THIS CREDIT AGREEMENT dated as of April 23, 2003, by and among PREIT
Associates, L.P., a Delaware limited partnership (the "Borrower"), PENNSYLVANIA
REAL ESTATE INVESTMENT TRUST, a Pennsylvania business trust (the "Parent"), each
of the financial institutions initially a signatory hereto together with their
assignees pursuant to Section 11.5.(d), and Wells Fargo Bank, National
Association, as Agent.
WHEREAS, the Lenders are willing to make available to the Borrower a
$200,000,000 credit facility, which will include a $175,000,000 term loan credit
facility and a $25,000,000 revolving credit facility, on the terms and
conditions contained herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereto agree as follows:
ARTICLE I. DEFINITIONS
Section 1.1. Definitions.
In addition to terms defined elsewhere herein, the capitalized terms
used herein shall have their respective defined meanings as set forth in
Annex I.
Section 1.2. General; References to Times.
Unless otherwise indicated, all accounting terms, ratios and
measurements shall be interpreted or determined in accordance with GAAP as in
effect as of the Agreement Date. References in this Agreement to "Sections",
"Articles", "Exhibits" and "Schedules" are to sections, articles, exhibits and
schedules herein and hereto unless otherwise indicated. references in this
Agreement to any document, instrument or agreement (a) shall include all
exhibits, schedules and other attachments thereto, (b) shall include all
documents, instruments or agreements issued or executed in replacement thereof,
to the extent permitted hereby and (c) shall mean such document, instrument or
agreement, or replacement thereto, as amended, supplemented, restated or
otherwise modified from time to time to the extent permitted hereby and in
effect at any given time. Wherever from the context it appears appropriate, each
term stated in either the singular or plural shall include the singular and
plural, and pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, the feminine and the neuter. Unless explicitly set forth
to the contrary, a reference to "Subsidiary" means a Subsidiary of the Parent or
a Subsidiary of such Subsidiary and a reference to an "Affiliate" means a
reference to an Affiliate of the Borrower. Titles and captions of Articles,
Sections, subsections and clauses in this Agreement are for convenience only,
and neither limit nor amplify the provisions of this Agreement. Unless otherwise
indicated, all references to time are references to San Francisco, California
time.
ARTICLE II. CREDIT FACILITIES
Section 2.1. Loans.
(a) Revolving Loans. Subject to the terms and conditions hereof, during
the period from the Effective Date to but excluding the Revolving Credit
Termination Date, each Lender severally and not jointly agrees to make Revolving
Loans to the Borrower in an aggregate principal amount at any one time
outstanding up to, but not exceeding, the amount of such Lender's Revolving
Commitment. Subject to the terms and conditions of this Agreement, during the
period from the Effective Date to but excluding the Revolving Credit Termination
Date, the Borrower may borrow, repay and reborrow Revolving Loans.
(b) Term Loans. Subject to the terms and conditions hereof, during the
period from the Effective Date to but excluding the Term Loan Facility
Expiration Date, each Lender severally and not jointly agrees to make Term Loans
to the Borrower in an aggregate principal amount at any one time outstanding up
to, but not exceeding, the amount of such Lender's Term Commitment; provided,
however, the aggregate amount of Term Loans advanced to finance the acquisition
of a given Rouse Property shall not exceed the amount set forth with respect to
such Property on Schedule 2.1.(b). Once repaid, the principal amount of a Term
Loan may not be reborrowed.
(c) Requesting Loans. The Borrower shall give the Agent notice pursuant
to a Notice of Borrowing of each borrowing of Loans. Each Notice of Borrowing
shall be delivered to the Agent before 9:00 a.m. (i) in the case of LIBOR Loans,
on the date three Business Days prior to the proposed date of such borrowing and
(ii) in the case of Base Rate Loans, on the date one Business Day prior to the
proposed date of such borrowing. The Agent will transmit by telecopy or other
similar form of transmission the Notice of Borrowing (or the information
contained in such Notice of Borrowing) to each Lender promptly upon receipt by
the Agent. Each Notice of Borrowing shall be irrevocable once given and binding
on the Borrower.
(d) Disbursements of Loan Proceeds. No later than 9:00 a.m. on the date
specified in the Notice of Borrowing, each Lender will make available for the
account of its applicable Lending Office to the Agent, in immediately available
funds, the proceeds of the Loan or Loans to be made by such Lender. With respect
to Loans to be made after the Effective Date, unless the Agent shall have been
notified by any Lender prior to the specified date of borrowing that such Lender
does not intend to make available to the Agent the Loan to be made by such
Lender on such date, the Agent may assume that such Lender will make the
proceeds of such Loan available to the Agent on the date of the requested
borrowing as set forth in the Notice of Borrowing and the Agent may (but shall
not be obligated to), in reliance upon such assumption, make available to the
Borrower the amount of such Loan to be provided by such Lender. Subject to
satisfaction of the applicable conditions set forth in Article V. for such
borrowing, the Agent will make the proceeds of such borrowing available to the
Borrower no later than 12:00 noon on the date and at the account specified by
the Borrower in such Notice of Borrowing.
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Section 2.2. Rates and Payment of Interest on Loans.
(a) Rates. The Borrower promises to pay to the Agent for the account of
each Lender interest on the unpaid principal amount of each Loan made by such
Lender for the period from and including the date of the making of such Loan to
but excluding the date such Loan shall be paid in full, at the following per
annum rates:
(i) during such periods as such Loan is a Base Rate Loan, at
the Base Rate (as in effect from time to time); and
(ii) during such periods as such Loan is a LIBOR Loan, at
LIBOR for such Loan for the Interest Period therefor (from the first
day to, but excluding, the last day of such Interest Period), plus the
Applicable Margin for such Loan.
Notwithstanding the foregoing, during the continuance of an Event of Default,
the Borrower shall pay to the Agent for the account of each Lender interest at
the Post-Default Rate on the outstanding principal amount of any Loan made by
such Lender and on any other amount payable by the Borrower hereunder or under
the Notes held by such Lender to or for the account of such Lender (including
without limitation, accrued but unpaid interest to the extent permitted under
Applicable Law).
(b) Payment of Interest. All accrued and unpaid interest on the
outstanding principal amount of each Loan shall be payable (i) monthly in
arrears on the first day of each month, commencing with the first full month
occurring after the Effective Date and (ii) on any date on which the principal
balance of such Loan is due and payable in full (whether at maturity, due to
acceleration or otherwise). Interest payable at the Post-Default Rate shall be
payable from time to time on demand. All determinations by the Agent of an
interest rate hereunder shall be conclusive and binding on the Lenders and the
Borrower for all purposes, absent manifest error.
Section 2.3. Number of Interest Periods.
There may be no more than (a) 4 different Interest Periods outstanding
at the same time with respect to Revolving Loans and (b) 4 different Interest
Periods outstanding at the same time with respect to Term Loans.
Section 2.4. Repayment of Loans.
The Borrower shall repay the entire outstanding principal amount of,
and all accrued and unpaid interest on, all (a) Revolving Loans on the Revolving
Credit Termination Date and (b) all Term Loans on the Term Loan Maturity Date.
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Section 2.5. Late Charges.
If any payment required under this Agreement is not paid within 10 days
after it becomes due and payable, the Requisite Lenders may, by notice to the
Borrower, require that the Borrower pay a late charge for late payment to
compensate the Lenders for the loss of use of funds and for the expenses of
handling the delinquent payment, in an amount not to exceed four percent (4.0%)
of such delinquent payment. Such late charge shall be paid in any event not
later than the due date of the next subsequent installment of principal and/or
interest. In the event the maturity of the Obligations hereunder occurs or is
accelerated pursuant to Section 9.2., this Section shall apply only to payments
overdue prior to the time of such acceleration. This Section shall not be deemed
to be a waiver of the Lenders' right to accelerate payment of any of the
Obligations as permitted under the terms of this Agreement.
Section 2.6. Prepayments.
(a) Optional. Subject to Section 4.4., the Borrower may prepay any Loan
at any time without premium or penalty. The Borrower shall give the Agent at
least three (3) Business Days prior written notice of the prepayment of any
Loan.
(b) Mandatory.
(i) Disposition of Assets. Promptly (and in any event within 5
Business Days) following the receipt by the Parent, the Borrower or any
Subsidiary of Net Proceeds in excess of $50,000 in respect of any
Disposition or Casualty Event, the Borrower shall repay a principal
amount of the Loans in an amount equal to 100% of the Net Proceeds of
such Disposition or Casualty Event.
(ii) Equity and Debt Issuance. Upon any Equity Issuance or
Debt Issuance by the Parent, the Borrower or any Subsidiary, the
Borrower shall repay a principal amount of the Loans in an amount equal
to 100% of the Net Proceeds of such Equity Issuance or Debt Issuance to
the extent, in the case of a Debt Issuance, such Net Proceeds exceed
$50,000. The provisions of this clause (ii) shall not apply to Net
Proceeds resulting from the refinancing of Indebtedness currently
secured by either the Dartmouth Mall or Moorestown Mall to the extent
such Net Proceeds are used to finance the acquisition of any of the
Rouse Properties.
Repayments of Loans required to be made pursuant to any of the immediately
preceding clauses shall be applied in accordance with Section 3.2.
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Section 2.7. Continuation.
So long as no Event of Default shall have occurred and be continuing,
the Borrower may on any Business Day, with respect to any LIBOR Loan, elect to
maintain such LIBOR Loan or any portion thereof as a LIBOR Loan by selecting a
new Interest Period for such LIBOR Loan. Each new Interest Period selected under
this Section shall commence on the last day of the immediately preceding
Interest Period. Each selection of a new Interest Period shall be made by the
Borrower giving to the Agent a Notice of Continuation not later than 9:00 a.m.
on the third Business Day prior to the date of any such Continuation. Such
notice by the Borrower of a Continuation shall be by telephone or telecopy,
confirmed immediately in writing if by telephone, in the form of a Notice of
Continuation, specifying (a) the proposed date of such Continuation, (b) the
LIBOR Loan and portion thereof subject to such Continuation and (c) the duration
of the selected Interest Period, all of which shall be specified in such manner
as is necessary to comply with all limitations on Loans outstanding hereunder.
Each Notice of Continuation shall be irrevocable by and binding on the Borrower
once given. Promptly after receipt of a Notice of Continuation, the Agent shall
notify each Lender by telex or telecopy, or other similar form of transmission
of the proposed Continuation. If the Borrower shall fail to select in a timely
manner a new Interest Period for any LIBOR Loan in accordance with this Section,
such Loan will automatically, on the last day of the current Interest Period
therefor, Continue as a LIBOR Loan having an Interest Period of one month
notwithstanding the Borrower not complying with this Section.
Section 2.8. Conversion.
So long as no Event of Default shall have occurred and be continuing,
the Borrower may on any Business Day, upon the Borrower's giving of a Notice of
Conversion to the Agent, Convert all or a portion of a Loan of one Type into a
Loan of another Type. Any Conversion of a LIBOR Loan into a Base Rate Loan shall
be made on, and only on, the last day of an Interest Period for such LIBOR Loan
and, upon Conversion of a Base Rate Loan into a LIBOR Loan, the Borrower shall
pay accrued interest to the date of Conversion on the principal amount so
Converted. Each such Notice of Conversion shall be given not later than 9:00
a.m. one Business Day prior to the date of any proposed Conversion into Base
Rate Loans and three Business Days prior to the date of any proposed Conversion
into LIBOR Loans. Promptly after receipt of a Notice of Conversion, the Agent
shall notify each Lender by telex or telecopy, or other similar form of
transmission of the proposed Conversion. Subject to the restrictions specified
above, each Notice of Conversion shall be by telephone (confirmed immediately in
writing) or telecopy in the form of a Notice of Conversion specifying (a) the
requested date of such Conversion, (b) the Type of Loan to be Converted, (c) the
portion of such Type of Loan to be Converted, (d) the Type of Loan such Loan is
to be Converted into and (e) if such Conversion is into a LIBOR Loan, the
requested duration of the Interest Period of such Loan. Each Notice of
Conversion shall be irrevocable by and binding on the Borrower once given.
Section 2.9. Notes.
(a) The Revolving Loans made by each Lender shall, in addition to this
Agreement, also be evidenced by a promissory note of the Borrower substantially
in the form of Exhibit A (each a "Revolving Note"), payable to the order of such
Lender in a principal amount equal to the amount of its Revolving Commitment as
originally in effect and otherwise duly completed.
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(b) The Term Loans made by each Lender shall, in addition to this
Agreement, also be evidenced by a promissory note of the Borrower substantially
in the form of Exhibit B (each a "Term Note"), payable to the order of such
Lender in a principal amount equal to the amount of its Term Commitment as
originally in effect and otherwise duly completed.
Section 2.10. Extension of Termination Dates.
The Borrower may request that the Agent and the Lenders extend the
current Revolving Credit Termination Date and/or Term Loan Maturity Date, in
either case, by 90 days by executing and delivering to the Agent at least 30
days prior to the current Revolving Credit Termination Date or Term Loan
Maturity Date, as applicable, a written request for such extension. The Agent
shall forward to each Lender a copy of any such extension request delivered to
the Agent promptly upon receipt thereof. Subject to satisfaction of the
following conditions, the Revolving Credit Termination Date or Term Loan
Maturity Date, as applicable, shall be extended for 90 days: (a) immediately
prior to such extension and immediately after giving effect thereto, no Default
or Event of Default shall exist and (b) the Borrower shall have paid the Fees
payable under Section 3.6.(c). The Revolving Credit Termination Date and Term
Loan Maturity Date may be extended only one time in each case pursuant to this
subsection.
ARTICLE III. PAYMENTS, FEES AND OTHER GENERAL PROVISIONS
Section 3.1. Payments.
Except to the extent otherwise provided herein, all payments of
principal, interest and other amounts to be made by the Borrower under this
Agreement or any other Loan Document shall be made in Dollars, in immediately
available funds, without deduction, set-off or counterclaim, to the Agent, not
later than 11:00 a.m. on the date on which such payment shall become due (each
such payment made after such time on such due date to be deemed to have been
made on the next succeeding Business Day). The Borrower shall, at the time of
making each payment under this Agreement or any other Loan Document, specify to
the Agent the amounts payable by the Borrower hereunder to which such payment is
to be applied. Each payment received by the Agent for the account of a Lender
under this Agreement or any Note of such Lender shall be paid to such Lender, by
wire transfer of immediately available funds in accordance with the wiring
instructions provided by such Lender to the Agent from time to time, for the
account of such Lender at the applicable Lending Office of such Lender. If the
Agent fails to pay such amounts to such Lender within one Business Day of
receipt by the Agent, the Agent shall pay interest on such amount until paid at
a rate per annum equal to the Federal Funds Rate from time to time in effect. If
the due date of any payment under this Agreement or any other Loan Document
would otherwise fall on a day which is not a Business Day such date shall be
extended to the next succeeding Business Day and interest shall be payable for
the period of such extension.
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Section 3.2. Pro Rata Treatment.
Except to the extent otherwise provided in this Agreement: (a) each
borrowing from the Lenders under Section 2.1.(a) and (b) shall be made from the
Lenders and each payment of the Fees under Section 3.6. shall be made for the
account of the Lenders pro rata according to the amounts of their respective
Commitments; (b) each payment or prepayment of principal of Revolving Loans by
the Borrower shall be made for the account of the Lenders pro rata in accordance
with the respective unpaid principal amounts of Revolving Loans held by them,
provided that if immediately prior to giving effect to any such payment in
respect of Revolving Loans, the outstanding principal amount of such Revolving
Loans shall not be held by the Lenders pro rata in accordance with their
respective Revolving Commitments in effect at the time such Loans were made,
then such payment shall be applied to the Revolving Loans in such manner as
shall result, as nearly as is practicable, in the outstanding principal amount
of the Revolving Loans being held by the Lenders pro rata in accordance with
their respective Revolving Commitments; (c) each payment or prepayment of
principal of Term Loans by the Borrower shall be made for account of the Lenders
pro rata in accordance with the respective unpaid principal amounts of the Term
Loans then owing to each of them; (d) each payment of interest on Revolving
Loans and Term Loans by the Borrower shall be made for the account of the
Lenders pro rata in accordance with the amounts of interest on such Loans then
due and payable to the respective Lenders; and (e) the making, Conversion and
Continuation of Loans of a particular Type (other than Conversions provided for
by Section 4.5.) shall be made pro rata among the Lenders according to the
amounts of their respective Revolving Commitments or Term Commitments (in the
case of making of Revolving Loans or Term Loans, as applicable) or their
respective Loans (in the case of Conversions and Continuations of Loans) and the
then current Interest Period for each Lender's portion of each Loan of such Type
shall be coterminous.
Section 3.3. Sharing of Payments, Etc.
If a Lender shall obtain payment of any principal of, or interest on,
any Loan made by it to the Borrower under this Agreement, or shall obtain
payment on any other Obligation owing by the Borrower or a Loan Party through
the exercise of any right of set-off, banker's lien or counterclaim or similar
right or otherwise or through voluntary prepayments directly to a Lender or
other payments made by the Borrower or other Loan Party to a Lender not in
accordance with the terms of this Agreement and such payment should be
distributed to the Lenders pro rata in accordance with Section 3.2. or Section
9.5., as applicable, such Lender shall promptly purchase from the other Lenders
participations in (or, if and to the extent specified by such Lender, direct
interests in) the Loans made by the other Lenders or other Obligations owed to
such other Lenders in such amounts, pay such amounts to the other Lenders and
make such other adjustments from time to time as shall be equitable, so that all
the Lenders shall share the benefit of such payment (net of any reasonable
expenses which may be incurred by such Lender in obtaining or preserving such
benefit) pro rata in accordance with Section 3.2. or Section 9.5. To such end,
all the Lenders shall make appropriate adjustments among themselves (by the
resale of participations sold or otherwise) if such payment is rescinded or must
otherwise be restored. The Borrower agrees that any Lender so purchasing a
participation (or direct interest) in the Loans or other Obligations owed to
such other Lenders may exercise all rights of set-off, banker's lien,
counterclaim or similar rights with respect to such participation as fully as if
such Lender were a direct holder of Loans in the amount of such participation.
Nothing contained herein shall require any Lender to exercise any such right or
shall affect the right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other indebtedness or obligation
of the Borrower.
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Section 3.4. Several Obligations.
No Lender shall be responsible for the failure of any other Lender to
make a Loan or to perform any other obligation to be made or performed by such
other Lender hereunder, and the failure of any Lender to make a Loan or to
perform any other obligation to be made or performed by it hereunder shall not
relieve the obligation of any other Lender to make any Loan or to perform any
other obligation to be made or performed by such other Lender.
Section 3.5. Minimum Amounts.
(a) Borrowings. Each borrowing of Base Rate Loans shall be in an
aggregate minimum amount of $500,000 and integral multiples of $25,000 in excess
thereof. Each borrowing and Continuation of, and each Conversion of Base Rate
Loans into, LIBOR Loans shall be in an aggregate minimum amount of $1,000,000
and integral multiples of $25,000 in excess of that amount. Notwithstanding the
foregoing, any such borrowing of Loans may be in the aggregate amount of the
unused Revolving Commitments or Term Commitments, as applicable.
(b) Prepayments. Each voluntary prepayment of Loans shall be in an
aggregate minimum amount of $500,000 and integral multiples of $100,000 in
excess thereof or, if all Loans are being prepaid at such time, the prepayment
may be in such other amount as is then outstanding.
Section 3.6. Fees.
(a) Facility Fees. On the Effective Date, the Borrower agrees to pay to
the Agent for the account of each Lender such facility fees as agreed to by the
Borrower, the Agent and such Lender.
(b) Unused Fee. During the period from the Effective Date to but
excluding the Revolving Credit Termination Date, the Borrower agrees to pay to
the Agent for the account of the Lenders an unused facility fee equal to 0.125%
per annum of the amount by which the aggregate amount of the Revolving
Commitments exceeds the aggregate amount of the Revolving Loans. Such fee shall
be computed on a daily basis and payable quarterly in arrears on the first day
of each January, April, July and October during the term of this Agreement and
on the Revolving Credit Termination Date.
(c) Extension Fee. If, pursuant to Section 2.10., the Borrower
exercises its right to extend the Revolving Credit Termination Date or the Term
Loan Maturity Date, the Borrower agrees to pay to the Agent for the account of
each Lender an extension fee equal to 0.20% of the amount of such Lender's (i)
Revolving Commitment at such time, in the case of an extension of the Revolving
Credit Termination Date or (ii) Term Commitment at such time, in the case of an
extension of the Term Loan Maturity Date. Any such fee shall be paid to the
Agent prior to, and as a condition to, any such extension.
