.
"Total Debt Service" means, as of the last day of each calendar
------------------
quarter, an amount equal to the sum of (i) interest (whether accrued, paid or
capitalized) payable by Borrower on its Debt for the previous four consecutive
quarters including the quarter then ended, plus (ii) scheduled payments of
principal on such Debt, whether or not paid by the Borrower (excluding balloon
payments) for the previous four consecutive quarters including the quarter then
ended.
"Total Liabilities" means the sum of the balance sheet amount of all
-----------------
Debt of the Borrower, the General Partner and their Consolidated Subsidiaries
and all accounts payable and all other liabilities of such Person, all as
determined in accordance with GAAP.
"Treasury Rate" means, as of any date, a rate equal to the annual
-------------
yield to maturity on the U.S. Treasury Constant Maturity Series with a ten-year
maturity, as such yield is reported in Federal Reserve Statistical Release H.15
- -- Selected Interest Rates, published most recently prior to the date the
applicable Treasury Rate is being
27
determined. Such yield shall be determined by straight line linear interpolation
between the yields reported in Release H.15, if necessary. In the event Release
H.15 is no longer published, the Administrative Agent shall select, in its
reasonable discretion, an alternate basis for the determination of Treasury
yield for U.S. Treasury Constant Maturity Series with ten-year maturities.
"Unencumbered Asset Pool Net Operating Cash Flow" means, as of
-----------------------------------------------
any date of determination with respect to the Unencumbered Asset Pool
Properties, Property Income with respect to the Unencumbered Asset Pool
Properties for the previous four (4) consecutive quarters (except as provided
below), including the quarter then ended, but less (x) Property Expenses with
respect to the Unencumbered Asset Pool Properties for the previous four (4)
consecutive quarters (except as provided below), including the quarter then
ended, and (y) the greater of (i) Capital Expenditures which are not related to
new construction for the previous four (4) consecutive quarters, including the
quarter then ended, and (ii) reserves for Capital Expenditures of $.70 per
square foot per annum for each Unencumbered Asset Pool Property that is an
office property, and $.40 per square foot per annum for each Unencumbered Asset
Pool Property that is an industrial property. Notwithstanding the foregoing,
with respect to any Unencumbered Asset Pool Property owned by the Borrower, the
General Partner or any of their Consolidated Subsidiaries for a period of less
four (4) fiscal quarters, but more than one (1) fiscal quarter, Unencumbered
Asset Pool Net Operating Cash Flow shall be determined in a manner consistent
with the foregoing calculation utilizing annualized Property Income, Property
Expenses and Capital Expenditures (or, if greater, reserves for Capital
Expenditures) for the relevant period of the Borrower's, the General Partner's
or any of their Consolidated Subsidiaries' ownership of such Unencumbered Asset
Pool Property, provided such period shall be at least one fiscal quarter.
"Unencumbered Asset Pool Properties" means, as of any date,
----------------------------------
the Real Property Assets listed in EXHIBIT B attached hereto and made a part
---------
hereof, each of which is 100% owned in fee (or leasehold pursuant to a
Financeable Ground Lease in the case of assets listed on EXHIBIT C as
---------
leaseholds), directly or indirectly, by the Borrower or the General Partner,
together with all Real Property Assets which have become part of the
Unencumbered Asset Pool Properties as of such date in accordance with Section
3.3, and, as to all of the foregoing, each of which is (i) either an industrial
property or primarily an office property which may have secondary uses, and (ii)
not subject to any Lien (other than Permitted Liens), subject to adjustment as
set forth herein.
28
"Unencumbered Asset Pool Properties Value" means the sum of:
----------------------------------------
(i) with respect to the Unencumbered Asset Pool
Properties owned by the Borrower, the General Partner or any of their
Consolidated Subsidiaries for a period of at least six (6) calendar months, the
quotient of (x) the Unencumbered Asset Pool Net Operating Cash Flow less
replacement reserves of $.30 per square foot per annum for each such
Unencumbered Asset Pool Property which is an office building and $.15 per square
foot per annum for each such Unencumbered Asset Pool Property which is an
industrial building, divided by (y) the FMV Cap Rate, and
(ii) with respect to Unencumbered Asset Pool
Properties owned by the Borrower, the General Partner or any of their
Consolidated Subsidiaries for a period of less than six (6) calendar months, the
lesser of (A) the quotient of (x) the Unencumbered Asset Pool Net Operating Cash
Flow on an annualized basis based upon the Unencumbered Asset Pool Net Operating
Cash Flow for the period of such Person's ownership of the Unencumbered Asset
Pool Property in question less replacement reserves of $.30 per square foot per
annum for each such Unencumbered Asset Pool Property which is an office building
and $.15 per square foot per annum for each such Unencumbered Asset Pool
Property which is an industrial building, divided by (y) the FMV Cap Rate and
(B) the purchase price actually paid by the Borrower, the General Partner or any
of their Consolidated Subsidiaries (as applicable) for such Unencumbered Asset
Pool Property; provided, however, that if any such Unencumbered Asset Pool
-------- -------
Property shall have been purchased as part of a portfolio of properties and no
purchase price shall have been specifically allocated thereto, then the purchase
price therefore shall be deemed to be equal to that percentage of the total
purchase price for such portfolio as is equal to the percentage of the total Net
Operating Cash Flow with respect to such portfolio represented by the Net
Operating Cash Flow attributable to the applicable Unencumbered Asset Pool
Property, and
(iii) with respect to Qualified Leased Development
Properties, forty percent (40%) of the book value thereof, provided that
availability under the Commitments attributable to such Qualified Leased
Development Properties shall not in any event exceed 10% of Unencumbered Asset
Pool Properties Value.
29
"Unfunded Liabilities" means, with respect to any Plan at any
--------------------
time, the amount (if any) by which (i) the value of all benefit liabilities
under such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the
fair market value of all Plan assets allocable to such liabilities under Title
IV of ERISA (excluding any accrued but unpaid contributions), all determined as
of the then most recent valuation date for such Plan, but only to the extent
that such excess represents a potential liability of a member of the ERISA Group
to the PBGC or any other Person under Title IV of ERISA.
"United States" means the United States of America, including
-------------
the States and the District of Columbia, but excluding its territories and
possessions.
"Unsecured Debt" means Debt not secured by a Lien on real
--------------
property.
"Unsecured Debt Ratio" means, as of any date of determination,
--------------------
the ratio of the Unencumbered Asset Pool Properties Value as of the date of
determination to the aggregate amount of Unsecured Debt of the Borrower, the
General Partner and their Consolidated Subsidiaries outstanding as of such date
of determination.
"Unused Commitments" means an amount equal to all unadvanced
------------------
funds (other than unadvanced funds in connection with any construction loan)
which any third party is obligated to advance to the Borrower or otherwise,
pursuant to any Loan Document, written instrument or otherwise.
Section I.2. Accounting Terms and Determinations. Unless
-----------------------------------
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP, applied on a basis consistent (except for changes
concurred in by the Borrower's independent public accountants) with the most
recent audited consolidated financial statements of the Borrower delivered to
the Administrative Agent and the Banks; provided that, if the Borrower notifies
--------
the Administrative Agent and the Banks that the Borrower wishes to amend any
covenant in Article V to eliminate the effect of any change in GAAP on the
operation of such covenant (or if the Administrative Agent notifies the Borrower
that the Required Banks wish to amend Article V for such purpose), then the
Borrower's compliance with such covenant shall be determined on the basis of
GAAP in effect
30
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant is amended in a manner satisfactory to
the Borrower and the Required Banks.
Section I.3. Types of Borrowings. The term "Borrowing" denotes
------------------- ---------
the aggregation of Loans of one or more Banks to be made to the Borrower
pursuant to Article II on the same date, all of which Loans are of the same type
(subject to Article VIII) and, except in the case of Base Rate Loans, have the
same Interest Period. Borrowings are classified for purposes of this Agreement
either by reference to the pricing of Loans comprising such Borrowing (e.g., a
---
"Euro-Dollar Borrowing" is a Borrowing comprised of Euro-Dollar Loans) or by
reference to the provisions of Article II under which participation therein is
determined (i.e., a "Committed Borrowing" is a Borrowing under Section 2.1 in
---
which all Banks participate in proportion to their Commitments, while a "Money
Market Borrowing" is a Borrowing under Section 2.3).
ARTICLE II
THE CREDITS
Section II.1. Commitments to Lend.
-------------------
(a) Each Bank severally agrees, on the terms and conditions
set forth in this Agreement, to make Committed Loans to the Borrower and
participate in Letters of Credit issued by the Fronting Bank on behalf of the
Borrower pursuant to this Section from time to time during the Term in amounts
such that the aggregate principal amount of Committed Loans by such Bank at any
one time outstanding together with such Bank's pro rata share of the Letter of
--- ----
Credit Usage shall not exceed the amount of its Commitment. The aggregate amount
of Committed Loans to be made hereunder together with the Letter of Credit Usage
and outstanding Money Market Loans shall not exceed the Loan Amount. Each
Borrowing under this subsection (a) shall be in an aggregate principal amount of
at least $2,500,000, or an integral multiple of $500,000 in excess thereof and
shall be made from the several Banks ratably in proportion to their respective
Commitments. Subject to the limitations set forth herein, any amounts repaid may
be reborrowed. Notwithstanding anything to the contrary, the number of new
Borrowings shall be limited to ten (10) Borrowings per month.
31
(b) Notwithstanding anything in the preceding subparagraph (a)
to the contrary, the Loan Amount shall in no event exceed (and no Bank shall be
deemed to have committed to fund its pro rata share of an amount which exceeds)
--- ----
an amount that would cause (A) the ratio of (i) Unencumbered Asset Pool Net
Operating Cash Flow to (ii) Pro-Forma Debt Service to be less than 1.8:1.0 or
(B) the Unsecured Debt Ratio to be less than 1.8:1.0 or (C) an amount which
would result in the violation of any provision of Section 5.8.
Section II.2. Notice of Committed Borrowing. (a) The Borrower
-----------------------------
shall give the Administrative Agent notice (a "Notice of Committed Borrowing")
-----------------------------
not later than 2:00 p.m. (New York City time) (x) one Domestic Business Day
before each Base Rate Borrowing or (y) three (3) Euro-Dollar Business Days
before each Euro-Dollar Borrowing, specifying:
(1) the date of such Borrowing, which shall be a
Domestic Business Day in the case of a Domestic Borrowing or a
Euro-Dollar Business Day in the case of a Euro-Dollar Borrowing,
(2) the aggregate amount of such Borrowing,
(3) whether the Loans comprising such Borrowing are
to be Base Rate Loans or Euro-Dollar Loans,
(4) in the case of a Euro-Dollar Borrowing, the
duration of the Interest Period applicable thereto, subject to the
provisions of the definition of Interest Period,
(5) the intended use for the proceeds of such
Borrowing, and
(6) that no Default or Event of Default has occurred
or is continuing.
Notwithstanding the time frame set forth in clause (a)(x) above, in the event
that the Money Market Quotes submitted by the Banks pursuant to Section 2.3(c)
below are, in the aggregate, in an amount less than the principal amount
requested by the Borrower in
32
the related Money Market Quote Request, then the Borrower shall be permitted to
give the Administrative Agent notice of its intent to make a Base Rate
Borrowing, in the amount of the difference between accepted Money Market Quotes
and the principal amount requested by Borrower in the related Money Market Quote
Request, no later than 2:30 p.m. (New York City time) on the date of such
Borrowing.
(b) Borrower shall give the Administrative Agent, and the
designated Fronting Bank, written notice in the event that it desires to have
Letters of Credit (each, a "Letter of Credit") issued hereunder no later than
----------------
2:00 p.m., New York City time, at least four (4) Domestic Business Days prior to
the date of such issuance. Each such notice shall specify (i) the designated
Fronting Bank, (ii) the aggregate amount of the requested Letters of Credit,
(iii) the individual amount of each requested Letter of Credit and the number of
Letters of Credit to be issued, (iv) the date of such issuance (which shall be a
Domestic Business Day), (v) the name and address of the beneficiary, (vi) the
expiration date of the Letter of Credit (which in no event shall be later than
twelve (12) months after the issuance of such Letter of Credit or the Maturity
Date, whichever is earlier), (vii) the purpose and circumstances for which such
Letter of Credit is being issued and (viii) the terms upon which each such
Letter of Credit may be drawn down (which terms shall not leave any discretion
to Fronting Bank). Each such notice may be revoked telephonically by the
Borrower to the applicable Fronting Bank and the Administrative Agent any time
prior to the date of issuance of the Letter of Credit by the applicable Fronting
Bank, provided such revocation is confirmed in writing by the Borrower to the
Fronting Bank and the Administrative Agent within one (1) Domestic Business Day
by facsimile. No later than 2:00 p.m., New York City time, on the date that is
four (4) Domestic Business Days prior to the date of issuance, the Borrower
shall specify a precise description of the documents and the verbatim text of
any certificate to be presented by the beneficiary of such Letter of Credit,
which if presented by such beneficiary prior to the expiration date of the
Letter of Credit would require the Fronting Bank to make a payment under the
Letter of Credit; provided, that Fronting Bank may, in its reasonable judgment,
--------
require changes in any such documents and certificates only in conformity with
changes in customary and commercially reasonable practice or law and, provided
--------
further, that no Letter of Credit shall require payment against a conforming
- -------
draft to be made thereunder on the following Domestic Business Day that such
draft is presented if such presentation is made later than 10:00 A.M. New York
City time (except that if the beneficiary of any Letter of Credit requests at
the time of the issuance of its Letter of Credit that payment be made on the
same Domestic Business Day against a conforming draft, such beneficiary
33
shall be entitled to such a same day draw, provided such draft is presented to
the applicable Fronting Bank no later than 10:00 A.M. New York City time and
provided further the Borrower shall have requested to the Fronting Bank and the
Administrative Agent that such beneficiary shall be entitled to a same day
draw). In determining whether to pay on such Letter of Credit, the Fronting Bank
shall be responsible only to determine that the documents and certificates
required to be delivered under the Letter of Credit have been delivered and that
they comply on their face with the requirements of that Letter of Credit.
Section II.3. Money Market Borrowings.
-----------------------
(a) The Money Market Option. In addition to Committed
-----------------------
Borrowings pursuant to Section 2.1, at such time as the Borrower's Credit Rating
is an Investment Grade Rating from at least two Rating Agencies, one of which
shall be S&P or Moody's, the Borrower may, as set forth in this Section 2.3,
request the Banks during the Term to make offers to make Money Market Loans to
the Borrower, not to exceed, at such time, the lesser of (i) the Committed Loans
and (ii) $150,000,000. The Banks may, but shall have no obligation to, make such
offers and the Borrower may, but shall have no obligation to, accept any such
offers in the manner set forth in this Section.
(b) Money Market Quote Request. When the Borrower wishes to
--------------------------
request offers to make Money Market Loans under this Section, it shall transmit
to the Administrative Agent by telex or facsimile transmission a Money Market
Quote Request substantially in the form of Exhibit D hereto so as to be received
---------
not later than 2:00 p.m. (New York City time) on (x) the fourth Euro-Dollar
Business Day prior to the date of Borrowing proposed therein, in the case of a
LIBOR Auction, or (y) the Domestic Business Day next preceding the date of
Borrowing proposed therein, in the case of an Absolute Rate Auction (or, in
either case, such other time or date as the Borrower and the Administrative
Agent shall have mutually agreed and shall have notified to the Banks not later
than the date of the Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be effective) specifying:
(i) the proposed date of Borrowing, which shall be a
Euro-Dollar Business Day in the case of a LIBOR Auction or a Domestic
Business Day in the case of an Absolute Rate Auction,
34
(ii) the aggregate amount of such Borrowing, which
shall be $10,000,000 or a larger multiple of $500,000,
(iii) the duration of the Interest Period applicable
thereto, subject to the provisions of the definition of Interest
Period, and
(iv) whether the Money Market Quotes requested are
to set forth a Money Market Margin or a Money Market Absolute Rate.
The Borrower may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market Quote Request. No Money Market Quote
Request shall be given within thirty days (or such other number of days as the
Borrower and the Administrative Agent may agree) of any other Money Market Quote
Request.
(c) Invitation for Money Market Quotes. Promptly upon
----------------------------------
receipt of a Money Market Quote Request, the Administrative Agent shall send to
the Banks by telex or facsimile transmission an Invitation for Money Market
Quotes substantially in the form of Exhibit F hereto, which shall constitute an
---------
invitation by the Borrower to each Bank to submit Money Market Quotes offering
to make the Money Market Loans to which such Money Market Quote Request relates
in accordance with this Section 2.3.
(d) Submission and Contents of Money Market Quotes. (i)
----------------------------------------------
Each Bank may submit a Money Market Quote containing an offer or offers to make
Money Market Loans in response to any Invitation for Money Market Quotes. Each
Money Market Quote must comply with the requirements of this subsection (d) and
must be submitted to the Administrative Agent by telex or facsimile transmission
at its offices specified in or pursuant to Section 9.1 not later than (x) 10:00
a.m. (New York City time) on the third Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction, or (y) 10:00 a.m.
(New York City time) on the proposed date of Borrowing, in the case of an
Absolute Rate Auction (or, in either case, such other time or date as the
Borrower and the Administrative Agent shall have mutually agreed and shall have
notified to the Banks not later than the date of the Money Market Quote Request
for the first LIBOR Auction or Absolute Rate Auction for which such change is to
be effective); provided that Money Market Quotes submitted by the Administrative
--------
Agent (or any affiliate of the Administrative Agent) in the capacity of a Bank
may be submitted, and may only be submitted, if the Administrative Agent or such
affiliate
35
notifies the Borrower of the terms of the offer or offers contained therein not
later than thirty (30) minutes prior to the applicable deadline for the other
Banks. Subject to Articles III and VI, any Money Market Quote so made shall be
irrevocable except with the written consent of the Administrative Agent given on
the instructions of the Borrower. Such Money Market Loans may be funded by such
Bank's Designated Lender (if any) as provided in Section 9.6(d); however such
Bank shall not be required to specify in its Money Market Quote whether such
Money Market Loans will be funded by such Designated Lender.
(ii) Each Money Market Quote shall be in substantially the form of
Exhibit E hereto and shall in any case specify:
- ---------
(1 the proposed date of Borrowing,
(2 the principal amount of the Money Market Loan for which each
such offer is being made, which principal amount (w) may be greater than or
less than the Commitment of the quoting Bank, (x) must be $10,000,000 or a
larger multiple of $500,000, (y) may not exceed the principal amount of
Money Market Loans for which offers were requested and (z) may be subject
to an aggregate limitation as to the principal amount of Money Market Loans
for which offers being made by such quoting Bank may be accepted,
(3 in the case of a LIBOR Auction, the margin above or below the
applicable London Interbank Offered Rate (the "Money Market Margin")
-------------------
offered for each such Money Market Loan, expressed as a percentage
(specified to the nearest 1/10,000th of 1%) to be added to or subtracted
from such base rate,
(4 in the case of an Absolute Rate Auction, the rate of interest
per annum (specified to the nearest 1/10,000th of 1%) (the "Money Market
------------
Absolute Rate") offered for each such Money Market Loan, and
-------------
(5 the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the quoting
Bank with respect to each Interest Period specified in the related Invitation
for Money Market Quotes.
36
(iii) Any Money Market Quote shall be disregarded if it:
(1 is not substantially in conformity with Exhibit F hereto or
---------
does not specify all of the information required by subsection (d)(ii)
above;
(2 contains qualifying, conditional or similar language;
(3 proposes terms other than or in addition to those set forth
in the applicable Invitation for Money Market Quotes; or
(4 arrives after the time set forth in subsection (d)(i).
(e Notice to Borrower. The Administrative Agent shall promptly
------------------
notify the Borrower (x) with respect to each Money Market Quote submitted in
accordance with subsection (d), of the terms of such Money Market Quote and the
identity of the Bank submitting such Money Market Quote and (y) of any Money
Market Quote that amends, modifies or is otherwise inconsistent with a previous
Money Market Quote submitted by such Bank with respect to the same Money Market
Quote Request. Any such subsequent Money Market Quote shall be disregarded by
the Administrative Agent unless such subsequent Money Market Quote is submitted
solely to correct a manifest error in such former Money Market Quote. The
Administrative Agent's notice to the Borrower shall specify (A) the aggregate
principal amount of Money Market Loans for which offers have been received for
each Interest Period specified in the related Money Market Quote Request, (B)
the respective principal amounts and Money Market Margins or Money Market
Absolute Rates, as the case may be, so offered and (C) if applicable,
limitations on the aggregate principal amount of Money Market Loans for which
offers in any single Money Market Quote may be accepted.
(f Acceptance and Notice by Borrower. Not later than 1:00 p.m. (New
---------------------------------
York City time) on (x) the third Euro-Dollar Business Day prior to the proposed
date of Borrowing, in the case of a LIBOR Auction, or (y) the proposed date of
Borrowing, in the case of an Absolute Rate Auction (or, in either case, such
other time or date as the Borrower and the Administrative Agent shall have
mutually agreed and shall have notified to the Banks not later than the date of
the Money Market Quote Request for the first LIBOR Auction or Absolute Rate
Auction for which such change is to be
37
effective), the Borrower shall notify the Administrative Agent of its acceptance
or non-acceptance of the offers so notified to it pursuant to subsection (e). In
the case of acceptance, such notice (a "Notice of Money Market Borrowing") shall
--------------------------------
specify the aggregate principal amount of offers for each Interest Period that
are accepted. The Borrower may accept any Money Market Quote in whole or in
part; provided that:
--------
(i) the aggregate principal amount of each Money Market
Borrowing may not exceed the applicable amount set forth in the related
Money Market Quote Request;
(ii) the principal amount of each Money Market Borrowing must be
$10,000,000 or a larger multiple of $500,000;
(iii) acceptance of offers may only be made on the basis of
ascending Money Market Margins or Money Market Absolute Rates, as the case
may be; and
(iv) the Borrower may not accept any offer that is described in
subsection (d)(iii) or that otherwise fails to comply with the requirements
of this Agreement.
(g Allocation by Administrative Agent. If offers are made by two or
----------------------------------
more Banks with the same Money Market Margins or Money Market Absolute Rates, as
the case may be, for a greater aggregate principal amount than the amount in
respect of which such offers are accepted for the related Interest Period, the
principal amount of Money Market Loans in respect of which such offers are
accepted shall be allocated by the Administrative Agent among such Banks as
nearly as possible (in multiples of $500,000, as the Administrative Agent may
deem appropriate) in proportion to the aggregate principal amounts of such
offers. Determinations by the Administrative Agent of the amounts of Money
Market Loans shall be conclusive in the absence of manifest error.
