EXHIBIT 10.3
AMENDED AND RESTATED GUARANTY OF PAYMENT
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AMENDED AND RESTATED GUARANTY OF PAYMENT (this "Guaranty"), made as of
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October 9, 1998, between KILROY REALTY CORPORATION, a Maryland corporation,
having an address at 2250 East Imperial Highway, Suite 1200, El Segundo,
California 90245 ("Guarantor"), and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, a
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New York banking corporation, having an office at 60 Wall Street, New York, New
York 10260, as lead agent (the "Lead Agent") for the banks (the "Banks") listed
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on the signature pages of the Amended and Restated Revolving Credit Agreement
(as the same may be amended, modified, supplemented or restated, the "Credit
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Agreement"), dated as of the date hereof, among Kilroy Realty, L.P.
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("Borrower"), the Banks, the Lead Agent, and Bank of Montreal, Commerzbank
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Aktiengesellschaft, Los Angeles Branch, Dresdner Bank AG, New York Branch and
Grand Cayman Branch, PNC Bank, National Association and Union Bank of
California, as Co-Agents.
W I T N E S S E T H:
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WHEREAS, the Borrower, the Lead Agent and the Banks entered into the
Revolving Credit Agreement, dated as of February 24, 1998 (the "Existing Credit
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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; and
WHEREAS, as a condition to the execution and delivery of the Credit
Agreement, the Banks have required that Guarantor amend and restate the Guaranty
of Payment (the "Existing Guaranty"), dated as February 24, 1998, in its
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entirety; and
WHEREAS, capitalized terms used herein and not otherwise defined shall have
the meanings ascribed there-to in the Credit Agreement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
I. The Existing Guaranty is hereby modified so that all of the terms and
conditions of the aforesaid Existing Guaranty shall be restated in their
entirety as set forth herein, and Guarantor agrees to comply with and be subject
to all of the terms, covenants and conditions of this Guaranty.
II. This Guaranty 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 Guaranty
shall be deemed to refer to this Guaranty.
1. Guarantor, on behalf of itself and its successors and assigns, hereby
irrevocably, absolutely and unconditionally guarantees the full and punctual
payment when due, whether at stated maturity or otherwise, of all Obligations of
Borrower now or hereafter existing under the Notes and the Credit Agreement, for
principal and/or interest as well as any and all other amounts due thereunder,
including, without limitation, all indemnity obligations of Borrower thereunder,
and any and all reasonable costs and expenses (including, without limitation,
reasonable attorneys' fees and disbursements) incurred by the Lead Agent or the
Banks in enforcing its rights under this Guaranty (all of the foregoing
obligations being the "Guaranteed Obligations").
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2. It is agreed that the Guaranteed Obligations of Guarantor hereunder
are primary and this Guaranty shall be enforceable against Guarantor and its
successors and assigns without the necessity for any suit or proceeding of any
kind or nature whatsoever brought by the Lead Agent against Borrower or its
respective successors or assigns or any other party or against any security for
the payment and performance of the Guaranteed Obligations and without the
necessity of any notice of non-payment or non-observance or of any notice of
acceptance of this Guaranty or of any notice or demand to which Guarantor might
otherwise be entitled (including, without limitation, diligence, presentment,
notice of maturity, extension of time, change in nature or form of the
Guaranteed Obligations, acceptance of further securi-
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ty, release of further security, imposition or agreement arrived at as to the
amount of or the terms of the Guaranteed Obligations, notice of adverse change
in Borrower's financial condition and any other fact which might materially
increase the risk to Guarantor), all of which Guarantor hereby expressly waives;
and Guarantor hereby expressly agrees that the validity of this Guaranty and the
obligations of Guarantor hereunder shall in no way be terminated, affected,
diminished, modified or impaired by reason of the assertion of or the failure to
assert by the Lead Agent against Borrower or its respective successors or
assigns, any of the rights or remedies reserved to the Lead Agent pursuant to
the provisions of the Loan Documents. Guarantor agrees that any notice or
directive given at any time to the Lead Agent which is inconsistent with the
waiver in the immediately preceding sentence shall be void and may be ignored by
the Lead Agent, and, in addition, may not be pleaded or introduced as evidence
in any litigation relating to this Guaranty for the reason that such pleading or
introduction would be at variance with the written terms of this Guaranty,
unless the Lead Agent has specifically agreed otherwise in a writing, signed by
a duly authorized officer of the Lead Agent. Guarantor specifically acknowledges
and agrees that the foregoing waivers are of the essence of this transaction and
that, but for this Guaranty and such waivers, the Lead Agent would decline to
execute the Loan Documents.