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Section 3.7. Computations.
Unless otherwise expressly set forth herein, any accrued interest on
any Loan, any Fees or other Obligations due hereunder shall be computed on the
basis of a year of 360 days and the actual number of days elapsed.
Section 3.8. Usury.
In no event shall the amount of interest due or payable on the Loans or
other Obligations exceed the maximum rate of interest allowed by Applicable Law
and, if any such payment is paid by the Borrower or received by any Lender, then
such excess sum shall be credited as a payment of principal, unless the Borrower
shall notify the respective Lender in writing that the Borrower elects to have
such excess sum returned to it forthwith. It is the express intent of the
parties hereto that the Borrower not pay and the Lenders receive, directly or
indirectly, in any manner whatsoever, interest in excess of that which may be
lawfully paid by the Borrower under Applicable Law. The parties hereto hereby
agree and stipulate that the only charge imposed upon the Borrower for the use
of money in connection with this Agreement is and shall be the interest
described in Sections 2.2.(a)(i) and (ii). Notwithstanding the foregoing, the
parties hereto further agree and stipulate that all agency fees, syndication
fees, facility fees, underwriting fees, default charges, late charges, funding
or "breakage" charges, increased cost charges, attorneys' fees and reimbursement
for costs and expenses paid by the Agent or any Lender to third parties or for
damages incurred by the Agent or any Lender, are charges made to compensate the
Agent or any such Lender for underwriting or administrative services and costs
or losses performed or incurred, and to be performed or incurred, by the Agent
and the Lenders in connection with this Agreement. Unless otherwise expressly
provided herein, all fees and all charges, other than charges for the use of
money, shall be fully earned and nonrefundable when due.
Section 3.9. Statements of Account.
The Agent will account to the Borrower monthly with a statement of
Loans, accrued interest and Fees, charges and payments made pursuant to this
Agreement and the other Loan Documents, and such account rendered by the Agent
shall be deemed conclusive upon the Borrower absent manifest error. The failure
of the Agent to deliver such a statement of accounts shall not relieve or
discharge the Borrower from any of its obligations hereunder.
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Section 3.10. Defaulting Lenders.
If for any reason any Lender (a "Defaulting Lender") shall fail or
refuse to perform any of its obligations under this Agreement or any other Loan
Document to which it is a party within the time period specified for performance
of such obligation or, if no time period is specified, if such failure or
refusal continues for a period of two Business Days after notice from the Agent,
then, in addition to the rights and remedies that may be available to the Agent
or the Borrower under this Agreement or Applicable Law, such Defaulting Lender's
right to participate in the administration of the Loans, this Agreement and the
other Loan Documents, including without limitation, any right to vote in respect
of, to consent to or to direct any action or inaction of the Agent or to be
taken into account in the calculation of the Requisite Lenders, shall be
suspended during the pendency of such failure or refusal. If a Lender is a
Defaulting Lender because it has failed to make timely payment to the Agent of
any amount required to be paid to the Agent hereunder (without giving effect to
any notice or cure periods), in addition to other rights and remedies which the
Agent or the Borrower may have under the immediately preceding provisions or
otherwise, the Agent shall be entitled (a) to collect interest from such
Defaulting Lender on such delinquent payment for the period from the date on
which the payment was due until the date on which the payment is made at the
Federal Funds Rate, (b) to withhold or setoff and to apply in satisfaction of
the defaulted payment and any related interest, any amounts otherwise payable to
such Defaulting Lender under this Agreement or any other Loan Document and (c)
to bring an action or suit against such Defaulting Lender in a court of
competent jurisdiction to recover the defaulted amount and any related interest.
Any amounts received by the Agent in respect of a Defaulting Lender's Loans
shall not be paid to such Defaulting Lender and shall be held uninvested by the
Agent until such Defaulting Lender cures its default.
Section 3.11. Taxes.
(a) Taxes Generally. Except as provided in subsection (c) of this
Section, all payments by the Borrower of principal of, and interest on, the
Loans and all other Obligations shall be made free and clear of and without
deduction for any present or future excise, stamp or other taxes, fees, duties,
levies, imposts, charges, deductions, withholdings or other charges of any
nature whatsoever imposed by any taxing authority, but excluding (i) franchise
taxes, (ii) any taxes (other than withholding taxes) that would not be imposed
but for a connection between the Agent or a Lender and the jurisdiction imposing
such taxes (other than a connection arising solely by virtue of the activities
of the Agent or such Lender pursuant to or in respect of this Agreement or any
other Loan Document), (iii) any taxes imposed on or measured by any Lender's
assets, income, receipts or branch profits and (iv) any taxes arising after the
Agreement Date solely as a result of or attributable to a Lender changing its
designated Lending Office after the date such Lender becomes a party hereto
(such non-excluded items being collectively called "Taxes"). If any withholding
or deduction from any payment to be made by the Borrower hereunder is required
in respect of any Taxes pursuant to any Applicable Law, then the Borrower will:
(i) pay directly to the relevant Governmental Authority the
full amount required to be so withheld or deducted;
(ii) promptly forward to the Agent an official receipt or
other documentation satisfactory to the Agent evidencing such payment
to such Governmental Authority; and
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(iii) pay to the Agent for its account or the account of the
applicable Lender, as the case may be, such additional amount or
amounts as is necessary to ensure that the net amount actually received
by the Agent or such Lender will equal the full amount that the Agent
or such Lender would have received had no such withholding or deduction
been required.
(b) Tax Indemnification. If the Borrower fails to pay any Taxes when
due to the appropriate Governmental Authority or fails to remit to the Agent,
for its account or the account of the respective Lender, as the case may be, the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Agent and the Lenders for any incremental Taxes, interest or
penalties that may become payable by the Agent or any Lender as a result of any
such failure. For purposes of this Section, a distribution hereunder by the
Agent or any Lender to or for the account of any Lender shall be deemed a
payment by the Borrower.
(c) Tax Forms. Prior to the date that any Lender or Participant
organized under the laws of a jurisdiction outside the United States of America
becomes a party hereto, such Person shall deliver to the Borrower and the Agent
such certificates, documents or other evidence, as required by the Internal
Revenue Code or Treasury Regulations issued pursuant thereto (including Internal
Revenue Service Forms W-8ECI and W-8BEN, as applicable, or appropriate successor
forms), properly completed, currently effective and duly executed by such Lender
or participant establishing that payments to it hereunder and under the Notes
are (i) not subject to United States Federal backup withholding tax and (ii) not
subject to United States Federal withholding tax under the Code. Each Lender
shall (x) deliver further copies of such forms or other appropriate
certifications on or before the date that any such forms expire or become
obsolete and after the occurrence of any event requiring a change in the most
recent form delivered to the Borrower and (y) obtain such extensions of the time
for filing, and renew such forms and certifications thereof as may be reasonably
requested by the Borrower or the Agent. The Borrower shall not be required to
pay any amount pursuant to last sentence of subsection (a) above to any Lender
or Participant that is organized under the laws of a jurisdiction outside of the
United States of America or the Agent, if it is organized under the laws of a
jurisdiction outside of the United States of America, if such Lender,
Participant or the Agent, as applicable, fails to comply with the requirements
of this subsection nor shall the Borrower be precluded from deducting any
applicable withholding taxes in such case. If any such Lender or Participant
fails to deliver the above forms or other documentation, then the Agent may
withhold from such payment to such Lender such amounts as are required by the
Code. If any Governmental Authority asserts that the Agent did not properly
withhold or backup withhold, as the case may be, any tax or other amount from
payments made to or for the account of any Lender, such Lender shall indemnify
the Agent therefor, including all penalties and interest, any taxes imposed by
any jurisdiction on the amounts payable to the Agent under this Section, and
costs and expenses (including all fees and disbursements of any law firm or
other external counsel and the allocated cost of internal legal services and all
disbursements of internal counsel) of the Agent. The obligation of the Lenders
under this Section shall survive the termination of the Commitments, repayment
of all Obligations and the resignation or replacement of the Agent.
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ARTICLE IV. YIELD PROTECTION, ETC.
Section 4.1. Additional Costs; Capital Adequacy.
(a) Additional Costs. The Borrower shall promptly pay to the Agent for
the account of a Lender from time to time such amounts as such Lender may
reasonably determine to be necessary to compensate such Lender for any costs
incurred by such Lender that it determines are attributable to its making or
maintaining of any LIBOR Loans or its obligation to make any LIBOR Loans
hereunder, any reduction in any amount receivable by such Lender under this
Agreement or any of the other Loan Documents in respect of any of such Loans or
such obligation or the maintenance by such Lender of capital in respect of its
Loans or its Commitments (such increases in costs and reductions in amounts
receivable being herein called "Additional Costs"), resulting from any
Regulatory Change that: (i) changes the basis of taxation of any amounts payable
to such Lender under this Agreement or any of the other Loan Documents in
respect of any of such Loans or its Commitments (other than taxes imposed on or
measured by the overall net income of such Lender or of its Lending Office for
any of such Loans by the jurisdiction in which such Lender has its principal
office or such Lending Office); or (ii) imposes or modifies any reserve, special
deposit or similar requirements (including without limitation, Regulation D of
the Board of Governors of the Federal Reserve System or other similar reserve
requirement applicable to any other category of liabilities or category of
extensions of credit or other assets by reference to which the interest rate on
LIBOR Loans is determined) relating to any extensions of credit or other assets
of, or any deposits with or other liabilities of, or other credit extended by,
or any other acquisition of funds by such Lender (or its parent corporation), or
any commitment of such Lender (including, without limitation, the Commitments of
such Lender hereunder); or (iii) has or would have the effect of reducing the
rate of return on capital of such Lender to a level below that which such Lender
could have achieved but for such Regulatory Change (taking into consideration
such Lender's policies with respect to capital adequacy).
(b) Lender's Suspension of LIBOR Loans. Without limiting the effect of
the provisions of the immediately preceding subsection (a), if by reason of any
Regulatory Change, any Lender either (i) incurs Additional Costs based on or
measured by the excess above a specified level of the amount of a category of
deposits or other liabilities of such Lender that includes deposits by reference
to which the interest rate on LIBOR Loans is determined as provided in this
Agreement or a category of extensions of credit or other assets of such Lender
that includes LIBOR Loans or (ii) becomes subject to restrictions on the amount
of such a category of liabilities or assets that it may hold, then, if such
Lender so elects by notice to the Borrower (with a copy to the Agent), the
obligation of such Lender to make or Continue, or to Convert any other Type of
Loans into, LIBOR Loans hereunder shall be suspended until such Regulatory
Change ceases to be in effect (in which case the provisions of Section 4.5.
shall apply).
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(c) Notification and Determination of Additional Costs. Each of the
Agent and each Lender agrees to notify the Borrower of any event occurring after
the Agreement Date entitling the Agent or such Lender to compensation under any
of the preceding subsections of this Section as promptly as practicable;
provided, however, the failure of the Agent or any Lender to give such notice
shall not release the Borrower from any of its obligations hereunder. The Agent
and or such Lender agrees to furnish to the Borrower (and in the case of a
Lender to the Agent as well) a certificate setting forth the basis and amount of
each request by the Agent or such Lender for compensation under this Section.
Determinations by the Agent or any Lender of the effect of any Regulatory Change
shall be conclusive absent manifest error, provided that such determinations are
made on a reasonable basis and in good faith.
Section 4.2. Suspension of LIBOR Loans.
Anything herein to the contrary notwithstanding, if, on or prior to the
determination of LIBOR for any Interest Period: (a) the Agent determines (which
determination shall be conclusive) that by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist for ascertaining the
LIBOR for such Interest Period or (b) the Agent determines (which determination
shall be conclusive) that LIBOR will not adequately and fairly reflect the cost
to the Lenders of making or maintaining LIBOR Loans for such Interest Period;
then the Agent shall give the Borrower and each Lender prompt notice thereof,
and, so long as such condition remains in effect, the Lenders shall be under no
obligation to, and shall not, make additional LIBOR Loans, Continue LIBOR Loans
or Convert Loans into LIBOR Loans and the Borrower shall, on the last day of
each current Interest Period for each outstanding LIBOR Loan, either repay such
Loan or Convert such Loan into a Base Rate Loan in accordance with Section 4.5.
Section 4.3. Illegality.
Notwithstanding any other provision of this Agreement, if it becomes
unlawful for any Lender to honor its obligation to make or maintain LIBOR Loans
hereunder, then such Lender shall promptly notify the Borrower thereof (with a
copy to the Agent) and such Lender's obligation to make or Continue, or to
Convert Loans of any other Type into, LIBOR Loans shall be suspended until such
time as such Lender may again make and maintain LIBOR Loans (in which case the
provisions of Section 4.5. shall be applicable).
Section 4.4. Compensation.
The Borrower shall pay to the Agent for the account of each Lender,
upon the request of such Lender through the Agent, such amount or amounts as
shall be sufficient (in the reasonable opinion of such Lender) to compensate it
for any loss, cost or expense that such Lender determines is attributable to:
(a) any payment or prepayment (whether mandatory or optional) of a LIBOR Loan,
or Conversion of a LIBOR Loan, made by such Lender for any reason (including,
without limitation, acceleration) on a date other than the last day of the
Interest Period for such Loan or (b) any failure by the Borrower for any reason
(including, without limitation, the failure of any of the applicable conditions
precedent specified in Article V. to be satisfied) to borrow a LIBOR Loan from
such Lender on the date for such borrowing, or to Convert a Base Rate Loan into
a LIBOR Loan or Continue a LIBOR Loan on the requested date of such Conversion
or Continuation. Upon the Borrower's request, any Lender requesting compensation
under this Section shall provide the Borrower with a statement setting forth the
basis for requesting such compensation and the method for determining the amount
thereof. Any such statement shall be conclusive absent manifest error.
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Section 4.5. Treatment of Affected Loans.
If the obligation of any Lender to make LIBOR Loans or to Continue, or
to Convert Base Rate Loans into, LIBOR Loans shall be suspended pursuant to
Section 4.1.(b), 4.2. or 4.3., then such Lender's LIBOR Loans shall be
automatically Converted into Base Rate Loans on the last day(s) of the then
current Interest Period(s) for LIBOR Loans (or, in the case of a Conversion
required by Section 4.1.(b) or 4.3., on such earlier date as such Lender may
specify to the Borrower with a copy to the Agent) and, unless and until such
Lender gives notice as provided below that the circumstances specified in
Section 4.1., 4.2. or 4.3. that gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's LIBOR Loans have been so Converted, all
payments and prepayments of principal that would otherwise be applied to such
Lender's LIBOR Loans shall be applied instead to its Base Rate Loans and (b) all
Loans that would otherwise be made or Continued by such Lender as LIBOR Loans
shall be made or Continued instead as Base Rate Loans, and all Base Rate Loans
of such Lender that would otherwise be Converted into LIBOR Loans shall remain
as Base Rate Loans. If such Lender gives notice to the Borrower (with a copy to
the Agent) that the circumstances specified in Section 4.1. or 4.3. that gave
rise to the Conversion of such Lender's LIBOR Loans pursuant to this Section no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when LIBOR Loans made by other Lenders are
outstanding, then such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding LIBOR Loans, to the extent necessary so that, after giving
effect thereto, all Loans held by the Lenders holding LIBOR Loans and by such
Lender are held pro rata (as to principal amounts, Types and Interest Periods)
in accordance with their respective Commitments.
Section 4.6. Change of Lending Office.
Each Lender agrees that it will use reasonable efforts to designate an
alternate Lending Office with respect to any of its Loans affected by the
matters or circumstances described in Sections 3.11., 4.1. or 4.3. to reduce the
liability of the Borrower or avoid the results provided thereunder, so long as
such designation is not disadvantageous to such Lender as determined by such
Lender in its sole discretion, except that such Lender shall have no obligation
to designate a Lending Office located in the United States of America.
ARTICLE V. CONDITIONS PRECEDENT
Section 5.1. Initial Conditions Precedent.
The obligation of the Agent and the Lenders to make the initial Loans
hereunder is subject to the following conditions precedent:
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(a) The Agent shall have received each of the following, in form and
substance satisfactory to the Agent:
(i) counterparts of this Agreement executed by each of the
parties hereto;
(ii) Revolving Notes and Term Notes executed by the Borrower,
payable to each Lender and complying with the terms of Sections 2.9.(a)
and (b);
(iii) the Guaranty executed by each of the Guarantors
initially to be a party thereto;
(iv) an opinion of counsel to the Parent, the Borrower, and
the Guarantors, addressed to the Agent and the Lenders and covering the
matters set forth on Exhibit C;
(v) a certificate of incumbency signed by the Secretary or
Assistant Secretary of the Parent with respect to each of the officers
of the Parent authorized to execute and deliver on behalf of the Parent
and the Borrower the Loan Documents to which the Parent or the Borrower
is a party and to execute and deliver (or make by telephone in the case
of Notices of Conversion or Continuation) on behalf of the Borrower
Notices of Borrowing, Notices of Conversion and Notices of
Continuation;
(vi) a certified copy (certified by the Secretary or Assistant
Secretary of the Parent) of all necessary action taken by the Parent to
authorize the execution, delivery and performance of the Loan Documents
to which either the Parent or the Borrower is a party;
(vii) the certificate or articles of incorporation, articles
of organization, certificate of limited partnership, declaration of
trust or other comparable organizational instrument (if any) of each
Guarantor that directly, or indirectly through one or more
Subsidiaries, owns, or is to acquire any interest in, a Rouse Property
(or any Equity Interest in a Person that has an interest in a Rouse
Property), certified as of a recent date by the Secretary of State of
the State of formation of such Person;
(viii) a Certificate of Good Standing or certificate of
similar meaning with respect to each such Guarantor (and in the case of
a limited partnership, the general partner of such Guarantor) issued as
of a recent date by the Secretary of State of the State of formation of
each such Person and certificates of qualification to transact business
or other comparable certificates issued by each Secretary of State (and
any state department of taxation, as applicable) of each state in which
such Person is required to be so qualified;
(ix) a certificate of incumbency signed by the Secretary or
Assistant Secretary (or other individual performing similar functions)
of each Guarantor with respect to each of the officers of such Person
authorized to execute and deliver the Loan Documents to which such
Person is a party;
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(x) copies certified by the Secretary or Assistant Secretary
(or other individual performing similar functions) of each Guarantor
that directly, or indirectly through one or more Subsidiaries, owns, or
is to acquire any interest in, a Rouse Property (or any Equity Interest
in a Person that has an interest in a Rouse Property) of the by-laws of
such Person, if a corporation, the operating agreement, if a limited
liability company, the partnership agreement, if a limited or general
partnership, or other comparable document in the case of any other form
of legal entity;
(xi) copies certified by the Secretary or Assistant Secretary
(or other individual performing similar functions) of each Guarantor of
all corporate, partnership, member or other necessary action taken by
each Guarantor to authorize the execution, delivery and performance of
the Loan Documents to which it is a party;
(xii) a Compliance Certificate based on the Parent's fiscal
quarter ending March 31, 2003 detailing the pro forma effect of (A) the
acquisition of Cherry Hill Mall, Moorestown Mall, The Gallery I and
Exton Mall and the funding of the entire Term Commitment and (B) the
acquisition of all Rouse Properties and the funding of the entire
Commitments;
(xiii) such other documents and instruments as the Agent, or
any Lender through the Agent, may reasonably request; and
(b) In the good faith judgment of the Agent:
(i) There shall not have occurred or become known to the Agent
or the Lenders any event, condition, situation or status since the date
of the information contained in the financial and business projections,
budgets, pro forma data and forecasts concerning the Parent, the
Borrower and the other Subsidiaries delivered to the Agent and the
Lenders prior to the Agreement Date that has had or could reasonably be
expected to have a Material Adverse Effect;
(ii) No litigation, action, suit, investigation or other
arbitral, administrative or judicial proceeding shall be pending or
threatened which could reasonably be expected to (A) have a Material
Adverse Effect or (B) restrain or enjoin, impose materially burdensome
conditions on, or otherwise materially and adversely affect the ability
of any Loan Party to fulfill its obligations under the Loan Documents
to which it is a party; and
(iii) The Parent, the Borrower and the other Loan Parties
shall have received all approvals, consents and waivers, and shall have
made or given all necessary filings and notices as shall be required to
consummate the transactions contemplated hereby without the occurrence
of any default under or violation of (A) any Applicable Law or (B) any
agreement, document or instrument to which any Loan Party is a party or
by which any of them or their respective properties is bound, except
for such approvals, consents, waivers, filings and notices the receipt,
making or giving of which, or the failure to make, give or receive
which, would not reasonably be likely to (1) have a Material Adverse
Effect, or (2) restrain or enjoin, impose materially burdensome
conditions on, or otherwise materially and adversely affect the ability
of the Borrower, the Parent or any other Loan Party to fulfill its
obligations under the Loan Documents to which it is a party.