(h Notification by Administrative Agent. Upon receipt of the
------------------------------------
Borrower's Notice of Money Market Borrowing in accordance with Section 2.3(f)
hereof, the Administrative Agent shall, on the date such Notice of Money Market
Borrowing is received by the Administrative Agent, notify each Bank of the
principal amount of the Money Market Borrowing accepted by the Borrower and of
such Bank's share (if any) of
38
such Money Market Borrowing and such Notice of Money Market Borrowing shall not
thereafter be revocable by the Borrower. A Bank who is notified that it has been
selected to make a Money Market Loan may designate its Designated Lender (if
any) to fund such Money Market Loan on its behalf, as described in Section
9.6(d). Any Designated Lender which funds a Money Market Loan shall on and after
the time of such funding become the obligee under such Money Market Loan and be
entitled to receive payment thereof when due. No Bank shall be relieved of its
obligation to fund a Money Market Loan, and no Designated Lender shall assume
such obligation, prior to the time the applicable Money Market Loan is funded.
Section II.4. Notice to Banks; Funding of Loans.
---------------------------------
(a Upon receipt of a Notice of Committed Borrowing, the Administrative
Agent shall notify each Bank on the same day as it receives the Notice of
Committed Borrowing of the contents thereof and of such Bank's share of such
Borrowing and such Notice of Committed Borrowing shall not thereafter be
revocable by the Borrower.
(b Not later than 2:00 P.M. (New York City time) on the date of each
Committed Borrowing, each Bank shall make available its share of such Committed
Borrowing, in Federal or other funds immediately available in New York City, to
the Administrative Agent at its address referred to in Section 9.1. The
Administrative Agent will make the funds so received from the Banks available to
the Borrower at the Administrative Agent's aforesaid address. If the Borrower
has requested the issuance of a Letter of Credit, no later than 12:00 Noon (New
York City time) on the date of such issuance as indicated in the notice
delivered pursuant to Section 2.2(b), the Fronting Bank shall issue such Letter
of Credit in the amount so requested and deliver the same to the Borrower with a
copy thereof to the Administrative Agent. At the request of any Bank, the
Administrative Agent promptly shall deliver copies thereof to such Bank.
Immediately upon the issuance of each Letter of Credit by the Fronting Bank,
such Fronting Bank shall be deemed to have sold and transferred to each other
Bank, and each such other Bank shall be deemed, and hereby agrees, to have
irrevocably and unconditionally purchased and received from the Fronting Bank,
without recourse or warranty, an undivided interest and a participation in such
Letter of Credit, any drawing thereunder, and the obligations of the Borrower
hereunder with respect thereto, and any security therefor or guaranty pertaining
thereto, in an amount equal to such Bank's ratable
39
share thereof (based upon the ratio its Commitment bears to the aggregate of all
Commitments). Upon any change in any of the Commitments in accordance herewith,
there shall be an automatic adjustment to such participations to reflect such
changed shares. The Fronting Bank shall have the primary obligation to fund any
and all draws made with respect to such Letter of Credit notwithstanding any
failure of a participating Bank to fund its ratable share of any such draw.
Unless the Administrative Agent determines that any applicable condition
specified in Article III has not been satisfied, the Administrative Agent will
instruct the Fronting Bank to make such Letter of Credit available to the
Borrower and the Fronting Bank shall make such Letter of Credit available to the
Borrower at the Borrower's aforesaid address or at such address in the United
States as Borrower shall request on the date of the Borrowing.
(c Unless the Administrative Agent shall have received notice from a
Bank prior to the date of any Borrowing that such Bank will not make available
to the Administrative Agent such Bank's share of such Borrowing, the
Administrative Agent may assume that such Bank has made such share available to
the Administrative Agent on the date of such Borrowing in accordance with
subsection (b) of this Section 2.4 and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so made
such share available to the Administrative Agent, such Bank and the Borrower
severally agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent, at (i) in the case of the Borrower, a rate
per annum equal to the higher of the Federal Funds Rate and the interest rate
applicable thereto pursuant to Section 2.7 and (ii) in the case of such Bank,
the Federal Funds Rate. If such Bank shall repay to the Administrative Agent
such corresponding amount, such amount so repaid shall constitute such Bank's
Loan included in such Borrowing for purposes of this Agreement.
Section II.5. Notes.
-----
(a The Loans shall be evidenced by the Notes, each of which shall be
payable to the order of each Bank for the account of its Applicable Lending
Office in an amount equal to each such Bank's Commitment.
40
(b Each Bank may, by notice to the Borrower and the Administrative
Agent, request that its Loans of a particular type be evidenced by a separate
Note in an amount equal to the aggregate unpaid principal amount of such Bank's
Loans of such type. Each such Note shall be in substantially the form of Exhibit
-------
A hereto, with appropriate modifications to reflect the fact that it evidences
- -
solely Loans of the relevant type for such Bank. Each reference in this
Agreement to the "Note" of such Bank shall be deemed to refer to and include any
----
or all of such Notes, as the context may require.
(c Upon receipt of each Bank's Note, the Administrative Agent shall
forward such Note to such Bank. Each Bank shall record the date, amount, type
and maturity of each Loan made by it and the date and amount of each payment of
principal made by the Borrower with respect thereto, and may, if such Bank so
elects in connection with any transfer or enforcement of its Note, endorse on
the schedule forming a part thereof appropriate notations to evidence the
foregoing information with respect to each such Loan then outstanding; provided
--------
that the failure of any Bank to make any such recordation or endorsement shall
not affect the obligations of the Borrower hereunder or under the Notes. Each
Bank is hereby irrevocably authorized by the Borrower so to endorse its Note and
to attach to and make a part of its Note a continuation of any such schedule as
and when required.
(d There shall be no more than ten (10) Euro-Dollar Borrowings
outstanding at any one time pursuant to this Agreement.
Section II.6. Maturity of Loans. The Loans shall mature, and the
-----------------
principal amount thereof shall be due and payable, on the Maturity Date.
Section II.7. Interest Rates.
--------------
(a Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Loan is made until it
becomes due, at a rate per annum equal to the sum of twenty-five (25) basis
points plus the Base Rate for such day. Such interest shall be payable for each
Interest Period on the last day thereof.
(b Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during the Interest Period applicable
thereto, at a
41
rate per annum equal to the sum of the Applicable Margin plus the Adjusted
London Interbank Offered Rate for such day. Such interest shall be payable for
each Interest Period on the last day thereof and, if such Interest Period is
longer than three months, at intervals of three months after the first day
thereof.
"Adjusted London Interbank Offered Rate" applicable to any Interest
--------------------------------------
Period means a rate per annum equal to the quotient obtained (rounded upward, if
necessary, to the next higher 1/100 of 1%) by dividing (i) the applicable London
Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve Percentage.
"Euro-Dollar Reserve Percentage" means for any day that percentage
------------------------------
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank to United
States residents). The Adjusted London Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of any change in the Euro-Dollar
Reserve Percentage.
The "London Interbank Offered Rate" applicable to a particular
-----------------------------
Interest Period shall mean a rate per annum equal to the rate for Dollar
deposits with maturities comparable to such Interest Period which appears on
Telerate Page 3740 or Page 3750 as of 11:00 a.m., London time, on the Quotation
Date; provided, however, if such rate does not appear on Telerate Page 3740 or
-------- -------
Page 3750, the "London Interbank Offered Rate" applicable to a particular
Interest Period shall mean a rate per annum equal to the rate at which Dollar
deposits in an amount approximately equal to the applicable Euro-Dollar Loan(s),
and with maturities comparable to the last day of the Interest Period with
respect to which such London Interbank Offered Rate is applicable, are offered
in immediately available funds in the London Interbank Market to the London
office of the Administrative Agent by leading banks in the Eurodollar market at
11:00 a.m., London time on the Quotation Date.
The "Quotation Date" means, in relation to any period for which an
--------------
interest rate is to be determined, two (2) Euro-Dollar Business Days before the
first day of that period, unless market practice differs in the relevant
interbank market
42
for a currency, in which case the Quotation Date for that currency will be
determined by the Administrative Agent in accordance with market practice in the
London interbank market (and if quotations would normally be given by leading
banks in the London interbank market on more than one day, the Quotation Date
will be the last of those days).
"Telerate Page 3740 or Page 3750" means the display designated as
-------------------------------
"Page 3740" or "Page 3750", as applicable, on the Associated Press-Dow Jones
Telerate Service (or such other page as may replace Page 3740 or Page 3750, as
applicable, on the Associated Press-Dow Jones Telerate Service or such other
service as may be nominated by the British Bankers' Association as the
information vendor for the purpose of displaying British Banker's Association
interest settlement rates for deposits in Dollars. Any London Interbank Offered
Rate determined on the basis of the rate displayed on Telerate Page 3740 or Page
3750 in accordance with the provisions hereof shall be subject to corrections,
if any, made in such rate and displayed by the Associated Press-Dow Jones
Telerate Service within one hour of the time when such rate is first displayed
by such Service.
(c Subject to Section 8.1, each Money Market LIBOR Loan shall bear
interest on the outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum equal to the sum of the London Interbank
Offered Rate for such Interest Period (determined in accordance with Section
2.7(b) as if the related Money Market LIBOR Borrowing were a Committed
Euro-Dollar Borrowing) plus (or minus) the Money Market Margin quoted by the
Bank making such Loan in accordance with Section 2.3. Each Money Market Absolute
Rate Loan shall bear interest on the outstanding principal amount thereof, for
the Interest Period applicable thereto, at a rate per annum equal to the Money
Market Absolute Rate quoted by the Bank making such Loan in accordance with
Section 2.3. Such interest shall be payable for each Interest Period on the last
day thereof and, if such Interest Period is longer than ninety days, at
intervals of ninety days after the first day thereof.
(d In the event that, and for so long as, any Event of Default shall
have occurred and be continuing, the outstanding principal amount of the Loans,
and, to the extent permitted by law, overdue interest in respect of all Loans,
shall bear interest at the annual rate of the sum of the Base Rate and four
percent (4%).
(e The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder. The Administrative Agent shall give prompt
notice to
43
the Borrower and the Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(f The Reference Bank agrees to use its best efforts to furnish
quotations to the Administrative Agent as contemplated by this Section. If the
Reference Bank does not furnish a timely quotation, the provisions of Section
8.1 shall apply.
Section II.8. Fees.
----
(a Commitment/Facility Fee. During the Term, the Borrower shall pay
-----------------------
to the Administrative Agent for the account of the Banks ratably in proportion
to their respective Commitments, a commitment fee on the daily average undrawn
and uncancelled Commitments in any given quarter determined as follows:
(i) prior to the Adjustment Date, the Borrower shall pay to the
Administrative Agent for the account of the Banks ratably in proportion to their
respective Commitments, a commitment fee on the daily average undrawn and
uncancelled Commitments in any given quarter at the respective percentages per
annum based upon the range into which the Total Debt Ratio then falls in
accordance with the following table:
- --------------------------------------------------- -------------------------------------------------
Applicable Commitment Fee (% per
Total Debt Ratio annum)
- --------------------------------------------------- -------------------------------------------------
less than 35% 0.20%
- --------------------------------------------------- -------------------------------------------------
equal to or greater than 35% but less than 45% 0.25%
- --------------------------------------------------- -------------------------------------------------
equal to or greater than 45% but less than 50% 0.30%
- --------------------------------------------------- -------------------------------------------------
equal to or greater than 50% but less than 55% 0.35%
- --------------------------------------------------- -------------------------------------------------
(ii) from and after the Adjustment Date, the Borrower shall pay to the
Administrative Agent for the account of the Banks ratably in proportion to their
44
respective Commitments, a facility fee on the daily average Commitments in any
given quarter at the respective percentages per annum based upon the Borrower's
Credit Rating in accordance with the following table:
- --------------------------------------------------- -------------------------------------------------
Borrower's Credit Rating Applicable Facility Fee (% per annum)
- --------------------------------------------------- -------------------------------------------------
BBB+/Baa1 0.20%
- --------------------------------------------------- -------------------------------------------------
BBB/Baa2 0.20%
- --------------------------------------------------- -------------------------------------------------
BBB-/Baa3 0.25%
- --------------------------------------------------- -------------------------------------------------
Below Investment Grade Rating or no rating 0.325%
- --------------------------------------------------- -------------------------------------------------
The commitment/facility fee shall be payable quarterly, in arrears, on each
January 1, April 1, July 1, and October 1 during the Term and any extensions
thereof. Any change in the Borrower's Credit Rating causing it to move into a
different range on the table shall effect an immediate change in the applicable
percentage per annum. In the event that the Borrower's (or the General
Partner's) Credit Rating is such that the Rating Agencies' ratings are split
between a higher and a lower rating, the applicable percentage per annum shall
be based upon the lower of such two (2) Credit Ratings. In the event that
Borrower (or, as applicable, the General Partner) receives more than two (2)
credit ratings and such credit ratings are not equivalent, the applicable fee
shall be determined by the lower of the two (2) highest ratings, provided that
each of said two (2) highest ratings shall be Investment Grade Ratings and at
least one of which shall be an Investment Grade Rating from S&P or Moody's. In
the event that such two ratings are more than one rating apart, the Applicable
Margin will be determined based on the rating which is one rating above the
lower of the two ratings.
(b Letter of Credit Fee. During the Term, the Borrower shall pay to
--------------------
the Administrative Agent, for the account of the Banks in proportion to their
interests in respect of undrawn issued Letters of Credit, a fee (a "Letter of
---------
Credit Fee") in an amount, provided that no Event of Default shall have occurred
- ----------
and be continuing, equal to a rate per annum equal to the Applicable Margin with
respect to Euro-Dollar Loans on the daily average of such issued and undrawn
Letters of Credit, which fee shall be payable, in arrears, on each January 1,
April 1, July 1 and October 1 during the Term. From the
45
occurrence, and during the continuance, of an Event of Default, such fee shall
be increased to be equal to four percent (4%) per annum on the daily average of
such issued and undrawn Letters of Credit.
(c Fronting Bank Fee. The Borrower shall pay any Fronting Bank, for
-----------------
its own account, a fee (a "Fronting Bank Fee") at a rate per annum equal to .15%
-----------------
of the issued and undrawn amount of such Letter of Credit, which fee shall be in
addition to and not in lieu of, the Letter of Credit Fee. The Fronting Bank Fee
shall be payable in arrears on each January 1, April 1, July 1 and October 1
during the Term.
(d Fees Non-Refundable. All fees set forth in this Section 2.8 shall
-------------------
be deemed to have been earned on the date payment is due in accordance with the
provisions hereof and shall be non-refundable. The obligation of the Borrower to
pay such fees in accordance with the provisions hereof shall be binding upon the
Borrower and shall inure to the benefit of the Administrative Agent and the
Banks regardless of whether any Loans are actually made.
Section II.9. Mandatory Termination. The term (the "Term") of the
--------------------- ----
Commitments shall terminate and expire, and the Borrower shall return or cause
to be returned all Letters of Credit to the Fronting Bank, on March 15, 2005
(the "Maturity Date").
-------------
Section II.10. Mandatory Prepayment.
--------------------
(a In the event that an Unencumbered Asset Pool Property (or any
Separate Parcel that originally formed a part of an Unencumbered Asset Pool
Property) is sold, transferred or released from the restrictions of Section 5.16
hereof, the Borrower shall, simultaneously with such sale, transfer or release,
prepay the Loans in an amount equal to 100% of the net proceeds of such sale or
transfer, in the event of a sale or transfer, or such lesser amount as shall be
required for the Borrower to remain in compliance with this Agreement, in the
event of such a sale, transfer or release. Notwithstanding the foregoing, a
simultaneous like-kind exchange under Section 1031 of the Internal Revenue Code
will not be subject to the provisions of this Section 2.10(a), provided that the
exchanged property has qualified as a New Acquisition and any cash "boot"
associated therewith shall be applied to prepayment of the Loans or such lesser
amount of such cash "boot" as shall be required for the Borrower to remain in
compliance with this Agreement. Sale of an Unencumbered Asset Pool Property (or
any Separate
46
Parcel that originally formed a part of a Unencumbered Asset Pool Property) in
violation of this Section 2.10 shall constitute an Event of Default.
(b Simultaneously with the closing of any sale of common shares of
beneficial interest, preferred shares of beneficial interest, partnership
interests, limited liability company interests, or other ownership or equity
interests in the Borrower or the General Partner, the Borrower shall,
simultaneously with such sale, prepay the Loans in an amount equal to 100% of
the Net Offering Proceeds. Notwithstanding the foregoing, however, in the event
that (i) the Net Offering Proceeds in connection with any individual offering
shall be less than $20,000,000, and the Borrower anticipates reinvesting the
same in Real Property Assets within fifteen (15) days after receipt thereof or
(ii) any Loans expire within thirty (30) days of the date thereof, the Borrower
may retain such funds, provided, however, that if the Borrower shall not in fact
so reinvest such funds in Real Property Assets within such fifteen (15) day
period or repay such Loans within such thirty (30) day period, as the case may
be, the Borrower shall immediately apply the same in repayment of the Loans.
(c In the event that the Unsecured Debt Ratio is not maintained as
of the last day of a calendar quarter, either (i) the Borrower will add a Real
Property Asset to the Unencumbered Asset Pool Properties in accordance with this
Agreement which, on a pro forma basis (i.e. the Unsecured Debt Ratio shall be
--------- ---
recalculated to include such Real Property Asset as though the same had been an
Unencumbered Asset Pool Property for the entire applicable period) would result
in compliance with the Unsecured Debt Ratio, or (ii) the Borrower shall prepay
to the Administrative Agent, for the account of the Banks, an amount necessary
to cause the Unsecured Debt Ratio to be in compliance within ninety (90) days of
the date on which the Unsecured Debt Ratio failed to be maintained. Failure by
the Borrower to comply with the Unsecured Debt Ratio within ninety (90) days of
the date of such non-compliance shall be an Event of Default.
Section II.11. Optional Prepayments.
--------------------
(a The Borrower may, upon at least one Domestic Business Day's
notice to the Administrative Agent, prepay to the Administrative Agent, for the
account of the Banks, any Base Rate Borrowing in whole at any time, or from time
to time in part in amounts aggregating One Million Dollars ($1,000,000), or an
integral multiple of One Million Dollars ($1,000,000) in excess thereof or, if
less, the outstanding principal balance, by paying the principal amount to be
prepaid together with accrued interest
47
thereon to the date of prepayment. Each such optional prepayment shall be
applied to prepay ratably the Loans of the several Banks included in such
Borrowing.
(b Except as provided in Section 8.2, the Borrower may not prepay
all or any portion of the principal amount of any Euro-Dollar Loan prior to the
maturity thereof unless the Borrower shall also pay any applicable expenses
pursuant to Section 2.13. Any such prepayment shall be upon at least three (3)
Euro-Dollar Business Days' notice to the Administrative Agent. Any notice of
prepayment delivered pursuant to this Section 2.11(b) shall set forth the amount
of such prepayment which is applicable to any Loan made for working capital
purposes. Each such optional prepayment shall be in the amounts set forth in
Section 2.11(a) above and shall be applied to prepay ratably the Loans of the
Banks included.
(c The Borrower may not prepay any Money Market Loan.
(d The Borrower may, upon at least one (1) Domestic Business Day's
notice to the Administrative Agent (by 2:00 p.m New York time on such Domestic
Business Day), reimburse the Administrative Agent for the benefit of the
Fronting Bank for the amount of any drawing under a Letter of Credit in whole or
in part in any amount.
(e The Borrower may at any time return any undrawn Letter of Credit
to the Fronting Bank in whole, but not in part, and the Fronting Bank shall give
the Administrative Agent and each of the Banks notice of such return.
(f The Borrower may at any time and from time to time cancel all or
any part of the Commitments in amounts aggregating One Million Dollars
($1,000,000), or an integral multiple of One Million Dollars ($1,000,000) in
excess thereof, by the delivery to the Administrative Agent and the Banks of a
notice of cancellation upon at least three (3) Domestic Business Days' notice to
Administrative Agent and the Banks, whereupon, all or such portion of the
Commitments shall terminate as to the Banks, pro rata on the date set forth in
--- ----
such notice of cancellation, and, if there are any Loans then outstanding in an
aggregate amount which exceeds the aggregate Commitments (after giving effect to
any such reduction), the Borrower shall prepay to the Administrative Agent, for
the account of the Banks, all or such portion of Loans outstanding on such date
in accordance with the requirements of Sections 2.11(a) and (b). In no event
shall the Borrower be permitted to cancel Commitments for which a Letter of
Credit has been issued and is outstanding unless the Borrower returns (or causes
to be returned) such
48
Letter of Credit to the Fronting Bank. The Borrower shall be permitted to
designate in its notice of cancellation which Loans, if any, are to be prepaid.
(g Upon receipt of a notice of prepayment or cancellation or a
return of a Letter of Credit pursuant to this Section, the Administrative Agent
shall promptly, and in any event within one (1) Domestic Business Day, notify
each Bank of the contents thereof and of such Bank's ratable share (if any) of
such prepayment or cancellation and such notice shall not thereafter be
revocable by the Borrower.
(h Any amounts so prepaid pursuant to this Section 2.11 may be
reborrowed subject to the other terms of this Agreement. In the event that the
Borrower elects to cancel all or any portion of the Commitments pursuant to
Section 2.11(c) hereof, such cancellation shall be irrevocable and such amounts
may not be reborrowed.
Section II.12. General Provisions as to Payments.
---------------------------------
(a The Borrower shall make each payment of principal of, and
interest on, the Loans and of fees hereunder, not later than 3:00 p.m. (New York
City time) on the date when due, in Federal or other funds immediately available
in New York City, to the Administrative Agent at its address referred to in
Section 9.1. The Administrative Agent will distribute to each Bank its ratable
share of each such payment received by the Administrative Agent for the account
of the Banks on the same day as received by the Administrative Agent if received
by the Administrative Agent by 3:00 p.m. (New York City time), or, if received
by the Administrative Agent after 3:00 p.m. (New York City time), on the
immediately following Domestic Business Day. If the Administrative Agent shall
fail to distribute to a Bank its ratable share of a payment on the same day it
is received or the immediately following Domestic Business Day, as applicable in
accordance with the immediately preceding sentence, the Administrative Agent
shall pay to such Bank the interest accrued on such payment at the Federal Funds
Rate, commencing on the day the Administrative Agent should have made the
payment to such Bank and ending on the day prior to the date payment is actually
made. Whenever any payment of principal of, or interest on, the Base Rate Loans
or of fees shall be due on a day which is not a Domestic Business Day, the date
for payment thereof shall be extended to the next succeeding Domestic Business
Day. Whenever any payment of principal of, or interest on, the Euro-Dollar Loans
shall be due on a day which is not a Euro-Dollar Business Day, the date for
payment thereof shall be extended to the next succeeding Euro-Dollar Business
Day unless such Euro-Dollar Business Day falls in
49
another calendar month, in which case the date for payment thereof shall be the
next preceding Euro-Dollar Business Day. If the date for any payment of
principal is extended by operation of law or otherwise, interest thereon shall
be payable for such extended time.