3. Guarantor waives, and covenants and agrees that it will not at any
time insist upon, plead or in any manner whatsoever claim or take the benefit or
advantage of, any and all appraisal, valuation, stay, extension, marshalling-of-
assets or redemption laws, or right of homestead or exemption, whether now or at
any time hereafter in force, which may delay, prevent or otherwise affect the
performance by Guarantor of its obligations under, or the enforcement by the
Lead Agent of, this Guaranty. Guarantor further covenants and agrees not to set
up or claim any defense, counterclaim, offset, set-off or other objection of any
kind to any action, suit or proceeding in law, equity or otherwise, or to any
demand or claim that may be instituted or made by the Lead Agent other than the
defense of the actual timely payment and performance by Borrower of the
Guaranteed Obligations hereunder; provided, however, that the foregoing shall
not be deemed a waiver of Guarantor's right to assert any
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compulsory counterclaim, if such counterclaim is compelled under local law or
rule of procedure, nor shall the foregoing be deemed a waiver of Guarantor's
right to assert any claim which would constitute a defense, setoff, counterclaim
or crossclaim of any nature whatsoever against Lead Agent or any Bank in any
separate action or proceeding. Guarantor represents, warrants and agrees that,
as of the date hereof, its obligations under this Guaranty are not subject to
any counterclaims, offsets or defenses against the Lead Agent or any of the
Banks of any kind.
4. The provisions of this Guaranty are for the benefit of the Lead Agent
and the Banks and their successors and permitted assigns, and nothing herein
contained shall impair as between Borrower and the Lead Agent and the Banks the
obligations of Borrower under the Loan Documents.
5. This Guaranty shall be a continuing, unconditional and absolute
guaranty and the liability of Guarantor hereunder shall in no way be terminated,
affected, modified, impaired or diminished by reason of the happening, from time
to time, of any of the following, although without notice or the further consent
of Guarantor:
(a) any assignment, amendment, modification or waiver of or change in any
of the terms, covenants, conditions or provisions of any of the Guaranteed
Obligations or the Loan Documents or the invalidity or unenforceability of any
of the foregoing; or
(b) any extension of time that may be granted by the Lead Agent and/or any
Bank to Borrower, any guarantor, or their respective successors or assigns,
heirs, executors, administrators or personal representatives; or
(c) any action which the Lead Agent may take or fail to take under or in
respect of any of the Loan Documents or by reason of any waiver or, or failure
to enforce any of the rights, remedies, powers or privileges available to the
Lead Agent under this Guaranty or available to the Lead Agent at law, equity
or otherwise, or any action on the
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part of the Lead Agent granting indulgence or extension in any form
whatsoever; or
(d) any sale, exchange, release, or other disposition of any property
pledged, mortgaged or conveyed, or any property in which the Lead Agent and/or
the Banks have been granted a lien or security interest to secure any
indebtedness of Borrower to the Lead Agent and/or the Banks; or
(e) any release of any person or entity who may be liable in any manner
for the payment and collection of any amounts owed by Borrower to the Lead
Agent and/or the Banks; or
(f) the application of any sums by whomsoever paid or however realized to
any amounts owing by Borrower to the Lead Agent and/or the Banks under the
Loan Documents in such manner as the Lead Agent shall determine in its sole
discretion; or
(g) Borrower's or any guarantor's voluntary or involuntary liquidation,
dissolution, sale of all or substantially all of their respective assets and
liabilities, appointment of a trustee, receiver, liquidator, sequestrator or
conservator for all or any part of Borrower's or Guarantor's assets,
insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment, or the commencement
of other similar proceedings affecting Borrower or any guarantor or any of the
assets of any of them, including, without limitation, (i) the release or
discharge of Borrower or any guarantor from the payment and performance of
their respective obligations under any of the Loan Documents by operation of
law, or (ii) the impairment, limitation or modification of the liability of
Borrower or any guarantor in bankruptcy, or of any remedy for the enforcement
of the Guaranteed Obligations under any of the Loan Documents, or Guarantor's
liability under this Guaranty, resulting from the operation of any present or
future provisions of the Bankruptcy Code or other present or future federal,
state or applicable statute or law or from the decision in any court; or
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(h) any improper disposition by Borrower of the proceeds of the Loans, it
being acknowledged by Guarantor that the Lead Agent or any Bank shall be
entitled to honor any request made by Borrower for a disbursement of such
proceeds and that neither the Lead Agent nor any Bank shall have any
obligation to see the proper disposition by Borrower of such proceeds.