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Section 5.2. Conditions Precedent to All Loans.
The obligation of the Lenders to make any Loans is all subject to the
further condition precedent that: (a) no Default, or Event of Default shall have
occurred and be continuing as of the date of the making of such Loan or would
exist immediately after giving effect thereto; (b) the representations and
warranties made or deemed made by each Loan Party in the Loan Documents to which
any of them is a party, shall be true and correct on and as of the date of the
making of such Loan with the same force and effect as if made on and as of such
date except to the extent that such representations and warranties expressly
relate solely to an earlier date (in which case such representations and
warranties shall have been true and accurate on and as of such earlier date) and
except for changes in factual circumstances not prohibited hereunder; and (c) in
the case of the borrowing of Loans, the Agent shall have received a timely
Notice of Borrowing. Each Credit Event shall constitute a certification by the
Borrower to the effect set forth in the preceding sentence (both as of the date
of the giving of notice relating to such Credit Event and, unless the Borrower
otherwise notifies the Agent prior to the date of such Credit Event, as of the
date of the occurrence of such Credit Event). In addition, the Borrower shall be
deemed to have represented to the Agent and the Lenders at the time any such
Loan is made that all conditions to the making of such Loan contained in Article
V. have been satisfied or waived as permitted hereunder.
Section 5.3. Conditions as Covenants.
If the Lenders make any Loans prior to the satisfaction of all
conditions precedent set forth in Sections 5.1. and 5.2., the Borrower shall
nevertheless cause such condition or conditions to be satisfied within 5
Business Days after the date of the making of such Loans unless waived as
permitted hereunder.
ARTICLE VI. REPRESENTATIONS AND WARRANTIES
Section 6.1. Representations and Warranties.
In order to induce the Agent and each Lender to enter into this
Agreement and to make Loans, the Borrower and the Parent each represents and
warrants to the Agent and each Lender as follows:
(a) Organization; Power; Qualification. Each of the Loan Parties is a
corporation, partnership or other legal entity, duly organized or formed,
validly existing and in good standing under the jurisdiction of its
incorporation or formation, has the power and authority to own or lease its
respective properties and to carry on its respective business as now being and
hereafter proposed to be conducted and is duly qualified and is in good standing
as a foreign corporation, partnership or other legal entity, and authorized to
do business, in each jurisdiction in which the character of its properties or
the nature of its business requires such qualification or authorization and
where the failure to be so qualified or authorized could reasonably be expected
to have, in each instance, a Material Adverse Effect.
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(b) Ownership Structure. Part I of Schedule 6.1.(b) is a complete and
correct list, as of the Agreement Date, of each Subsidiary of the Parent that
owns, or is to acquire any interest in, a Rouse Property (or any Equity Interest
in a Person that directly, or indirectly through one or more Subsidiaries, has
an interest in a Rouse Property), setting forth (i) the jurisdiction of
organization of such Subsidiary, (ii) each Person holding any Equity Interest in
such Subsidiary, (iii) the nature of the Equity Interests held by each such
Person and (iv) the percentage of ownership of such Subsidiary represented by
such Equity Interests. Except as disclosed in such Schedule (w) each of the
Parent and its Subsidiaries owns, free and clear of all Liens, and has the
unencumbered right to vote, all outstanding Equity Interests in each Person
shown to be held by it on such Schedule, (x) all of the issued and outstanding
capital stock of each such Person organized as a corporation is validly issued,
fully paid and nonassessable and (y) there are no outstanding subscriptions,
options, warrants, commitments, preemptive rights or agreements of any kind
(including, without limitation, any stockholders' or voting trust agreements)
for the issuance, sale, registration or voting of, or outstanding securities
convertible into, any additional shares of capital stock of any class, or
partnership or other ownership interests of any type in, any such Person. Part
II of Schedule 6.1.(b) is a complete and correct list of each Subsidiary of the
Parent that will directly, or indirectly through a Subsidiary, own a Rouse
Property upon the acquisition thereof, setting forth (i) the jurisdiction of
organization of such Subsidiary, (ii) each Person holding any Equity Interest in
such Subsidiary, (iii) the nature of the Equity Interests held by each such
Person and (iv) the percentage of ownership of such Subsidiary represented by
such Equity Interests.
(c) Authorization of Loan Documents and Borrowings. The Borrower has
the right and power, and has taken all necessary action to authorize it, to
borrow hereunder. The Parent, the Borrower and each other Loan Party has the
right and power, and has taken all necessary action to authorize it, to execute,
deliver and perform each of the Loan Documents to which it is a party in
accordance with their respective terms and to consummate the transactions
contemplated hereby and thereby. The Loan Documents to which the Parent, the
Borrower or any other Loan Party is a party have been duly executed and
delivered by the duly authorized officers of such Person and each is a legal,
valid and binding obligation of such Person enforceable against such Person in
accordance with its respective terms, except as the same may be limited by
bankruptcy, insolvency, fraudulent conveyance and other similar laws affecting
the rights of creditors generally and the availability of equitable remedies for
the enforcement of certain obligations (other than the payment of principal)
contained herein or therein may be limited by equitable principles generally.
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(d) Compliance of Loan Documents and Borrowing with Laws, etc. The
execution, delivery and performance of this Agreement and the other Loan
Documents to which the Parent, the Borrower or any other Loan Party is a party
in accordance with their respective terms, and the borrowings hereunder, do not
and will not, by the passage of time, the giving of notice, or both: (i) require
any Governmental Approval or violate any Applicable Law (including all
Environmental Laws) relating to any Loan Party or any other Subsidiary; (ii)
result in a breach of or constitute a default under the declaration of trust,
certificate or articles of incorporation, bylaws, partnership agreement or other
organizational documents of any Loan Party or any other Subsidiary, or any
indenture, agreement or other instrument to which any Loan Party or any other
Subsidiary is a party or by which it or any of its respective properties may be
bound; or (iii) result in or require the creation or imposition of any Lien upon
or with respect to any property now owned or hereafter acquired by any Loan
Party or any other Subsidiary other than in favor of the Agent for the benefit
of the Lenders.
(e) Compliance with Law; Governmental Approvals. Each Loan Party and
each other Subsidiary is in compliance with each Governmental Approval
applicable to it and in compliance with all other Applicable Law relating to
such Loan Party or such other Subsidiary except for noncompliances which, and
Governmental Approvals the failure to possess could not reasonably be expected
to have a Material Adverse Effect.
(f) Title to Properties. Each of the Parent, the Borrower, the other
Loan Parties and all other Subsidiaries has good, marketable and legal title to,
or a valid leasehold interest in, its respective assets necessary to the conduct
of their businesses.
(g) Existing Indebtedness. As of the Agreement Date, the Loan Parties
and the other Subsidiaries have performed and are in compliance with all of the
terms of all Indebtedness of the Loan Parties and other Subsidiaries and all
instruments and agreements relating thereto, and no default or event of default,
or event or condition which with the giving of notice, the lapse of time, or
both, would constitute such a default or event of default, exists with respect
to any such Indebtedness.
(h) Litigation. Except as set forth on Schedule 6.1.(h), there are no
actions, suits or proceedings pending (nor, to the knowledge of the Parent or
the Borrower, are there any actions, suits or proceedings threatened, nor is
there any basis therefor) against or in any other way relating adversely to or
affecting the Parent, the Borrower, any other Loan Party or any other Subsidiary
or any of its respective property in any court or before any arbitrator of any
kind or before or by any other Governmental Authority which could reasonably be
expected to have a Material Adverse Effect, and there are no strikes, slow
downs, work stoppages or walkouts or other labor disputes in progress or
threatened relating to any Loan Party or any other Subsidiary which could
reasonably be expected to have a Material Adverse Effect.
(i) Taxes. All federal, state and other tax returns of the Loan Parties
and the other Subsidiaries required by Applicable Law to be filed have been duly
filed, and all federal, state and other taxes, assessments and other
governmental charges or levies upon any Loan Party or any other Subsidiary and
its respective properties, income, profits and assets which are due and payable
have been paid, except any such nonpayment which is at the time permitted under
Section 7.7. All charges, accruals and reserves on the books of the Parent and
each of its Subsidiaries in respect of any taxes or other governmental charges
are in accordance with GAAP.
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(j) Financial Statements. The Parent has furnished to each Lender
copies of the audited consolidated balance sheet of the Parent and its
consolidated Subsidiaries for the fiscal year ending December 31, 2002, and the
related consolidated statements of income, shareholders' equity and cash flows
for the fiscal year ending on such date, with the opinion thereon of KPMG LLP.
Such balance sheet and statements (including in each case related schedules and
notes) present fairly, in accordance with GAAP consistently applied throughout
the periods involved, and in all material respects, the consolidated financial
position of the Parent and its consolidated Subsidiaries as at their respective
dates and the results of operations and the cash flow for such periods. Neither
the Parent nor any of its Subsidiaries has on the Agreement Date any material
contingent liabilities, liabilities, liabilities for taxes, unusual or long-term
commitments or unrealized or forward anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in said
financial statements.
(k) No Material Adverse Change. Since December 31, 2002, there has been
no material adverse change in the consolidated financial condition, results of
operations, business or prospects of the Parent and its consolidated
Subsidiaries taken as a whole. Each of the Parent, the Borrower, the other Loan
Parties and the other Subsidiaries is Solvent.
(l) ERISA. No member of the ERISA Group maintains or has ever
maintained any Benefit Plan. No member of the ERISA Group contributes or is
obligated to contribute to or has ever contributed to or been obligated to
contribute to any Multiemployer Plan. No member of the ERISA Group has failed to
make any contribution or payment in respect of any Benefit Arrangement, or made
any amendment to any 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.
(m) Absence of Defaults. No Loan Party nor any other Subsidiary is in
default under its declaration of trust, certificate or articles of
incorporation, bylaws, partnership agreement or other similar organizational
documents, and no event has occurred, which has not been remedied, cured or
waived: (i) which constitutes a Default or an Event of Default; or (ii) which
constitutes, or which with the passage of time, the giving of notice, or both,
would constitute, a default or event of default by any Loan Party or any other
Subsidiary under any agreement (excluding any Loan Document) or judgment, decree
or order to which any Loan Party or any other Subsidiary is a party or by which
any such Person or any of its respective properties may be bound where such
default or event of default could, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(n) Environmental Laws. Each of the Loan Parties and the other
Subsidiaries is in compliance with all applicable Environmental Laws and has
obtained all Governmental Approvals which are required under Environmental Laws
and is in compliance with all terms and conditions of such Governmental
Approvals, where with respect to each of the foregoing the failure to obtain or
to comply with could be reasonably expected to have a Material Adverse Effect.
Except for any of the following matters that could not be reasonably expected to
have a Material Adverse Effect, neither the Parent nor the Borrower is aware of,
nor has either received notice of, any past or present events, conditions,
circumstances, activities, practices, incidents, actions, or plans which, with
respect to any Loan Party or any other Subsidiary, may unreasonably interfere
with or prevent compliance or continued compliance with Environmental Laws, or
may give rise to any common-law or legal liability, based on or related to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling or the emission, discharge, release or threatened release
into the environment, of any Hazardous Material; and there is no civil,
criminal, or administrative action, suit, demand, claim, hearing, notice, or
demand letter, notice of violation, investigation, or proceeding pending or, to
the Parent's or the Borrower's knowledge after due inquiry, threatened, against
any Loan Party or any other Subsidiary relating in any way to Environmental Laws
which could be reasonably expected to have a Material Adverse Effect.
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(o) Investment Company; Public Utility Holding Company. No Loan Party
nor any other Subsidiary is (i) an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, (ii) a "holding company" or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended, or (iii) subject to any other
Applicable Law which purports to regulate or restrict its ability to borrow
money or to consummate the transactions contemplated by this Agreement or to
perform its obligations under any Loan Document to which it is a party.
(p) Margin Stock. No Loan Party nor any other Subsidiary is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose, whether immediate, incidental or ultimate, of buying or
carrying "margin stock" within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System.
(q) Affiliate Transactions. Except as permitted by Section 8.7., no
Loan Party is a party to or bound by any agreement or arrangement (whether oral
or written) to which any Affiliate of the Borrower is a party.
(r) Business. As of the Agreement Date, the Parent, the Borrower, the
other Loan Parties and the other Subsidiaries are engaged in the business of
acquiring, developing, owning, operating and managing commercial real estate,
including, retail, multi-family and industrial properties, together with related
business activities and investments incidental thereto.
(s) Accuracy and Completeness of Information. All written information,
reports and other papers and data (excluding financial projections or other
forward looking statements) furnished to the Agent or any Lender by, or at the
direction of, the Parent, the Borrower, any other Loan Party or any other
Subsidiary were, at the time the same were so furnished, to the best of the
Parent's and the Borrower's knowledge, complete and correct in all material
respects, to the extent necessary to give the recipient a true and accurate
knowledge of the subject matter, or, in the case of financial statements,
present fairly, in accordance with GAAP consistently applied throughout the
periods involved, the financial position of the Persons involved as at the date
thereof and the results of operations for such periods. All financial
projections and other forward looking statements prepared by or on behalf of the
Parent, the Borrower or any other Loan Party or Subsidiary that have been or may
hereafter be made available to the Agent or any Lender were or will be prepared
in good faith based on reasonable assumptions. No document furnished or written
statement made, in each case by, or at the direction of any Loan Party or any
other Subsidiary to the Agent or any Lender in connection with the negotiation,
preparation or execution of any Loan Document contains or will contain any
untrue statement of a fact material to the creditworthiness of any Loan Party or
any other Subsidiary or omits or will omit to state a fact material to the
creditworthiness of any Loan Party or any other Subsidiary which is necessary in
order to make the statements contained therein not misleading.
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(t) Not Plan Assets. None of the assets of any Loan Party or any other
Subsidiary constitutes "plan assets" within the meaning of ERISA, the Internal
Revenue Code and the respective regulations promulgated thereunder, of any ERISA
Benefit Plan. The execution, delivery and performance of the Loan Documents by
the Loan Parties, and the borrowing and repayment of amounts thereunder, do not
and will not constitute "prohibited transactions" under ERISA or the Internal
Revenue Code for which no statutory or administrative exemption is available.
(u) Tax Shelter Regulations. None of the Borrower, any other Loan Party
nor any other Subsidiary intends to treat the Loans or the transactions
contemplated by this Agreement and the other Loan Documents as being a
"reportable transaction" (within the meaning of Treasury Regulation Section
1.6011-4). If the Borrower, any other Loan Party or any other Subsidiary
determines to take any action inconsistent with such intention, the Borrower
will promptly notify the Agent thereof. If the Borrower so notifies the Agent,
the Borrower acknowledges that one or more of the Lenders may treat its Loans as
part of a transaction that is subject to Treasury Regulation Section 301.6112-1,
and such Lender or Lenders, as applicable, will maintain the lists and other
records, including the identity of the applicable Loan Parties, all as required
by such Treasury Regulation.
Section 6.2. Survival of Representations and Warranties, Etc.
All statements contained in any certificate, financial statement or
other instrument delivered by, or at the direction of, any Loan Party or any
other Subsidiary to the Agent or any Lender (other than the content of any
projections or other similar forward looking statements) pursuant to or in
connection with this Agreement or any of the other Loan Documents (including,
but not limited to, any such statement made in or in connection with any
amendment thereto or any statement contained in any certificate, financial
statement or other instrument delivered by, or at the direction of, the Parent
or the Borrower prior to the Agreement Date and delivered to the Agent or any
Lender in connection with closing the transactions contemplated hereby) shall
constitute representations and warranties made by the Parent and the Borrower
under this Agreement. All representations and warranties made under this
Agreement and the other Loan Documents shall be deemed to be made at and as of
the Agreement Date, the Effective Date and at and as of the date of the
occurrence of any Credit Event, except to the extent that such representations
and warranties expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on and as of
such earlier date) and except for changes in factual circumstances specifically
permitted hereunder. All such representations and warranties shall survive the
effectiveness of this Agreement, the execution and delivery of the Loan
Documents and the making of the Loans.
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ARTICLE VII. AFFIRMATIVE COVENANTS
For so long as this Agreement is in effect, unless the Requisite
Lenders (or, if required pursuant to Section 11.6., all of the Lenders) shall
otherwise consent in the manner provided for in Section 11.6., the Borrower and
the Parent, as applicable, shall comply with the following covenants:
Section 7.1. Financial Reporting and Other Information
The Parent shall furnish to the Agent each of the following:
(a) Quarterly Financial Statements. As soon as available and in any
event within 45 days after the close of each of the first, second and third
fiscal quarters of the Parent, the consolidated balance sheet of the Parent and
its Subsidiaries as at the end of such period and the related consolidated
statements of income and cash flows of the Parent and its Subsidiaries for such
period, and setting forth in each case in comparative form the figures for the
corresponding periods of the previous fiscal year, all of which shall be
accompanied by a statement signed by the chief financial officer of the Parent
on behalf of the Parent stating that, in his or her opinion, such statements
present fairly, in accordance with GAAP and in all material respects, the
consolidated financial position of the Parent and its Subsidiaries as at the
date thereof and the results of operations for such period (subject to normal
year-end audit adjustments).
(b) Year-End Statements. As soon as available and in any event within
120 days after the end of each fiscal year of the Parent, the audited
consolidated balance sheet of the Parent and its Subsidiaries as at the end of
such fiscal year and the related audited consolidated statements of income and
cash flows of the Parent and its Subsidiaries for such fiscal year, setting
forth in comparative form the figures as at the end of and for the previous
fiscal year, all of which shall be (a) accompanied by a statement signed by the
chief financial officer of the Parent on behalf of the Parent stating that, in
his or her opinion, such statements present fairly, in accordance with GAAP and
in all material respects, the financial position of the Parent and its
Subsidiaries as at the date thereof and the result of operations for such period
and (b) certified by KPMG LLP or any other independent certified public
accountants of recognized national standing acceptable to the Agent and the
Requisite Lenders, whose opinion shall be unqualified and in scope and substance
satisfactory to the Agent and the Requisite Lenders and who shall have
authorized the Parent to deliver such financial statements and certification
thereof to the Agent and the Lenders pursuant to this Agreement.
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(c) Compliance Certificate. At the time the financial statements are
furnished pursuant to the immediately preceding subsections (a) and (b), a
certificate substantially in the form of Exhibit D (a "Compliance Certificate")
executed on behalf of the Parent by the chief financial officer of the Parent
(i) setting forth as of the end of such quarterly accounting period or fiscal
year, as the case may be, the calculations required to establish whether or not
the Parent and the Borrower, as applicable, were in compliance with the
covenants contained in Section 8.1.; and (ii) stating that no Default or Event
of Default exists, or, if such is not the case, specifying such Default or Event
of Default and its nature, when it occurred and, whether it is continuing and
the steps being taken by the Parent or the Borrower with respect to such event,
condition or failure.
(d) Reports from Accountants. Upon the request of the Agent, copies of
all reports, if any, submitted to the Parent or its Board of Trustees by its
independent public accountants including, without limitation, any management
report.
(e) Shareholder Information. Promptly upon the mailing thereof to the
shareholders of the Parent generally, copies of all financial statements,
reports, proxy statements and other written information so mailed and promptly
upon the issuance thereof copies of all press releases issued by the Parent, the
Borrower, any Subsidiary or any other Loan Party.
(f) Securities Filings. Within 10 Business Days of the filing thereof,
copies of all registration statements (excluding the exhibits thereto and any
registration statements on Form S-8 or its equivalent), reports on Forms 10-K,
10-Q and 8-K (or their equivalents) and all other periodic reports which the
Parent, any other Loan Party or any other Subsidiary shall file with the
Securities and Exchange Commission (or any Governmental Authority substituted
therefor) or any national securities exchange.
(g) Pricing Certificate. At the time the financial statements are
furnished pursuant to subsections (a) and (b) above, a certificate substantially
in the form of Exhibit E (a "Pricing Certificate") executed by the chief
financial officer of the Parent (i) setting forth as of the end of such
quarterly accounting period or fiscal year, as the case may be, the calculations
required to establish the ratio of Total Liabilities to Gross Asset Value (as
determined in accordance with Section 8.1.) and (ii) stating the corresponding
level of Applicable Margin with respect to such ratio.