(b Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Banks
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Bank on such due
date an amount equal to the amount then due such Bank. If and to the extent that
the Borrower shall not have so made such payment, each Bank shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Administrative Agent, at the Federal Funds Rate.
(c All payments made on the Notes shall be credited, to the extent
of the amount thereof, in the following manner: (a) first, against all costs,
expenses and other fees (including reasonable attorneys' fees) arising under the
terms hereof, of which, if no Event of Default shall have occurred and be
continuing, the Borrower has received notice pursuant to the terms hereof, (b)
second, against the amount of interest accrued and unpaid on the Notes as of the
date of such payment, (c) third, against all principal due and owing on the
Notes as of the date of such payment, and (d) fourth, to all other amounts
constituting any portion of the Obligations.
Section II.13. Funding Losses. If the Borrower makes any payment of
--------------
principal with respect to any Euro-Dollar Loan (pursuant to Article II, VI or
VIII or otherwise, and specifically including any payments made pursuant to
Sections 2.10 or 2.11) on any day other than the last day of the Interest Period
applicable thereto, or if the Borrower fails to borrow any Euro-Dollar Loans,
after notice has been given to any Bank in accordance with Section 2.4(a), or to
prepay any Euro-Dollar Loans, after notice has been given to any Bank in
accordance with Section 2.11(b), the Borrower shall reimburse each Bank within
15 days after demand for any resulting loss or expense incurred by it (or by an
existing Participant in the related Loan; provided that no Participant shall be
entitled to receive more than the Bank, with respect to which such Participant
is a Participant, would be entitled to receive under this Section 2.13),
including (without
50
limitation) any loss incurred in obtaining, liquidating or employing deposits
from third parties, but excluding loss of margin for the period after any such
payment or failure to borrow, provided that such Bank shall have delivered to
--------
the Borrower a certificate as to the amount of such loss or expense and the
calculation thereof, which certificate shall be conclusive in the absence of
manifest error.
Section II.14. Computation of Interest and Fees. Interest based on the
--------------------------------
Prime Rate hereunder shall be computed on the basis of a year of 365 days (or
366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest and
fees shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
Section II.15. Method of Electing Interest Rates.
---------------------------------
(a The Loans included in each Borrowing shall bear interest
initially at the type of rate specified by the Borrower in the applicable Notice
of Committed Borrowing. Thereafter, the Borrower may from time to time elect to
change or continue the type of interest rate borne by each Group of Loans
(subject in each case to the provisions of Article VIII), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect to
convert such Loans to Euro-Dollar Loans as of any Euro-Dollar Business Day;
(ii) if such Loans are Euro-Dollar Loans, the Borrower may elect
to convert such Loans to Base Rate Loans or elect to continue such Loans as
Euro-Dollar Loans for an additional Interest Period, in each case effective
on the last day of the then current Interest Period applicable to such
Loans.
Each such election shall be made by delivering a notice (a "Notice of Interest
------------------
Rate Election") to the Administrative Agent at least three (3) Euro-Dollar
- -------------
Business Days before the conversion or continuation selected in such notice is
to be effective (unless the relevant Loans are to be continued as Base Rate
Loans, in which case such notice shall be delivered to the Administrative Agent
no later than 2:00 p.m. (New York City time) at least one (1) Domestic Business
Day before such continuation is to be effective). A Notice of Interest Rate
Election may, if it so specifies, apply to only a portion of the aggregate
principal amount of the relevant Group of Loans; provided that (i) such portion
--------
51
is allocated ratably among the Loans comprising such Group, (ii) the portion to
which such notice applies, and the remaining portion to which it does not apply,
are each $1,000,000 or any larger multiple of $1,000,000, (iii) there shall be
no more than ten (10) Borrowings comprised of Euro-Dollar Loans outstanding at
any time under this Agreement, (iv) no Loan may be continued as, or converted
into, a Euro-Dollar Loan when any Event of Default has occurred and is
continuing, and (v) no Interest Period shall extend beyond the Maturity Date.
(b Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such
notice applies;
(ii) the date on which the conversion or continuation selected
in such notice is to be effective, which shall comply with the applicable
clause of subsection (a) above;
(iii) if the Loans comprising such Group are to be converted, the
new type of Loans and, if such new Loans are Euro-Dollar Loans, the
duration of the initial Interest Period applicable thereto; and
(iv) if such Loans are to be continued as Euro-Dollar Loans for
an additional Interest Period, the duration of such additional Interest
Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election from the
Borrower pursuant to subsection (a) above, the Administrative Agent shall notify
each Bank on the same day as it receives such Notice of Interest Rate Election
of the contents thereof and such notice shall not thereafter be revocable by the
Borrower. If the Borrower fails to deliver a timely Notice of Interest Rate
Election to the Administrative Agent for any Group of Euro-Dollar Loans, such
Loans shall be converted into Base Rate Loans on the last day of the then
current Interest Period applicable thereto.
Section II.16. Letters of Credit. (a) Subject to the terms contained
-----------------
in this Agreement and the other Loan Documents, upon the receipt of a notice in
accordance
52
with Section 2.2(b) requesting the issuance of a Letter of Credit, the Fronting
Bank shall issue a Letter of Credit or Letters of Credit in such form as is
reasonably acceptable to the Borrower in an amount or amounts equal to the
amount or amounts requested by the Borrower.
(b) Each Letter of Credit shall be issued in the minimum amount of One
Million Dollars ($1,000,000).
(c) The Letter of Credit Usage shall be no more than Twenty-Five
Million Dollars ($25,000,000) at any one time.
(d) There shall be no more than three (3) Letters of Credit
outstanding at any one time.
(e) In the event of any request for a drawing under any Letter of
Credit by the beneficiary thereunder, the Fronting Bank shall endeavor to notify
the Borrower and the Administrative Agent (and the Administrative Agent shall
endeavor to notify each Bank thereof) on or before the date on which the
Fronting Bank intends to honor such drawing, and, except as provided in this
subsection (e), the Borrower shall reimburse the Fronting Bank, in immediately
available funds, on the same day on which such drawing is honored in an amount
equal to the amount of such drawing. Notwithstanding anything contained herein
to the contrary, however, unless the Borrower shall have notified the
Administrative Agent and the Fronting Bank prior to 2:00 p.m. (New York time) on
the Domestic Business Day immediately prior to the date of such drawing that the
Borrower intends to reimburse the Fronting Bank for the amount of such drawing
with funds other than the proceeds of the Loans, the Borrower shall be deemed to
have timely given a Notice of Committed Borrowing pursuant to Section 2.2 to the
Administrative Agent, requesting a Borrowing of Base Rate Loans on the date on
which such drawing is honored and in an amount equal to the amount of such
drawing. Each Bank (other than the Fronting Bank) shall, in accordance with
Section 2.4(b), make available its share of such Borrowing to the Administrative
Agent, the proceeds of which shall be applied directly by the Administrative
Agent to reimburse the Fronting Bank for the amount of such draw. In the event
that any such Bank fails to make available to the Fronting Bank the amount of
such Bank's participation on the date of a drawing, the Fronting Bank shall be
entitled to recover such amount on demand from such Bank together with interest
at the Federal Funds Rate commencing on the date such drawing is honored.
53
(f) If, at the time a beneficiary under any Letter of Credit requests
a drawing thereunder, an Event of Default as described in Section 6.1(f) or
Section 6.1(g) shall have occurred and is continuing, then on the date on which
the Fronting Bank shall have honored such drawing, the Borrower shall have an
unreimbursed obligation (the "Unreimbursed Obligation") to the Fronting Bank in
-----------------------
an amount equal to the amount of such drawing, which amount shall bear interest
at the annual rate of the sum of the Base Rate plus four percent (4%). Each Bank
shall purchase an undivided participating interest in the Unreimbursed
Obligation in an amount equal to its pro rata share of the Commitments, and upon
receipt thereof the Fronting Bank shall deliver to such Bank an Unreimbursed
Obligation participation certificate dated the date of the Fronting Bank's
receipt of such funds and in the amount of such Bank's pro rata share.
(g) If, after the date hereof, any change in any law or regulation or
in the interpretation thereof by any court or administrative or governmental
authority charged with the administration thereof shall either (i) impose,
modify or deem applicable any reserve, special deposit or similar requirement
against letters of credit issued by, or assets held by, or deposits in or for
the account of, or participations in any letter of credit, upon any Bank
(including the Fronting Bank) or (ii) impose on any Bank any other condition
regarding this Agreement or such Bank (including the Fronting Bank) as it
pertains to the Letters of Credit or any participation therein and the result of
any event referred to in the preceding clause (i) or (ii) shall be to increase,
by an amount deemed by the Fronting Bank or such Bank to be material, the cost
to the Fronting Bank or any Bank of issuing or maintaining any Letter of Credit
or participating therein then the Borrower shall pay to the Fronting Bank or
such Bank, within 15 days after written demand by such Bank (with a copy to the
Administrative Agent), which demand shall be accompanied by a certificate
showing, in reasonable detail, the calculation of such amount or amounts, such
additional amounts as shall be required to compensate the Fronting Bank or such
Bank for such increased costs or reduction in amounts received or receivable
hereunder.
(h) The Borrower hereby agrees to protect, indemnify, pay and save the
Fronting Bank harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys' fees and disbursements) which the Fronting Bank may incur or be
subject to as a result of (i) the issuance of the Letters of Credit, other than
as a result of the gross negligence or willful misconduct of the Fronting Bank
or (ii) the failure of the Fronting Bank to honor a drawing under any Letter of
Credit as a result of any act or omission, whether rightful or
54
wrongful, of any present or future de jure or de facto government or
-- ---- -- -----
Governmental Authority (collectively, "Governmental Acts"), other than as a
-----------------
result of the gross negligence or willful misconduct of the Fronting Bank. As
between the Borrower and the Fronting Bank, the Borrower assumes all risks of
the acts and omissions of, or misuses of, the Letters of Credit issued by the
Fronting Bank, by the beneficiaries of such Letters of Credit. In furtherance
and not in limitation of the foregoing, the Fronting Bank shall not be
responsible (i) for the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in connection with the
application for and issuance of such Letters of Credit, even if it should in
fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) for the validity or insufficiency of any instrument
transferring or assigning or purporting to transfer or assign any such Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason; (iii) for
failure of the beneficiary of any such Letter of Credit to comply fully with
conditions required in order to draw upon such Letter of Credit; (iv) for
errors, omissions, interruptions or delays in transmission or delivery of any
message, by mail, cable, telegraph, telex, facsimile transmission, or otherwise;
(v) for errors in interpretation of any technical terms; (vi) for any loss or
delay in the transmission or otherwise of any documents required in order to
make a drawing under any such Letter of Credit or of the proceeds thereof; (vii)
for the misapplication by the beneficiary of any such Letter of Credit of the
proceeds of such Letter of Credit; and (viii) for any consequence arising from
causes beyond the control of the Fronting Bank, including any Government Acts,
in each case other than as a result of the gross negligence or willful
misconduct of the Fronting Bank. None of the above shall affect, impair or
prevent the vesting of the Fronting Bank's rights and powers hereunder. In
furtherance and extension and not in limitation of the specific provisions
hereinabove set forth, any action taken or omitted by the Fronting Bank under or
in connection with the Letters of Credit issued by it or the related
certificates, if taken or omitted in good faith, shall not put the Fronting Bank
under any resulting liability to the Borrower.
(i) If the Fronting Bank or the Administrative Agent is required at
any time, pursuant to any bankruptcy, insolvency, liquidation or reorganization
law or otherwise, to return to the Borrower any reimbursement by the Borrower of
any drawing under any Letter of Credit, each Bank shall pay to the Fronting Bank
or the Administrative Agent, as the case may be, its share of such payment, but
without interest thereon unless the Fronting Bank or the Administrative Agent is
required to pay interest on such amounts to the person recovering such payment,
in which case with interest
55
thereon, computed at the same rate, and on the same basis, as the interest that
the Fronting Bank or the Administrative Agent is required to pay.
Section II.17. Letter of Credit Usage Absolute. The obligations of the
-------------------------------
Borrower under this Agreement in respect of any Letter of Credit shall be
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement (as the same may be amended from time to time) and any
Letter of Credit Documents (as hereinafter defined) under all circumstances,
including, without limitation, to the extent permitted by law, the following
circumstances:
(a) any lack of validity or enforceability of any Letter of Credit or
any other agreement or instrument relating thereto (collectively, the "Letter of
---------
Credit Documents") or any Loan Document;
- ----------------
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the obligations of the Borrower in respect of the
Letters of Credit or any other amendment or waiver of or any consent by the
Borrower to departure from all or any of the Letter of Credit Documents or any
Loan Document; provided, that the Fronting Bank shall not consent to any such
--------
change or amendment unless previously consented to in writing by the Borrower;
(c) any exchange, release or non-perfection of any collateral, or any
release or amendment or waiver of or consent to departure from any guaranty, for
all or any of the obligations of the Borrower in respect of the Letters of
Credit;
(d) the existence of any claim, set-off, defense or other right that
the Borrower may have at any time against any beneficiary or any transferee of a
Letter of Credit (or any Persons for whom any such beneficiary or any such
transferee may be acting), the Administrative Agent, the Fronting Bank or any
Bank (other than a defense based on the gross negligence or willful misconduct
of the Administrative Agent, the Fronting Bank or such Bank) or any other
Person, whether in connection with the Loan Documents, the transactions
contemplated hereby or by the Letters of Credit Documents or any unrelated
transaction;
(e) any draft or any other document presented under or in connection
with any Letter of Credit or other Loan Document proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate
56
in any respect; provided, that payment by the Fronting Bank under such Letter of
--------
Credit against presentation of such draft or document shall not have constituted
gross negligence or willful misconduct of the Fronting Bank;
(f) payment by the Fronting Bank against presentation of a draft or
certificate that does not comply with the terms of the Letter of Credit;
provided, that such payment shall not have constituted gross negligence or
- --------
willful misconduct of the Fronting Bank; and
(g) any other circumstance or happening whatsoever other than the
payment in full of all obligations hereunder in respect of any Letter of Credit
or any agreement or instrument relating to any Letter of Credit, whether or not
similar to any of the foregoing, that might otherwise constitute a defense
available to, or a discharge of, the Borrower; provided, that such other
--------
circumstance or happening shall not have been the result of gross negligence or
willful misconduct of the Fronting Bank.
ARTICLE III
CONDITIONS
Section III.1. Closing. The closing hereunder shall occur on the date
-------
(the "Closing Date") when each of the following conditions is satisfied (or
------------
waived by the Administrative Agent and the Required Banks, such waiver to be
evidenced by the continuation or funding after the date hereof of Loans and
notice of such waiver to be given to the Banks by the Administrative Agent),
each document to be dated the Closing Date unless otherwise indicated:
(a) the Borrower shall have executed and delivered to the
Administrative Agent a Note for the account of each Bank dated on or before the
Closing Date complying with the provisions of Section 2.5;
(b) the Borrower shall have executed and delivered to the
Administrative Agent a duly executed original of this Agreement;
(c) the General Partner shall have executed and delivered to the
Administrative Agent a duly executed original of the Guaranty;
57
(d) the Administrative Agent shall have received an opinion of Latham
& Watkins, counsel for the Borrower and the General Partner, acceptable to the
Administrative Agent, the Banks and their counsel;
(e) the Administrative Agent shall have received all documents the
Administrative Agent may reasonably request relating to the existence of the
Borrower, the General Partner, the authority for and the validity of this
Agreement and the other Loan Documents, and any other matters relevant hereto,
all in form and substance reasonably satisfactory to the Administrative Agent.
Such documentation shall include, without limitation, the articles of
incorporation and by-laws or the partnership agreement and limited partnership
certificate, as applicable, of the Borrower and the General Partner, as amended,
modified or supplemented to the Closing Date, each certified to be true, correct
and complete by a senior officer of the Borrower or the General Partner, as the
case may be, as of the Closing Date, together with a good standing certificate
from the Secretary of State (or the equivalent thereof) of the State of Delaware
with respect to the Borrower and of the State of Maryland with respect to the
General Partner, and a good standing certificate from the Secretary of State (or
the equivalent thereof) of each other State in which the Borrower and the
General Partner is required to be qualified to transact business, each to be
dated not more than forty-five (45) days prior to the Closing Date;
(f) the Administrative Agent shall have received all certificates,
agreements and other documents and papers referred to in this Section 3.1 and
Section 3.2, unless otherwise specified, in sufficient counterparts,
satisfactory in form and substance to the Administrative Agent in its sole
discretion;
(g) the Borrower and the General Partner shall have taken all actions
required to authorize the execution and delivery of this Agreement and the other
Loan Documents and the performance thereof by the Borrower and the General
Partner;
(h) the Administrative Agent and the Banks shall have received an
unaudited consolidated balance sheet and income statement of the Borrower for
the fiscal quarter ended September 30, 2001;
58
(i) the Administrative Agent shall be satisfied that neither the
Borrower nor the General Partner is subject to any present or contingent
environmental liability which could reasonably be expected to have a Material
Adverse Effect;
(j) the Administrative Agent shall have received wire transfer
instructions in connection with the Loans to be made on the Closing Date;
(k) the Administrative Agent shall have received, for its and any
other Bank's account, all fees due and payable pursuant to Section 2.8 hereof on
or before the Closing Date, and the reasonable fees and expenses accrued through
the Closing Date of Skadden, Arps, Slate, Meagher & Flom LLP;
(l) the Administrative Agent shall have received copies of all
consents, licenses and approvals, if any, required in connection with the
execution, delivery and performance by the Borrower, and the validity and
enforceability against the Borrower, of the Loan Documents, or in connection
with any of the transactions contemplated thereby to occur on or prior to the
Closing Date, and such consents, licenses and approvals shall be in full force
and effect;
(m) the representations and warranties of the Borrower contained in
this Agreement shall be true and correct in all material respects on and as of
the Closing Date both before and after giving effect to the making of any Loans;
(n) receipt by the Administrative Agent and the Banks of a certificate
of the chief financial officer or the chief accounting officer of the Borrower
certifying that the Borrower is in compliance with all covenants of the Borrower
contained in this Agreement, including, without limitation, the requirements of
Section 5.8, as of the Closing Date; and
(o) the General Partner shall intend to continue to qualify as a real
estate investment trust under the Internal Revenue Code.
The Administrative Agent shall promptly notify the Borrower and the Banks of the
Closing Date, and such notice shall be conclusive and binding on all parties
hereto.
Section III.2. Borrowings. The obligation of any Bank to make a Loan
----------
on the occasion of any Borrowing or to participate in any Letter of Credit
issued by the
59
Fronting Bank and the obligation of the Fronting Bank to issue a Letter of
Credit on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:
(a) the Closing Date shall have occurred on or prior to March 15,
2002;
(b) receipt by the Administrative Agent of a Notice of Borrowing as
required by Section 2.2 or 2.3;
(c) immediately after such Borrowing, the Outstanding Balance will not
exceed the aggregate amount of the Commitments and with respect to each Bank,
such Bank's pro rata portion of the Committed Loans and Letter of Credit Usage
--- ----
will not exceed such Bank's Commitment;
(d) immediately before and after such Borrowing, no Default or Event
of Default shall have occurred and be continuing both before and after giving
effect to the making of such Loans;
(e) the representations and warranties of the Borrower contained in
this Agreement (other than representations and warranties which speak as of a
specific date) shall be true and correct in all material respects on and as of
the date of such Borrowing both before and after giving effect to the making of
such Loans;
(f) no law or regulation shall have been adopted, no order, judgment
or decree of any governmental authority shall have been issued, and no
litigation shall be pending or threatened, which does or, with respect to any
threatened litigation, seeks to enjoin, prohibit or restrain, the making or
repayment of the Loans, the issuance of any Letter of Credit or any
participations therein or the consummation of the transactions contemplated
hereby; and
(g) no event, act or condition shall have occurred after the Closing
Date which, in the reasonable judgment of the Administrative Agent or the
Required Banks, as the case may be, has had or is likely to have a Material
Adverse Effect.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the facts specified in clauses
(c) through (g) of this Section (except that with respect to clause (f), such
representation and
60
warranty shall be deemed to be limited to laws, regulations, orders, judgments,
decrees and litigation affecting the Borrower and not solely the Banks).
Section III.3. New Acquisitions and Additional Real Property Assets.
----------------------------------------------------
(a) Any New Acquisition or Real Property Asset desired by the Borrower
to be included as a Unencumbered Asset Pool Property after the date hereof, (y)
prior to the date on which Borrower has received an Investment Grade Rating from
either S&P or Moody's, will require the approval of the Administrative Agent and
the Required Banks, and (z) after such date will require the approval of the
Administrative Agent. The Borrower shall submit to the Administrative Agent the
materials set forth below (the "Due Diligence Package") relating to each New
---------------------
Acquisition or Real Property Asset that the Borrower desires to be added to the
Unencumbered Asset Pool Properties. The Due Diligence Package shall include (i)
a description of the Real Property Asset, (ii) two years of historical cash flow
operating statements, if available, (iii) five years of cash flow projections
(including capital expenditures), (iv) the credit history of each existing
tenant which occupies more than 15% of such Real Property Asset, (v) a map and
site plan, (vi) copies of all lease agreements and abstracts thereof with each
existing tenant which occupies more than 15% of such Real Property Asset, (vii)
a satisfactory environmental report indicating that (A) the Real Property Asset
complies with all Environmental Laws in all material respects, (B) is free of
all Material of Environmental Concern in all material respects and (C) is not
subject to any Environmental Claim, (viii) an engineer's inspection report
satisfactory to the Administrative Agent (provided, however, the Administrative
Agent shall not deem an engineer's inspection report satisfactory unless the
Required Banks shall find such engineer's inspection report satisfactory), (ix)
a title report and an existing survey of the property dated not more than twelve
(12) months prior to such submission, (x) tenant delinquency reports, if
available, (xi) a rent roll certified to be true, correct and complete by an
authorized officer of Borrower, (xii) a final investment memorandum prepared by
the Borrower in connection with the Real Property Asset, and (xiii) a statement
with respect to the purchase price of such Real Property Asset or, if such Real
Property Asset was purchased as part of a portfolio and there was no allocation
of purchase price, of the purchase price of the portfolio of Real Property
Assets of which it formed a part. The Borrower shall permit the Administrative
Agent at all reasonable times and upon reasonable prior notice to make an
inspection of such New Acquisition or Real Property Asset.