6. Guarantor agrees that if at any time all or any part of any payment at
any time received by the Lead Agent and/or any Bank from Borrower or Guarantor
under or with respect to this Guaranty is or must be rescinded or returned by
the Lead Agent or any Bank for any reason whatsoever (including, without
limitation, the insolvency, bankruptcy or reorganization of Borrower or
Guarantor), then Guarantor's obligations hereunder shall, to the extent of the
payment rescinded or returned, be deemed to have continued in existence
notwithstanding such previous receipt by such party, and Guarantor's obligations
hereunder shall continue to be effective or reinstated, as the case may be, as
to such payment, as though such previous payment had never been made.
7. Until this Guaranty is terminated pursuant to the terms hereof,
Guarantor (i) shall have no right of subrogation against Borrower or any entity
comprising same by reason of any payments or acts of performance by Guarantor in
compliance with the obligations of Guarantor hereunder; (ii) waives any right to
enforce any remedy which Guarantor now or hereafter shall have against Borrower
or any entity comprising same by reason of any one or more payment or acts of
performance in compliance with the obligations of Guarantor hereunder and (iii)
from and after an Event of Default (as defined in the Credit Agreement),
subordinates any liability or indebtedness of Borrower or any entity comprising
same now or hereafter held by Guarantor or any affiliate of Guarantor to the
obligations of Borrower under the Loan Documents. The foregoing, however, shall
not be deemed in any way to limit any rights that Guarantor may have pursuant to
the Agreement of Limited Partnership of Borrower or which it may have at law or
in equity with respect to any other partners of Borrower.
8. Guarantor represents and warrants to the Lead Agent and the Banks
(with the knowledge that the
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Lead Agent and the Banks are relying upon the same) as of the date hereof, as
follows:
(a) as of the date hereof, Guarantor is the sole general partner of
Borrower;
(b) based upon such relationship, Guarantor has determined that it is in
its best interests to enter into this Guaranty;
(c) in the good faith judgement of Guarantor, the benefits to be derived
by Guarantor from Borrower's access to funds made possible by the Loan
Documents are at least equal to the obligations undertaken pursuant to this
Guaranty;
(d) Guarantor is solvent and has corporate power and authority to enter
into this Guaranty and to perform its obligations under the term hereof and
(i) Guarantor is organized and validly existing under the laws of the State of
Maryland, (ii) Guarantor has complied with all provisions of applicable law in
connection with all aspects of this Guaranty, and (iii) the person executing
this Guaranty has all the requisite power and authority to execute and deliver
this Guaranty;
(e) to the best of Guarantor's knowledge, there is no action, suit,
proceeding, or investigation pending or threatened against or affecting
Guarantor at law, in equity, in admiralty or before any arbitrator or any
governmental department, commission, board, bureau, agency or instrumentality
(domestic or foreign) which is reasonably likely to materially and adversely
impair the ability of Guarantor to perform its obligations under this
Guaranty;
(f) the execution and delivery of and the performance by Guarantor of its
obligations under this Guaranty have been duly authorized by all necessary
action on the part of Guarantor and do not (i) violate any provision of any
law, rule, regulation (including, without limitation, Regulation U or X of the
Board of Governors of the Federal Reserve System of the United States), order,
writ, judgment, decree, determination or award presently in effect
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having applicability to Guarantor or the organizational documents of Guarantor
the consequences of which violation is likely to materially and adversely
impair the ability of Guarantor to perform its obligations under this Guaranty
or (ii) violate or conflict with, result in a breach of or constitute a
default under any material indenture, agreement or other instrument to which
Guarantor is a party, or by which Guarantor or any of its property is bound
the consequences of which violation, conflict, breach or default is reasonably
likely to materially and adversely impair the ability of Guarantor to perform
its obligations under this Guaranty;
(g) this Guaranty has been duly executed by Guarantor and constitutes the
legal, valid and binding obligation of Guarantor, enforceable against it 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;
(h) no authorization, consent, approval, license or formal exemption from,
nor any filing, declaration or registration with, any Federal, state, local or
foreign court, governmental agency or regulatory authority is required in
connection with the execution, delivery and performance by Guarantor of this
Guaranty, except those which have already been obtained; and
(i) Guarantor is not an "investment company" as that term is defined in,
nor is it otherwise subject to regulation under, the Investment Company Act of
1940, as amended.