(h) Annual Budget and Plans of the Parent. No later than 20 days before
the end of each fiscal year of the Parent ending after December 31, 2000 and
prior to the Termination Date, projected balance sheets, operating statements
and cash flow budgets of the Parent and its Subsidiaries on a consolidated basis
for each quarter of the next succeeding fiscal year, all itemized in reasonable
detail. The foregoing shall be accompanied by pro forma calculations, together
with detailed assumptions, required to establish whether or not the Parent, and
when appropriate its consolidated Subsidiaries, will be in compliance with the
covenants contained in Section 8.1. and at the end of each fiscal quarter of the
next succeeding fiscal year.
(i) Ownership Share/Recourse Share Calculations. Promptly upon the
request of the Agent, evidence of the Parent's calculation of the Ownership
Share and Recourse Share with respect to a Subsidiary or an Unconsolidated
Affiliate, such evidence to be in form and detail reasonably satisfactory to the
Agent.
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(j) ERISA Notices. If and when any member of the ERISA Group (i) gives
notice to the PBGC of any "reportable event" (as defined in Section 4043 of
ERISA) with respect to any Benefit Plan which might constitute grounds for a
termination of such Benefit Plan under Title IV of ERISA, or knows that the plan
administrator of any Benefit Plan has given notice of any such reportable event,
a copy of the notice of such reportable event 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 Benefit 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 Benefit
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 Benefit Plan
pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails to make
any payment or contribution to any Benefit Plan or Multiemployer Plan or in
respect of any Benefit Arrangement or makes any amendment to any Benefit 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, a certificate of the controller 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.
(k) Litigation and Governmental Proceedings. To the extent the Parent
or the Borrower is aware of the same, prompt notice of the commencement of any
proceeding or investigation by or before any Governmental Authority and any
action or proceeding in any court or other tribunal or before any arbitrator
against or in any other way relating adversely to, or adversely affecting, the
Parent, the Borrower, any other Loan Party or any other Subsidiary or any of
their respective properties, assets or businesses which, if determined or
resolved adversely to such Person, could reasonably be expected to have a
Material Adverse Effect, and prompt notice of the receipt of notice that any
United States income tax returns of the Parent, the Borrower or any of its
Subsidiaries are being audited.
(l) Modification of Organizational Documents. At least five (5)
Business Days prior to the effectiveness thereof, a copy of any amendment or
other modification to the Trust Agreement, the Partnership Agreement,
certificate or articles of incorporation, bylaws, partnership agreement or other
similar organizational documents of the Parent, the Borrower or any other Loan
Party that owns, or is to acquire any interest in, a Rouse Property (or any
Equity Interest in a Person that directly, or indirectly through one or more
Subsidiaries, has an interest in a Rouse Property).
(m) Material Adverse Change. Prompt notice of any change in the
business, assets, liabilities, financial condition, results of operations of the
Parent, the Borrower, any Subsidiary or any other Loan Party which has had or
could reasonably be expected to have Material Adverse Effect.
(n) Default. Prompt notice of the occurrence of any Default or Event of
Default.
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(o) Change in Ownership of the Parent. Prompt notice of any approval
given by the board of trustees of the Parent to any "person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) with respect to such "person" or "group"
becoming the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a Person will be deemed to have "beneficial ownership"
of all securities that such Person has the right to acquire, whether such right
is exercisable immediately or only after the passage of time), directly or
indirectly, of more than 9.9% of the total voting power of the then outstanding
voting stock of the Parent.
(p) Other Information, Etc. From time to time and promptly upon each
request, such data, certificates, reports, statements, opinions of counsel,
documents or further information regarding the business, assets, liabilities,
financial condition, results of operations of the Parent, the Borrower, any
other Loan Party or any other Subsidiary as the Agent (or any Lender through the
Agent) may reasonably request.
Upon receipt of any of the items referred to above (other than items
requested under the immediately preceding subsection (p)), the Agent shall
promptly forward a copy thereof to each Lender at its Lending Office. Upon
receipt of any item requested by a Lender under the immediately preceding
subsection (p), the Agent shall promptly forward a copy thereof to such Lender
at its Lending Office.
Section 7.2. Preservation of Existence and Similar Matters.
Except as otherwise permitted under Section 8.4., the Borrower and the
Parent shall preserve and maintain, and cause each Subsidiary to preserve and
maintain, its respective existence, rights, franchises, licenses and privileges
in the jurisdiction of its incorporation or formation and qualify and remain
qualified and authorized to do business in each jurisdiction in which the
character of its properties or the nature of its business requires such
qualification and authorization and where the failure to be so authorized and
qualified could reasonably be expected to have a Material Adverse Effect.
Section 7.3. Compliance with Applicable Law.
The Borrower and the Parent shall comply, and cause each Subsidiary to
comply, with all Applicable Law, including the obtaining of all Governmental
Approvals, the failure with which to comply could reasonably be expected to have
a Material Adverse Effect.
Section 7.4. Maintenance of Property.
In addition to the requirements of any of the other Loan Documents, the
Borrower and the Parent shall (a) protect and preserve, and cause each
Subsidiary to protect and preserve, all of its properties, and maintain in good
repair, working order and condition all tangible properties, ordinary wear and
tear and casualty excepted, and (b) from time to time make or cause to be made
all needed and appropriate repairs, renewals, replacements and additions to such
properties, so that the business carried on in connection therewith may be
properly and advantageously conducted at all times except where the failure to
do any of the foregoing under clauses (a) and (b) herein could not reasonably be
expected to have a Material Adverse Effect.
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Section 7.5. Conduct of Business.
The Parent and the Borrower shall at all times carry on, and, except as
permitted under Section 8.4., cause each of their Subsidiaries to carry on, its
respective businesses as described in Section 6.1.(r).
Section 7.6. Insurance.
The Borrower and the Parent shall maintain, and cause each Loan Party
to maintain, insurance with financially sound and reputable insurance companies
against such risks and in such amounts as is customarily maintained by similar
businesses or as may be required by Applicable Law. The Borrower and the Parent
shall from time to time deliver to the Agent upon request a detailed list,
together with copies of all policies of the insurance then in effect, stating
the names of the insurance companies, the amounts and rates of the insurance,
the dates of the expiration thereof and the properties and risks covered
thereby.
Section 7.7. Payment of Taxes and Claims.
The Borrower and the Parent shall pay or discharge, and cause each
Subsidiary to pay and discharge, when due (a) all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits or
upon any properties belonging to it, and (b) all lawful claims of materialmen,
mechanics, carriers, warehousemen and landlords for labor, materials, supplies
and rentals which, if unpaid, might become a Lien on any properties of such
Person, except in each case, any such non-payment or failure to discharge which
could not reasonably be expected to have a Material Adverse Effect; provided,
however, that this Section shall not require the payment or discharge of any
such tax, assessment, charge, levy or claim which is being contested in good
faith by appropriate proceedings which operate to suspend the collection thereof
and for which adequate reserves have been established on the books of the
Borrower, the Parent or such Subsidiary, as applicable, in accordance with GAAP.
Section 7.8. Books and Records; Visits and Inspections.
The Borrower and the Parent will keep, and will cause each Subsidiary
to 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. The Borrower and the Parent will permit, and will cause
each Subsidiary to permit, representatives of the Agent or any Lender to visit
and inspect any of their respective properties, to examine and make abstracts
from any of their respective books and records and to discuss their respective
affairs, finances and accounts with their respective officers, employees and
independent public accountants in the Borrower's presence prior to an Event of
Default, all at such reasonable times during business hours and as often as may
reasonably be desired and so long as no Event of Default shall have occurred and
be continuing, with reasonable notice and, at any time after the occurrence and
during the continuance of a Default or Event of Default, all at the Borrower's
expense.
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Section 7.9. Use of Proceeds.
(a) Loans. The Borrower shall use the proceeds of the Term Loans to
finance the acquisition of Cherry Hill Mall in Camden County, New Jersey,
Moorestown Mall in Burlington County, New Jersey, The Gallery I in Philadelphia,
Pennsylvania and Exton Mall in Chester County, Pennsylvania, in each case in
connection with the Rouse Acquisition. The Borrower may also use up to
$11,000,000 of the proceeds of the Term Loans for general corporate purposes.
The Borrower shall use the proceeds of the Revolving Loans only for general
corporate purposes, including without limitation, to finance (a) the acquisition
of Plymouth Meeting Mall in Montgomery County and Echelon Mall in Camden County,
New Jersey, in each case in connection with the Rouse Acquisition, (b) working
capital needs and (c) capital expenditures.
(b) Margin Stock. The Borrower and the Parent shall not, and shall not
permit any Subsidiary, to use any part of the proceeds of any Loan to purchase
or carry, or to reduce or retire or refinance any credit incurred to purchase or
carry, any margin stock (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System) or to extend credit to others for the
purpose of purchasing or carrying any such margin stock.
Section 7.10. Environmental Matters.
The Borrower and the Parent shall comply, and cause all of its
Subsidiaries to comply, with all Environmental Laws the failure to comply with
which could reasonably be expected to have a Material Adverse Effect. If the
Borrower, the Parent or any Subsidiary shall (a) receive notice that any
violation of any Environmental Law may have been committed or is about to be
committed by such Person, (b) receive notice that any administrative or judicial
complaint or order has been filed or is about to be filed against the Borrower,
any Subsidiary or any other Loan Party alleging violations of any Environmental
Law or requiring the Borrower, or Subsidiary or any other Loan Party to take any
action in connection with the release of Hazardous Materials or (c) receive any
notice from a Governmental Authority or private party alleging that the
Borrower, or Subsidiary or any other Loan Party may be liable or responsible for
costs associated with a response to or cleanup of a release of a Hazardous
Materials or any damages caused thereby, the Borrower shall provide the Agent
with a copy of such notice within 10 days after the receipt thereof by the
Borrower or any of the Subsidiaries. The Borrower, the Parent and the
Subsidiaries shall promptly take all actions necessary to prevent the imposition
of any Liens on any of their respective properties arising out of or related to
any Environmental Laws.
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Section 7.11. Further Assurances.
At the Borrower's cost and expense, upon request of the Agent, the
Borrower shall duly execute and deliver or cause to be duly executed and
delivered, to the Agent such further instruments, documents and certificates,
and do and cause to be done such further acts that may be reasonably necessary
or advisable in the reasonable opinion of the Agent to carry out more
effectively the provisions and purposes of this Agreement and the other Loan
Documents.
Section 7.12. REIT Status.
The Parent shall at all times maintain its status as a REIT.
Section 7.13. Exchange Listing.
The Parent shall maintain at least one class of common shares of the
Parent having trading privileges on the New York Stock Exchange or the American
Stock Exchange or which is subject to price quotations on The NASDAQ Stock
Market's National Market System.
Section 7.14. Guarantors.
(a) Generally. The Parent shall cause any Subsidiary or Approved Joint
Venture, as applicable that is not already a Guarantor and to which any of the
following conditions apply (each a "New Guarantor"), to execute and deliver to
the Agent an Accession Agreement to the Guaranty, together with the other items
required to be delivered under the immediately following subsection (b):
(i) such Subsidiary Guarantees, or otherwise becomes obligated
in respect of, any Indebtedness of any other Person (other than
Indebtedness under Guarantees which are solely Guarantees of
performance and not of payment and other Guarantees of such Person for
liabilities arising from reasonable and customary exceptions to
Nonrecourse Indebtedness, such as for fraud, willful misrepresentation,
misapplication of funds (including misappropriation of security
deposits and failure to apply rents to operating expenses or debt
service), indemnities relating to environmental matters and waste of
property constituting security for such Nonrecourse Indebtedness,
post-default interest, attorney's fees and other costs of collection to
the extent not covered by the value of the property constituting
security for such Nonrecourse Indebtedness and other similar exceptions
to recourse liability); or
(ii) such Subsidiary is formed or otherwise acquired after the
Agreement Date and can become a party to the Guaranty without
violating: (A) terms of its articles of incorporation, bylaws,
operating agreement, partnership agreement, declaration of trust,
shareholders agreement, member agreement or other similar
organizational document, which terms expressly prohibit such Subsidiary
from providing Guarantees of Indebtedness of any other Person, (B) any
fiduciary obligation owing to the holders of an equity interest in such
Subsidiary and imposed under Applicable Law or (C) the terms of any
documents evidencing Indebtedness of such Subsidiary.
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Any such Accession Agreement and the other items required under such subsection
(b) must be delivered to the Agent no later than 45 days following on the last
day of the Parent's fiscal quarter during which any of the above conditions
first applies to a Subsidiary. Notwithstanding the foregoing, if the assets of a
Subsidiary consist solely of Equity Interests in another Subsidiary and such
other Subsidiary is not required to become a Guarantor under the terms of this
Section, then such Subsidiary shall not be required to become a Guarantor under
the terms of this Section.
(b) Required Deliveries. Each Accession Agreement delivered by a New
Guarantor under the immediately preceding subsections (a) shall be accompanied
by (i) the items that would have been delivered under Sections 5.1.(a)(iv), and
(vii) through (xi) if such New Guarantor had been a Guarantor on the Agreement
Date; (ii) if such New Guarantor is not a Wholly Owned Subsidiary, a written
acknowledgement of all Persons (other than Loan Parties) holding Equity
Interests in such New Guarantor, pursuant to which such Persons acknowledge and
consent to the Guaranty made by such New Guarantor and (iii) such other
documents and instruments as the Agent may reasonably request.
(c) Release of Certain Guarantors. The Borrower may request in writing
that the Agent release a Guarantor that became a party to the Guaranty pursuant
to subsection (a) above or Section 5.1., other than the Parent, if such
Guarantor (i) will be, upon the release of the Guaranty, incurring Indebtedness
secured by a Lien on its Properties and the documents evidencing such
Indebtedness specifically prohibit such Guaranty, (ii) such Guarantor will be,
upon the release of the Guaranty, selling, conveying, transferring or otherwise
disposing of all or a substantial part of its business or assets, or (iii) the
provisions of the immediately preceding subsection (a) no longer apply, and upon
receipt of such request the Agent shall release such Guarantor from the Guaranty
so long as: (I) such Guarantor is not otherwise required to be a party to the
Guaranty under this Section; and (II) no Event of Default shall then be in
existence or would occur as a result of such release.
ARTICLE VIII. NEGATIVE COVENANTS
For so long as this Agreement is in effect, unless the Requisite
Lenders (or, if required pursuant to Section 11.6., all of the Lenders) shall
otherwise consent in the manner set forth in Section 11.6., the Borrower and the
Parent, as applicable, shall comply with the following covenants:
Section 8.1. Financial Covenants.
(a) Minimum Tangible Net Worth. The Parent shall not permit its
Tangible Net Worth determined on a consolidated basis at the end of any fiscal
quarter to be less than (i) $228,835,000 plus (ii) 75% of the Net Proceeds of
all Equity Issuances effected at any time after the December 28, 2000 by the
Parent or any of its Subsidiaries to any Person other than the Parent or any of
its Subsidiaries (in the case of any Equity Issuance effected by a Subsidiary,
the amount of such Net Proceeds shall be appropriately adjusted to account for
minority interests consistent with GAAP) excluding (a) the Equity Issuances
described on Schedule 8.1.(a) the Net Proceeds of which shall not exceed an
aggregate amount of $45,000,000 and (b) Equity Issuances of common shares of the
Parent solely in exchange for equivalent operating units of the Borrower.
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(b) Ratio of Total Liabilities to Gross Asset Value. The Parent shall
not permit the ratio of (i) Total Liabilities of the Parent and its Subsidiaries
determined on a consolidated basis to (ii) Gross Asset Value of the Parent and
its Subsidiaries determined on a consolidated basis, to exceed 0.70 to 1 at any
time.
(c) Ratio of EBITDA to Interest Expense. The Parent shall not permit
the ratio of (i) EBITDA of the Parent and its Subsidiaries and determined on a
consolidated basis for the period of four consecutive fiscal quarters most
recently ending to (ii) Interest Expense of the Parent and its Subsidiaries
determined on a consolidated basis for such period, to be less than 1.90 to 1
for any such period.
(d) Ratio of Adjusted EBITDA to Debt Service. The Parent shall not
permit the ratio of (i) Adjusted EBITDA of the Parent and its Subsidiaries
determined on a consolidated basis for the period of four consecutive fiscal
quarters most recently ending to (ii) Debt Service of the Parent and its
Subsidiaries determined on a consolidated basis for such period, to be less than
1.550 to 1 for any such period.
(e) Permitted Investments. The Parent and the Borrower shall not make
any Investment in or otherwise own, and shall not permit any Subsidiary to make
any Investment in or otherwise own, the following items which would cause the
aggregate value of such holdings of the Parent, the Borrower and its
Subsidiaries to exceed the following percentages of Gross Asset Value:
(i) unimproved real estate, such that the aggregate value of
all such unimproved real estate, calculated on the basis of cost,
exceeds 5.0% of Gross Asset Value;
(ii) Investments in Persons (other than Investments in
Subsidiaries and Unconsolidated Affiliates) such that the aggregate
value of such Investment calculated on the basis of cost, exceeds 10.0%
of Gross Asset Value;
(iii) Mortgages in favor of the Parent, the Borrower or any
other Subsidiary, such that the aggregate amount of Indebtedness
secured by such Mortgages exceeds 10.0% of Gross Asset Value (excluding
any Mortgage encumbering any Property owned by a Subsidiary the
accounts of which are required to be consolidated with those of the
Parent under GAAP); and
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(iv) Investments in Subsidiaries that are not Wholly Owned
Subsidiaries and Investments in Unconsolidated Affiliates such that the
aggregate value of such Investments calculated on the basis of cost,
exceeds 50.0% of Gross Asset Value.
In addition to the foregoing limitations, the aggregate value of the Investments
and other items subject to the limitations in the preceding clauses (i) through
(iii) shall not exceed 20.0% of Gross Asset Value. The Lenders agree that the
Exchange Note (as defined in that certain letter agreement dated as of April 23,
2003 among certain of the parties to the Existing Credit Agreement) is not
subject to the limitations of this subsection.
(f) Properties under Development or Redevelopment. The Parent and the
Borrower shall not permit the aggregate amount of Total Budgeted Cost Until
Stabilization with respect to all Development Properties and Major Redevelopment
Properties owned by the Parent, the Borrower, any Subsidiary or any
Unconsolidated Affiliate to exceed 25.0% of Gross Asset Value at any time. For
purposes of this subsection, the Total Budgeted Cost Until Stabilization with
respect to any Development Property or Major Redevelopment Property owned by an
Unconsolidated Affiliate of the Parent shall equal the greater of (i) the
product of (x) the Parent's Ownership Share in such Unconsolidated Affiliate and
(y) the Total Budgeted Cost Until Stabilization for such Property and (ii) the
Parent's Recourse Share of all Indebtedness of such Unconsolidated Affiliate.
For purposes of calculating Gross Asset Value as used in this subsection, the
Gross Asset Value of Development Properties and Major Redevelopment Properties
shall include, without duplication of any other amounts already included
elsewhere in such calculation, the Total Budgeted Cost Until Stabilization of
such Properties.
(g) Leasing Requirement for Properties under Development or
Redevelopment. The Parent and the Borrower shall not at any time permit the
aggregate amount of projected rentable square footage of all Development
Properties and Major Redevelopment Properties owned by the Parent, the Borrower,
any Subsidiary or any Unconsolidated Affiliate subject to binding leases to be
less than 50.0% of the aggregate amount of projected rentable square footage of
all such Development Properties and Major Redevelopment Properties.
(h) Floating Rate Indebtedness. The Parent and the Borrower will not,
and will not permit any of their respective Subsidiaries to, incur, assume or
suffer to exist at any time Floating Rate Indebtedness in an aggregate
outstanding principal amount in excess of $400,000,000.
(i) Secured Recourse Indebtedness. The Parent shall not permit the
ratio of (i) Secured Indebtedness of the Parent and the Borrower that is not
Nonrecourse Indebtedness to (ii) Gross Asset Value, to exceed 0.150 to 1 at any
time.
(j) Additional Unsecured Indebtedness. The Parent and the Borrower
shall not, and shall not permit any Subsidiary to, incur, assume or otherwise
become obligated after the Agreement Date in respect of any Indebtedness that is
not Secured Indebtedness other than (i) the Obligations and (ii) Indebtedness
under the Existing Credit Agreement and any other Loan Document (as defined in
the Existing Credit Agreement).