61
(b) The Borrower shall distribute a copy of the items listed in
clauses (i), (ii), (iii), (v) and (xii) of the Section 3.3(a) by overnight mail
to each of the Banks for their review and approval (the "Bank Due Diligence
------------------
Package"). In the event that a Bank desires additional materials which are
- -------
included in the Due Diligence Package delivered to the Administrative Agent,
such Bank(s) shall notify the Borrower within two (2) Business Days of receipt
of the Bank Due Diligence Package and the Borrower shall deliver such requested
materials to the requesting Bank within one (1) Business Day of request
therefor. To the extent approval is required pursuant to Section 3.3(a) hereof,
failure to respond to the Administrative Agent in writing by any Bank within ten
(10) Domestic Business Days after receipt of the Bank Due Diligence Package
shall be deemed to be an approval by such Bank of such New Acquisition or Real
Property Asset for inclusion as an Unencumbered Asset Pool Property.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent and each of the other
Banks which may become a party to this Agreement to make the Loans, the Borrower
makes the following representations and warranties as of the date hereof. Such
representations and warranties shall survive the effectiveness of this
Agreement, the execution and delivery of the other Loan Documents and the making
of the Loans.
Section IV.1. Existence and Power. The Borrower is duly organized,
-------------------
validly existing and in good standing as a limited partnership under the laws of
the State of Delaware and has all powers and all material governmental licenses,
authorizations, consents and approvals required to own its property and assets
and carry on its business as now conducted or as it presently proposes to
conduct and has been duly qualified and is in good standing in every
jurisdiction in which the failure to be so qualified and/or in good standing is
likely to have a Material Adverse Effect.
Section IV.2. Power and Authority. The Borrower has the organizational
-------------------
power and authority to execute, deliver and carry out the terms and provisions
of each of the Loan Documents to which it is a party and has taken all necessary
action to authorize the execution and delivery on behalf of the Borrower and the
performance by the Borrower of such Loan Documents. The Borrower has duly
executed and delivered each
62
Loan Document to which it is a party, and each such Loan Document constitutes
the legal, valid and binding obligation of the Borrower, enforceable in
accordance with its terms, except as enforceability may be limited by applicable
insolvency, bankruptcy or other laws affecting creditors rights generally, or
general principles of equity, whether such enforceability is considered in a
proceeding in equity or at law.
Section IV.3. No Violation. Neither the execution, delivery or
------------
performance by or on behalf of the Borrower of the Loan Documents, nor
compliance by the Borrower with the terms and provisions thereof nor the
consummation of the transactions contemplated by the Loan Documents, (i) will
contravene any applicable provision of any law, statute, rule, regulation,
order, writ, injunction or decree of any court or governmental instrumentality
applicable to Borrower or (ii) will conflict with or result in any breach of,
any of the terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien upon any of the property or assets of the Borrower
pursuant to the terms of any material indenture, mortgage, deed of trust, or
other agreement or other instrument to which the Borrower (or of any partnership
of which the Borrower is a partner) is a party or by which it or any of its
property or assets is bound or to which it is subject or (iii) will conflict
with or result in a breach of any organizational document of any Subsidiary, the
certificate of limited partnership, partnership agreement or other
organizational document of Borrower, or the General Partner's articles of
incorporation or by-laws.
Section IV.4. Financial Information.
---------------------
(a) The unaudited consolidated balance sheets of the Borrower and the
General Partner as of December 31, 2001, when delivered to Administrative Agent
and to the Banks shall fairly present, in conformity with GAAP, the consolidated
financial position of the Borrower and the General Partner as of such date and
their consolidated results of operations for such fiscal year.
(b) Since December 31, 2001, (i) there has been no material adverse
change in the business, financial position or results of operations of the
Borrower or the General Partner and (ii) except as previously disclosed to the
Administrative Agent and to the Banks, neither the Borrower nor the General
Partner has incurred any material indebtedness or guaranty.
63
Section IV.5. Litigation.
----------
(a) There is no action, suit or proceeding pending against, or to the
knowledge of the Borrower, threatened against or affecting, (i) the Borrower,
the General Partner or any of their Subsidiaries, (ii) the Loan Documents or any
of the transactions contemplated by the Loan Documents or (iii) any of their
assets, in any case before any court or arbitrator or any governmental body,
agency or official which could reasonably be expected to have a Material Adverse
Effect or which in any manner draws into question the validity of this Agreement
or the other Loan Documents.
(b) There are no final nonappealable judgments or decrees in an
aggregate amount of One Million Dollars ($1,000,000) or more entered by a court
or courts of competent jurisdiction against the Borrower or the General Partner
(other than any judgment as to which, and only to the extent, a reputable
insurance company has acknowledged coverage of such claim in writing).
Section IV.6. Compliance with ERISA.
---------------------
(a) Except as previously disclosed to the Administrative Agent in
writing as of the Closing Date, each member of the ERISA Group has fulfilled its
obligations under the minimum funding standards of ERISA and the Internal
Revenue Code with respect to each Plan and is in compliance in all material
respects with the presently applicable provisions of ERISA and the Internal
Revenue Code with respect to each Plan. No member of the ERISA Group has (i)
sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement,
which has resulted or could result in the imposition of a Lien or the posting of
a bond or other security under ERISA or the Internal Revenue Code or (iii)
incurred any liability under Title IV of ERISA other than a liability to the
PBGC for premiums under Section 4007 of ERISA.
(b) Except for each "employee benefit plan" (as such term is defined
in Section 3(3) of ERISA) that is maintained, or contributed to, by one or more
members of the ERISA Group, no member of the ERISA Group is a "party in
interest" (as such term is defined in Section 3(14) of ERISA or a "disqualified
person" (as such term is defined in Section 4975(e)(2) of the Code) with respect
to any funded employee benefit
64
plan and none of the assets of any such plans have been invested in a manner
that would cause the transactions contemplated by the Loan Documents to
constitute a nonexempt prohibited transaction (as such term is defined in
Section 4975 of the Code or Section 406 of ERISA).
Section IV.7. Environmental Compliance. To the best of
------------------------
Borrower's knowledge, except as set forth in the Phase I environmental report(s)
delivered to and accepted by the Administrative Agent with respect to each of
the Unencumbered Asset Pool Properties (as supplemented or amended, the
"Environmental Reports"), (i) there are in effect all Environmental Approvals
---------------------
which are required to be obtained under all Environmental Laws with respect to
the Property, except for such Environmental Approvals the absence of which would
not have a Material Adverse Effect, (ii) the Borrower is in compliance in all
material respects with the terms and conditions of all such Environmental
Approvals, and is also in compliance in all material respects with all other
Environmental Laws or any plan, order, decree, judgment, injunction, notice or
demand letter issued, entered or approved thereunder, except to the extent
failure to comply would not have a Material Adverse Effect.
Except as set forth in the Environmental Reports or otherwise
disclosed in writing to the Administrative Agent as of the Closing Date, to
Borrower's actual knowledge:
(i) There are no Environmental Claims or
investigations pending or threatened by any Governmental Authority with
respect to any alleged failure by the Borrower to have any
Environmental Approval required in connection with the conduct of the
business of the Borrower on any of the Unencumbered Asset Pool
Properties, or with respect to any generation, treatment, storage,
recycling, transportation, Release or disposal of any Material of
Environmental Concern generated by the Borrower or any lessee on any of
the Unencumbered Asset Pool Properties;
(ii) No Material of Environmental Concern has been
Released at the Property to an extent that it may reasonably be
expected to have a Material Adverse Effect;
65
(iii) No PCB (in amounts or concentrations which
exceed those set by applicable Environmental Laws) is present at any of
the Unencumbered Asset Pool Properties;
(iv) No friable asbestos is present at any of the
Unencumbered Asset Pool Properties;
(v) There are no underground storage tanks for
Material of Environmental Concern, active or abandoned, at any of the
Unencumbered Asset Pool Properties;
(vi) No Environmental Claims have been filed with a
Governmental Authority with respect to any of the Unencumbered Asset
Pool Properties, and none of the Unencumbered Asset Pool Properties is
listed or proposed for listing on the National Priority List
promulgated pursuant to CERCLA, on CERCLIS or on any similar state list
of sites requiring investigation or clean-up;
(vii) There are no Liens arising under or pursuant to
any Environmental Laws on any of the Unencumbered Asset Pool
Properties, and no government actions have been taken or are in process
which could subject any of the Unencumbered Asset Pool Properties to
such Liens; and
(viii) There have been no environmental
investigations, studies, audits, tests, reviews or other analyses
conducted by, or which are in the possession of, the Borrower in
relation to any of the Unencumbered Asset Pool Properties which have
not been made available to the Administrative Agent.
Section IV.8. Taxes. The initial tax year of the Borrower for
-----
federal income tax purposes was 1996. The federal income tax returns of the
Borrower and its Consolidated Subsidiaries for the fiscal year ended December
31, 1996 have been filed. The Borrower and its Subsidiaries have filed all
United States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by the Borrower or any
Subsidiary except those being contested in good faith. The charges, accruals and
reserves on the books of the Borrower and its Subsidiaries in respect of taxes
or other governmental charges are, in the opinion of the Borrower, adequate.
66
Section IV.9. Full Disclosure. All information heretofore
---------------
furnished by the Borrower to the Administrative Agent or any Bank for purposes
of or in connection with this Agreement or any transaction contemplated hereby
is true and accurate in all material respects on the date as of which such
information is stated or certified. The Borrower has disclosed to the Banks in
writing any and all facts known to the Borrower which materially and adversely
affect or are likely to materially and adversely affect (to the extent the
Borrower can now reasonably foresee), the business, operations or financial
condition of the Borrower considered as one enterprise or the ability of the
Borrower to perform its obligations under this Agreement or the other Loan
Documents.
Section IV.10. Solvency. On the Closing Date and after giving
--------
effect to the transactions contemplated by the Loan Documents occurring on the
Closing Date, the Borrower is Solvent.
Section IV.11. Use of Proceeds; Margin Regulations. All
-----------------------------------
proceeds of the Loans will be used by the Borrower only in accordance with the
provisions hereof. No part of the proceeds of any Loan will be used by the
Borrower to purchase or carry any Margin Stock or to extend credit to others for
the purpose of purchasing or carrying any Margin Stock. Neither the making of
any Loan nor the use of the proceeds thereof will violate or be inconsistent
with the provisions of Regulations T, U or X of the Federal Reserve Board.
Section IV.12. Governmental Approvals. No order, consent,
----------------------
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required to authorize, or is required
in connection with the execution, delivery and performance of any Loan Document
or the consummation of any of the transactions contemplated thereby other than
those that have already been duly made or obtained and remain in full force and
effect.
Section IV.13. Investment Company Act; Public Utility Holding
----------------------------------------------
Company Act. The Borrower is not (x) an "investment company" or a company
- ----------- ------------------
"controlled" by an "investment company", within the meaning of the Investment
---------- ------------------
Company Act of 1940, as amended, (y) a "holding company" or a "subsidiary
--------------- ----------
company" of a "holding company" or an "affiliate" of either a "holding company"
- ------- --------- ---------------
or a "subsidiary company" within the meaning of the Public Utility Holding
------------------
Company Act of 1935, as
67
amended, or (z) subject to any other federal or state law or regulation which
purports to restrict or regulate its ability to borrow money.
Section IV.14. Closing Date Transactions. On the Closing Date
-------------------------
and immediately prior to or concurrently with the making of the Loans, the
transactions (other than the making of the Loans) intended to be consummated on
the Closing Date will have been consummated in accordance with all applicable
laws. On or prior to the Closing Date, all consents and approvals of, and
filings and registrations with, and all other actions by, any Person required in
order to make or consummate such transactions have been obtained, given, filed
or taken and are in full force and effect.
Section IV.15. Representations and Warranties in Loan
--------------------------------------
Documents. All representations and warranties made by the Borrower in the Loan
- ---------
Documents are true and correct in all material respects.
Section IV.16. Patents, Trademarks, etc. The Borrower has
------------------------
obtained and holds in full force and effect all patents, trademarks, service
marks, trade names, copyrights and other such rights, free from burdensome
restrictions, which are necessary for the operation of its business as presently
conducted, the impairment of which is likely to have a Material Adverse Effect.
To the Borrower's knowledge, no material product, process, method, substance,
part or other material presently sold by or employed by the Borrower in
connection with such business infringes any patent, trademark, service mark,
trade name, copyright, license or other such right owned by any other Person.
There is not pending or, to the Borrower's knowledge, threatened any claim or
litigation against or affecting the Borrower contesting its right to sell or use
any such product, process, method, substance, part or other material.
Section IV.17. No Default. No Default or Event of Default
----------
exists under or with respect to any Loan Document. The Borrower is not in
default in any material respect beyond any applicable grace period under or with
respect to any other material agreement, instrument or undertaking to which it
is a party or by which it or any of its property is bound in any respect, the
existence of which default is likely (to the extent that the Borrower can now
reasonably foresee) to result in a Material Adverse Effect.
Section IV.18. Licenses, etc. The Borrower has obtained and
-------------
holds in full force and effect, all franchises, licenses, permits, certificates,
authorizations, qualifications, accreditations, easements, rights of way and
other consents and approvals
68
which are necessary for the operation of its businesses as presently conducted,
the absence of which is likely (to the extent that the Borrower can now
reasonably foresee) to have a Material Adverse Effect.
Section IV.19. Compliance With Law. The Borrower is in
-------------------
compliance with all laws, rules, regulations, orders, judgments, writs and
decrees, including, without limitation, all building and zoning ordinances and
codes, the failure to comply with which is likely (to the extent that the
Borrower can now reasonably foresee) to have a Material Adverse Effect.
Section IV.20. No Burdensome Restrictions. The Borrower is not
--------------------------
a party to any agreement or instrument or subject to any other obligation or any
charter or corporate or partnership restriction, as the case may be, which,
individually or in the aggregate, is likely (to the extent that the Borrower can
now reasonably foresee) to have a Material Adverse Effect.
Section IV.21. Brokers' Fees. The Borrower has not dealt with
-------------
any broker or finder with respect to the transactions contemplated by the Loan
Documents (except with respect to the acquisition or disposition of Real
Property Assets) or otherwise in connection with this Agreement other than J.P.
Morgan Securities Inc., the fees and expenses of which shall be paid by Borrower
pursuant to the Fee Letter, and the Borrower has not done any acts, had any
negotiations or conversation, or made any agreements or promises which will in
any way create or give rise to any obligation or liability for the payment by
the Borrower of any brokerage fee, charge, commission or other compensation to
any party with respect to the transactions contemplated by the Loan Documents
(except with respect to the acquisition or disposition of Real Property Assets),
other than the fees payable hereunder.
Section IV.22. Labor Matters. Except as set forth on Schedule
------------- --------
4.22 attached hereto and made a part hereof, there are no collective bargaining
- ----
agreements or Multiemployer Plans covering the employees of the Borrower and the
Borrower has not suffered any strikes, walkouts, work stoppages or other
material labor difficulty within the last five (5) years.
Section IV.23. Organizational Documents. The documents
------------------------
delivered pursuant to Section 3.1(e) constitute, as of the Closing Date, all of
the organizational documents (together with all amendments and modifications
thereof) of the Borrower.
69
The Borrower represents that it has delivered to the Administrative Agent true,
correct and complete copies of each of the documents set forth in this Section
4.23.
Section IV.24. Principal Offices. The principal office, chief
-----------------
executive office and principal place of business of the Borrower is 2250 East
Imperial Highway, Suite 1200, El Segundo, California 90245.
Section IV.25. REIT Status. For the fiscal year ended December 31,
-----------
2001, the General Partner will qualify, and the General Partner intends to
continue to qualify as a real estate investment trust under the Code.
Section IV.26. Ownership of Property. The Borrower owns fee simple
---------------------
title to or a ground leasehold interest in each of the Unencumbered Asset Pool
Properties.
Section IV.27. Insurance. The Borrower currently maintains
---------
insurance at 100% replacement cost insurance coverage in respect of each of the
Real Property Assets, as well as comprehensive general liability insurance
(including "builders' risk") against claims for personal, and bodily injury
and/or death, to one or more persons, or property damage, as well as workers'
compensation insurance, in each case with respect to the Real Property Assets
with insurers having an A.M. Best policyholders' rating of not less than A-VIII
in amounts that prudent owner of assets such as the Real Property Assets would
maintain.
ARTICLE V
AFFIRMATIVE AND NEGATIVE COVENANTS
The Borrower covenants and agrees that, so long as any Bank has
any Commitment hereunder or any Obligations remain unpaid:
Section V.1. Information. The Borrower will deliver to the
-----------
Administrative Agent and to each of the Banks:
(a) as soon as available and in any event within 105 days after
the end of each fiscal year of the Borrower, an audited consolidated balance
sheet of the
70
Borrower as of the end of such fiscal year and the related consolidated
statements of cash flow and operations for such fiscal year, setting forth in
each case in comparative form the figures for the previous fiscal year, audited
by Deloitte & Touche or other independent public accountants of similar
standing;
(b) as soon as available and in any event within sixty (60) days
after the end of each quarter of each fiscal year (other than the last quarter
in any fiscal year) of the Borrower, a statement of the Borrower, prepared in
accordance with GAAP, setting forth the operating income and operating expenses
of the Borrower, in sufficient detail so as to calculate Unencumbered Asset Pool
Net Operating Cash Flow of the Borrower for the immediately preceding quarter;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the chief
financial officer, controller, treasurer or vice president-corporate finance of
the Borrower (i) setting forth in reasonable detail the calculations required to
establish whether the Borrower was in compliance with the requirements of
Section 5.8 on the date of such financial statements;(ii) stating whether any
Default exists on the date of such certificate and, if any Default then exists,
setting forth the details thereof and the action which the Borrower is taking or
proposes to take with respect thereto; and (iii) certifying (x) that such
financial statements fairly present the financial condition and the results of
operations of the Borrower as of the dates and for the periods indicated, in
accordance with GAAP, subject, in the case of interim financial statements, to
normal year-end adjustments, and (y) that such officer has reviewed the terms of
the Loan Documents and has made, or caused to be made under his or her
supervision, a review in reasonable detail of the business and condition of the
Borrower during the period beginning on the date through which the last such
review was made pursuant to this Section 5.1(c) and ending on a date not more
than ten (10) Domestic Business Days prior to the date of such delivery and that
on the basis of such review of the Loan Documents and the business and condition
of the Borrower, to the best knowledge of such officer, no Default or Event of
Default under any other provision of Section 6.1 occurred or, if any such
Default or Event of Default has occurred, specifying the nature and extent
thereof and, if continuing, the action the Borrower proposes to take in respect
thereof;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of a firm of independent
public
71
accountants confirming the calculations set forth in the officer's certificate
delivered simultaneously therewith pursuant to clause (c) above;
(e) (i) within five (5) days after the president, chief financial
officer, treasurer, controller or other executive officer of the Borrower
obtains knowledge of any Default, if such Default is then continuing, a
certificate of the chief financial officer or the president of the Borrower
setting forth the details thereof and the action which the Borrower is taking or
proposes to take with respect thereto; (ii) promptly and in any event within ten
(10) days after the Borrower obtains knowledge thereof, notice of (x) any
litigation or governmental proceeding pending or threatened against the Borrower
which is likely to individually or in the aggregate, result in a Material
Adverse Effect, and (y) any other event, act or condition which is likely to
result in a Material Adverse Effect;
(f) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) with respect to any Plan which might constitute grounds
for a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any Multiemployer
Plan is in reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of an intent
to terminate, impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum funding standard under
Section 412 of the Internal Revenue Code, a copy of such application; (v) gives
notice of intent to terminate any Plan under Section 4041(c) of ERISA, a copy of
such notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such
notice; or (vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has resulted or could result
in the imposition of a Lien or the posting of a bond or other security, a
certificate of the chief financial officer or the chief accounting officer of
the Borrower setting forth details as to such occurrence and action, if any,
which the Borrower or applicable member of the ERISA Group is required or
proposes to take;
72
(g) promptly and in any event within five (5) Domestic Business
Days after the Borrower obtains actual knowledge of any of the following events,
a certificate of the Borrower executed by an officer of the Borrower specifying
the nature of such condition and the Borrower's, and if the Borrower has actual
knowledge thereof, the Environmental Affiliate's proposed initial response
thereto: (i) the receipt by the Borrower, or, if the Borrower has actual
knowledge thereof, any of the Environmental Affiliates, of any communication
(written or oral), whether from a governmental authority, citizens group,
employee or otherwise, that alleges that the Borrower, or, if the Borrower has
actual knowledge thereof, any of the Environmental Affiliates, is not in
compliance with applicable Environmental Laws, and such noncompliance is likely
to have a Material Adverse Effect, (ii) the Borrower shall obtain actual
knowledge that there exists any Environmental Claim which is likely to have a
Material Adverse Effect pending or threatened against the Borrower or any
Environmental Affiliate or (iii) the Borrower obtains actual knowledge of any
release, emission, discharge or disposal of any Material of Environmental
Concern that is likely to form the basis of any Environmental Claim against the
Borrower or any Environmental Affiliate;
(h) promptly and in any event within five (5) Domestic Business
Days after receipt of any material notices or correspondence from any company or
agent for any company providing insurance coverage to the Borrower relating to
any material loss or loss of the Borrower with respect to any of the
Unencumbered Asset Pool Properties, copies of such notices and correspondence;
and
(i) promptly upon the mailing thereof to the shareholders or
partners of the Borrower, copies of all financial statements, reports and proxy
statements so mailed;
(j) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their
equivalents) which the Borrower shall have filed with the Securities and
Exchange Commission;
(k) simultaneously with delivery of the information required by
Sections 5.1(a) and (b), a statement of Unencumbered Asset Pool Net Operating
Cash Flow with respect to each Mortgaged Property and a list of all Unencumbered
Asset Pool Properties; and
73
(l) from time to time such additional information regarding the
financial position or business of the Borrower as the Administrative Agent, at
the request of any Bank, may reasonably request.
Section V.2. Payment of Obligations. The Borrower will pay and
----------------------
discharge, at or before maturity, all its material obligations and liabilities
including, without limitation, any obligation pursuant to any agreement by which
it or any of its properties is bound and any tax liabilities, in any case, where
failure to do so will likely result in a Material Adverse Effect except (i) such
tax liabilities may be contested in good faith by appropriate proceedings, and
will maintain in accordance with GAAP, appropriate reserves for the accrual of
any of the same; or (ii) such obligation or liability as may be contested in
good faith by appropriate proceedings.
Section V.3. Maintenance of Property; Insurance.
----------------------------------
(a) The Borrower will keep each of the Unencumbered Asset Pool
Properties in good repair, working order and condition, subject to ordinary wear
and tear.
