EXHIBIT 10.2
SECOND AMENDED AND RESTATED GUARANTY OF PAYMENT
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SECOND AMENDED AND RESTATED GUARANTY OF PAYMENT (this "Guaranty"),
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made as of November 8, 1999, 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
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NEW YORK, a 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
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"Banks") listed on the signature pages of the Second Amended and Restated
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Revolving Credit Agreement (as the same may be amended, modified, supplemented
or restated, the "Credit Agreement"), dated as of the date hereof, among Kilroy
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Realty, L.P. ("Borrower"), the Banks, the Lead Agent, in its capacity as Lead
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Agent and Bank, The Chase Manhattan Bank, as Bank and as Documentation Agent,
J.P. Morgan Securities Inc., as Syndication Agent, Co-Lead Arranger and Joint
Bookmanager, and Chase Securities Inc., as Co-Lead Arranger and Joint
Bookmanager.
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, which was amended and
restated in its entirety by that certain Amended and Restated Revolving Credit
Agreement, dated as of October 9, 1998 (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 in
that Credit Agreement 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, dated as February 24,
1998, which was amended and restated in its entirety by that certain Amended and
Restated Guaranty of Payment, dated as of October 9, 1998 (the "Existing
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Guaranty"); and
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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 rea-
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sonable 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 security, 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
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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
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,
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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 part of the Lead
Agent granting indulgence or extension in any form whatsoever; or
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(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,
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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
(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)
subor-
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dinates 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, provided, however, until an
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Event of Default has occurred and is continuing, Borrower or any entity
comprising same shall not be prohibited from making payments to Guarantor or any
affiliate thereof on such subordinated liability or indebtedness in accordance
with the terms thereof. 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 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
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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 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;
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(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 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
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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: David Stone
Telecopy: 212-648-5018
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With Copies of
Notices to the
Lead Agent to: if, prior to January 15, 2000, to:
Skadden, Arps, Slate,
Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attn: Martha Feltenstein, Esq.
Telecopy: (212) 735-2000
if, after January 15, 2000, to:
Skadden, Arps, Slate,
Meagher & Flom LLP
4 Times Square
New York, New York
Attn: Martha Feltenstein, Esq.
Telecopy: (212) 735-2000
Each such notice, request or other communication shall be effective
(i) if given by telex or facsimile 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
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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 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
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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 & Treasurer