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Section 8.2. Restricted Payments.
The Parent and the Borrower will not declare or make, or permit any
other Subsidiary to declare or make, any Restricted Payment; provided, however,
that:
(a) the Parent may acquire limited partnership interests in the
Borrower in exchange for cash or common stock of the Parent;
(b) the Parent may declare or make cash distributions to its
shareholders during any period of four consecutive fiscal quarters in an
aggregate amount not to exceed the greater of (i) 95.0% of Funds From Operations
of the Parent for such period or (ii) the amount for the Parent to remain in
compliance with Section 7.12.;
(c) the Parent may make cash distributions to its shareholders of
capital gains resulting from gains from certain asset sales to the extent
necessary to avoid payment of taxes on such asset sales imposed under Sections
857(b)(3) and 4981 of the Internal Revenue Code;
(d) the Parent may make cash payments to repurchase outstanding shares
of its common stock;
(e) the Parent may cause the Borrower (directly or indirectly through
any intermediate Subsidiaries) to make distributions to the Parent and to the
limited partners of the Borrower, and the Parent may cause other Subsidiaries of
the Parent to make distributions to the Parent and to other holders of Equity
Interests in such Subsidiaries, in each case, so long as immediately after
giving effect to any such distribution no Default or Event of Default would
exist; and
(f) subject to the following sentence, if a Default or Event of Default
shall have occurred and be continuing, the Parent may only declare or make cash
distributions to its shareholders during any fiscal year in an aggregate amount
not to exceed the minimum amount necessary for the Parent to remain in
compliance with Section 7.12.
Notwithstanding the foregoing, if a Default or Event of Default specified in
Section 9.1.(a), Section 9.1.(e) or Section 9.1.(f) shall have occurred and be
continuing, or if as a result of the occurrence of any other Event of Default
the Obligations have been accelerated pursuant to Section 9.2.(a), the Parent
and the Borrower shall not, and shall not permit any other Subsidiary to, make
any Restricted Payments to any Person whatsoever other than to the Borrower or
any Subsidiary.
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Section 8.3. Restrictions on Intercompany Transfers.
The Borrower shall not create or otherwise cause or suffer to exist or
become effective, or permit any Subsidiary to create or otherwise cause or
suffer to exist or become effective, any consensual encumbrance or restriction
of any kind on the ability of such Subsidiary to: (i) pay dividends or make any
other distribution on any of such Subsidiary's capital stock or other equity
interests owned by the Borrower or such Subsidiary of the Borrower; (ii) pay any
Indebtedness owed to the Borrower or any Subsidiary; (iii) make loans or
advances to the Borrower or any Subsidiary; or (iv) transfer any of its property
or assets to the Borrower or any Subsidiary; provided, however that the Borrower
or any such Subsidiary may have provision for preferred, priority or guaranteed
payments to a joint venture partner of such Subsidiary.
Section 8.4. Mergers, Acquisitions and Sales of Assets.
The Parent and the Borrower shall not (a) enter into, and shall not
permit any other Loan Party to enter into, any transaction of merger or
consolidation; (b) liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution) or permit any other Loan Party to do any of the
foregoing; (c) convey, sell, lease, sublease, transfer or otherwise dispose of,
in one transaction or a series of transactions, all or any substantial part of
its business or assets, or the capital stock of or other Equity Interests in any
of its Subsidiaries, whether now owned or hereafter acquired or permit any Loan
Party to do any of the foregoing or (d) acquire a Substantial Amount of the
assets of, or make an Investment of a Substantial Amount in, any other Person or
permit any Loan Party to do any of the foregoing; provided, however, that:
(i) any Loan Party that is a Subsidiary of the Parent or the
Borrower may merge or consolidate with the Parent, the Borrower, or a
Subsidiary of the Parent or of the Borrower so long as in the case of
(A) a merger or consolidation involving the Parent or the Borrower, the
Parent or the Borrower, as the case may be, is the survivor and (B) any
other merger or consolidation, the survivor is, or will become upon the
consummation of such merger or consolidation, a Loan Party;
(ii) any Loan Party may sell, transfer or dispose of its
assets to the Borrower or a Subsidiary that is a Loan Party;
(iii) a Loan Party (other than the Borrower, the Parent or any
Loan Party which owns, or is to acquire any interest in, a Rouse
Property (or any Equity Interest in a Person that directly, or
indirectly through one or more Subsidiaries, has an interest in a Rouse
Property)) may convey, sell, transfer or otherwise dispose of, in one
transaction or a series of transactions, all or any substantial part of
its business or assets, or the capital stock of or other Equity
Interests in any of its Subsidiaries, and thereafter liquidate,
provided that immediately prior to any such conveyance, sale, transfer,
disposition or liquidation and immediately thereafter and after giving
effect thereto, no Default or Event of Default is or would be in
existence;
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(iv) the Parent, the Borrower and any other Loan Party may,
directly or indirectly, (A) acquire (whether by purchase, acquisition
of Equity Interests of a Person, or as a result of a merger or
consolidation) a Substantial Amount of the assets of, or make an
Investment of a Substantial Amount in, any other Person and (B) sell,
lease or otherwise transfer, whether by one or a series of
transactions, a Substantial Amount of assets (including capital stock
or other securities of Subsidiaries) to any other Person, so long as,
in each case, (1) the Parent shall have given the Agent and the Lenders
at least 30 days prior written notice of such consolidation, merger,
acquisition, Investment, sale, lease or other transfer; (2) immediately
prior thereto, and immediately thereafter and after giving effect
thereto, no Default or Event of Default is or would be in existence;
(3) in the case of a consolidation or merger by the Parent, the
Borrower or a Loan Party which owns, or is to acquire any interest in,
a Rouse Property (or any Equity Interest in a Person that directly, or
indirectly through one or more Subsidiaries, has an interest in a Rouse
Property), such Person shall be the survivor thereof and (4) at the
time the Parent gives notice pursuant to clause (1) of this subsection,
the Parent shall have delivered to the Agent and the Lenders a
Compliance Certificate, calculated on a pro forma basis, evidencing the
continued compliance by the Borrower and the Parent with the terms and
conditions of this Agreement and the other Loan Documents, including
without limitation, the financial covenants contained in Section 8.1.,
after giving effect to such consolidation, merger, acquisition,
Investment, sale, lease or other transfer;
(v) any Loan Party (other than the Borrower or the Parent) may
convey, sell, lease, sublease, transfer or otherwise dispose of, in one
transaction or a series of transactions, all or any substantial part of
its business or assets, or the capital stock of or other Equity
Interests in any of its Subsidiaries, whether now owned or hereafter
acquired; and
(vi) the Parent, the Borrower and any other Loan Party may
lease and sublease its assets, as lessor or sublessor (as the case may
be), in the ordinary course of their business.
Section 8.5. Fiscal Year.
The Parent shall not change its fiscal year from that in effect as of
the Agreement Date.
Section 8.6. Modifications of Organizational Documents.
The Parent shall not amend, supplement, restate or otherwise modify the
Trust Agreement, and the Borrower shall not amend, supplement, restate or
otherwise modify the Partnership Agreement, in each case in any respect, without
the prior written consent of the Agent and the Requisite Lenders unless such
amendment, supplement, restatement or other modification could not reasonably be
expected to have in a Material Adverse Effect.
Section 8.7. Transactions with Affiliates.
The Borrower and the Parent shall not permit to exist or enter into,
and will not permit any of its Subsidiaries to permit to exist or enter into,
any transaction (including the purchase, sale, lease or exchange of any property
or the rendering of any service) with any Affiliate, except (a) transactions in
the ordinary course of and pursuant to the reasonable requirements of the
business of the Borrower, the Parent or any Subsidiary and upon fair and
reasonable terms which are no less favorable to the Borrower, the Parent or such
Subsidiary than would be obtained in a comparable arm's length transaction with
a Person that is not an Affiliate, (b) transactions between or among the Parent,
the Borrower and it Subsidiaries and (c) the transactions described on Schedule
8.1.(a).
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Section 8.8. ERISA Exemptions.
The Borrower and the Parent shall not permit, and shall not permit any
other Loan Party or any other Subsidiary to permit, any of its respective assets
to become or be deemed to be "plan assets" within the meaning of ERISA, the
Internal Revenue Code and the respective regulations promulgated thereunder.
Section 8.9. Negative Pledge.
The Borrower will not create, assume or suffer to exist, and will not
permit any Subsidiary to create, assume or suffer to exist, any Lien or Negative
Pledge on any Rouse Property (or any of its rights in respect thereof), now
owned or hereafter acquired, except for (a) Permitted Liens and (b) Liens and
Negative Pledges described on Schedule 8.9.
Section 8.10. Modification of Exchange Documents or New Castle Partnership
Agreement.
The Borrower shall not, and shall not permit any Subsidiary to, amend,
supplement, restate or otherwise modify any of the following after the execution
thereof, if such amendment, supplement, restatement or other modification would
(a) adversely affect the rights of the Lenders under or in respect of any of the
Loan Documents or (b) reduce in any way the amount of Net Operating Income the
Borrower or any of its Subsidiaries is entitled to receive with respect to any
of the Rouse Properties from the amount they are entitled to receive at the time
any of the following first become effective: (i) the Amended and Restated
Limited Partnership Agreement for New Castle Associates and (ii) any document,
instrument or agreement to which the Borrower or any Subsidiary is a party with
APEX Mall, Inc. (or other "qualified intermediary" within the meaning of Section
1031 of the Internal Revenue Code) or any of its affiliates, and entered into in
connection with the Rouse Acquisition.
ARTICLE IX. DEFAULT
Section 9.1. Events of Default.
Each of the following shall constitute an Event of Default, whatever
the reason for such event and whether it shall be voluntary or involuntary or be
effected by operation of Applicable Law or pursuant to any judgment or order of
any Governmental Authority:
(a) Default in Payment. The Borrower shall fail to pay when due under
this Agreement or any other Loan Document (whether upon demand, at maturity, by
reason of acceleration or otherwise) the principal of, or any interest on, any
of the Loans, or shall fail to pay any of the other payment Obligations owing by
the Borrower under this Agreement or any other Loan Document, or any other Loan
Party shall fail to pay when due any payment obligation owing by such Loan Party
under any Loan Document to which it is a party and any such failure shall
continue for a period of five (5) calendar days thereafter.
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(b) Default in Performance.
(i) The Borrower or the Parent shall fail to perform or
observe any term, covenant, condition or agreement on its part to be
performed or observed and contained in Sections 7.1.(n) or Article
VIII.; or
(ii) The Borrower, the Parent or any other Loan Party shall
fail to perform or observe any term, covenant, condition or agreement
contained in this Agreement or any other Loan Document to which it is a
party and not otherwise mentioned in this Section and such failure
shall continue for a period of 30 days after the earlier of (x) the
date upon which the Borrower obtains knowledge of such failure or (y)
the date upon which the Parent or the Borrower has received written
notice of such failure from the Agent; provided, however, that if any
such failure referred to in this clause (ii) is reasonably capable of
being cured but not within such 30-day period and the Borrower has in
good faith commenced to cure such failure prior to the expiration of
such 30-day period and continues to diligently prosecute such cure, no
Event of Default shall be deemed to have occurred unless such failure
has not been cured within 30 calendar days after the last day of such
initial 30-day period;
(c) Misrepresentations. Any written statement, representation or
warranty made or deemed made by or on behalf of the Borrower, the Parent or any
other Loan Party under this Agreement or under any other Loan Document, or any
amendment hereto or thereto, or in any other writing or statement (other than
forward looking statements) at any time furnished by, or at the direction of,
the Borrower, the Parent or any other Loan Party to the Agent or any Lender,
shall at any time prove to have been incorrect or misleading in any material
respect when furnished or made.
(d) Indebtedness Cross-Default.
(i) The Parent, the Borrower, any other Loan Party, any other
Subsidiary shall fail to pay when due and payable the principal of, or
interest on, any Indebtedness (other than the Loans) having an
aggregate outstanding principal amount of $5,000,000 or more, and in
any such case such failure shall continue beyond any applicable notice
and cure periods; or
(ii) The maturity of any such Indebtedness shall have (x) been
accelerated in accordance with the provisions of any indenture,
contract or instrument evidencing, providing for the creation of or
otherwise concerning such Indebtedness or (y) been required to be
prepaid or repurchased prior to the stated maturity thereof.
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(e) Voluntary Bankruptcy Proceeding. The Borrower, the Parent or any
other Loan Party shall: (i) commence a voluntary case under the Bankruptcy Code
of 1978, as amended or other federal bankruptcy laws (as now or hereafter in
effect); (ii) file a petition seeking to take advantage of any other Applicable
Laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts; (iii) consent to, or fail to
contest in a timely and appropriate manner, any petition filed against it in an
involuntary case under such bankruptcy laws or other Applicable Laws or consent
to any proceeding or action described in the immediately following subsection;
(iv) apply for or consent to, or fail to contest in a timely and appropriate
manner, the appointment of, or the taking of possession by, a receiver,
custodian, trustee, or liquidator of itself or of a substantial part of its
property, domestic or foreign; (v) admit in writing its inability to pay its
debts as they become due; (vi) make a general assignment for the benefit of
creditors; (vii) make a conveyance fraudulent as to creditors under any
Applicable Law; or (viii) take any corporate or partnership action for the
purpose of effecting any of the foregoing.
(f) Involuntary Bankruptcy Proceeding. A case or other proceeding shall
be commenced against the Borrower, the Parent or any other Loan Party in any
court of competent jurisdiction seeking: (i) relief under the Bankruptcy Code of
1978, as amended or other federal bankruptcy laws (as now or hereafter in
effect) or under any other Applicable Laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment
of debts; or (ii) the appointment of a trustee, receiver, custodian, liquidator
or the like of such Person, or of all or any substantial part of the assets,
domestic or foreign, of such Person, and in the case of either clause (i) or
(ii) such case or proceeding shall continue undismissed or unstayed for a period
of 60 consecutive days, or an order granting the relief requested in such case
or proceeding (including, but not limited to, an order for relief under such
Bankruptcy Code or such other federal bankruptcy laws) shall be entered.
(g) Revocation of Loan Documents. The Borrower, the Parent or any other
Loan Party shall disavow, revoke or terminate in writing any Loan Document to
which it is a party or shall otherwise challenge or contest in any action, suit
or proceeding in any court or before any Governmental Authority the validity or
enforceability of any Loan Document.
(h) Judgment. A judgment or order for the payment of money shall be
entered against the Borrower, the Parent or any other Loan Party, by any court
or other tribunal and (i) such judgment or order shall continue for a period of
30 days without being paid, bonded over, stayed or dismissed through appropriate
appellate proceedings and (ii) either (A) the amount for which the insurer has
denied liability exceeds, individually or together with all other such judgments
or orders entered against the Borrower, the Parent and the other Loan Parties,
$5,000,000 in amount or (B) could reasonably be expected to have a Material
Adverse Effect.
(i) Attachment. A warrant, writ of attachment, execution or similar
process shall be issued against any property of the Borrower, the Parent or any
other Loan Party, which exceeds, individually or together with all other such
warrants, writs, executions and processes, $5,000,000 in amount and such
warrant, writ, execution or process shall not be paid, discharged, vacated,
stayed or bonded for a period of 30 days.
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(j) ERISA.
(i) 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 and such failure
shall continue for a period of 30 days; or
(ii) 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, the liability
resulting therefrom shall exceed $1,000,000 and either (A) such notice
shall not have been revoked or rescinded after 30 days from the filing
thereof or (B) such Material Plan shall be terminated; or
(iii) 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, the liability resulting
therefrom shall exceed $1,000,000 and either (A) such proceedings shall
not have been dismissed or terminated after 30 days from the filing
thereof or (B) such Material Plan shall be terminated or such liability
shall be imposed; or
(iv) 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, the liability resulting therefrom shall exceed
$1,000,000 and such condition shall exist for a period of 30 days; or
(v) 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 an obligation to pay on a
current annual basis during the term of this Agreement an amount in
excess of $1,000,000.
(k) Loan Documents. An Event of Default (as defined therein) shall
occur under any of the other Loan Documents (other than a Security Document);
(l) Change of Control/Change in Management.
(i) (A) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a Person will be deemed to have "beneficial
ownership" of all securities that such Person has the right to acquire,
whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 20% of the total voting
power of the then outstanding voting stock of the Parent other than
such Persons who are, as of the Agreement Date, current officers or
trustees of the Parent or Affiliates of current officers or trustees of
the Parent or (B) during any period of 12 consecutive months ending
after the Agreement Date, individuals who at the beginning of any such
12-month period constituted the Board of Trustees of the Parent
(together with any new trustees whose election by such Board or whose
nomination for election by the shareholders of the Parent was approved
by a vote of a majority of the trustees then still in office who were
either trustees 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 Board of Trustees of the Parent
then in office;
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(ii) If three or more of the following four individuals shall
cease for any reason (other than death, disability or resignation) to
be principally involved in the senior management of the Parent: Ronald
Rubin, George Rubin, Jonathan B. Weller and Edward Glickman (each a
"Principal Officer");
(iii) If three or more of the Principal Officers shall die,
become disabled or resign and the Parent shall have failed to replace
the resulting vacancies in senior management with individuals
reasonably acceptable to the Agent and the Requisite Lenders and such
failure shall continue for a period in excess of 120 days; or
(iv) The Parent or a Wholly Owned Subsidiary of the Parent
that is a Guarantor shall cease (A) to be the sole general partner of
the Borrower or (B) to own and control, directly or indirectly, at
least 70.0% of all partnership interests of the Borrower.
(m) Strike; Casualty. Any strike, lockout, labor dispute, embargo,
condemnation, act of God or public enemy, or other casualty which causes, for
more than 30 consecutive days beyond the coverage period of any applicable
business interruption insurance, the cessation or substantial curtailment of
revenue producing activities of the Borrower or its Subsidiaries taken as a
whole and only if any such event or circumstance could reasonably be expected to
have a Material Adverse Effect.
(n) Existing Credit Agreement. An Event of Default under and as defined
in the Existing Credit Agreement shall occur.
Section 9.2. Remedies Upon Event of Default.
Upon the occurrence of an Event of Default the following provisions
shall apply:
(a) Acceleration; Termination of Facilities.
(i) Automatic. Upon the occurrence of an Event of Default
specified in Sections 9.1.(e) or 9.1.(f), (A)(1) the principal of, and
all accrued interest on, the Loans and the Notes at the time
outstanding and (2) all of the other Obligations of the Borrower,
including, but not limited to, the other amounts owed to the Lenders
and the Agent under this Agreement, the Notes or any of the other Loan
Documents, shall become immediately and automatically due and payable
without presentment, demand, protest, or other notice of any kind, all
of which are expressly waived by the Borrower and (B) the Commitments
and the obligation of the Lenders to make Loans hereunder shall
immediately and automatically terminate.
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(ii) Optional. If any other Event of Default shall have
occurred and be continuing, the Agent may, and at the direction of the
Requisite Lenders shall: (A) declare (1) the principal of, and accrued
interest on, the Loans and the Notes at the time outstanding and (2)
all of the other Obligations, including, but not limited to, the other
amounts owed to the Lenders and the Agent under this Agreement, such
Notes or any of the other Loan Documents to be forthwith due and
payable, whereupon the same shall immediately become due and payable
without presentment, demand, protest or other notice of any kind, all
of which are expressly waived by the Borrower and (B) terminate the
Commitments and the obligation of the Lenders to make Loans hereunder.
(b) Loan Documents. The Requisite Lenders may direct the Agent to, and
the Agent if so directed shall, exercise any and all of its rights and remedies
under or in respect of any and all of the other Loan Documents.
(c) Applicable Law. The Requisite Lenders may direct the Agent to, and
the Agent if so directed shall, exercise all other rights and remedies it may
have under any Applicable Law.
Section 9.3. Termination of Commitments Upon Certain Defaults.
Upon the occurrence of a Default specified in Sections 9.1.(e) or
9.1.(f), the Commitments shall immediately and automatically terminate.
Section 9.4. Marshaling; Payments Set Aside.
Neither the Agent nor any Lender shall be under any obligation to
marshal any assets in favor of any Loan Party or any other party or against or
in payment of any or all of the Obligations. To the extent that any Loan Party
makes a payment or payments to the Agent and/or any Lender, or the Agent and/or
any Lender enforce their security interests or exercise their rights of setoff,
and such payment or payments or the proceeds of such enforcement or setoff or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such recovery, the Obligations or part
thereof originally intended to be satisfied, and all Liens, rights and remedies
therefor, shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.