(b) The Borrower shall (a) maintain insurance as specified in
Section 4.27 hereof with insurers meeting the qualifications described therein,
which insurance shall in any event not provide for materially less coverage than
the insurance in effect on the Closing Date, and (b) furnish to each Bank from
time to time, upon written request, copies of the policies under which such
insurance is issued, certificates of insurance and such other information
relating to such insurance as such Bank may reasonably request. The Borrower
will deliver to the Banks (i) upon request of any Bank through the
Administrative Agent from time to time, full information as to the insurance
carried, (ii) within five (5) days of receipt of notice from any insurer, a copy
of any notice of cancellation or material change in coverage from that existing
on the date of this Agreement and (iii) forthwith, notice of any cancellation or
nonrenewal of coverage by the Borrower.
Section V.4. Conduct of Business. The Borrower's primary business
-------------------
will continue to be acquiring, owning, operating, managing, developing (to the
extent permitted in this Agreement), and leasing office and industrial
properties.
Section V.5. Compliance with Laws. (a) The Borrower will comply in
--------------------
all material respects with all applicable laws, ordinances, rules, regulations,
and
74
requirements of governmental authorities (including, without limitation,
Environmental Laws, all zoning and building codes and ERISA and the rules and
regulations thereunder) except where the necessity of compliance therewith is
contested in good faith by appropriate proceedings.
(b) In the ordinary course of its business and at such times as
Borrower reasonably deems appropriate, Borrower shall conduct periodic reviews
of the effect of Environmental Laws on its business, operations and properties,
in the course of which it shall use commercially reasonable efforts to identify
and evaluate applicable liabilities and costs (including, without limitation,
any capital or operating expenditures required as a matter of Environmental Law
for clean-up or closure of properties presently or previously owned, any capital
or operating expenditures required as a matter of Environmental Law to achieve
or maintain compliance with Environmental Law or as a condition of any license,
permit or contract to which Borrower is a party or a beneficiary, any related
constraints on operating activities, including, without limitation, any periodic
or permanent shutdown of any facility or reduction in the level of or change in
the nature of operations conducted thereat, any costs or liabilities in
connection with off-site disposal of wastes or Materials of Environmental
Concern, and any actual or potential liabilities to third parties, including,
without limitation, employees, and any related costs and expenses). Borrower
shall notify the Administrative Agent immediately if, on the basis of any such
review, such Borrower has reasonably concluded that such associated potential
liabilities and costs, including, without limitation, the costs of compliance
with Environmental Laws, could reasonably be expected to have a Material Adverse
Effect.
Section V.6. Inspection of Property, Books and Records. The
-----------------------------------------
Borrower will keep proper books of record and account in which full, true and
correct entries shall be made of all dealings and transactions in relation to
its business and activities; and will permit representatives of any Bank at such
Bank's expense to visit and inspect any of its properties to examine and make
abstracts from any of its books and records and to discuss its affairs, finances
and accounts with its officers and employees, all at such reasonable times, upon
reasonable notice, and as often as may reasonably be desired.
Section V.7. Existence.
---------
75
(a) The Borrower shall do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence
or its partnership existence, as applicable.
(b) The Borrower shall do or cause to be done all things
necessary to preserve and keep in full force and effect its patents, trademarks,
servicemarks, tradenames, copyrights, franchises, licenses, permits,
certificates, authorizations, qualifications, accreditations, easements, rights
of way and other rights, consents and approvals the nonexistence of which is
likely to have a Material Adverse Effect.
Section V.8. Financial Covenants.
-------------------
(a) Total Liabilities to Total Asset Value. As of the last day of
--------------------------------------
each calendar quarter, the Total Debt Ratio will not be greater than 55%.
(b) EBITDA Debt Service Coverage. As of the last day of each
----------------------------
calendar quarter, the ratio of (i) Annual EBITDA to (ii) Total Debt Service,
will not be less than 2.0:1.0.
(c) Fixed Charge Coverage. As of the last day of each calendar
---------------------
quarter, the ratio of (x) Annual EBITDA, less reserves for Capital Expenditures
of $.70 per square foot per annum for each Real Property Asset that is an office
property and $.40 per square foot per annum for each Real Property Asset that is
an industrial property to (y) the sum of (i) Total Debt Service, and (ii)
dividends or other payments payable by the General Partner with respect to any
preferred stock issued by the General Partner and distributions or other
payments payable by the Borrower with respect to any preferred partnership units
of the Borrower, will not be less than 1.5:1.0.
(d) Limitation on Secured Debt. Secured Debt of the Borrower, the
--------------------------
General Partner and their Consolidated Subsidiaries shall at no time exceed
forty percent (40%) of Total Asset Value.
(e) Unsecured Debt Ratio. As of each of (x) the last day of each
--------------------
calendar quarter, and (y) any Borrowing, the Unsecured Debt Ratio shall not be
less than 1.8:1.0.
76
(f) Unencumbered Asset Pool Debt Service Coverage. As of the last
---------------------------------------------
day of each calendar quarter and as of the date of any sale or secured financing
of any Unencumbered Asset Pool Property, the ratio of (i) Unencumbered Asset
Pool Net Operating Cash Flow to (ii) Pro-Forma Debt Service will not be less
than 1.8:1.0.
(g) Dividends. The Borrower will not, as determined on an
---------
aggregate annual basis, pay any partnership distributions in excess of the
greater of (i) 95% of its consolidated FFO for such year, and (ii) an amount
which results in distributions to the General Partner in an amount sufficient to
permit the General Partner to pay dividends to its shareholders which it
reasonably believes are necessary for it to (A) maintain its qualification as a
real estate investment trust for federal and state income tax purposes, and (B)
avoid the payment of federal or state income or excise tax. During the
continuance of an Event of Default under Section 6.1(a), the Borrower shall make
only those partnership distributions necessary to make distributions to the
General Partner to pay dividends to its shareholders which it reasonably
believes are necessary to maintain its status as a real estate investment trust
for federal and state income tax purposes.
(h) Minimum Consolidated Tangible Net Worth. The Consolidated
---------------------------------------
Tangible Net Worth will at no time be less than the sum of (i) $575,000,000 plus
(ii) 90% of all Net Offering Proceeds.
(i) Debt. Prior to the date on which the Borrower receives an
----
Investment Grade Rating from either S&P or Moody's, neither the Borrower nor the
General Partner shall, at any time, create, incur, assume, guaranty, suffer to
exist or otherwise become or remain directly or indirectly liable with respect
to any Debt other than Non-Recourse Debt. Notwithstanding the provisions of the
sentence immediately foregoing, the Borrower shall have the right to incur
Recourse Debt (A) up to an aggregate maximum of $5,000,000 which is either (i)
unsecured or (ii) incurred with respect to assets which are not Unencumbered
Asset Pool Properties and is subject to a purchase money security interest or
security interest under a conditional sale agreement, and (B) up to an aggregate
maximum of $50,000,000 which is secured by real property.
Section V.9. Restriction on Fundamental Changes; Operation and
-------------------------------------------------
Control. (a) The Borrower shall not enter into any merger or consolidation,
- -------
unless the Borrower is the surviving entity, or liquidate, wind-up or dissolve
(or suffer any liquidation or dissolution), discontinue its business or convey,
lease, sell, transfer or otherwise dispose of, in one transaction or series of
transactions, any substantial part of
77
its business or property, whether now or hereafter acquired, hold an interest in
any subsidiary which is not controlled by the Borrower or the General Partner or
enter into other business lines, without the prior written consent of the
Administrative Agent, which consent shall not be given unless the Required Banks
so consent.
(b) The Borrower shall not amend its articles of incorporation,
by-laws or agreement of limited partnership, as applicable, in any material
respect which is reasonably likely to have an adverse effect on the Banks,
without the Administrative Agent's consent, which shall not be unreasonably
withheld or delayed.
Section V.10. Changes in Business. The Borrower shall not enter
-------------------
into any business which is substantially different from that conducted by the
Borrower on the Closing Date after giving effect to the transactions
contemplated by the Loan Documents.
Section V.11. Sale of Unencumbered Asset Pool Properties.
------------------------------------------
Concurrent with the sale or transfer of any Unencumbered Asset Pool Property,
the Borrower shall (i) deliver written notice to the Administrative Agent, (ii)
deliver to the Administrative Agent a certificate from its chief financial
officer, chief accounting officer, vice president or other duly authorized
officer certifying that at the time of such sale or other disposal (based on
pro-forma calculations for the previous period assuming that such Unencumbered
Asset Pool Property was not a Unencumbered Asset Pool Property for the relevant
period) all of the covenants contained in Sections 5.8, 5.14, 5.16, 5.17 and
5.20 are and after giving effect to the transaction shall continue to be true
and accurate in all respects, and (iii) pay to the Administrative Agent an
amount equal to that required pursuant to Section 2.10(a). In the event that a
Separate Parcel that originally formed a part of a Unencumbered Asset Pool
Property is to be sold or transferred, the value of the remaining portion of the
Unencumbered Asset Pool Property will be determined by Administrative Agent at
the time of sale or transfer in its sole discretion.
Section V.12. Fiscal Year; Fiscal Quarter. The Borrower shall not
---------------------------
change its fiscal year or any of its fiscal quarters without the Administrative
Agent's prior written consent, which consent shall not be unreasonably withheld
or delayed.
Section V.13. Margin Stock. None of the proceeds of the Loan will
------------
be used, directly or indirectly, for the purpose, whether immediate, incidental
or ultimate, of buying or carrying any Margin Stock.
78
Section V.14. Development Activities. The Borrower shall not
----------------------
engage in any development activities except for development in connection with
the expansion and/or repositioning or restoration following a casualty or
condemnation of existing improvements on Real Property Assets. Notwithstanding
the foregoing, the Borrower may engage in all other development activities where
there is construction completion risk provided that in no event shall the
aggregate value (determined in accordance with the book value thereof, in
accordance with GAAP) of the Real Property Assets under such other type of
development exceed twenty percent (20%) of the Borrower's Total Asset Value.
Section V.15. Interest Rate Protection. On or before the date
------------------------
which is two (2) weeks after the date hereof, the Borrower and the General
Partner shall obtain, and shall thereafter during the Term maintain, Interest
Rate Hedges on a notional amount of the Debt under clause (A) of the definition
of Debt of the Borrower, the General Partner and their Subsidiaries which, when
added to the aggregate principal amount of the Debt under clause (A) of the
definition of Debt of the Borrower, the General Partner and their Subsidiaries
which bears interest at a fixed rate, equals or exceeds 50% of the aggregate
principal amount of all Debt under clause (A) of the definition of Debt of the
Borrower, the General Partner and their Subsidiaries. "Interest Rate Hedges"
--------------------
shall mean interest rate exchange, collar, cap, swap, adjustable strike cap,
adjustable strike corridor or similar agreements having terms, conditions and
tenors reasonably acceptable to the Administrative Agent entered into by the
Borrower, the General Partner and/or their Subsidiaries in order to provide
protection to, or minimize the impact upon, the Borrower, the General Partner
and/or their Subsidiaries of increasing floating rates of interest applicable to
Debt under clause (A) of the definition of Debt.
Section V.16. Joint Ventures. The value of the Borrower's and the
--------------
General Partner's interest in any joint venture, whether consolidated or
unconsolidated, shall at no time exceed 15% of Total Asset Value.
Section V.17. Investments in Unimproved Real Property. The
---------------------------------------
aggregate amount of the investments of the Borrower, the General Partner and
their Consolidated Subsidiaries in unimproved real property will at no time
exceed 7.5% of Total Asset Value.
Section V.18. Use of Proceeds. The Borrower shall use the proceeds
---------------
of the Loans solely to finance the acquisition of additional Unencumbered Asset
Pool
79
Properties or other Real Property Assets which are industrial or office
properties and for its general business purposes.
Section V.19. General Partner Status. The General Partner shall at
----------------------
all times (i) maintain its status as a self-directed and self-administered real
estate investment trust under the Internal Revenue Code, and (ii) remain a
publicly traded company listed on the New York Stock Exchange.
Section V.20. Certain Requirements for the Unencumbered Asset
-----------------------------------------------
Pool. (a) At all times, (i) the Real Property Assets in the Unencumbered Asset
- ----
Pool shall be on average during any consecutive twelve-month period (tested
quarterly) at least 85% leased to tenants and (ii) any Real Property Asset that
is a part of the Unencumbered Asset Pool less than 85% leased to tenants for
more than twelve months shall not account for more than ten percent (10%) of the
Unencumbered Asset Pool Properties Value.
(b) Any Subsidiary which owns any of the Real Property Assets in
the Unencumbered Asset Pool shall not at any time incur any Debt, nor shall the
Borrower pledge its interest in such Subsidiary nor shall the Borrower or such
Subsidiary enter into any negative pledge with respect thereto.
ARTICLE VI
DEFAULTS
Section VI.1. Events of Default. Each of the following shall
-----------------
constitute an event of default under this Agreement (an "Event of Default"):
----------------
(a) the Borrower shall fail to pay when due any principal of any
Loan, or the Borrower shall fail to pay when due any interest on any Loan;
provided, however, that the Borrower shall be entitled to a three (3) Domestic
- -------- -------
Business Day grace period with respect thereto but only as to two (2) payments
of interest during the Term, or the Borrower shall fail to pay within three (3)
Domestic Business Days after the same is due any fees or other amounts payable
hereunder;
80
(b) the Borrower shall fail to observe or perform any covenant
contained in Sections 5.8 to 5.20, inclusive, subject to any applicable grace
periods set forth therein;
(c) the Borrower shall fail to observe or perform any covenant
or agreement contained in this Agreement (other than those covered by clause (a)
or (b) above) for 30 days after written notice thereof has been given to the
Borrower by the Administrative Agent;
(d) any representation, warranty, certification or statement
made by the Borrower in this Agreement or in any certificate, financial
statement or other document delivered pursuant to this Agreement shall prove to
have been incorrect in any material respect when made (or deemed made);
(e) the Borrower or the General Partner shall default in the
payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) of any amount owing in respect of any
Recourse Debt or Debt guaranteed by the Borrower or the General Partner (other
than the Obligations) in an aggregate principal amount of more than $1,000,000
and such default shall continue beyond the giving of any required notice and the
expiration of any applicable grace period (as the same may be extended by the
applicable lender) and such default shall not be waived by the applicable lender
(which waiver shall serve to reinstate the applicable loan), or the Borrower or
the General Partner shall default in the performance or observance of any
obligation or condition with respect to any such Debt or any other event shall
occur or condition exist beyond the giving of any required notice and the
expiration of any applicable grace period (as the same may be extended by the
applicable lender), if in any such case as a result of such default, event or
condition, the lender thereof shall accelerate the maturity of any such Debt or
to permit (without any further requirement of notice or lapse of time) the
holder or holders thereof, or any trustee or agent for such holders, to
accelerate the maturity of any such Debt and such default shall not be waived by
the applicable lender (which waiver shall serve to reinstate the applicable
loan), or any such Debt shall become or be declared to be due and payable prior
to its stated maturity other than as a result of a regularly scheduled payment;
(f) the Borrower or the General Partner shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter
81
in effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property, or shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become due, or shall
take any corporate action to authorize any of the foregoing;
(g) an involuntary case or other proceeding shall be commenced
against the Borrower or the General Partner seeking liquidation, reorganization
or other relief with respect to it or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Borrower or the General Partner under the
federal bankruptcy laws as now or hereafter in effect;
(h) the Borrower shall default in its obligations under any Loan
Document other than this Agreement beyond any applicable notice and grace
periods;
(i) the General Partner shall default in its obligations under
the Guaranty beyond any applicable notice and grace periods;
(j) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $1,000,000 which it shall have become
liable to pay under Title IV of ERISA, or notice of intent to terminate a
Material Plan shall be filed under Title IV of ERISA by any member of the ERISA
Group, any plan administrator or any combination of the foregoing, or the PBGC
shall institute proceedings under Title IV of ERISA to terminate, to impose
liability (other than for premiums under Section 4007 of ERISA) in respect of,
or to cause a trustee to be appointed to administer any Material Plan, or a
condition shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any Material Plan must be terminated, or there shall
occur a complete or partial withdrawal from, or a default, within the meaning of
Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans
which could cause one or more members of the ERISA Group to incur a current
payment obligation in excess of $1,000,000;
82
(k) one or more final nonappealable judgments or decrees in an
aggregate amount of $10,000,000 as of such date shall be entered by a court or
courts of competent jurisdiction against the Borrower or the General Partner
(other than any judgment as to which, and only to the extent, a reputable
insurance company has acknowledged coverage of such claim in writing) and (i)
any such judgments or decrees shall not be stayed, discharged, paid, bonded or
vacated within thirty (30) days (or bonded, vacated or satisfied within thirty
(30) after any stay is lifted) or (ii) enforcement proceedings shall be
commenced by any creditor on any such judgments or decrees;
(l) (i) any Environmental Claim shall have been asserted against
the Borrower or any Environmental Affiliate, (ii) any release, emission,
discharge or disposal of any Material of Environmental Concern shall have
occurred, and such event is reasonably likely to form the basis of an
Environmental Claim against the Borrower or any Environmental Affiliate, or
(iii) the Borrower or the Environmental Affiliates shall have failed to obtain
any Environmental Approval necessary for the ownership, or operation of its
business, property or assets or any such Environmental Approval shall be
revoked, terminated, or otherwise cease to be in full force and effect, in the
case of clauses (i), (ii) or (iii) above, if the existence of such condition has
had or is reasonably likely to have a Material Adverse Effect;
(m) during any consecutive two year period commencing on or
after the date hereof, individuals who at the beginning of such period
constituted the Board of Directors of the General Partner of the Borrower
(together with any new directors whose election by the Board of Directors or
whose nomination for election by the General Partner stockholders was approved
by a vote of at least a majority of the members of the Board of Directors then
in the office who either were members of the Board of Directors at the beginning
of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the members of the
Board of Directors then in office;
(n) the General Partner shall cease at any time to qualify as a
real estate investment trust under the Internal Revenue Code; and
(o) at any time, for any reason, the Borrower or the General
Partner seeks to repudiate its obligations under any Loan Document.
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Section VI.2. Rights and Remedies. (a) Upon the occurrence of any
-------------------
Event of Default described in Sections 6.1(f) or (g), the unpaid principal
amount of, and any and all accrued interest on, the Loans and any and all
accrued fees and other Obligations hereunder shall automatically become
immediately due and payable, with all additional interest from time to time
accrued thereon and without presentation, demand, or protest or other
requirements of any kind (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and notice of acceleration), all of which are hereby expressly waived by the
Borrower; and upon the occurrence and during the continuance of any other Event
of Default, the Administrative Agent may exercise any of its rights and remedies
hereunder and by written notice to the Borrower, declare the Commitment of each
Bank to make Loans to be terminated whereupon the same shall forthwith
terminate, declare the unpaid principal amount of and any and all accrued and
unpaid interest on the Loans and any and all accrued fees and other Obligations
hereunder to be, and the same shall thereupon be, immediately due and payable
with all additional interest from time to time accrued thereon and without
presentation, demand, or protest or other requirements of any kind other than as
provided in the Loan Documents (including, without limitation, valuation and
appraisement, diligence, presentment, and notice of intent to demand or
accelerate), all of which are hereby expressly waived by the Borrower.
(b) Notwithstanding the foregoing, upon the occurrence and
during the continuance of any Event of Default other than any Event of Default
described in Sections 6.1(f) or (g), the Administrative Agent shall not exercise
any of its rights and remedies hereunder nor declare the unpaid principal amount
of and any and all accrued and unpaid interest on the Loans and any and all
accrued fees and other Obligations hereunder to be immediately due and payable,
until such time as the Administrative Agent shall have delivered a notice to the
Banks specifying the Event of Default which has occurred and whether
Administrative Agent recommends the acceleration of the Obligations due
hereunder or the exercise of other remedies hereunder. The Banks shall notify
the Administrative Agent if they approve or disapprove of the acceleration of
the Obligations due hereunder or the exercise of such other remedy recommended
by Administrative Agent within five (5) Domestic Business Days after receipt of
such notice. If any Bank shall not respond within such five (5) Domestic
Business Day period, then such Bank shall be deemed to have accepted
Administrative Agent's recommendation for acceleration of the Obligations due
hereunder or the exercise of such other remedy. Regardless of the Administrative
Agent's recommendation, if the Required Banks shall approve the acceleration of
the Obligations due hereunder or the exercise of
84
such other remedy, then Administrative Agent shall declare the Commitment of
each Bank to make Loans to be terminated whereupon the same shall forthwith
terminate and declare the unpaid principal amount of and any and all accrued and
unpaid interest on the Loans and any and all accrued fees and other Obligations
hereunder to be immediately due and payable or exercise such other remedy
approved by the Required Banks. If the Required Banks shall neither approve nor
disapprove the acceleration of the Obligations due hereunder or such other
remedy recommended by Administrative Agent, then Administrative Agent may
accelerate the Obligations due hereunder or exercise any of its rights and
remedies hereunder in its sole discretion. If the Required Banks shall
disapprove the acceleration of the Obligations due hereunder or the exercise of
such other remedy recommended by Administrative Agent, but approve of another
remedy, then to the extent permitted hereunder, Administrative Agent shall
exercise such remedy. In the event the Administrative Agent exercises any remedy
provided in any of the Loan Documents, the Administrative Agent shall act as a
collateral agent for the Banks.
(c) Notwithstanding the foregoing, if in Administrative
Agent's sole judgement, immediate action is required after an Event of Default
has occurred to prevent loss to the Banks, the Administrative Agent may exercise
any of its rights and remedies pursuant to this Agreement, including, without
limitation, acceleration of the Obligations hereunder, without the prior consent
of the Required Banks provided that the Administrative Agent has notified the
Banks of its intention so to exercise such rights and remedies and within 48
hours (such hours being counted only on Domestic Business Days) thereafter the
Required Banks have not instructed the Administrative Agent to the contrary.
Section VI.3. Notice of Default. If the Administrative Agent
-----------------
shall not already have given any notice to the Borrower under Section 6.1, the
Administrative Agent shall give notice to the Borrower under Section 6.1
promptly upon being requested to do so by the Required Banks and shall thereupon
notify all the Banks thereof.