9. Guarantor and the Lead Agent each acknowledge and agree that this
Guaranty is a guarantee of payment and performance and not of collection and
enforcement in respect of any obligations which may accrue to the Lead Agent
and/or the Banks from Borrower under the provisions of any Loan Document.
10. Subject to the terms and conditions of the Credit Agreement, and in
conjunction therewith, the Lead
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Agent or any Bank may assign any or all of its rights under this Guaranty. In
the event of any such assignment, the Lead Agent shall give Guarantor prompt
written notice of same. If the Lead Agent and/or any Bank elects to sell all the
Loans or participations in the Loans and the Loan Documents, including this
Guaranty, the Lead Agent or any Bank may forward to each purchaser and
prospective purchaser all documents and information relating to this Guaranty or
to Guarantor, whether furnished by Borrower or Guarantor or otherwise, subject
to the terms and conditions of the Credit Agreement.
11. Guarantor agrees, upon the written request of the Lead Agent, to
execute and deliver to the Lead Agent, from time to time, any modification or
amendment hereto or any additional instruments or documents reasonably
considered necessary by the Lead Agent or its counsel to cause this Guaranty to
be, become or remain valid and effective in accordance with its terms, provided,
that, any such modification, amendment, additional instrument or document shall
not increase Guarantor's obligation's or diminish its rights hereunder and shall
be reasonably satisfactory as to form to Guarantor and to Guarantor's counsel.
12. The representations and warranties of Guarantor set forth in this
Guaranty shall survive until this Guaranty shall terminate in accordance with
the terms hereof.
13. This Guaranty contains the entire agreement among the parties with
respect to the subject matter hereof and supersedes all prior agreements
relating to such subject matter and may not be modified, amended, supplemented
or discharged except by a written agreement signed by Guarantor and the Lead
Agent.
14. If all or any portion of any provision contained in this Guaranty
shall be determined to be invalid, illegal or unenforceable in any respect for
any reason, such provision or portion thereof shall be deemed stricken and
severed from this Guaranty and the remaining provisions and portions thereof
shall continue in full force and effect.
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15. This Guaranty may be executed in counterparts which together shall
constitute the same instrument.
16. All notices, requests and other communications to any party hereunder
shall be in writing (including bank wire, telex, facsimile transmission followed
by telephonic confirmation or similar writing) and shall be, addressed to such
party at the address set forth below or to such other address as may be
identified by any party in a written notice to the others :
If to Guarantor: Kilroy Realty Corporation
2250 East Imperial Highway
Suite 1200
El Segundo, California 90245
Attn: Chief Financial Officer
Telecopy: (310) 322-5981
With Copies of
Notices to
Guarantor to: Latham & Watkins
633 West Fifth Street
Suite 4000
Los Angeles, California 90071
Attn: Glen B. Collyer, Esq.
Telecopy: (213) 891-8763
If to the Lead
Agent: Morgan Guaranty
Trust Company of New York
60 Wall Street
New York, New York 10260
Attn: Mr. Tim O'Donovan
Telecopy: (212) 648-5249
With Copies of
Notices to the
Lead Agent to: Skadden, Arps, Slate,
Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attn: Martha Feltenstein, Esq.
Telecopy: (212) 735-2000
Each such notice, request or other communication shall be effective
(i) if given by telex or facsimi-
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le transmission, when such telex or facsimile is transmitted to the telex number
or facsimile number specified in this Section and the appropriate answerback or
facsimile confirmation is received, (ii) if given by certified registered mail,
return receipt requested, with first class postage prepaid, addressed as
aforesaid, upon receipt or refusal to accept delivery, (iii) if given by a
nationally recognized overnight carrier, 24 hours after such communication is
deposited with such carrier with postage prepaid for next day delivery, or (iv)
if given by any other means, when delivered at the address specified in this
Section.
17. Any acknowledgment or new promise, whether by payment of principal or
interest or otherwise by Borrower or Guarantor, with respect to the Guaranteed
Obligations shall, if the statute of limitations in favor of Guarantor against
the Lead Agent shall have commenced to run, toll the running of such statute of
limitations, and if the period of such statute of limitations shall have
expired, prevent the operation of such statute of limitations.