Section 9.5. Allocation of Proceeds.
If an Event of Default shall have occurred and be continuing and
maturity of any of the Obligations has been accelerated, all payments received
by the Agent under any of the Loan Documents, in respect of any principal of or
interest on the Obligations or any other amounts payable by the Borrower or any
other Loan Party hereunder or thereunder, shall be applied in the following
order and priority:
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(a) amounts due to the Agent and the Lenders in respect of
Fees and other fees and expenses due under Section 11.2.;
(b) payments of interest on the Loans, to be applied for the
ratable benefit of the Lenders, in such order as the Lenders may
determine in their sole discretion;
(c) payments of principal of the Loans, to be applied for the
ratable benefit of the Lenders, in such order as the Lenders may
determine in their sole discretion;
(d) amounts due to the Agent and the Lenders pursuant to
Sections 10.7. and 11.9.;
(e) payments of all other amounts due under any of the Loan
Documents, if any, to be applied for the ratable benefit of the
Lenders; and
(f) any amount remaining after application as provided above,
shall be paid to the Borrower or whomever else may be legally entitled
thereto.
Section 9.6. Performance by Agent.
If the Borrower shall fail to perform any covenant, duty or agreement
contained in any of the Loan Documents, the Agent may perform or attempt to
perform such covenant, duty or agreement on behalf of the Borrower after the
expiration of any cure or grace periods set forth herein. In such event, the
Borrower shall, at the request of the Agent, promptly pay any amount reasonably
expended by the Agent in such performance or attempted performance to the Agent,
together with interest thereon at the applicable Post-Default Rate from the date
of such expenditure until paid. Notwithstanding the foregoing, neither the Agent
nor any Lender shall have any liability or responsibility whatsoever for the
performance of any obligation of the Borrower under this Agreement or any other
Loan Document.
Section 9.7. Rights Cumulative.
The rights and remedies of the Agent and the Lenders under this
Agreement and each of the other Loan Documents shall be cumulative and not
exclusive of any rights or remedies which any of them may otherwise have under
Applicable Law. In exercising their respective rights and remedies, the Agent
and the Lenders may be selective and no failure or delay by the Agent or any of
the Lenders in exercising any right shall operate as a waiver of it, nor shall
any single or partial exercise of any power or right preclude its other or
further exercise or the exercise of any other power or right.
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ARTICLE X. THE AGENT
Section 10.1. Authorization and Action.
Each Lender hereby irrevocably appoints and authorizes the Agent to
take such action as contractual representative on such Lender's behalf and to
exercise such powers under this Agreement and the other Loan Documents as are
specifically delegated to the Agent by the terms hereof and thereof, together
with such powers as are reasonably incidental thereto. Nothing herein shall be
construed to deem the Agent a trustee or fiduciary for any Lender nor to impose
on the Agent duties or obligations other than those expressly provided for
herein. Without limiting the generality of the foregoing, the use of the terms
"Agent", "agent" and similar terms in the Loan Documents with reference to the
Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any Applicable Law. Instead, use of
such terms is merely a matter of market custom, and is intended to create or
reflect only an administrative relationship between independent contracting
parties. At the request of a Lender, the Agent will forward to such Lender
copies or, where appropriate, originals of the documents delivered to the Agent
pursuant to this Agreement or the other Loan Documents. The Agent will also
furnish to any Lender, upon the request of such Lender, a copy of any
certificate or notice furnished to the Agent by the Borrower, any Loan Party or
any other Affiliate of the Borrower, pursuant to this Agreement or any other
Loan Document not already delivered to such Lender pursuant to the terms of this
Agreement or any such other Loan Document. As to any matters not expressly
provided for by the Loan Documents (including, without limitation, enforcement
or collection of any of the Obligations), the 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 Requisite Lenders (or all of the
Lenders if explicitly required under any other provision of this Agreement), and
such instructions shall be binding upon all Lenders and all holders of any of
the Obligations; provided, however, that, notwithstanding anything in this
Agreement to the contrary, the Agent shall not be required to take any action
which exposes the Agent to personal liability or which is contrary to this
Agreement or any other Loan Document or Applicable Law. Not in limitation of the
foregoing, the Agent shall not exercise any right or remedy it or the Lenders
may have under any Loan Document upon the occurrence of a Default or an Event of
Default unless the Requisite Lenders have so directed the Agent to exercise such
right or remedy. Without limiting the foregoing, no Lender shall have any right
of action whatsoever against the Agent as a result of the Agent acting or
refraining from acting under this Agreement or any of the other Loan Documents
in accordance with the instructions of the Requisite Lenders, or where
applicable, all the Lenders.
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Section 10.2. Agent's Reliance, Etc.
Notwithstanding any other provisions of this Agreement or any other
Loan Documents, neither the Agent nor any of its directors, officers, agents,
employees or counsel shall be liable for any action taken or omitted to be taken
by it or them under or in connection with this Agreement, except for its or
their own gross negligence or willful misconduct in connection with its duties
expressly set forth herein or therein. Without limiting the generality of the
foregoing, the Agent: (a) may treat the payee of any Note as the holder thereof
until the Agent receives written notice of the assignment or transfer thereof
signed by such payee and in form satisfactory to the Agent; (b) may consult with
legal counsel (including its own counsel or counsel for the Borrower or any Loan
Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (c)
makes no warranty or representation to any Lender or any other Person and shall
not be responsible to any Lender or any other Person for any statements,
warranties or representations made by any Person in or in connection with this
Agreement or any other Loan Document; (d) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of any of this Agreement or any other Loan Document or the
satisfaction of any conditions precedent under this Agreement or any Loan
Document on the part of the Borrower or other Persons or inspect the property,
books or records of the Borrower or any other Person; (e) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, any other
Loan Document, or any other instrument or document furnished pursuant thereto;
and (f) shall incur no liability under or in respect of this Agreement or any
other Loan Document by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telephone or telecopy) believed by it to
be genuine and signed, sent or given by the proper party or parties.
Section 10.3. Notice of Defaults.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or Event of Default unless the Agent has received notice
from a Lender or the Borrower referring to this Agreement, describing with
reasonable specificity such Default or Event of Default and stating that such
notice is a "notice of default." If any Lender (excluding the Agent in its
capacity as a Lender) becomes aware of any Default or Event of Default, it shall
promptly send to the Agent such a "notice of default." Further, if the Agent
receives such a "notice of default", the Agent shall give prompt notice thereof
to the Lenders.
Section 10.4. Wells Fargo as Lender.
Wells Fargo, as a "Lender", shall have the same rights and powers under
this Agreement and any other Loan Document as any other Lender and may exercise
the same as though it were not the Agent; and the term "Lender" or "Lenders"
shall, unless otherwise expressly indicated, include Wells Fargo in each case in
its individual capacity. Wells Fargo and its affiliates may each accept deposits
from, maintain deposits or credit balances for, invest in, lend money to, act as
trustee under indentures of, serve as financial advisor to, and generally engage
in any kind of business with the Borrower, any other Loan Party or any other
affiliate thereof as if it were any other bank and without any duty to account
therefor to the other Lenders. Further, the Agent and any affiliate may accept
fees and other consideration from the Borrower for services in connection with
this Agreement and otherwise without having to account for the same to the other
Lenders. The Lenders acknowledge that, pursuant to such activities, Wells Fargo
or its affiliates may receive information regarding the Parent, the Borrower,
other Loan Parties, other Subsidiaries and other Affiliates (including
information that may be subject to confidentiality obligations in favor of such
Person) and acknowledge that the Agent shall be under no obligation to provide
such information to them.
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Section 10.5. Approvals of Lenders.
All communications from the Agent to any Lender requesting such
Lender's determination, consent, approval or disapproval (a) shall be given in
the form of a written notice to such Lender, (b) shall be accompanied by a
description of the matter or issue as to which such determination, approval,
consent or disapproval is requested, or shall advise such Lender where
information, if any, regarding such matter or issue may be inspected, or shall
otherwise describe the matter or issue to be resolved, (c) shall include, if
reasonably requested by such Lender and to the extent not previously provided to
such Lender, written materials and a summary of all oral information provided to
the Agent by the Borrower in respect of the matter or issue to be resolved, and
(d) shall include the Agent's recommended course of action or determination in
respect thereof. Each Lender shall reply promptly, but in any event within 10
Business Days of receipt of such communication (or such lesser period as may be
required under the Loan Documents for the Agent to respond). Unless a Lender
shall give written notice to the Agent that it specifically objects to the
recommendation or determination of the Agent (together with a written
explanation of the reasons behind such objection) within the applicable time
period for reply, such Lender shall be deemed to have conclusively approved of
or consented to such recommendation or determination.
Section 10.6. Lender Credit Decision, Etc.
Each Lender expressly acknowledges and agrees that neither the Agent
nor any of its officers, directors, employees, agents, counsel,
attorneys-in-fact or other affiliates has made any representations or warranties
as to the financial condition, operations, creditworthiness, solvency or other
information concerning the business or affairs of the Borrower, any other Loan
Party, any Subsidiary or other Person to such Lender and that no act by the
Agent hereinafter taken, including any review of the affairs of the Borrower,
shall be deemed to constitute any such representation or warranty by the Agent
to any Lender. Each Lender acknowledges that it has, independently and without
reliance upon the Agent, any other Lender or counsel to the Agent, or any of
their respective officers, directors, employees and agents, and based on the
financial statements of the Borrower, the Subsidiaries or any other Affiliate
thereof, and inquiries of such Persons, its independent due diligence of the
business and affairs of the Borrower, the Loan Parties, the Subsidiaries and
other Persons, its review of the Loan Documents, the legal opinions required to
be delivered to it hereunder, the advice of its own counsel and such other
documents and information as it has deemed appropriate, made its own credit and
legal analysis and decision to enter into this Agreement and the transaction
contemplated hereby. Each Lender also acknowledges that it will, independently
and without reliance upon the Agent, any other Lender or counsel to the Agent or
any of their respective officers, directors, employees and agents, and based on
such review, advice, documents and information as it shall deem appropriate at
the time, continue to make its own decisions in taking or not taking action
under the Loan Documents. The Agent shall not be required to keep itself
informed as to the performance or observance by the Parent, the Borrower or any
other Loan Party of the Loan Documents or any other document referred to or
provided for therein or to inspect the properties or books of, or make any other
investigation of, the Parent, the Borrower, any other Loan Party or any other
Subsidiary. Except for notices, reports and other documents and information
expressly required to be furnished to the Lenders by the Agent under this
Agreement or any of the other Loan Documents, the Agent shall have no duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of the Borrower, any other Loan Party or any other Affiliate
thereof which may come into possession of the Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or other Affiliates. Each Lender
acknowledges that the Agent's legal counsel in connection with the transactions
contemplated by this Agreement is only acting as counsel to the Agent and is not
acting as counsel to such Lender.
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Section 10.7. Indemnification of Agent.
Each Lender agrees to indemnify the Agent (to the extent not reimbursed
by the Borrower and without limiting the obligation of the Borrower to do so)
pro rata in accordance with such Lender's respective Commitment Percentage, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may at any time be imposed on, incurred by, or asserted
against the Agent (in its capacity as Agent but not as a "Lender") in any way
relating to or arising out of the Loan Documents, any transaction contemplated
hereby or thereby or any action taken or omitted by the Agent under the Loan
Documents (collectively, "Indemnifiable Amounts"); provided, however, that no
Lender shall be liable for any portion of such Indemnifiable Amounts to the
extent resulting from the Agent's gross negligence or willful misconduct or if
the Agent fails to follow the written direction of the Requisite Lenders unless
such failure is pursuant to the advice of counsel of which the Lenders have
received notice. Without limiting the generality of the foregoing, each Lender
agrees to reimburse the Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees of the counsel(s) of the Agent's
own choosing) incurred by the Agent in connection with the preparation,
execution, administration, or enforcement of, or legal advice with respect to
the rights or responsibilities of the parties under, the Loan Documents, any
suit or action brought by the Agent to enforce the terms of the Loan Documents
and/or collect any Obligations, any "lender liability" suit or claim brought
against the Agent and/or the Lenders, and any claim or suit brought against the
Agent and/or the Lenders arising under any Environmental Laws, to the extent
that the Agent is not reimbursed for such expenses by the Borrower. Such
out-of-pocket expenses (including counsel fees) shall be advanced by the Lenders
on the request of the Agent notwithstanding any claim or assertion that the
Agent is not entitled to indemnification hereunder upon receipt of an
undertaking by the Agent that the Agent will reimburse the Lenders if it is
actually and finally determined by a court of competent jurisdiction that the
Agent is not so entitled to indemnification. The agreements in this Section
shall survive the payment of the Loans and all other amounts payable hereunder
or under the other Loan Documents and the termination of this Agreement.
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Section 10.8. Collateral Matters.
Each Lender authorizes and directs the Agent to enter into the Loan
Documents for the benefit of the Lenders. Each Lender hereby agrees that, except
as otherwise set forth herein, any action taken by the Requisite Lenders in
accordance with the provisions of this Agreement or the Loan Documents, and the
exercise by the Requisite Lenders of the powers set forth herein or therein,
together with such other powers as are reasonably incidental thereto, shall be
authorized and binding upon all of the Lenders.
Section 10.9. Successor Agent.
The Agent may resign at any time as Agent under the Loan Documents by
giving written notice thereof to the Lenders and the Borrower. In the event of a
material breach of its duties hereunder, the Agent may be removed as Agent under
the Loan Documents at any time by all Lenders (other than the Agent as a
"Lender") and the Borrower upon 30-day's prior notice. Upon any such resignation
or removal, the Requisite Lenders (other than, in the case of the removal of the
Agent under the immediately preceding sentence, the Agent as a "Lender") shall
have the right to appoint a successor Agent which appointment shall, provided no
Default or Event of Default shall have occurred and be continuing, be subject to
the Borrower's approval, which approval shall not be unreasonably withheld or
delayed. If no successor Agent shall have been so appointed in accordance with
the immediately preceding sentence, and shall have accepted such appointment,
within 30 days after the resigning Agent's giving of notice of resignation or
the Lenders' removal of the resigning Agent, then the resigning or removed Agent
may, on behalf of the Lenders, appoint a successor Agent, which shall be a
Lender, if any Lender shall be willing to serve, and otherwise shall be an
Eligible Assignee. Upon the acceptance of any appointment as Agent hereunder by
a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the resigning
Agent, and the retiring Agent shall be discharged from its duties and
obligations under the Loan Documents. After any resigning Agent's resignation or
removal hereunder as Agent, the provisions of this Article X. shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under the Loan Documents. Notwithstanding anything contained herein to the
contrary, the Agent may assign its rights and duties under the Loan Documents to
any of its affiliates by giving the Borrower and each Lender prior written
notice.
ARTICLE XI. MISCELLANEOUS
Section 11.1. Notices.
Unless otherwise provided herein, communications provided for hereunder
shall be in writing and shall be mailed, telecopied or delivered as follows:
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If to the Borrower:
PREIT Associates, L.P.
200 South Broad Street
Philadelphia, PA 19102
Attention: Edward Glickman
Telephone: (215) 875-0700
Telecopy: (215) 546-7311
With a copy of notices of Defaults, Events of Default or notices
pursuant to Article IX. to:
PREIT Associates, L.P.
200 South Broad Street
Philadelphia, PA 19102
Attention: Bruce Goldman
Telephone: (215) 875-0700
Telecopy: (215) 546-7311
And
Drinker, Biddle & Reath LLP
One Logan Square
18th and Cherry Streets
Philadelphia, PA 19103
Attention: Howard A. Blum
Telephone: (215) 988-2700
Telecopy: (215) 988-2757
If to the Agent or a Lender:
To the address or telecopy number, as applicable, of the Agent
or such Lender, as the case may be, set forth on its signature
page hereto or, in the case of a Lender, in the applicable
Assignment and Acceptance Agreement.
or, as to each party at such other address as shall be designated by such party
in a written notice to the other parties delivered in compliance with this
Section. All such notices and other communications shall be effective (i) if
mailed, when received; (ii) if telecopied, upon mechanical confirmation of
transmission if received on a Business Day prior to 5:00 p.m. local time at the
point of destination and, if otherwise, on the next succeeding Business Day; or
(iii) if hand delivered, when delivered. Notwithstanding the immediately
preceding sentence, all notices or communications to the Agent or any Lender
under Article II. shall be effective only when actually received. Any notice to
the Borrower received by any individual designated by the Borrower to receive
such notice shall be effective notwithstanding the fact that any other
individual designated by the Borrower to receive a copy of such notice did not
receive such copy. Neither the Agent nor any Lender shall incur any liability to
the Borrower (nor shall the Agent incur any liability to the Lenders) for acting
upon any telephonic notice referred to in this Agreement which the Agent or such
Lender, as the case may be, believes in good faith to have been given by a
Person authorized to deliver such notice or for otherwise acting in good faith
hereunder. In addition to the Agent's Lending Office, the Borrower shall send
copies of the notices described in Article II. to the following address of the
Agent:
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Wells Fargo Bank, National Association
Disbursement and Operations Center
2120 East Park Place, Suite 100
El Segundo, California 90245
Attention: Disbursement Administrator, Philadelphia REG
Telecopy Number: (310) 615-1016
Telephone Number: (310) 335-9462
Section 11.2. Expenses.
The Borrower agrees (a) to pay or reimburse the Agent for all of its
reasonable out-of-pocket costs and expenses incurred in connection with the
preparation, negotiation and execution of, and any amendment, supplement or
modification to, any of the Loan Documents, and the consummation of the
transactions contemplated thereby, including the reasonable fees and
disbursements of counsel to the Agent, (b) to pay or reimburse the Agent and,
after the occurrence and during the continuance of an Event of Default, the
Lenders, for all their costs and expenses incurred in connection with the
enforcement or preservation of any rights under the Loan Documents, including
the reasonable fees and disbursements of their respective counsel (including the
allocated fees and expenses of in-house counsel) and any payments in
indemnification or otherwise payable by the Lenders to the Agent pursuant to the
Loan Documents, (c) to pay, indemnify and hold the Agent and the Lenders
harmless from any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any failure to pay or delay in paying,
documentary, stamp, excise and other similar taxes, if any, which may be payable
or determined to be payable in connection with the execution and delivery of any
of the Loan Documents, or consummation of any amendment, supplement or
modification of, or any waiver or consent under or in respect of, any Loan
Document and (d) to the extent not already covered by any of the preceding
subsections, to pay the fees and disbursements of counsel to the Agent and any
Lender incurred in connection with the representation of the Agent or such
Lender in any matter relating to or arising out of any bankruptcy or other
proceeding of the type described in Sections 9.1.(e) or 9.1.(f), including,
without limitation (i) any motion for relief from any stay or similar order,
(ii) the negotiation, preparation, execution and delivery of any document
relating to the Obligations and (iii) the negotiation and preparation of any
debtor-in-possession financing or any plan of reorganization of the Parent, the
Borrower or any other Loan Party, whether proposed by the Parent, the Borrower,
such Loan Party, the Lenders or any other Person, and whether such fees and
expenses are incurred prior to, during or after the commencement of such
proceeding or the confirmation or conclusion of any such proceeding.
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Section 11.3. Setoff.
Subject to Section 3.3. and in addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
the Agent, each Lender and each Participant is hereby authorized by the
Borrower, at any time or from time to time, during the continuance of an Event
of Default without prior notice to the Borrower or to any other Person, any such
notice being hereby expressly waived, but in the case of a Lender or Participant
subject to receipt of the prior written consent of the Agent exercised in its
sole discretion, to set-off and to appropriate and to apply any and all deposits
(general or special, including, but not limited to, indebtedness evidenced by
certificates of deposit, whether matured or unmatured) and any other
indebtedness at any time held or owing by the Agent, such Lender or any
affiliate of the Agent or such Lender, to or for the credit or the account of
the Borrower against and on account of any of the Obligations, irrespective of
whether or not any or all of the Loans and all other Obligations have been
declared to be, or have otherwise become, due and payable as permitted by
Section 9.2., and although such obligations shall be contingent or unmatured.
Promptly following any such set-off the Agent shall notify the Borrower thereof
and of the application of such set-off, provided that the failure to give such
notice shall not invalidate such set-off.
Section 11.4. Litigation; Jurisdiction; Other Matters; Waivers.