Section VI.4. Actions in Respect of Letters of Credit. (a) If,
---------------------------------------
at any time and from time to time, any Letter of Credit shall have been issued
hereunder and an Event of Default shall have occurred and be continuing, then,
upon the occurrence and during the continuation thereof, the Administrative
Agent may, and if requested by the Required Banks the Administrative Agent
shall, whether in addition to the taking by the Administrative Agent of any of
the actions described in this Article or otherwise, make a demand upon the
Borrower to, and forthwith upon such demand (but in any event within
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ten (10) days after such demand) the Borrower shall, pay to the Administrative
Agent, on behalf of the Banks, in same day funds at the Administrative Agent's
office designated in such demand, for deposit in a special cash collateral
account (the "Letter of Credit Collateral Account") to be maintained in the name
-----------------------------------
of the Administrative Agent (on behalf of the Banks) and under its sole dominion
and control at such place as shall be designated by the Administrative Agent, an
amount equal to the amount of the Letter of Credit Usage under the Letters of
Credit. Interest shall accrue on the Letter of Credit Collateral Account at a
rate equal to the rate on overnight funds.
(b) The Borrower hereby pledges, assigns and grants to the
Administrative Agent, as administrative agent for its benefit and the ratable
benefit of the Banks a lien on and a security interest in, the following
collateral (the "Letter of Credit Collateral"):
---------------------------
(i) the Letter of Credit Collateral Account, all cash
deposited therein and all certificates and instruments, if any, from
time to time representing or evidencing the Letter of Credit Collateral
Account;
(ii) all notes, certificates of deposit and other
instruments from time to time hereafter delivered to or otherwise
possessed by the Administrative Agent for or on behalf of the Borrower
in substitution for or in respect of any or all of the then existing
Letter of Credit Collateral;
(iii) all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the then
existing Letter of Credit Collateral; and
(iv) to the extent not covered by the above clauses, all
proceeds of any or all of the foregoing Letter of Credit Collateral.
The lien and security interest granted hereby secures the payment of all
obligations of the Borrower now or hereafter existing hereunder and under any
other Loan Document.
(c) The Borrower hereby authorizes the Administrative Agent
for the ratable benefit of the Banks to apply, from time to time after funds are
deposited in the Letter of Credit Collateral Account, funds then held in the
Letter of Credit Collateral Account to the payment of any amounts, in such order
as the Administrative Agent may
86
elect, as shall have become due and payable by the Borrower to the Banks in
respect of the Letters of Credit.
(d) Neither the Borrower nor any Person claiming or acting
on behalf of or through the Borrower shall have any right to withdraw any of the
funds held in the Letter of Credit Collateral Account, except as provided in
Section 6.4(h) hereof.
(e) The Borrower agrees that it will not (i) sell or
otherwise dispose of any interest in the Letter of Credit Collateral or (ii)
create or permit to exist any lien, security interest or other charge or
encumbrance upon or with respect to any of the Letter of Credit Collateral,
except for the security interest created by this Section 6.4.
(f) If any Event of Default shall have occurred and be
continuing:
(i) The Administrative Agent may, in its sole
discretion, without notice to the Borrower except as required by law
and at any time from time to time, charge, set off or otherwise apply
all or any part of the Letter of Credit Collateral first, (x) amounts
-----
previously drawn on any Letter of Credit that have not been reimbursed
by the Borrower and (y) any Letter of Credit Usage described in clause
(ii) of the definition thereof that are then due and payable and
second, any other unpaid Obligations then due and payable against the
------
Letter of Credit Collateral Account or any part thereof, in such order
as the Administrative Agent shall elect. The rights of the
Administrative Agent under this Section 6.4 are in addition to any
rights and remedies which any Bank may have.
(ii) The Administrative Agent may also exercise, in
its sole discretion, in respect of the Letter of Credit Collateral
Account, in addition to the other rights and remedies provided herein
or otherwise available to it, all the rights and remedies of a secured
party upon default under the Uniform Commercial Code in effect in the
State of New York at that time.
(g) The Administrative Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Letter of
Credit Collateral if the Letter of Credit Collateral is accorded treatment
substantially equal to that which the Administrative Agent accords its own
property, it being understood that, assuming such treatment, the Administrative
Agent shall not have any responsibility or liability with respect thereto.
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(h) At such time as all Events of Default have been cured
or waived in writing, all amounts remaining in the Letter of Credit Collateral
Account shall be promptly returned to the Borrower. Absent such cure or written
waiver, any surplus of the funds held in the Letter of Credit Collateral Account
and remaining after payment in full of all of the Obligations of the Borrower
hereunder and under any other Loan Document after the Maturity Date shall be
paid to the Borrower or to whomsoever may be lawfully entitled to receive such
surplus.
ARTICLE VII
THE ADMINISTRATIVE AGENT
Section VII.1. Appointment and Authorization. Each Bank
-----------------------------
irrevocably appoints and authorizes the Administrative Agent to take such action
as agent on its behalf and to exercise such powers under this Agreement and the
other Loan Documents as are delegated to the Administrative Agent by the terms
hereof or thereof, together with all such powers as are reasonably incidental
thereto. Except as otherwise expressly permitted by this Agreement or with the
prior written consent of the Administrative Agent, only the Administrative Agent
(and not one or more of the Banks) shall have the authority to deal directly
with the Borrower under this Agreement and each Bank acknowledges that all
notices, demands or requests from such Bank to Borrower must be forwarded to the
Administrative Agent for delivery to the Borrower. Each Bank acknowledges that,
except as otherwise expressly set forth in this Agreement, the Borrower has no
obligation to act or refrain from acting on instructions or demands of one or
more Banks absent written instructions from Administrative Agent in accordance
with its rights and authority hereunder.
Section VII.2. Administrative Agent and Affiliates. Chase
-----------------------------------
shall have the same rights and powers under this Agreement as any other Bank and
may exercise or refrain from exercising the same as though it were not the
Administrative Agent, and Chase and its affiliates may accept deposits from,
lend money to, and generally engage in any kind of business with the Borrower or
any subsidiary or affiliate of the Borrower as if it were not the Administrative
Agent hereunder, and the term "Bank" and "Banks" shall include Chase in its
individual capacity.
Section VII.3. Action by Administrative Agent. (a) The
------------------------------
obligations of the Administrative Agent hereunder are only those expressly set
forth herein. Without
88
limiting the generality of the foregoing, the Administrative Agent shall not be
required to take any action with respect to any Default, except as expressly
provided in Article VI. The Administrative Agent shall not have by reason of the
execution and delivery of the Loan Documents to which it is a party, the
performance of any of its obligations thereunder, or by the use of the term
"Administrative Agent", a fiduciary relationship in respect of any Bank or the
Borrower.
(b) The Administrative Agent shall promptly forward, or make
available by Intralinks or other internet access system, to each Bank tangible
or electronic copies, or notify (in writing or electronically and, if
electronically, the Administrative Agent will also transmit a fax indicating
that the information in question is being transmitted electronically) each Bank
as to the contents, of all notices, financial statements and other significant
materials and communications received from the Borrower pursuant to the terms of
this Agreement or any other Loan Document and, in the event that the Borrower
fails to pay when due the principal of or interest on any Loan, the
Administrative Agent shall promptly give notice thereof to the Banks. As to any
matters not expressly provided for by the Loan Documents, the Administrative
Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully protected
in so acting or refraining from acting) upon the instructions of the Required
Banks, and such instructions shall be binding upon all the Banks; provided,
however, that the Administrative Agent shall not be required to take any action
that exposes the Administrative Agent to personal liability or that is contrary
to this Agreement or applicable law. If the Borrower shall have made any payment
of principal of and interest on the Loans or any other amount due hereunder in
accordance with Article II hereof and the Administrative Agent shall not have
distributed to each Bank its proper share of such payment on the date on which
such payment shall be received (other than as a result of any shutdown of or
disturbance in any payment system or any other event or circumstance beyond the
reasonable control of the Administrative Agent), then the Administrative Agent
shall pay such proper share to such Bank together with interest thereon at the
Federal Funds Rate for each day from the date such payment shall have been
received from the Borrower until the date such amount is paid by the
Administrative Agent to such Bank. If any Bank transfers funds to the
Administrative Agent in anticipation of the making of a Loan that is
subsequently not made, then the Administrative Agent agrees to repay such funds
to such Bank upon the receipt of a notice from such Bank requesting the
repayment of such funds, together with interest thereon at the Federal Funds
Rate for each day from the date which is the day upon which Administrative Agent
shall have received a notice from
89
such bank requesting the repayment of such funds until the date such amount is
paid by the Administrative Agent to such Bank.
Section VII.4. Consultation with Experts. The Administrative
-------------------------
Agent may consult with legal counsel (who may be counsel for the Borrower),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.
Section VII.5. Liability of Administrative Agent. Neither the
---------------------------------
Administrative Agent nor any of its affiliates nor any of their respective
directors, officers, agents or employees shall be liable for any action taken or
not taken by it in connection herewith (i) with the consent or at the request of
the Required Banks or, where required by the terms of this Agreement, all of the
Banks, or (ii) in the absence of its own gross negligence or willful misconduct.
Neither the Administrative Agent nor any of its directors, officers, agents or
employees shall be responsible for or have any duty to ascertain, inquire into
or verify (i) any statement, warranty or representation made in connection with
this Agreement or any borrowing hereunder; (ii) the performance or observance of
any of the covenants or agreements of the Borrower; (iii) the satisfaction of
any condition specified in Article III, except receipt of items required to be
delivered to the Administrative Agent; or (iv) the validity, effectiveness or
genuineness of this Agreement, the other Loan Documents or any other instrument
or writing furnished in connection herewith. The Administrative Agent shall not
incur any liability by acting in reliance upon any notice, consent, certificate,
statement, or other writing (which may be a bank wire, telex or similar writing)
believed by it in good faith to be genuine or to be signed by the proper party
or parties.
Section VII.6. Indemnification. Each Bank shall, ratably in
---------------
accordance with its Commitment, indemnify the Administrative Agent, its
affiliates and their respective directors, officers, agents and employees (to
the extent not reimbursed by the Borrower) against any cost, expense (including
counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from such indemnitees' gross negligence or willful
misconduct) that such indemnitees may suffer or incur as a result of, or in
connection with, the Administrative Agent's capacity as Administrative Agent in
connection with this Agreement, the other Loan Documents or any action taken or
omitted by such indemnitees in accordance with this Agreement.
90
Section VII.7. Credit Decision. Each Bank acknowledges that it
---------------
has, independently and without reliance upon the Administrative Agent or any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will, independently and without
reliance upon the 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 credit decisions in taking or not taking any action under this
Agreement.
Section VII.8. Successor Administrative Agent. The
------------------------------
Administrative Agent may resign at any time by giving notice thereof to the
Banks and the Borrower. In addition, if the Administrative Agent at any time
shall have been finally determined to have committed gross negligence or willful
misconduct in connection with its performance of its duties as Administrative
Agent hereunder or if the Commitment of the Administrative Agent, in its
capacity as a Bank, inclusive of participations, shall be less than $10,000,000,
then, upon notice from the Required Banks, the Administrative Agent shall
resign. Upon any such resignation, the Required Banks shall have the right to
appoint a successor Administrative Agent with the consent of the Borrower;
provided that the consent of the Borrower shall not be required if an Event of
Default shall have occurred and be continuing. If no successor Administrative
Agent shall have been so appointed by the Required Banks, and shall have
accepted such appointment, within 30 days after the retiring Administrative
Agent gives notice of resignation, then the retiring Administrative Agent may,
on behalf of the Banks, appoint a successor Administrative Agent, which shall be
a commercial bank organized or licensed under the laws of the United States of
America or of any State thereof and having a combined capital and surplus of at
least $500,000,000, total assets of at least $25,000,000,000 and a long-term
senior unsecured indebtedness rating of BBB+ or better by S&P (if rated by S&P)
and Baa1 by Moody's (if rated by Moody's). Upon the acceptance of its
appointment as the Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder first accruing or arising after the effective date of such
retirement. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was the
Administrative Agent.
91
If, at any time during the Term, the Administrative Agent
shall no longer have any Commitment under this Agreement, the Administrative
Agent shall give notice of its offer to resign to the Banks and the Borrower.
Upon any such offer of resignation, the Required Banks shall have the right to
appoint a successor Administrative Agent or to retain the Administrative Agent
with the consent of the Borrower; provided that the consent of the Borrower
shall not be required if an Event of Default shall have occurred and be
continuing.
Section VII.9. Administrative Agent's Fee. The Borrower shall
--------------------------
pay to the Administrative Agent for its own account fees in the amounts and at
the times previously agreed upon between the Borrower and the Administrative
Agent.
Section VII.10. Copies of Notices. Administrative Agent shall
-----------------
deliver to each Bank a copy of any notice sent to the Borrower by Administrative
Agent in connection with the performance of its duties as Administrative Agent
hereunder; and Administrative Agent shall deliver to each Bank a copy of any
notice sent to the Administrative Agent by the Borrower in connection with any
Default or Event of Default hereunder.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
Section VIII.1. Basis for Determining Interest Rate Inadequate
----------------------------------------------
or Unfair. If on or prior to the first day of any Interest Period for any
- ---------
Euro-Dollar Borrowing or Money Market Borrowing:
(a) the Administrative Agent is advised by the Reference Bank
that deposits in dollars (in the applicable amounts) are not being offered to
the Reference Bank in the relevant market for such Interest Period, or
(b) Banks having 50% or more of the aggregate amount of the
affected Loans advise the Administrative Agent that the Adjusted London
Interbank Offered Rate as determined by the Administrative Agent will not
adequately and fairly reflect the cost to such Banks of funding their
Euro-Dollar Loans for such Interest Period, the Administrative Agent shall
forthwith give notice thereof to the Borrower and the
92
Banks, whereupon until the Administrative Agent notifies the Borrower that the
circumstances giving rise to such suspension no longer exist, the obligations of
the Banks to make Euro-Dollar Loans, or to continue or convert outstanding Loans
as or into Euro-Dollar Loans, as the case may be, shall be suspended, and each
outstanding Euro-Dollar Loan shall be converted into a Base Rate Loan on the
last day of the then current Interest Period applicable thereto. Unless the
Borrower notifies the Administrative Agent at least two Domestic Business Days
before the date of any Euro-Dollar Borrowing or Money Market LIBOR Borrowing for
which a Notice of Borrowing has previously been given that it elects not to
borrow on such date, (i) if such Borrowing is a Committed Borrowing, such
Borrowing shall instead be made as a Base Rate Borrowing, and (ii) if such
Borrowing is a Money Market LIBOR Borrowing, the Money Market LIBOR Loans
comprising such Borrowing shall bear interest for each day from and including
the first day to but excluding the last day of the Interest Period applicable
thereto at the Base Rate for such day.
Section VIII.2. Illegality. If, after the date of this
----------
Agreement, the adoption of any applicable law, rule or regulation, or any change
in any existing applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its Euro-Dollar Lending Office) with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall make it unlawful or
impossible for any Bank (or its Euro-Dollar Lending Office) to make, maintain or
fund its Euro-Dollar Loans or Money Market Loans or to participate in any Letter
of Credit issued by the Fronting Bank, or, with respect to the Fronting Bank, to
issue any Letter of Credit, and such Bank shall so notify the Administrative
Agent, the Administrative Agent shall forthwith give notice thereof to the other
Banks and the Borrower, whereupon until such Bank notifies the Borrower and the
Administrative Agent that the circumstances giving rise to such suspension no
longer exist, the obligation of such Bank to make or convert Euro-Dollar Loans
or Money Market Loans, or to participate in any Letter of Credit issued by the
Fronting Bank or, with respect to the Fronting Bank, to issue any Letter of
Credit, shall be suspended. Before giving any notice to the Administrative Agent
pursuant to this Section, such Bank shall designate a different Euro-Dollar
Lending Office if such designation will avoid the need for giving such notice
and will not, in the judgment of such Bank, be otherwise disadvantageous to such
Bank. If such Bank shall determine that it may not lawfully continue to maintain
and fund any of its outstanding Euro-Dollar Loans or Money Market Loans (as the
case may be) to maturity and shall so
93
specify in such notice, the Borrower shall immediately prepay in full the then
outstanding principal amount of each such Euro-Dollar Loan or Money Market Loan,
together with accrued interest thereon. Concurrently with prepaying each such
Euro-Dollar Loan, the Borrower shall borrow a Base Rate Loan in an equal
principal amount from such Bank (on which interest and principal shall be
payable contemporaneously with the related Euro-Dollar Loans or Money Market
Loans of the other Banks), and such Bank shall make such a Base Rate Loan.
Section VIII.3. Increased Cost and Reduced Return.
---------------------------------
(a) If, after (x) the date hereof, in the case of any
Committed Loan or any obligation to make Committed Loans or (y) the date of the
related Money Market Quote, in the case of any Money Market Loan, the adoption
of any applicable law, rule or regulation, or any change in any applicable law,
rule or regulation, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Bank (or
its Applicable Lending Office) with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency shall impose, modify or deem applicable any reserve (including, without
limitation, any such requirement imposed by the Board of Governors of the
Federal Reserve System (but excluding with respect to any Euro-Dollar Loan any
such requirement reflected in an applicable Euro-Dollar Reserve Percentage)),
special deposit, insurance assessment or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Bank (or its
Applicable Lending Office) or shall impose on any Bank (or its Applicable
Lending Office) or on the London interbank market any other condition affecting
its Euro-Dollar Loans or Money Market LIBOR Loans, its Note, or its obligation
to make Euro-Dollar Loans, and the result of any of the foregoing is to increase
the cost to such Bank (or its Applicable Lending Office) of making or
maintaining any Euro-Dollar Loan, or to reduce the amount of any sum received or
receivable by such Bank (or its Applicable Lending Office) under this Agreement
or under its Note with respect thereto, by an amount deemed by such Bank to be
material, then, within 15 days after demand by such Bank (with a copy to the
Administrative Agent), which demand shall be accompanied by a certificate
showing, in reasonable detail, the calculation of such amount or amounts, the
Borrower shall pay to such Bank such additional amount or amounts as will
compensate such Bank for such increased cost or reduction.
94
(b) 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 in any such law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on 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 15 days after
demand by such Bank (with a copy to the Administrative Agent), which demand
shall be accompanied by a certificate showing, in reasonable detail, the
calculation of such amount or amounts, the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank (or its Parent) for
such reduction.
(c) Each Bank will promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Bank to compensation pursuant to this
Section (although failure or delay on the part of any Bank to provide such
notice or to demand compensation pursuant to this Section, after receiving
notice of increased cost or reduced rate of return, shall not constitute a
waiver of such Bank's right to demand such compensation unless such failure
materially prejudices Borrower's rights hereunder) and will designate a
different Applicable Lending Office if such designation will avoid the need for,
or reduce the amount of, such compensation and will not, in the judgment of such
Bank, be otherwise disadvantageous to such Bank. A certificate of any Bank
claiming compensation under this Section and setting forth the additional amount
or amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods.
Section VIII.4. Taxes.
-----
(a) Any and all payments by the Borrower to or for the account
of any Bank or the Administrative Agent hereunder or under any other Loan
Document shall be made free and clear of and without deduction for any and all
present or future taxes, duties, levies, imposts, deductions, charges or
withholdings, and all liabilities, including,
95
without limitation, penalties, interest and expenses, with respect thereto,
excluding, in the case of each Bank and the Administrative Agent, taxes imposed
- ---------
on its income, and franchise taxes imposed on it, by the jurisdiction under the
laws of which such Bank or the Administrative Agent (as the case may be) is
organized or any political subdivision thereof and, in the case of each Bank,
taxes imposed on its income, and franchise or similar taxes imposed on it, by
the jurisdiction of such Bank's Applicable Lending Office or any political
subdivision thereof (and, if different from the jurisdiction of such Bank's
Applicable Lending Office, the jurisdiction of the domicile of its Loans either
established by the Bank pursuant to Section 9.12 or determined by the applicable
taxing authorities)(all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from
-----
or in respect of any sum payable hereunder or under any Note or Letter of Credit
or participation therein to any Bank or the Administrative Agent, (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 8.4) such Bank, the Fronting Bank or the Administrative Agent (as
the case may be) receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower shall make such deductions,
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law and (iv) the
Borrower shall furnish to the Administrative Agent, at its address referred to
in Section 9.1, the original or a certified copy of a receipt evidencing payment
thereof.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes and any other excise or property taxes, or
charges or similar levies which arise from any payment made hereunder or under
any Note or Letter of Credit or participation therein or from the execution or
delivery of, or otherwise with respect to, this Agreement or any Note or Letter
of Credit or participation therein (hereinafter referred to as "Other Taxes").
-----------
(c) The Borrower agrees to indemnify each Bank, the Fronting
Bank and the Administrative Agent for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed or asserted by
any jurisdiction on amounts payable under this Section 8.4) paid by such Bank,
the Fronting Bank or the Administrative Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto (whether or not such Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority). Any payment
required under this indemnification shall be made within 15
96
days from the date such Bank, the Fronting Bank or the Administrative Agent (as
the case may be) makes demand therefor. The Administrative Agent shall
reasonably cooperate, at no cost to the Administrative Agent or the Banks, with
efforts by Borrower to recover any Taxes or Other Taxes which Borrower
reasonably believes were incorrectly or illegally imposed.
(d) Each Bank organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and delivery
of this Agreement in the case of each Bank listed on the signature pages hereof
and on or prior to the date on which it becomes a Bank in the case of each other
Bank, and from time to time thereafter if requested in writing by the Borrower
(but only so long as such Bank remains lawfully able to do so), shall provide
the Borrower with Internal Revenue Service form 1001 or 4224, as appropriate, or
any successor form prescribed by the Internal Revenue Service, certifying that
such Bank is entitled to benefits under an income tax treaty to which the United
States is a party which reduces the rate of withholding tax on payments of
interest or certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States. If the form provided by a Bank at the time such Bank first became a
party to this Agreement or at any time thereafter (other than solely by reason
of a change in United States law or a change in the terms of any treaty to which
the United States is a party after the date hereof) indicates a United States
interest withholding tax rate in excess of zero (or would have indicated such a
withholding tax rate if such form had been submitted and completed accurately
and completely and either was not submitted or was not completed accurately and
completely), or if a Bank otherwise is subject to United States interest
withholding tax at a rate in excess of zero at any time for any reason (other
than solely by reason of a change in United States law or regulation or a change
in any treaty to which the United States is a party after the date hereof),
withholding tax at such rate shall be considered excluded from "Taxes" as
defined in Section 8.4(a). In addition, any amount that otherwise would be
considered "Taxes" or "Other Taxes" for purposes of this Section 8.4 shall be
excluded therefrom if the Bank either has transferred the domicile of its Loans
pursuant to Section 9.12 or changed the Applicable Lending Office with respect
to such Loans and such amount would not have been incurred had such transfer or
change not been made.
(e) For any period with respect to which a Bank has failed to
provide the Borrower with the appropriate form pursuant to Section 8.4(d)
(unless such failure is due to a change in treaty, law or regulation occurring
subsequent to the date on which a
97
form originally was required to be provided), such Bank shall not be entitled to
indemnification under Section 8.4(a) with respect to Taxes imposed by the United
States; provided, however, that should a Bank, which is otherwise exempt from or
-------- -------
subject to a reduced rate of withholding tax, become subject to Taxes because of
its failure to deliver a form required hereunder, the Borrower shall take such
steps as such Bank shall reasonably request to assist such Bank to recover such
Taxes.