18. This Guaranty shall be binding upon Guarantor and its successors and
assigns and shall inure to the benefit of the Lead Agent and the Banks and their
successors and permitted assigns.
19. The failure of the Lead Agent to enforce any right or remedy
hereunder, or promptly to enforce any such right or remedy, shall not constitute
a waiver thereof, nor give rise to any estoppel against the Lead Agent, nor
excuse Guarantor from its obligations hereunder. Any waiver of any such right or
remedy to be enforceable against the Lead Agent must be expressly set forth in a
writing signed by the Lead Agent.
20. (a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK.
(b) Any legal action or proceeding with respect to this Guaranty 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
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execution and delivery of this Guaranty, the Guarantor 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
Guarantor irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to the Guarantor at
its address for notices set forth herein. The Guarantor hereby irrevocably
waives, to the fullest extent permitted by law, 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 Guaranty brought in the
courts referred to above and hereby further irrevocably waives, to the fullest
extent permitted by law, 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 Lead Agent to
serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against the Guarantor in any other
jurisdiction.
(c) GUARANTOR HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY AND ALL
CLAIMS OR CAUSES OF ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY. IT IS
HEREBY ACKNOWLEDGED BY GUARANTOR THAT THE WAIVER OF A JURY TRIAL IS A MATERIAL
INDUCEMENT FOR THE Lead Agent TO ACCEPT THIS GUARANTY AND THAT THE LOANS MADE BY
THE BANKS ARE MADE IN RELIANCE UPON SUCH WAIVER. GUARANTOR FURTHER WARRANTS AND
REPRESENTS THAT SUCH WAIVER HAS BEEN KNOWINGLY AND VOLUNTARILY MADE, FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS GUARANTY MAY
BE FILED BY THE LEAD AGENT IN COURT AS A WRITTEN CONSENT TO A NON-JURY TRIAL.
(d) Guarantor does hereby further covenant and agree to and with the
Lead Agent that Guarantor may be joined in any action against Borrower in
connection with the Loan Documents and that recovery may be had against
Guarantor in such action or in any independent action against Guarantor (with
respect to the Guaranteed Obligations), without the Lead Agent first pursuing or
exhausting any remedy or claim against Borrower or its successors or assigns.
Guarantor also agrees that, in an action brought with respect to the Guaranteed
Obligations
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in any jurisdiction, it shall be conclusively bound by the judgment in any such
action by the Lead Agent (wherever brought) against Borrower or its successors
or assigns, as if Guarantor were a party to such action, even though Guarantor
was not joined as parties in such action.
(e) Guarantor agrees to pay all reasonable expenses (including,
without limitation, attorneys' fees and disbursements) which may be incurred by
the Lead Agent or the Banks in connection with the enforcement of their rights
under this Guaranty, whether or not suit is initiated.
21. Notwithstanding anything to the contrary contained herein, this
Guaranty shall terminate and be of no further force or effect upon the full
performance and payment of the Guaranteed Obligations hereunder. Upon
termination of this Guaranty in accordance with the terms of this Guaranty, the
Lead Agent promptly shall deliver to Guarantor such documents as Guarantor or
Guarantor's counsel reasonably may request in order to evidence such
termination.
22. All of the Lead Agent's rights and remedies under each of the Loan
Documents or under this Guaranty are intended to be distinct, separate and
cumulative and no such right or remedy therein or herein mentioned is intended
to be in exclusion of or a waiver of any other right or remedy available to the
Lead Agent.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Guaranty of Payment as of the date and year first above written.
GUARANTOR:
KILROY REALTY CORPORATION
By: /s/ Tyler H. Rose
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Name: Tyler H. Rose
Title: Senior Vice President and Trea-
surer
ACCEPTED:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, AS Lead Agent
By: /s/ Tim O'Donovan
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Name: Tim O'Donovan
Title: Vice President
ACKNOWLEDGMENT
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STATE OF CALIFORNIA )
) SS.
COUNTY OF LOS ANGELES )
On September 25, 1998, before me, Judy LaCoss, a Notary Public,
personally appeared Tyler H. Rose, personally known to me to be the person whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his authorized capacity, and that by his signature on the
instrument, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
[Seal]
/s/ Judy LaCoss
Notary Public