(a) EACH PARTY HERETO ACKNOWLEDGES THAT ANY DISPUTE OR CONTROVERSY
BETWEEN OR AMONG THE BORROWER, THE AGENT OR ANY OF THE LENDERS WOULD BE BASED ON
DIFFICULT AND COMPLEX ISSUES OF LAW AND FACT AND WOULD RESULT IN DELAY AND
EXPENSE TO THE PARTIES. ACCORDINGLY, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
EACH OF THE LENDERS, THE AGENT AND THE BORROWER HEREBY WAIVES ITS RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR
TRIBUNAL IN WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST ANY PARTY HERETO
ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR BY REASON OF ANY
OTHER SUIT, CAUSE OF ACTION OR DISPUTE WHATSOEVER BETWEEN OR AMONG THE BORROWER,
THE AGENT OR ANY OF THE LENDERS OF ANY KIND OR NATURE.
(b) EACH OF THE BORROWER, THE AGENT AND EACH LENDER HEREBY AGREES
THAT THE FEDERAL DISTRICT COURT OF THE EASTERN DISTRICT OF PENNSYLVANIA OR, AT
THE OPTION OF THE AGENT, ANY STATE COURT LOCATED IN PHILADELPHIA COUNTY,
PENNSYLVANIA, SHALL HAVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
DISPUTES BETWEEN OR AMONG THE BORROWER, THE AGENT OR ANY OF THE LENDERS,
PERTAINING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT AND THE LOANS, OR ANY OTHER
LOAN DOCUMENT OR TO ANY MATTER ARISING HEREFROM OR THEREFROM. THE BORROWER AND
EACH OF THE LENDERS EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCH COURTS.
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(c) EACH PARTY FURTHER WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT
OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM AND EACH
AGREES NOT TO PLEAD OR CLAIM THE SAME.
(d) THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE
DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY THE AGENT OR ANY LENDER OR THE
ENFORCEMENT BY THE AGENT OR ANY LENDER OF ANY JUDGMENT OBTAINED IN SUCH FORUM IN
ANY OTHER APPROPRIATE JURISDICTION.
(e) THE FOREGOING WAIVERS HAVE BEEN MADE WITH THE ADVICE OF
COUNSEL AND WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF, AND
SHALL SURVIVE THE PAYMENT OF THE LOANS AND ALL OTHER OBLIGATIONS AND THE
TERMINATION OF THIS AGREEMENT.
Section 11.5. Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns, except that the Borrower may not assign or otherwise transfer
any of its rights under, and no Person may assume any of the Borrower's
obligations under, this Agreement or any of the other Loan Documents without the
prior written consent of all of the Lenders.
(b) Any Lender may make, carry or transfer Loans at, to or for the
account of, any of its branch offices or the office of an affiliate of such
Lender except to the extent such transfer would result in increased costs to, or
taxes payable by or for the account of, the Borrower.
(c) Any Lender may at any time grant to one or more banks or other
financial institutions (each a "Participant") participating interests in its
Commitments or the Obligations owing to such Lender; provided, however, any such
participating interest must be for a constant percentage of a Lender's
Commitments and not a varying percentage interest. Except as otherwise provided
in Section 11.3., no Participant shall have any rights or benefits under this
Agreement or any other Loan Document. In the event of any such grant by a Lender
of a participating interest to a Participant, such Lender shall remain
responsible for the performance of its obligations hereunder, and the Borrower
and the Agent shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement pursuant to which any Lender may grant such a participating interest
shall provide that such Lender 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, however, such Lender may agree with the Participant
that it will not, without the consent of the Participant, agree to any such
amendment, modification or waiver if it requires the consent of all of the
Lenders under Sections 11.6.(a), (b) or (d). An assignment or other transfer
which is not permitted by subsection (d) or (e) below shall be given effect for
purposes of this Agreement only to the extent of a participating interest
granted in accordance with this subsection (c). The selling Lender shall
promptly notify the Agent and the Borrower of the sale of any participation
hereunder and the terms thereof.
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(d) Any Lender may with the prior written consent of the Agent and
the Borrower (provided, that the Borrower's consent shall not be required if a
Default or Event of Default shall have occurred and be continuing) which
consent, in each case, shall not be unreasonably withheld, assign to one or more
Eligible Assignees (each an "Assignee") all or a portion of such Lender's
Commitments and its other rights and obligations under this Agreement and such
Lender's Notes; provided, however, (i) no such consent by the Borrower or Agent
shall be required in the case of any assignment to another Lender or to any
affiliate of a Lender; (ii) any partial assignment shall be in an amount at
least equal to $10,000,000 and integral multiples of $1,000,000 in excess
thereof, and after giving effect to such assignment the assigning Lender retains
a Commitment, or if the Commitments have been terminated, holds Notes having an
aggregate outstanding principal balance, of at least $10,000,000; (iii) after
giving effect to any such assignment by the Lender then acting as Agent, such
Lender shall retain a Commitment, or if the Commitments have been terminated,
hold Notes having an aggregate outstanding principal balance, greater than or
equal to the Commitment of each other Lender (other than any Lender whose
Commitment has increased as a result of a merger or combination with another
Lender); (iv) any such assignment must be of proportionate amounts of both
Commitments of such Lender; (v) such Lender must give the Agent at least 10 days
prior written notice of any such assignment; and (vi) each such assignment shall
be effected by means of an Assignment and Acceptance Agreement. Upon execution
and delivery of such instrument and payment by such Assignee to such transferor
Lender of an amount equal to the purchase price agreed between such transferor
Lender and such Assignee, such Assignee shall be deemed to be a Lender party to
this Agreement as of the effective date of the Assignment and Acceptance
Agreement and shall have all the rights and obligations of a Lender with the
Commitments as set forth in such Assignment and Acceptance Agreement, and the
transferor Lender 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
(d), the transferor Lender, the Agent and the Borrower shall make appropriate
arrangements so that new Notes are issued to the Assignee and such transferor
Lender, as appropriate. In connection with any such assignment, the transferor
Lender shall pay to the Agent an administrative fee for processing such
assignment in the amount of $3,000.
(e) The Agent shall maintain a copy of each Assignment and
Acceptance Agreement delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lenders and the Commitments of
each Lender from time to time (the "Register"). The Agent shall give each Lender
and the Borrower notice of the assignment by any Lender of its rights as
contemplated by this Section. The Borrower, the Agent and the Lenders may treat
each Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement and the other Loan Documents. The Register and copies
of each Assignment and Acceptance Agreement shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice to the Agent. Upon its receipt of an Assignment and
Acceptance Agreement executed by an assigning Lender, together with each Note
subject to such assignment (a "Surrendered Note"), the Agent shall, if such
Assignment and Acceptance Agreement has been completed and if the Agent receives
the processing and recording fee described in subsection (d) above, (i) accept
such Assignment and Acceptance Agreement, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof, and return each
Surrendered Note, to the Borrower.
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(f) Notwithstanding anything in this Agreement to the contrary,
and without the need to comply with any of the formal or procedural requirements
of this Agreement, including this Section 11.5., any Lender may at any time and
from time to time pledge and assign all or any portion of its rights under all
or any of the Loan Documents to a Federal Reserve Bank; provided that no such
pledge or assignment shall release such Lender from its obligations thereunder.
To facilitate any such pledge or assignment, Agent shall, at the request of and
at the expense of such Lender, enter into a letter agreement with the Federal
Reserve Bank in, or substantially in, the form of the exhibit to Appendix C to
the Federal Reserve Bank of New York Operating Circular No. 10.
(g) A Lender may furnish any information concerning the Borrower,
any other Loan Party or any of their respective Subsidiaries in the possession
of such Lender from time to time to Assignees and Participants (including
prospective Assignees and Participants) subject to compliance with Section 11.8.
(h) Anything in this Section to the contrary notwithstanding, no
Lender may assign or participate any interest in any Loan held by it hereunder
to the Borrower, any other Loan Party or any of their respective Affiliates or
Subsidiaries.
(i) Each Lender agrees that, without the prior written consent of
the Borrower and the Agent, it will not make any assignment hereunder in any
manner or under any circumstances that would require registration or
qualification of, or filings in respect of, any Loan or Note under the
Securities Act or any other securities laws of the United States of America or
of any other jurisdiction.
Section 11.6. Amendments.
Except as otherwise expressly provided in this Agreement, any consent
or approval required or permitted by this Agreement or in any Loan Document to
be given by the Lenders may be given, and any term of this Agreement or of any
other Loan Document (other than any fee letter solely between the Borrower and
the Agent) may be amended, and the performance or observance by the Borrower,
any other Loan Party or any other Subsidiary of any terms of this Agreement or
such other Loan Document (other than any fee letter solely between the Borrower
and the Agent) or the continuance of any Default or Event of Default may be
waived (either generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Requisite Lenders
(and, in the case of an amendment to any Loan Document, the written consent of
each Loan Party which is party thereto). Notwithstanding the foregoing, no
amendment, waiver or consent shall, unless in writing, and signed by all of the
Lenders (or the Agent at the written direction of the Lenders), do any of the
following:
-53-
(a) increase the Commitments of the Lenders or subject the Lenders to
any additional obligations;
(b) reduce the principal of, or interest rates that have accrued
or that will be charged on the outstanding principal amount of, any Loans or
other Obligations;
(c) reduce the amount of any Fees payable to the Lenders hereunder;
(d) postpone any date fixed for any payment of any principal of,
interest on, or Fees with respect to, any Loans or any other Obligations;
(e) change the Commitment Percentages (excluding any change as a result
of an assignment of Commitments permitted under Section 11.5.(d));
(f) modify the definition of the term "Revolving Credit Termination
Date," "Term Loan Facility Expiration Date" or "Term Loan Maturity Date";
(g) amend this Section or amend the definitions of the terms used in
this Agreement or the other Loan Documents insofar as such definitions affect
the substance of this Section;
(h) modify the definition of the term "Requisite Lenders" or modify in
any other manner the number or percentage of the Lenders required to make any
determinations or waive any rights hereunder or to modify any provision hereof;
(i) release any Guarantor from its obligations under the Guaranty
(except for releases permitted under Section 7.14.(c));
(j) modify the terms of, or waive the Parent's compliance with, Section
8.1.(b); and
(k) waive a Default or Event of Default under subsection (a) of
Section 9.1.
No amendment, waiver or consent unless in writing and signed by the Agent, in
addition to the Lenders required hereinabove to take such action, shall affect
the rights or duties of the Agent under this Agreement or any of the other Loan
Documents. No waiver shall extend to or affect any obligation not expressly
waived or impair any right consequent thereon and any amendment, waiver or
consent shall be effective only in the specific instance and for the specific
purpose set forth therein. No course of dealing or delay or omission on the part
of the Agent or any Lender in exercising any right shall operate as a waiver
thereof or otherwise be prejudicial thereto. Except as otherwise explicitly
provided for herein or in any other Loan Document, no notice to or demand upon
the Borrower shall entitle the Borrower to other or further notice or demand in
similar or other circumstances.
-54-
Section 11.7. Nonliability of Agent and Lenders.
The relationship between the Borrower, on the one hand, and the Lenders
and the Agent, on the other hand, shall be solely that of borrower and lender.
Neither the Agent nor any Lender shall have any fiduciary responsibilities to
the Borrower and no provision in this Agreement or in any of the other Loan
Documents, and no course of dealing between or among any of the parties hereto,
shall be deemed to create any fiduciary duty owing by the Agent or any Lender to
any Lender, the Borrower, any Subsidiary or any other Loan Party. Neither the
Agent nor any Lender undertakes any responsibility to the Parent or the Borrower
to review or inform the Parent or the Borrower of any matter in connection with
any phase of the business or operations of the Parent or the Borrower.
Section 11.8. Confidentiality.
Except as otherwise provided by Applicable Law, the Agent and each
Lender shall utilize all non-public information obtained pursuant to the
requirements of this Agreement which has been identified as confidential or
proprietary by the Parent or the Borrower in accordance with its customary
procedure for handling confidential information of this nature and in accordance
with safe and sound banking practices but in any event may make disclosure: (a)
to any of their respective affiliates (provided any such affiliate shall agree
to keep such information confidential in accordance with the terms of this
Section); (b) as reasonably required by any bona fide Assignee, Participant or
other transferee in connection with the contemplated transfer of any Commitment
or participations therein as permitted hereunder (provided they shall agree to
keep such information confidential in accordance with the terms of this
Section); (c) as required by any Governmental Authority or representative
thereof or pursuant to legal process; (d) to the independent auditors and other
professional advisors (provided they shall be notified of the confidential
nature of the information of the Agent or any Lender and shall agree to keep
such information confidential in accordance with the terms of this Section); and
(e) after the happening and during the continuance of an Event of Default, to
any other Person, in connection with the exercise by the Agent or the Lenders of
rights hereunder or under any of the other Loan Documents. The Agent and each
Lender agrees to use any such non-public information solely in connection with
the transactions contemplated by this Agreement and the other Loan Documents.
Notwithstanding anything to the contrary set forth herein or in any other
written or oral understanding or agreement to which the parties hereto are
parties or by which they are bound, the parties hereto acknowledge and agree
that (i) any obligations of confidentiality contained herein and therein do not
apply and have not applied from the commencement of discussions between the
parties to the tax treatment and tax structure of the transactions contemplated
by the Loan Documents (and any related transactions or arrangements), and (ii)
each party (and each of its employees, representatives, or other agents) may
disclose to any and all Persons, without limitation of any kind, the tax
treatment and tax structure of the transactions contemplated by the Loan
Documents and all materials of any kind (including opinions or other tax
analyses) that are provided to such party relating to such tax treatment and tax
structure, all within the meaning of Treasury Regulations Section 1.6011-4;
provided, however, that each party recognizes that the privilege each has to
maintain, in its sole discretion, the confidentiality of a communication
relating to the transactions contemplated by the Loan Documents, including a
confidential communication with its attorney or a confidential communication
with a federally authorized tax practitioner under Section 7525 of the Internal
Revenue Code, is not intended to be affected by the foregoing.
-55-
Section 11.9. Indemnification.
(a) The Borrower shall and hereby agrees to indemnify, defend and
hold harmless the Agent, any affiliate of the Agent and each of the Lenders and
their respective directors, officers, shareholders, agents, employees and
counsel (each referred to herein as an "Indemnified Party") from and against any
and all losses, costs, claims, damages, liabilities, deficiencies, judgments or
expenses of every kind and nature (including, without limitation, amounts paid
in settlement, court costs and the fees and disbursements of counsel incurred in
connection with any litigation, investigation, claim or proceeding or any advice
rendered in connection therewith) (the foregoing items referred to herein as
"Claims and Expenses") incurred by an Indemnified Party in connection with,
arising out of, or by reason of, any suit, cause of action, claim, arbitration,
investigation or settlement, consent decree or other proceeding (the foregoing
referred to herein as an "Indemnity Proceeding") which is in any way related
directly or indirectly to: (i) this Agreement or any other Loan Document or the
transactions contemplated hereby or thereby; (ii) the making of any Loans
hereunder; (iii) any actual or proposed use by the Borrower of the proceeds of
the Loans; (iv) the Agent's or any Lender's entering into this Agreement; (v)
the fact that the Agent and the Lenders have established the credit facility
evidenced hereby in favor of the Borrower; (vi) the fact that the Agent and the
Lenders are creditors of the Borrower and have or are alleged to have
information regarding the financial condition, strategic plans or business
operations of the Parent, the Borrower and the other Subsidiaries; (vii) the
fact that the Agent and the Lenders are material creditors of the Borrower and
are alleged to influence directly or indirectly the business decisions or
affairs of the Parent, the Borrower and the other Subsidiaries or their
financial condition; (viii) the exercise of any right or remedy the Agent or the
Lenders may have under this Agreement or the other Loan Documents; provided,
however, that the Borrower shall not be obligated to indemnify any Indemnified
Party for any acts or omissions of such Indemnified Party in connection with
matters described in clause (i) and this clause (viii) to the extent found in a
final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct;
or (ix) any violation or non-compliance by the Borrower or any Subsidiary of any
Applicable Law (including any Environmental Law) including, but not limited to,
any Indemnity Proceeding commenced by (A) the Internal Revenue Service or state
taxing authority or (B) any Governmental Authority or other Person under any
Environmental Law, including any Indemnity Proceeding commenced by a
Governmental Authority or other Person seeking remedial or other action to cause
the Borrower or its Subsidiaries (or its respective properties) (or the Agent
and/or the Lenders as successors to the Borrower) to be in compliance with such
Environmental Laws.
(b) The Borrower's indemnification obligations under this Section
shall apply to all Indemnity Proceedings arising out of, or related to, the
foregoing whether or not an Indemnified Party is a named party in such Indemnity
Proceeding. In this connection, this indemnification shall cover all costs and
expenses of any Indemnified Party in connection with any deposition of any
Indemnified Party or compliance with any subpoena (including any subpoena
requesting the production of documents). This indemnification shall, among other
things, apply to any Indemnity Proceeding commenced by other creditors of the
Borrower or any Subsidiary, any shareholder of the Borrower or any Subsidiary
(whether such shareholder(s) are prosecuting such Indemnity Proceeding in their
individual capacity or derivatively on behalf of the Borrower), any account
debtor of the Borrower or any Subsidiary or by any Governmental Authority. If
and to the extent that the obligations of the Borrower hereunder are
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under Applicable Law. The Borrower's obligations hereunder are in
addition to, and not in substitution of, any other obligation in respect of
indemnification contained in this Agreement or any other Loan Document.
-56-
Section 11.10. Termination; Survival.
At such time as (a) all of the Commitments have been terminated, (b)
none of the Lenders is obligated any longer under this Agreement to make any
Loans and (c) all Obligations (other than obligations which survive as provided
in the following sentence) have been paid and satisfied in full, this Agreement
shall terminate. Notwithstanding any termination of this Agreement, or of the
other Loan Documents, the indemnities to which the Agent and the Lenders are
entitled under the provisions of Sections 10.7., 11.2. and 11.9. and any other
provision of this Agreement and the other Loan Documents, and the waivers of
jury trial and submission to jurisdictions contained in Section 11.4., shall
continue in full force and effect and shall protect the Agent and the Lenders
against events arising after such termination as well as before.
Section 11.11. Severability of Provisions.
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective only to the
extent of such prohibition or unenforceability without invalidating the
remainder of such provision or the remaining provisions or affecting the
validity or enforceability of such provision in any other jurisdiction.
Section 11.12. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA APPLICABLE TO CONTRACTS EXECUTED,
AND TO BE FULLY PERFORMED, IN SUCH COMMONWEALTH.
Section 11.13. Counterparts.
This Agreement and any amendments, waivers, consents or supplements may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all of which counterparts together shall constitute but
one and the same instrument.
-57-
Section 11.14. Obligations with Respect to Loan Parties.
The obligations of the Borrower or the Parent to direct or prohibit the
taking of certain actions by the other Loan Parties as specified herein shall be
absolute and not subject to any defense the Borrower or the Parent may have that
the Borrower or the Parent does not control such Loan Parties.
Section 11.15. Limitation of Liability.
Neither the Agent, any Lender, nor any affiliate, officer, director,
employee, attorney, or agent of the Agent or any Lender shall have any liability
with respect to, and the Borrower and the Parent each hereby waives, releases,
and agrees not to sue any of them upon, any claim for any special, indirect,
incidental, or consequential damages suffered or incurred by the Borrower or the
Parent in connection with, arising out of, or in any way related to, this
Agreement or any of the other Loan Documents, or any of the transactions
contemplated by this Agreement or any of the other Loan Documents. The Borrower
and the Parent each hereby waives, releases, and agrees not to sue the Agent or
any Lender or any of their respective affiliates, officers, directors,
employees, attorneys, or agents for punitive damages in respect of any claim in
connection with, arising out of, or in any way related to, this Agreement or any
of the other Loan Documents, or any of the transactions contemplated by this
Agreement or financed hereby. Notwithstanding anything in this Section to the
contrary, no Defaulting Lender shall be entitled to claim any of the benefits of
this Section.
Section 11.16. Entire Agreement.
This Agreement and the other Loan Documents referred to herein embody
the final, entire agreement among the parties hereto and supersede any and all
prior commitments, agreements, representations, and understandings, whether
written or oral, relating to the subject matter hereof and may not be
contradicted or varied by evidence of prior, contemporaneous, or subsequent oral
agreements or discussions of the parties hereto. There are no oral agreements
among the parties hereto.
Section 11.17. Construction.
The Borrower, the Parent, the Agent and each Lender acknowledge that
each of them has had the benefit of legal counsel of its own choice and has been
afforded an opportunity to review this Agreement and the other Loan Documents
with its legal counsel and that this Agreement and the other Loan Documents
shall be construed as if jointly drafted by the Borrower, the Parent, the Agent
and each Lender.