(f) If the Borrower is required to pay additional amounts to
or for the account of any Bank pursuant to this Section 8.4, then such Bank will
change the jurisdiction of its Applicable Lending Office so as to eliminate or
reduce any such additional payment which may thereafter accrue if such change,
in the judgment of such Bank, is not otherwise disadvantageous to such Bank.
Section VIII.5. Base Rate Loans Substituted for Affected
----------------------------------------
Euro-Dollar Loans. If (i) the obligation of any Bank to make, or convert
- -----------------
outstanding Loans to, Euro-Dollar Loans has been suspended pursuant to Sections
8.1 or 8.2 or (ii) any Bank has demanded compensation under Section 8.3 or 8.4
with respect to its Euro-Dollar Loans and the Borrower shall, by at least five
(5) Euro-Dollar Business Days' prior notice to such Bank through the
Administrative Agent, have elected that the provisions of this Section shall
apply to such Bank, then, unless and until such Bank notifies the Borrower that
the circumstances giving rise to such suspension or demand for compensation no
longer exist:
(a) all Loans which would otherwise be made by such Bank as
Euro-Dollar Loans shall be made instead as Base Rate Loans (on which interest
and principal shall be payable contemporaneously with the related Euro-Dollar
Loans of the other Banks), and
(b) after each of its Euro-Dollar Loans has been repaid, all
payments of principal which would otherwise be applied to repay such Euro-Dollar
Loans shall be applied to repay its Base Rate Loans instead.
Section VIII.6. SPC Loans. Notwithstanding anything to the
---------
contrary contained herein, any Bank (a "Granting Bank") may grant to one special
-------------
purpose funding vehicle (an "SPC") sponsored by such Granting Bank, as
---
identified as such in writing by such Granting Bank to the Administrative Agent
and the Borrower from
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time to time (including, without limitation, by the execution of this Agreement
on the date hereof by a Granting Bank and its SPC identified as such on the
signature pages hereof), the option to provide to the Borrower all or any part
of any Loan that such Granting Bank would otherwise be obligated to make to the
Borrower pursuant to the terms hereof; provided, that (i) nothing herein shall
--------
constitute a commitment to make any Loan by any SPC, and (ii) if an SPC elects
not to exercise such option or otherwise fails to provide all or any part of
such Loan, the Granting Bank shall be obligated to make such Loan pursuant to
the terms hereof. The making of a Loan by an SPC hereunder shall utilize the
Commitment of such Granting Bank to the same extent, and as if, such Loan were
made by such Granting Bank. Any SPC that makes a Loan shall (i) have in regard
to such Loan all of the rights (exercisable, however, only through its Granting
Bank acting as its agent) that such Granting Bank would have had if it had made
such Loan directly, and (ii) comply with this Agreement in regard to such Loan
on the same terms as any other Bank party hereto; provided that (A) the Granting
Bank's Commitment shall remain the Commitment of such Granting Bank, and (B) all
monetary obligations of an SPC hereunder in respect of any Loan it provides
shall remain the obligations of such Granting Bank to the extent at any time
that such SPC elects not to or otherwise fails to perform or pay any such
obligation. Each party hereto hereby agrees that no SPC shall be liable for any
payment under this Agreement for which a Bank would otherwise be liable for so
long as, and to the extent, its sponsoring Granting Bank makes such payment.
Notwithstanding any Loan that may be provided by an SPC hereunder, the
Administrative Agent and Borrower shall be entitled to continue to communicate
and deal solely and directly with the Granting Bank in accordance with this
Agreement in respect of such Loan. Each SPC that is a signatory hereto, and each
SPC that subsequently is identified by its Granting Bank as having been granted
such option, shall be deemed to have confirmed (and the Borrower and the
Administrative Agent may require a written acknowledgment of such confirmation
signed by any SPC not a signatory hereto that is subsequently so identified by
its Granting Bank) to the Borrower and the Administrative Agent that (a) it has
received a copy of the Agreement and each Loan Document, together with copies of
the financial statements heretofore provided to the Banks under the terms of
this Agreement and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Agreement; (b) agrees that it will independently and without reliance upon the
Administrative Agent, its Granting Bank or any other Bank, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Agreement
and any other Loan Document; (c) appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such powers and
discretion under this Agreement and any other Loan
99
Document as are delegated to the Administrative Agent by the terms thereof,
together with such powers and discretion as are reasonably incidental thereto;
(d) agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement and any other Loan Document are
required to be performed by it as a Bank, subject to the terms of this Section
-------
8.6; and (e) appoints its Granting Bank, or a specified branch or affiliate
- ---
thereof, as its agent and attorney in fact and grants to its Granting Bank an
irrevocable power of attorney to receive payments made for the benefit such SPC
under this Agreement, to deliver and receive all communications and notices
under this Agreement and other Loan Documents and to exercise on such SPC's
behalf all rights to vote and to grant and make approvals, waivers, consents of
amendments to or under this Agreement and other Loan Documents. Any document
executed by such agent on such SPC's behalf in connection with this Agreement or
other Loan Documents shall be binding on such SPC. In furtherance of the
foregoing, all the Banks and the Administrative Agent each hereby agrees (which
agreement shall survive the termination of this Agreement) that, prior to the
date that is one (1) year and one (1) day after the payment in full of all
outstanding commercial paper or other senior indebtedness of any SPC, it will
not institute against, or join any other person in instituting against, such SPC
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or similar proceedings under the laws of the United States or any
State thereof. In addition, notwithstanding anything to the contrary contained
in Section 9.6(c), any SPC may (i) with notice to, but without the prior written
consent of, the Borrower or Administrative Agent, and without the payment of any
processing fee therefor, assign all or a portion of its interests in any Loans
to its Granting Bank or to any financial institutions consented to by the
Borrower and the Administrative Agent (and, subject to all of the provisions of
this paragraph, such consents shall be deemed to have been granted with respect
to any SPC signatory hereto on the date hereof) providing liquidity and/or
credit facilities to or for the account of such SPC to support the funding or
maintenance of loans, and (ii) disclose on a confidential basis any non-public
information relating to its Loans to any rating agency, commercial paper dealer
or provider of liquidity and/or credit facilities to such SPC. Nothing in this
Section 8.6 that would affect the rights or obligations of an SPC may be amended
without the written consent of any SPC that has any Loan outstanding at the time
of such amendment.
ARTICLE IX
MISCELLANEOUS
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Section IX.1. Notices. All notices, requests and other
-------
communications to any party hereunder shall be in writing (including bank wire,
telex, facsimile transmission or similar writing) and shall be given to such
party: (x) in the case of the Borrower or the Administrative Agent, at its
address or telecopy number set forth on the signature pages hereof, together
with copies thereof, in the case of the Borrower, to Latham & Watkins, 633 West
Fifth Street, Suite 4000, Los Angeles, CA 90071, Attention: Glen B. Collyer,
Esq., Telephone: (213) 485-1234, Telecopy: (213) 891-8763, and in the case of
the Administrative Agent, to JPMorgan Chase Bank, 270 Park Avenue, 31/st/ Floor,
New York, New York 10017, Attention: Loan and Agency Services, Telephone: (212)
552-7400, Telecopy number: (212) 552-5701, and to Skadden, Arps, Slate, Meagher
& Flom LLP, 4 Times Square, New York, New York 10036, Attention: Martha
Feltenstein, Esq., Telephone: (212) 735-2272, Telecopy: (917) 777-2272, (y) in
the case of any Bank, at its address or telecopy number set forth on the
signature pages hereof or in its Administrative Questionnaire, or (z) in the
case of any party, such other address or telecopy number as such party may
hereafter specify for the purpose by notice to the Administrative Agent, the
Banks and the Borrower. Each such notice, request or other communication shall
be effective (i) if given by telecopy, when such telecopy is transmitted to the
telecopy number specified in this Section, (ii) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iii) if given by any other means, when delivered at
the address specified in this Section; provided that notices to the
--------
Administrative Agent under Article II or Article VIII shall not be effective
until received.
Section IX.2. No Waivers. No failure or delay by the
----------
Administrative Agent or any Bank in exercising any right, power or privilege
hereunder or under any Note shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
Section IX.3. Expenses; Indemnification.
-------------------------
(a) The Borrower shall pay (i) all reasonable out-of-pocket
expenses of the Administrative Agent (including, without limitation, reasonable
fees and disbursements of special counsel Skadden, Arps, Slate, Meagher & Flom
LLP, local counsel for the Administrative Agent, and travel, site visits, third
party reports (including Appraisals), mortgage recording taxes, environmental
and engineering expenses), in
101
connection with the preparation and administration of this Agreement, the Loan
Documents and the documents and instruments referred to therein, the syndication
of the Loans, any waiver or consent hereunder or any amendment or modification
hereof or any Default or alleged Default hereunder and (ii) if an Event of
Default occurs, all out-of-pocket expenses incurred by the Administrative Agent
and each Bank, including, without limitation, reasonable fees and disbursements
of counsel for the Administrative Agent, in connection with the enforcement of
the Loan Documents and the instruments referred to therein and such Event of
Default and collection, bankruptcy, insolvency and other enforcement proceedings
resulting therefrom.
(b) The Borrower agrees to indemnify the Administrative Agent
and each Bank, their respective affiliates and the respective directors,
officers, agents and employees of the foregoing (each an "Indemnitee") and hold
----------
each Indemnitee harmless from and against any and all liabilities, losses,
damages, costs and expenses of any kind, including, without limitation, the
reasonable fees and disbursements of counsel and settlements and settlement
costs, which may be incurred by such Indemnitee in connection with any
investigative, administrative or judicial proceeding (whether or not such
Indemnitee shall be designated a party thereto) that may at any time (including,
without limitation, at any time following the payment of the Obligations) be
imposed on, asserted against or incurred by any Indemnitee as a result of, or
arising out of, or in any way related to or by reason of, (i) any of the
transactions contemplated by the Loan Documents or the execution, delivery or
performance of any Loan Document (including, without limitation, the Borrower's
actual or proposed use of proceeds of the Loans, whether or not in compliance
with the provisions hereof), (ii) any violation by the Borrower or the
Environmental Affiliates of any applicable Environmental Law, (iii) any
Environmental Claim arising out of the management, use, control, ownership or
operation of property or assets by the Borrower or any of the Environmental
Affiliates, including, without limitation, all on-site and off-site activities
involving Material of Environmental Concern, (iv) the breach of any
environmental representation or warranty set forth herein, (v) the grant to the
Administrative Agent and the Banks of any Lien in any property or assets of the
Borrower or any stock or other equity interest in the Borrower, and (vi) the
exercise by the Administrative Agent and the Banks of their rights and remedies
(including, without limitation, foreclosure) under any agreements creating any
such Lien (but excluding in each case, as to any Indemnitee, any such losses,
liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements incurred solely by reason of (y) the
gross negligence or willful misconduct of such Indemnitee as finally determined
by a court of competent jurisdiction or (z) any
102
investigative, administrative or judicial proceeding imposed or asserted against
any Indemnitee by any bank regulatory agency or by any equity holder of such
Indemnitee). The Borrower's obligations under this Section shall survive the
termination of this Agreement and the payment of the Obligations.
(c) The Borrower shall pay, and hold the Administrative Agent
and each of the Banks harmless from and against, any and all present and future
U.S. stamp, recording, transfer and other similar foreclosure related taxes with
respect to the foregoing matters and hold the Administrative Agent and each Bank
harmless from and against any and all liabilities with respect to or resulting
from any delay or omission (other than to the extent attributable to such Bank)
to pay such taxes.
Section IX.4. Sharing of Set-Offs. In addition to any rights
-------------------
now or hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance of
any Event of Default, each Bank is hereby authorized at any time or from time to
time, without presentment, demand, protest or other notice of any kind to the
Borrower or to any other Person, any such notice being hereby expressly waived,
to set off and to appropriate and apply any and all deposits (general or
special, time or demand, provisional or final), other than deposits held for the
benefit of third parties, and any other indebtedness at any time held or owing
by such Bank (including, without limitation, by branches and agencies of such
Bank wherever located) to or for the credit or the account of the Borrower
against and on account of the Obligations of the Borrower then due and payable
to such Bank under this Agreement or under any of the other Loan Documents,
including, without limitation, all interests in Obligations purchased by such
Bank. Each Bank agrees that if it shall, by exercising any right of set-off or
counterclaim or otherwise, receive payment of a proportion of the aggregate
amount of principal and interest due with respect to any Note held by it or
Letter of Credit participated in by it, or, in the case of the Fronting Bank,
Letter of Credit issued by it, which is greater than the proportion received by
any other Bank or Letter of Credit issued or participated in by such other Bank,
in respect of the aggregate amount of principal and interest due with respect to
any Note held by such other Bank, the Bank receiving such proportionately
greater payment shall purchase such participations in the Notes held by the
other Banks or Letter of Credit issued or participated in by such other Bank,
and such other adjustments shall be made, as may be required so that all such
payments of principal and interest with respect to the Notes held by the Banks
or Letter of Credit issued or participated in by such other Banks shall be
shared by the Banks pro rata; provided that nothing in this Section shall impair
--------
the right
103
of any Bank to exercise any right of set-off or counterclaim it may have and to
apply the amount subject to such exercise to the payment of indebtedness of the
Borrower other than its indebtedness under the Notes or the Letters of Credit.
The Borrower agrees, to the fullest extent that it may effectively do so under
applicable law, that any holder of a participation in a Note, whether or not
acquired pursuant to the foregoing arrangements, may exercise rights of set-off
or counterclaim and other rights with respect to such participation as fully as
if such holder of a participation were a direct creditor of the Borrower in the
amount of such participation.
Section IX.5. Amendments and Waivers. Any provision of this
----------------------
Agreement (including any of the financial covenants given by the Borrower
pursuant to Section 5.8), the Notes, the Letters of Credit or other Loan
Documents may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed by the Borrower and the Required Banks (and, if the
rights or duties of the Administrative Agent are affected thereby, by the
Administrative Agent); provided that no such amendment or waiver shall, unless
--------
signed by all the Banks, (i) increase or decrease the Commitment of any Bank
(except for a ratable decrease in the Commitments of all Banks and except as
contemplated in the definition of the term "Loan Amount"), increase the
aggregate Commitments above $500,000,000, or subject any Bank to any additional
obligation, (ii) reduce the principal of or rate of interest on any Loan or any
fees specified herein, (iii) postpone the date fixed for any payment of
principal of or interest on any Loan or any fees hereunder or for any reduction
or termination of any Commitment, (iv) release the Guaranty or otherwise release
any other collateral, (v) subordinate the Loans to any other Debt, or (vi)
change the percentage of the Commitments or of the aggregate unpaid principal
amount of the Notes, or the number of Banks, which shall be required for the
Banks or any of them to take any action under this Section 9.5 or any other
provision of this Agreement. Notwithstanding the foregoing, no amendment, waiver
or consent shall, unless in writing and signed by the Designating Lender on
behalf of its Designated Lender affected thereby, (a) subject such Designated
Lender to any additional obligations, (b) reduce the principal of, interest on,
or other amounts due with respect to, the Designated Lender Note made payable to
such Designated Lender, or (c) postpone any date fixed for any payment of
principal of, or interest on, or other amounts due with respect to the
Designated Lender Note made payable to the Designated Lender.
Section IX.6. Successors and Assigns.
----------------------
104
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, except that the Borrower may not assign or otherwise transfer any of
its rights under this Agreement or the other Loan Documents without the prior
written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
entities (each a "Participant") participating interests in its Commitment or any
-----------
or all of its Loans. In the event of any such grant by a Bank of a participating
interest to a Participant, whether or not upon notice to the Borrower and the
Administrative Agent, such Bank shall remain responsible for the performance of
its obligations hereunder, and the Borrower and the Administrative Agent shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement. Any agreement pursuant to
which any Bank may grant such a participating interest shall provide that such
Bank shall retain the sole right and responsibility to enforce the obligations
of the Borrower hereunder including, without limitation, the right to approve
any amendment, modification or waiver of any provision of this Agreement;
provided that such participation agreement may provide that such Bank will not
- --------
agree to any modification, amendment or waiver of this Agreement described in
clause (i), (ii), (iii) or (iv) of Section 9.5 without the consent of the
Participant. The Borrower agrees that each Participant shall, to the extent
provided in its participation agreement, be entitled to the benefits of Article
VIII with respect to its participating interest. An assignment or other transfer
which is not permitted by subsection (c) or (d) below shall be given effect for
purposes of this Agreement only to the extent of a participating interest
granted in accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or
other institutions (each an "Assignee") all, or a proportionate part of all, of
--------
its rights and obligations under this Agreement, the Notes and the other Loan
Documents, and such Assignee shall assume such rights and obligations, pursuant
to an Assignment and Assumption Agreement in substantially the form of Exhibit D
---------
attached hereto executed by such Assignee and such transferor Bank, with (and
subject to) the subscribed consent of the Administrative Agent, which consent
shall not be unreasonably withheld, and, provided no Event of Default shall have
occurred and be continuing, the Borrower, which consent shall not be
unreasonably withheld or delayed. Upon execution and delivery of such instrument
and payment by such Assignee to such transferor Bank of an amount equal to the
purchase price agreed between such transferor Bank and such Assignee, such
Assignee shall be a Bank party to this Agreement and shall have all the rights
and
105
obligations of a Bank with a Commitment as set forth in such instrument of
assumption, and the transferor 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 subsection (c), the transferor Bank, the Administrative Agent and the
Borrower shall make appropriate arrangements so that, if required, a new Note or
Notes are issued to the Assignee. In connection with any such assignment (except
for an assignment by a Bank to its Affiliate), the transferor Bank shall pay to
the Administrative Agent an administrative fee for processing such assignment in
the amount of $3,500. If the Assignee is not incorporated under the laws of the
United States of America or a state thereof, it shall deliver to the Borrower
and the Administrative Agent certification as to exemption from deduction or
withholding of any United States federal income taxes in accordance with Section
8.4.
(d) Any Bank (each, a "Designating Lender") may at any time
------------------
designate one Designated Lender to fund Money Market Loans on behalf of such
Designating Lender subject to the terms of this Section 9.6(d) and the
provisions in Section 9.6(b) and (c) shall not apply to such designation. No
Bank may designate more than one (1) Designated Lender. The parties to each such
designation shall execute and deliver to the Administrative Agent for its
acceptance a Designation Agreement. Upon such receipt of an appropriately
completed Designation Agreement executed by a Designating Lender and a designee
representing that it is a Designated Lender, the Administrative Agent will
accept such Designation Agreement and will give prompt notice thereof to the
Borrower, whereupon, (i) the Borrower shall execute and deliver to the
Designating Bank a Designated Lender Note payable to the order of the Designated
Lender, (ii) from and after the effective date specified in the Designation
Agreement, the Designated Lender shall become a party to this Agreement with a
right (subject to the provisions of Section 2.3(b)) to make Money Market Loans
on behalf of its Designating Lender pursuant to Section 2.3 after the Borrower
has accepted a Money Market Loan (or portion thereof) of the Designating Lender,
and (iii) the Designated Lender shall not be required to make payments with
respect to any obligations in this Agreement except to the extent of excess cash
flow of such Designated Lender which is not otherwise required to repay
obligations of such Designated Lender which are then due and payable; provided,
however, that regardless of such designation and assumption by the Designated
Lender, the Designating Lender shall be and remain obligated to the Borrower and
the Banks for each and every of the obligations of the Designating Lender and
its related Designated Lender with respect to this Agreement, including, without
limitation, any indemnification obligations under Section 7.6 hereof and any
sums otherwise payable to
106
the Borrower by the Designated Lender. Each Designating Lender shall serve as
the administrative agent of the Designated Lender and shall on behalf of, and to
the exclusion of, the Designated Lender: (i) receive any and all payments made
for the benefit of the Designated Lender and (ii) give and receive all
communications and notices and take all actions hereunder, including, without
limitation, votes, approvals, waivers, consents and amendments under or relating
to this Agreement and the other Loan Documents. Any such notice, communication,
vote, approval, waiver, consent or amendment shall be signed by the Designating
Lender as administrative agent for the Designated Lender and shall not be signed
by the Designated Lender on its own behalf and shall be binding upon the
Designated Lender to the same extent as if signed by the Designated Lender on
its own behalf. The Borrower, the Administrative Agent, and the Banks may rely
thereon without any requirement that the Designated Lender sign or acknowledge
the same. No Designated Lender may assign or transfer all or any portion of its
interest hereunder or under any other Loan Document, other than assignments to
the Designating Lender which originally designated such Designated Lender or
otherwise in accordance with the provisions of Section 9.6(b) and (c).
(e) Any Bank may at any time assign all or any portion of its
rights under this Agreement and its Note and the Letter(s) of Credit
participated in by such Bank or, in the case of the Fronting Bank, issued by it,
to a Federal Reserve Bank. No such assignment shall release the transferor Bank
from its obligations hereunder.
(f) No Assignee, Participant or other transferee of any Bank's
rights shall be entitled to receive any greater payment under Section 8.3 or 8.4
than such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower's prior written
consent or by reason of the provisions of Section 8.2, 8.3 or 8.4 requiring such
Bank to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.
Section IX.7. Governing Law; Submission to Jurisdiction.
-----------------------------------------
(a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT
GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW).
107
(b) Any legal action or proceeding with respect to this
Agreement or any other Loan Document and any action for enforcement of any
judgment in respect thereof may be brought in the courts of the State of New
York or of the United States of America for the Southern District of New York,
and, by execution and delivery of this Agreement, the Borrower hereby accepts
for itself and in respect of its property, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts and appellate courts from any
thereof. The Borrower irrevocably consents to the service of process out of any
of the aforementioned courts in any such action or proceeding by the hand
delivery, or mailing of copies thereof by registered or certified mail, postage
prepaid, to the Borrower at its address set forth below. The Borrower hereby
irrevocably waives any objection which it may now or hereafter have to the
laying of venue of any of the aforesaid actions or proceedings arising out of or
in connection with this Agreement or any other Loan Document brought in the
courts referred to above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum. Nothing herein shall
affect the right of the Administrative Agent, any Bank or any holder of a Note
to serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against the Borrower in any other jurisdiction.
Section IX.8. Marshaling; Recapture. Neither the Administrative
---------------------
Agent nor any Bank shall be under any obligation to marshal any assets in favor
of the Borrower or any other party or against or in payment of any or all of the
Obligations. To the extent any Bank receives any payment by or on behalf of the
Borrower, which payment or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
the Borrower or its estate, trustee, receiver, custodian or any other party
under any bankruptcy law, state or federal law, common law or equitable cause,
then to the extent of such payment or repayment, the Obligation or part thereof
which has been paid, reduced or satisfied by the amount so repaid shall be
reinstated by the amount so repaid and shall be included within the liabilities
of the Borrower to such Bank as of the date such initial payment, reduction or
satisfaction occurred.
Section IX.9. Counterparts; Integration; Effectiveness. This
----------------------------------------
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. This
108
Agreement constitutes the entire agreement and understanding among the parties
hereto and supersedes any and all prior agreements and understandings, oral or
written, relating to the subject matter hereof. This Agreement shall become
effective upon receipt by the Administrative Agent of counterparts hereof signed
by each of the parties hereto (or, in the case of any party as to which an
executed counterpart shall not have been received, receipt by the Administrative
Agent in form satisfactory to it of telegraphic, telex or other written
confirmation from such party of execution of a counterpart hereof by such
party).
Section IX.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
--------------------
Administrative Agent AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section IX.11. Survival. All indemnities set forth herein shall
--------
survive the execution and delivery of this Agreement and the other Loan
Documents and the making and repayment of the Loans hereunder.
Section IX.12. Domicile of Loans. Subject to the provisions of
-----------------
Article VIII, each Bank may transfer and carry its Loans at, to or for the
account of any domestic or foreign branch office, subsidiary or affiliate of
such Bank.
Section IX.13. Limitation of Liability. No claim may be made by
-----------------------
the Borrower or any other Person against the Administrative Agent or any Bank or
the affiliates, directors, officers, employees, attorneys or agent of any of
them for any consequential or punitive damages in respect of any claim for
breach of contract or any other theory of liability arising out of or related to
the transactions contemplated by this Agreement or by the other Loan Documents,
or any act, omission or event occurring in connection therewith; and the
Borrower hereby waives, releases and agrees not to sue upon any claim for any
such damages, whether or not accrued and whether or not known or suspected to
exist in its favor.
Section IX.14. No Bankruptcy Proceedings. Each of the Borrower,
-------------------------
the Banks, and the Administrative Agent hereby agrees that it will not institute
against any Designated Lender or join any other Person in instituting against
any Designated Lender any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding under any federal or state bankruptcy or similar law,
until the later to occur of (i) one year and
109
one day after the payment in full of the latest maturing commercial paper note
issued by such Designated Lender and (ii) the Maturity Date.
110
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
BORROWER: KILROY REALTY, L.P., a Delaware limited
- -------- partnership
By: Kilroy Realty Corporation, a Maryland
corporation, its general partner
By: /s/ Timothy M. Schoen
-------------------------------
Name: Timothy M. Schoen
Title: Vice President
Corporate Finance
By: /s/ Tyler H. Rose
-------------------------------
Name: Tyler H. Rose
Title: Senior Vice President
and Treasurer
ADMINISTRATIVE AGENT AND BANK:
- -----------------------------
JPMORGAN CHASE BANK, as
Administrative Agent and as a Bank
By: /s/ Christina Gould
------------------------------
Name: Christina Gould
Title: Vice President
JPMorgan Chase Bank
270 Park Avenue, 31/st/ Floor
New York, New York 10017
Attn: John F. Mix
Telephone number: (212) 270-9562
Telecopy number: (270) 270-3513
Domestic and Euro-Dollar
Lending Office:
JPMorgan Chase Bank
270 Park Avenue, 31/st/ Floor
New York, New York 10017
Attn: Loan and Agency Services
Telephone: (212) 552-7400
Telecopy number: (212) 552-5701
Commitment:
- ----------
$39,000,000.00
CO-SYNDICATION AGENT
- --------------------
AND BANK: COMMERZBANK
- --------
AKTIENGESELLSCHAFT, NEW YORK
AND GRAND CAYMAN BRANCHES
By: /s/ David Schwar
--------------------------------
Name: David Schwar
Title: Senior Vice President
By: /s/ Christine Finkel
--------------------------------
Name: Christine Finkel
Title: Vice President
Commitment: $39,000,000.00
- ----------
CO-SYNDICATION AGENT
- --------------------
AND BANK: FLEET NATIONAL BANK
- --------
By: /s/ Bill Lamb
--------------------------------
Name: Bill Lamb
Title: Vice President
Commitment: $39,000,000.00
- ----------
CO-SYNDICATION AGENT
- --------------------
AND BANK: FIRST UNION NATIONAL BANK
- --------
By: /s/ Cynthia A. Bean
--------------------------------
Name: Cynthia A. Bean
Title: VP
Commitment: $39,000,000.00
- ----------
CO-DOCUMENTATION AGENT
- ----------------------
AND BANK: BANK ONE, N.A.
- --------
By: /s/ Dell K. McCoy
--------------------------------------
Name: Dell K. McCoy
Title: Vice President
Commitment: $36,000,000
- ----------
CO-DOCUMENTATION AGENT
- ----------------------
AND BANK: DRESDNER BANK AG, NEW YORK
- --------
BRANCH AND GRAND CAYMAN
BRANCH
By: /s/ Garrett W. Thelander
--------------------------------------
Name: Garrett W. Thelander
Title: Director
By: /s/ Clifford Rooke
--------------------------------------
Name: Clifford Rooke
Title: Director
Commitment: $36,000,000.00
- ----------
CO-AGENT AND BANK: KEYBANK NATIONAL ASSOCIATION
- -----------------
By: /s/ Scott Chills
--------------------------------------
Name: Scott Chills
Title: Vice President
Commitment: $34,000,000.00
- ----------
BANK: UNION BANK OF CALIFORNIA
- ----
By: /s/ Kandice K. Parsons
-----------------------------
Name: Kandice K. Parsons
Title: Vice President
Commitment: $28,000,000.00
- ----------
BANK: KBC BANK N.V.
- ----
By: /s/ Jean-Pierre Diels
-----------------------------
Name: Jean-Pierre Diels
Title: First Vice President
By: /s/ Declan Meagher
-----------------------------
Name: Declan Meagher
Title: First Vice President
Commitment: $25,000,000.00
- ----------
BANK: MELLON BANK, N.A.
- ----
By: /s/ Michael P. Gage
-----------------------------
Name: Michael P. Gage
Title: F.V.P.
Commitment: $25,000,000.00
- ----------
BANK: PNC BANK, NATIONAL ASSOCIATION
- ----
By: /s/ Paul Jamidlkowski
-----------------------------
Name: Paul Jamidlkowski
Title: Vice President
Commitment: $25,000,000.00
- ----------
BANK: U.S. BANK
- ----
By: /s/ Perry L. Skoll
-----------------------------
Name: Perry L. Skoll
Title: Vice President
Commitment: $25,000,000.00
- ----------
BANK: CHANG HWA COMMERCIAL BANK, LTD.,
- ----
LOS ANGELES BRANCH
By: /s/ James Lin
-----------------------------
Name: James Lin
Title: SVP & General Manager
Commitment: $20,000,000.00
- ----------
BANK: COMERICA BANK
- ----
By: /s/ Charles L. Weddell
----------------------------
Name: Charles L. Weddell
Title: Vice President
Commitment: $15,000,000.00
- ----------
EXHIBIT A
---------
NOTE
______________ New York, New York
March 15, 2002
For value received, KILROY REALTY, L.P., a Delaware limited
partnership (the "Borrower") promises to pay to the order of _______________
--------
(the "Bank"), for the account of its Applicable Lending Office, the unpaid
----
principal amount of each Loan made by the Bank to the Borrower pursuant to the
Credit Agreement referred to below on the Maturity Date. The Borrower promises
to pay interest on the unpaid principal amount of each such Loan on the dates
and at the rate or rates provided for in the Credit Agreement. All such payments
of principal and interest shall be made in lawful money of the United States in
Federal or other immediately available funds at the office of Administrative
Agent under the Credit Agreement (as defined below).
All Loans made by the Bank, the respective types and maturities
thereof and all repayments of the principal thereof shall be recorded by the
Bank and, if the Bank so elects in connection with any transfer or enforcement
hereof, appropriate notations to evidence the foregoing information with respect
to each such Loan then outstanding may be endorsed by the Bank on the schedule
attached hereto, or on a continuation of such schedule attached to and made a
part hereof; provided that the failure of the Bank to make any such recordation
--------
or endorsement shall not affect the obligations of the Borrower hereunder or
under the Credit Agreement.
This Note is one of the Notes referred to in the Third Amended and
Restated Revolving Credit Agreement, dated as of March 15, 2002, among the
Borrower, the Banks party thereto, JPMorgan Chase Bank, as Administrative Agent
and as Bank, J.P. Morgan Securities Inc., as Lead Arranger and Sole Bookrunner,
Commerzbank AG, First Union National Bank and Fleet National Bank, as
Syndication Agents, and Bank One, N.A. and Dresdner Bank AG, New York and Grand
Cayman Branches, as Co-Documentation Agents (as the same may be amended from
time to time, the "Credit Agreement").
----------------
Terms defined in the Credit Agreement are used herein with the
same meanings. Reference is made to the Credit Agreement for provisions for the
prepayment hereof and the acceleration of the maturity hereof.
KILROY REALTY, L.P., a Delaware limited
partnership
By: Kilroy Realty Corporation, a Maryland
corporation, its general partner
By: _____________________
Name:
Title:
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
_______________________________________________________________
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
EXHIBIT A-1
-----------
NOTE
$______________ New York, New York
March 15, 2002
For value received, KILROY REALTY, L.P., a Delaware limited
partnership (the "Borrower") promises to pay to the order of _______________
--------
(the "Bank"), for the account of its Applicable Lending Office, the unpaid
----
principal amount of each Loan made by the Bank to the Borrower pursuant to the
Credit Agreement referred to below on the Maturity Date. The Borrower promises
to pay interest on the unpaid principal amount of each such Loan on the dates
and at the rate or rates provided for in the Credit Agreement. All such payments
of principal and interest shall be made in lawful money of the United States in
Federal or other immediately available funds at the office of Administrative
Agent under the Credit Agreement (as defined below).
All Loans made by the Bank, the respective types and maturities
thereof and all repayments of the principal thereof shall be recorded by the
Bank and, if the Bank so elects in connection with any transfer or enforcement
hereof, appropriate notations to evidence the foregoing information with respect
to each such Loan then outstanding may be endorsed by the Bank on the schedule
attached hereto, or on a continuation of such schedule attached to and made a
part hereof; provided that the failure of the Bank to make any such recordation
--------
or endorsement shall not affect the obligations of the Borrower hereunder or
under the Credit Agreement.
This Note is one of the Designated Lender Notes referred to in the
Third Amended and Restated Revolving Credit Agreement, dated as of March 15,
2002, among the Borrower, the Banks party thereto, JPMorgan Chase Bank, as
Administrative Agent and as Bank, J.P. Morgan Securities Inc., as Lead Arranger
and Sole Bookrunner, Commerzbank AG, First Union National Bank and Fleet
National Bank, as Syndication Agents, and Bank One, N.A. and Dresdner Bank AG,
New York and Grand Cayman Branches, as Co-Documentation Agents (as the same may
be amended from time to time, the "Credit Agreement").
----------------
Terms defined in the Credit Agreement are used herein with the
same meanings. Reference is made to the Credit Agreement for provisions for the
prepayment hereof and the acceleration of the maturity hereof.
KILROY REALTY, L.P., a Delaware limited
partnership
By: Kilroy Realty Corporation, a Maryland
corporation, its general partner
By: _____________________
Name:
Title:
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
_______________________________________________________________
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
EXHIBIT B
---------
Unencumbered Asset Pool Properties
(Fee Interests)
PROPERTY LOCATION
26541 Agoura Rd. (ARC) Calabasas, CA
5151-5155 Camino Ruiz Camarillo, CA
23600-610 Telo Avenue Torrance, CA
1633 26th Street Santa Monica, CA
3130 Wilshire Santa Monica, CA
525 N. Brand Glendale, CA
Westside Media Ctr Ph. I Los Angeles, CA
Calabasas Phase I Calabasas, CA
Westside Media Ctr Ph. II Los Angeles, CA
909 N. Sepulveda El Segundo, CA
Calabasas Phase III Calabasas, CA
2501 Pullman (Caltrans) Santa Ana, CA
9401 & 9451 Toledo Way (Mazda) Irvine, CA
601 Valencia Brea, CA
Anaheim Corp Center Anaheim, CA
8101 Kaiser Anaheim, CA
1240 & 1250 Lakeview Ave. Anaheim, CA
15435-445 Innovation Drive San Diego, CA
AMCC Expansion San Diego, CA
Pacific Tech Center San Diego, CA
4361 Latham Riverside, CA
4351 Latham Riverside, CA
Walnut Business Diamond Bar, CA
5325 Hunter (Clothestime) Anaheim, CA
Brea Industrial Properties Brea, CA
Garden Grove Industrial Properties Garden Grove, CA
12400 Industry Garden Grove, CA
1675 MacArthur Costa Mesa, CA
2055 Main Street Irvine, CA
14831 Franklin Tustin, CA
1951 Carnegie Santa Ana, CA
1250 N. Tustin Avenue Anaheim, CA
2911 Dow Avenue Tustin, CA
5115 N. 27th Avenue Phoenix, AZ
EXHIBIT C
---------
Unencumbered Asset Pool Properties
(Leasehold Interests)
Kilroy Airport Center,
(Long Beach) Long Beach, CA
EXHIBIT D
---------
FORM OF ASSIGNMENT AND ASSUMPTION
---------------------------------
ASSIGNMENT AND ASSUMPTION AGREEMENT
-----------------------------------
AGREEMENT dated as of __________, ____ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"), KILROY REALTY, L.P. (the "Borrower")
and JPMORGAN CHASE BANK, as Administrative Agent (the "Agent").
W I T N E S S E T H
-------------------
WHEREAS, this Assignment and Assumption Agreement (the
"Assignment") relates to the Third Amended and Restated Revolving Credit
Agreement, dated as of March 15, 2002, among the Borrower, the Banks party
thereto, JPMorgan Chase Bank, as Administrative Agent and as Bank, J.P. Morgan
Securities Inc., as Lead Arranger and Sole Bookrunner, Commerzbank AG, First
Union National Bank and Fleet National Bank, as Syndication Agents, and Bank
One, N.A. and Dresdner Bank AG, New York and Grand Cayman Branches, as
Co-Documentation Agents (as the same may be amended from time to time, the
"Credit Agreement").
----------------
WHEREAS, as provided under the Credit Agreement, the Assignor
has a Commitment to make Loans to the Borrower in an aggregate principal amount
at any time outstanding not to exceed $__________;
WHEREAS, Loans made to the Borrower by the Assignor under the
Credit Agreement in the aggregate principal amount of $____________ are
outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all
of the rights of the Assignor under the Credit Agreement in respect of a portion
of its Commitment thereunder in an amount equal to $__________ (the "Assigned
Amount"), together with a corresponding portion of its outstanding Loans, and
the Assignee proposes to accept assignment of such rights and assume the
corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise
-----------
defined herein shall have the respective meanings set forth in the Credit
Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells
----------
to the Assignee all of the rights of the Assignor under the Credit Agreement to
the extent of the Assigned Amount, and the Assignee hereby accepts such
assignment from the Assignor and assumes all of the obligations of the Assignor
under the Credit Agreement to the extent of the Assigned Amount, including the
purchase from the Assignor of the corresponding portion of the principal amount
of the Loans made by the Assignor outstanding at the date hereof. Upon the
execution and delivery hereof by the Assignor, the Assignee, the Borrower and
the Agent and the payment of the amounts specified in Section 3 required to be
paid on the date hereof (i) the Assignee shall, as of the date hereof, succeed
to the rights and be obligated to perform the obligations of a Bank under the
Credit Agreement with a Commitment in an amount equal to the Assigned Amount,
and (ii) the Commitment of the Assignor shall, as of the date hereof, be reduced
by a like amount and the Assignor released from its obligations under the Credit
Agreement to the extent such obligations have been assumed by the Assignee. The
assignment provided for herein shall be without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and
--------
sale contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on
the date hereof in Federal funds the amount heretofore agreed between them.1 It
is understood that Commitment Fees accrued to the date hereof are for the
account of the Assignor and such fees accruing from and including the date
hereof are for the account of the Assignee. Each of the Assignor and the
Assignee hereby agrees that if it receives any amount under the Credit Agreement
which is for the account of the other party hereto, it shall receive the same
for the account of such other party to the extent of such other party's interest
therein and shall promptly pay the same to such other party.
SECTION 4. Consent of the Borrower and the Agent. This
-------------------------------------
Agreement is conditioned upon the written consent of the Borrower and the
consent of the Agent pursuant to section 9.6(c) of the Credit Agreement. The
execution of this Agreement by the Borrower and the Agent is evidence of the
required consents. Pursuant to Section 9.6(c) the Borrower agrees to execute and
deliver a Note payable
__________________
/1/ The amount should combine principal together with accrued interest and
breakage compensation, if any, to be paid by the Assignee, net of any
portion of any up-front fee to be paid by the Assignor to the Assignee.
It may be preferable in an appropriate case to specify these amounts
generically or by formula rather than as a fixed sum.
to the order of the Assignee to evidence the assignment and assumption provided
for herein.
SECTION 5. Non-Reliance on Assignor. The Assignor represents
------------------------
and warrants that it is the legal and beneficial owner of the interest being
assigned by it hereunder, that it has not created any adverse claim upon such
interest and that such interest is free and clear of any adverse claim, and that
it is authorized to enter into this Agreement. The Assignor makes no other
representation or warranty in connection with, and shall have no responsibility
with respect to, the solvency, financial condition, or statements of the
Borrower, or the validity and enforceability of the obligations of the Borrower
in respect of the Credit Agreement or any Note. The Assignee acknowledges that
it has, independently and without reliance on the Assignor, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and will continue to be
responsible for making its own independent appraisal of the business, affairs
and financial condition of the Borrower. The Assignee represents and warrants
that it is authorized to enter into this Agreement.
SECTION 6. Governing Law. This Agreement shall be governed by
-------------
and construed in accordance with the external laws of the State of New York.
SECTION 7. Counterparts. This Agreement may be signed in any
------------
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date first
above written.
[ASSIGNOR]
By:____________________________
Name:
Title:
[ASSIGNEE]
By:____________________________
Name:
Title:
JPMORGAN CHASE BANK, as
Administrative Agent
By:________________________
Name:
Title:
CONSENTED TO:
KILROY REALTY, L.P.
By: Kilroy Realty Corporation,
its general partner
By: __________________________
Name: Tyler H. Rose
Title: Senior Vice President and Treasurer
EXHIBIT E
Form of Money Market Quote Request
----------------------------------
[Date]
To: JPMORGAN CHASE BANK (the "Administrative Agent")
From: Kilroy Realty, L.P. (the "Borrower")
Re: Third Amended and Restated Revolving Credit Agreement, dated as of
March 15, 2002, among the Borrower, the Banks party thereto, the
Administrative Agent, J.P. Morgan Securities Inc., as Lead Arranger
and Sole Bookrunner, Commerzbank AG, First Union National Bank and
Fleet National Bank, as Syndication Agents, and Bank One, N.A. and
Dresdner Bank AG, New York and Grand Cayman Branches, as
Co-Documentation Agents (as the same may be amended from time to
time, the "Credit Agreement").
----------------
We hereby give notice pursuant to Section 2.3 of the Credit
Agreement that we request Money Market Quotes for the following proposed Money
Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount/2/ Interest Period/3/
- ------------------- ------------------
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
_____________________________
/2/ Amount must be $10,000,000 or a larger multiple of $500,000.
/3/ Not less than one month (LIBOR Auction) or not less than 30 days
(Absolute Rate Auction), subject to the provisions of the definition of
Interest Period.
The funding of Money Market Loans made in connection with this
Money Market Quote Request [may/may not] be made by Designated Lenders.
Terms used herein have the meanings assigned to them in the
Credit Agreement.
Kilroy Realty, L.P.
By: Kilroy Realty Corporation
By:_______________________
Name:
Title:
EXHIBIT F
Form of Invitation for Money Market Quotes
------------------------------------------
To: [Name of Bank]
Re: Invitation for Money Market Quotes to Kilroy Realty, L.P. (the
"Borrower")
Pursuant to Section 2.3 of the Third Amended and Restated
Revolving Credit Agreement, dated as of March 15, 2002, among the Borrower, the
Banks party thereto, JPMorgan Chase Bank, as Administrative Agent and as Bank,
J.P. Morgan Securities Inc., as Lead Arranger and Sole Bookrunner, Commerzbank
AG, First Union National Bank and Fleet National Bank, as Syndication Agents,
and Bank One, N.A. and Dresdner Bank AG, New York and Grand Cayman Branches, as
Co-Documentation Agents, we are pleased on behalf of the Borrower to invite you
to submit Money Market Quotes to the Borrower for the following proposed Money
Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount Interest Period
- ---------------- ---------------
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Please respond to this invitation by no later than 10:00 A.M.
(New York City time) on [date].
JPMORGAN CHASE BANK, as
Administrative Agent
By_____________________________
Authorized Officer
EXHIBIT G
Form of Money Market Quote
--------------------------
To: JPMorgan Chase Bank, as Administrative Agent (the "Administrative
Agent")
Re: Money Market Quote to Kilroy Realty, L.P. (the "Borrower")
In response to your invitation on behalf of the Borrower dated
_____________, 19__, we hereby make the following Money Market Quote on the
following terms:
1. Quoting Bank: ________________________________
2. Person to contact at Quoting Bank:
_____________________________
3. Date of Borrowing: ____________________*
4. We hereby offer to make Money Market Loan(s) in the following principal
amounts, for the following Interest Periods and at the following rates:
Principal Interest Money Market
Amount** Period*** [Margin****] [Absolute Rate*****]
- -------- --------- ---------------------------------
$
$
[Provided, that the aggregate principal amount of Money Market Loans
for which the above offers may be accepted shall not exceed
$____________.]**
We understand and agree that the offer(s) set forth
above, subject to the satisfaction of the applicable conditions set
forth in the Third Amended and Restated Revolving Credit Agreement,
dated as of March 15, 2002, among the Borrower, the Banks party
thereto, the Administrative
Agent, J.P. Morgan Securities Inc., as Lead Arranger and Sole
Bookrunner, Commerzbank AG, First Union National Bank and Fleet
National Bank, as Syndication Agents, and Bank One, N.A. and Dresdner
Bank AG, New York and Grand Cayman Branches, as Co-Documentation
Agents, irrevocably obligates us to make the Money Market Loan(s) for
which any offer(s) are accepted, in whole or in part.
Very truly yours,
[NAME OF BANK]
Dated:_______________ By:____________________________
Authorized Officer