Section 11.18. Time of the Essence.
Time is of the essence of each and every provision of this Agreement.
[Signatures on Next Page]
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IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be executed by their authorized officers all as of the day and year
first above written.
PREIT Associates, L.P.
By: Pennsylvania Real Estate Investment Trust,
its general partner
By: /s/ Jonathan B. Weller
------------------------------------------
Name: Jonathan B. Weller
-----------------------------------
Title: President & Chief Operating Officer
-----------------------------------
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
By: /s/ Jonathan B. Weller
-----------------------------------------------
Name: Jonathan B. Weller
------------------------------------------
Title: President & Chief Operating Officer
-----------------------------------------
[Signatures Continued on Next Page]
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[Signature Page to Credit Agreement dated as of
April 23, 2003 with PREIT Associates, L.P.]
Wells Fargo Bank, National Association,
as Agent and as a Lender
By: /s/ Charles Cooke
----------------------
Name: Charles Cooke
----------------
Title: Vice President
---------------
Revolving Commitment: $25,000,000
Term Commitment: $175,000,000
Lending Office (all Types of Loans):
Wells Fargo Bank, National Association
Two Logan Square, Suite 1750
100-120 N. 18th Street
Philadelphia, PA 19103
Attention: Charles J. Cooke
Telecopier: (215) 561-3812
Telephone: (215) 640-3924
Address for Notices:
Wells Fargo Bank, National Association
Two Logan Square, Suite 1750
100-120 N. 18th Street
Philadelphia, PA 19103
Attention: Charles J. Cooke
Telecopier: (215) 561-3812
Telephone: (215) 640-3924
with a copy to:
Wells Fargo Bank, National Association
Real Estate Group
420 Montgomery Street, 6th Floor
San Francisco, California 94111
Attention: Chief Credit Officer
Telecopier: (415) 781-8324
Telephone: (415) 394-4078
-60-
================================================================================
$200,000,000 Senior Credit Facility
CREDIT AGREEMENT
Dated as of April 23, 2003
by and among
PREIT Associates, L.P.,
as Borrower,
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST,
as Parent,
The financial institutions party hereto
and their assignees under Section 11.5.(d),
as Lenders,
and
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent and Sole Lead
Arranger
================================================================================
TABLE OF CONTENTS*
Article I. Definitions................................................................................1
Section 1.1. Definitions....................................................................1
Section 1.2. General; References to Times...................................................1
Article II. Credit Facilities.........................................................................2
Section 2.1. Loans..........................................................................2
Section 2.2. Rates and Payment of Interest on Loans.........................................3
Section 2.3. Number of Interest Periods.....................................................3
Section 2.4. Repayment of Loans.............................................................3
Section 2.5. Late Charges...................................................................3
Section 2.6. Prepayments....................................................................4
Section 2.7. Continuation...................................................................4
Section 2.8. Conversion.....................................................................5
Section 2.9. Notes..........................................................................5
Section 2.10. Extension of Termination Dates.................................................6
Article III. Payments, Fees and Other General Provisions..............................................6
Section 3.1. Payments.......................................................................6
Section 3.2. Pro Rata Treatment.............................................................6
Section 3.3. Sharing of Payments, Etc.......................................................7
Section 3.4. Several Obligations............................................................7
Section 3.5. Minimum Amounts................................................................8
Section 3.6. Fees...........................................................................8
Section 3.7. Computations...................................................................8
Section 3.8. Usury..........................................................................9
Section 3.9. Statements of Account..........................................................9
Section 3.10. Defaulting Lenders.............................................................9
Section 3.11. Taxes.........................................................................10
Article IV. Yield Protection, Etc....................................................................11
Section 4.1. Additional Costs; Capital Adequacy............................................11
Section 4.2. Suspension of LIBOR Loans.....................................................12
Section 4.3. Illegality....................................................................13
Section 4.4. Compensation..................................................................13
Section 4.5. Treatment of Affected Loans...................................................13
Section 4.6. Change of Lending Office......................................................14
Article V. Conditions Precedent......................................................................14
Section 5.1. Initial Conditions Precedent..................................................14
Section 5.2. Conditions Precedent to All Loans.............................................16
Section 5.3. Conditions as Covenants.......................................................17
- --------
* This Table of Contents is not part of the Credit Agreement and is provided as
a convenience only.
-i-
Article VI. Representations and Warranties...........................................................17
Section 6.1. Representations and Warranties................................................17
Section 6.2. Survival of Representations and Warranties, Etc...............................22
Article VII. Affirmative Covenants...................................................................22
Section 7.1. Financial Reporting and Other Information.....................................22
Section 7.2. Preservation of Existence and Similar Matters.................................26
Section 7.3. Compliance with Applicable Law................................................26
Section 7.4. Maintenance of Property.......................................................26
Section 7.5. Conduct of Business...........................................................26
Section 7.6. Insurance.....................................................................26
Section 7.7. Payment of Taxes and Claims...................................................27
Section 7.8. Books and Records; Visits and Inspections.....................................27
Section 7.9. Use of Proceeds...............................................................27
Section 7.10. Environmental Matters.........................................................28
Section 7.11. Further Assurances............................................................28
Section 7.12. REIT Status...................................................................28
Section 7.13. Exchange Listing..............................................................28
Section 7.14. Guarantors....................................................................29
Article VIII. Negative Covenants.....................................................................30
Section 8.1. Financial Covenants...........................................................30
Section 8.2. Restricted Payments...........................................................32
Section 8.3. Restrictions on Intercompany Transfers........................................33
Section 8.4. Mergers, Acquisitions and Sales of Assets.....................................33
Section 8.5. Fiscal Year...................................................................35
Section 8.6. Modifications of Organizational Documents.....................................35
Section 8.7. Transactions with Affiliates..................................................35
Section 8.8. ERISA Exemptions..............................................................35
Section 8.9. Negative Pledge...............................................................35
Section 8.10. Modification of Exchange Documents or New Castle Partnership Agreement........36
Article IX.Default...................................................................................36
Section 9.1. Events of Default.............................................................36
Section 9.2. Remedies Upon Event of Default................................................40
Section 9.3. Termination of Commitments Upon Certain Defaults..............................41
Section 9.4. Marshaling; Payments Set Aside................................................41
Section 9.5. Allocation of Proceeds........................................................41
Section 9.6. Performance by Agent..........................................................42
Section 9.7. Rights Cumulative.............................................................42
Article X. The Agent.................................................................................42
Section 10.1. Authorization and Action......................................................42
Section 10.2. Agent's Reliance, Etc.........................................................43
Section 10.3. Notice of Defaults............................................................44
Section 10.4. Wells Fargo as Lender.........................................................44
Section 10.5. Approvals of Lenders..........................................................44
Section 10.6. Lender Credit Decision, Etc...................................................45
Section 10.7. Indemnification of Agent......................................................45
Section 10.8. Collateral Matters............................................................46
Section 10.9. Successor Agent...............................................................46
-ii-
Article XI. Miscellaneous.............................................................................47
Section 11.1. Notices.......................................................................47
Section 11.2. Expenses......................................................................48
Section 11.3. Setoff........................................................................49
Section 11.4. Litigation; Jurisdiction; Other Matters; Waivers..............................49
Section 11.5. Successors and Assigns........................................................50
Section 11.6. Amendments....................................................................53
Section 11.7. Nonliability of Agent and Lenders.............................................54
Section 11.8. Confidentiality...............................................................54
Section 11.9. Indemnification...............................................................55
Section 11.10. Termination; Survival.........................................................56
Section 11.11. Severability of Provisions....................................................56
Section 11.12. GOVERNING LAW.................................................................56
Section 11.13. Counterparts..................................................................57
Section 11.14. Obligations with Respect to Loan Parties......................................57
Section 11.15. Limitation of Liability.......................................................57
Section 11.16. Entire Agreement..............................................................57
Section 11.17. Construction..................................................................57
Section 11.18. Time of the Essence...........................................................58
SCHEDULE 1.1. List of Loan Parties
SCHEDULE 2.1.(b) Term Loan Amounts
SCHEDULE 6.1.(b) Ownership Structure
SCHEDULE 6.1.(h) Litigation
SCHEDULE 8.1.(a) Equity Issuances
SCHEDULE 8.9. Negative Pledge
EXHIBIT A Form of Revolving Note
EXHIBIT B Form of Term Note
EXHIBIT C Form of Opinion of Counsel
EXHIBIT D Form of Compliance Certificate
EXHIBIT E Form of Pricing Certificate
EXHIBIT F Form of Assignment and Acceptance Agreement
EXHIBIT G Form of Guaranty
EXHIBIT H Form of Notice of Borrowing
EXHIBIT I Form of Notice of Continuation
EXHIBIT J Form of Notice of Conversion
-iii-
ANNEX I
DEFINED TERMS
"Accession Agreement" means an Accession Agreement substantially in the
form of Annex I to the Guaranty.
"Additional Costs" has the meaning given that term in Section 4.1.
"Adjusted EBITDA" means, for any given period, (a) the EBITDA of the
Parent and its Subsidiaries determined on a consolidated basis for such period
minus (b) an amount equal to the sum of (A) the Reserve for Replacements for all
Properties owned by the Parent or any of its Subsidiaries plus (B) the greater
of the Parent's (i) Ownership Share or (ii) Recourse Share of the Reserve for
Replacements for all Properties owned by Unconsolidated Affiliates.
"Affiliate" means any Person (other than the Agent or any Lender): (a)
directly or indirectly controlling, controlled by, or under common control with,
the Borrower; (b) directly or indirectly owning or holding five percent (5.0%)
or more of any equity interest in the Borrower; or (c) five percent (5.0%) or
more of whose voting stock or other equity interest is directly or indirectly
owned or held by the Borrower. For purposes of this definition, "control"
(including with correlative meanings, the terms "controlling", "controlled by"
and "under common control with") means the possession directly or indirectly of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities or by contract or
otherwise. The Affiliates of a Person shall include any officer or director (or
other Persons holding similar positions) of such Person.
"Agent" means Wells Fargo Bank, National Association, as contractual
representative for the Lenders under the terms of this Agreement, and any of its
successors.
"Agreement Date" means the date as of which this Agreement is dated.
"Applicable Law" means all applicable provisions of constitutions,
statutes, rules, regulations and orders of all governmental bodies and all
orders and decrees of all courts, tribunals and arbitrators.
"Applicable Margin" means the percentage rate set forth below
corresponding to the ratio of Total Liabilities to Gross Asset Value as
determined in accordance with Section 8.1.(b) in effect at such time:
I-1
- --------------------------------------------------------------------------------
Ratio of Total Liabilities to
Level Gross Asset Value Applicable Margin
- --------------------------------------------------------------------------------
1 Less than or equal to 0.60 to 1.00 2.50%
- --------------------------------------------------------------------------------
2 Greater than 0.60 to 1.00 but less than 2.75%
or equal to 0.65 to 1.00
- --------------------------------------------------------------------------------
3 Greater than 0.65 to 1.00 but less than 3.00%
or equal to 0.70 to 1.00
- --------------------------------------------------------------------------------
The Applicable Margin for Loans shall be determined by the Agent from time to
time, based on the ratio of Total Liabilities to Gross Asset Value as set forth
in the Pricing Certificate most recently delivered by the Borrower pursuant to
Section 7.1.(h). Any adjustment to such Applicable Margin shall be effective (i)
in the case of a Pricing Certificate delivered in connection with quarterly
financial statements of the Parent delivered pursuant to Section 7.1.(a), as of
the date 45 days following the end of the last day of the applicable fiscal
period covered by such Pricing Certificate, and (ii) in the case of a Pricing
Certificate delivered in connection with annual financial statements of the
Parent delivered pursuant to Section 7.1.(b), as of the date 120 days following
the end of the last day of the applicable fiscal period covered by such Pricing
Certificate. Notwithstanding the foregoing, for the period from the Effective
Date through but excluding the date on which the Agent first determines the
Applicable Margin for Loans as set forth above, such Applicable Margin shall
equal 3.00%. Thereafter, such Applicable Margin shall be adjusted from time to
time as set forth above. In addition to the foregoing, the Applicable Margin
shall be determined by the Agent based on the ratio of Total Liabilities to
Gross Asset Value immediately after the following (and after giving effect
thereto including the incurrence or repayment of any Indebtedness in connection
therewith): (x) the acquisition of each Rouse Property and (y) the disposition
of each Property in the Multi-Family Disposition, in each case as such ratio is
set forth in a Pricing Certificate which the Borrower shall deliver to the Agent
within 1 Business Day of the occurrence of any such event.
"Approved Joint Venture" has the meaning given such term in the
Existing Credit Agreement.
"Assignee" has the meaning given that term in Section 11.5.(d).
"Assignment and Acceptance Agreement" means an Assignment and
Acceptance Agreement among a Lender, an Assignee and the Agent, substantially in
the form of Exhibit F.
I-2
"Base Rate" means the greater of (a) the rate of interest per annum
publicly announced from time to time by the Agent at its principal office in San
Francisco, California as its "prime rate" (which rate of interest may not be the
lowest rate charged by the Agent or any of the Lenders on similar loans) and (b)
the Federal Funds Rate plus one-half of one percent (0.5%). Each change in the
Base Rate shall become effective without prior notice to the Borrower or the
Lenders automatically as of the opening of business on the date of such change
in the Base Rate.
"Base Rate Loan" means a Loan bearing interest at a rate based on the
Base Rate.
"Benefit Arrangement" means at any time an employee benefit plan within
the meaning of Section 3(3) of ERISA which is not a Benefit Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Benefit 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.
"Blue Route" means, collectively, Metroplex West Associates, L.P. and
Metroplex East Associates, L.P., each Pennsylvania limited partnerships, (a)
which own certain real property and improvements located in Plymouth Township,
Montgomery County, Pennsylvania, (b) which have obtained $76,350,000 of
construction financing for the purposes of financing of construction of certain
improvements located on such real property, and (c) of which (i) the Borrower is
one of the limited partners and (ii) certain Wholly Owned Subsidiaries of the
Borrower are some of the general partners.
"Borrower" has the meaning set forth in the introductory paragraph
hereof and shall include the Borrower's successors and permitted assigns.
"Business Day" means (a) any day other than a Saturday, Sunday or other
day on which banks in Washington, D.C. or San Francisco, California are
authorized or required to close and (b) with reference to a LIBOR Loan, any such
day that is also a day on which dealings in Dollar deposits are carried out in
the London interbank market.
"Capitalized Lease Obligation" means obligations under a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP. The amount of a Capitalized Lease Obligation is the capitalized amount of
such obligation determined in accordance with GAAP.
"Casualty Event" means any loss of or damage to, or any condemnation or
other taking of, any Property or other asset that results in the receipt of
insurance proceeds, proceeds of a condemnation award or other compensation.
"Commitment" means a Lender's Revolving Commitment or Term Commitment.
"Commitment Percentage" means, as to each Lender, the ratio, expressed
as a percentage, of (a) the aggregate amount of such Lender's Commitments to (b)
the aggregate amount of the Commitments of all Lenders hereunder; provided,
however, that if at the time of determination the Commitments have terminated or
been reduced to zero, the "Commitment Percentage" of each Lender shall be the
Commitment Percentage of such Lender in effect immediately prior to such
termination or reduction.
I-3
"Compliance Certificate" has the meaning given that term in Section
7.1.(c).
"Contingent Obligation" as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person with respect to any
Indebtedness, lease, dividend or other payment obligation of another Person if
the primary purpose or intent of the Person incurring such liability, or the
primary effect thereof, is to provide assurance to the obligee of such liability
that such liability will be paid or discharged, or that the holders of such
liability will be protected (in whole or in part) against loss with respect
thereto. Contingent Obligations shall include (i) any Guaranty of the
Indebtedness of another (other than of such Person for liabilities arising from
reasonable and customary exceptions to Nonrecourse Indebtedness, such as for
fraud, willful misrepresentation, misapplication of funds (including
misappropriation of security deposits and failure to apply rents to operating
expenses or debt service), indemnities relating to environmental matters and
waste of property constituting security for such Nonrecourse Indebtedness,
post-default interest, attorney's fees and other costs of collection to the
extent not covered by the value of the property constituting security for such
Nonrecourse Indebtedness and other similar exceptions to recourse liability),
(ii) the obligation to make take-or-pay or similar payments if required
regardless of nonperformance by any other party or parties to an agreement, and
(iii) any liability of such Person for the Indebtedness of another through any
agreement to purchase, repurchase or otherwise acquire such obligation or any
property constituting security therefor, to provide funds for the payment or
discharge of such obligation or to maintain the solvency, financial condition or
any balance sheet item or level of income of another. The amount of any
Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported or, if not a fixed and determined amount, the
maximum amount so guaranteed.
"Continue", "Continuation" and "Continued" each refers to the
continuation of a LIBOR Loan from one Interest Period to another Interest Period
pursuant to Section 2.7.
"Convert", "Conversion" and "Converted" each refers to the conversion
of a Loan of one Type into a Loan of another Type pursuant to Section 2.8.
"Credit Event" means any of the following: (a) the making (or deemed
making) of any Loan and (b) the Conversion of a Loan.
"Credit Rating" means, for any Person, the lowest rating assigned by a
Rating Agency to each series of rated senior unsecured long term indebtedness of
such Person.
"Debt Issuance" means any incurrence, sale, issuance, placement,
assumption, refinancing or guaranty of Indebtedness by the Parent, the Borrower
or any Subsidiary.
I-4
"Debt Service" means, with respect to a Person and for a given period,
(a) such Person's Interest Expense for the fiscal quarter most recently ended
plus (b) regularly scheduled principal payments on Indebtedness of such Person
during the fiscal quarter most recently ended, other than any balloon, bullet or
similar principal payment payable on any Indebtedness of such Person which
repays such Indebtedness in full plus (c) the greater of such Person's (i)
Ownership Share or (ii) Recourse Share of the amount of any payments of the type
described in the immediately preceding clause (b) of Unconsolidated Affiliates
of such Person.
"Default" means any of the events specified in Section 9.1., whether or
not there has been satisfied any requirement for the giving of notice, the lapse
of time, or both.
"Defaulting Lender" has the meaning set forth in Section 3.10.
"Development Property" means a Property (a) which is not a Major
Redevelopment Property; (b) either which is under development and either
construction has commenced or the owner of such Property (or an Affiliate) has
entered into a binding construction contract; and (c) either (i) which has not
achieved an Occupancy Rate of 85% or more or (ii) on which the improvements
(other than tenant improvements on unoccupied space) related to the development
have not been completed.
"Disposition" means any sale, lease, assignment, transfer or other
disposition by the Parent, the Borrower or any Subsidiary of all or any portion
of any Property or other asset, or of any Equity Interest in a Subsidiary,
excluding a sale, lease, assignment, transfer or disposition to a Loan Party.
"Dollars" or "$" means the lawful currency of the United States of
America.
"EBITDA" means, with respect to any Person for any period and without
duplication, net earnings (loss) of such Person for such period (excluding
equity in net earnings or net loss of Unconsolidated Affiliates) plus the sum of
the following amounts (but only to the extent included in determining net
earnings (loss) for such period): (a) depreciation and amortization expense and
other non-cash charges of such Person for such period, plus (b) interest expense
of such Person for such period, plus (c) all provisions for any federal, state
or other income tax of such Person in respect of such period, minus (plus) (d)
extraordinary gains (losses) of such Person for such period, plus (e) the
greater of such Person's (i) Ownership Share or (ii) Recourse Share of the
EBITDA of the Unconsolidated Affiliates of such Person for such period. For
purposes of this definition, net earnings (loss) shall be determined before
minority interests and distributions to holders of Preferred Stock.
"Effective Date" means the later of: (a) the Agreement Date; and (b)
the date on which all of the conditions precedent set forth in Section 5.1.
shall have been fulfilled or waived in writing by the Agent.
I-5
"Eligible Assignee" means any Person who is: (i) currently a Lender;
(ii) a commercial bank, trust company, savings and loan association, savings
bank, insurance company, investment bank or pension fund organized under the
laws of the United States of America, any state thereof or the District of
Columbia, and having total assets in excess of $5,000,000,000; or (iii) a
commercial bank organized under the laws of any other country which is a member
of the Organisation for Economic Co-operation and Development, or a political
subdivision of any such country, and having total assets in excess of
$10,000,000,000, provided that such bank is acting through a branch or agency
located in the United States of America. If such entity is not currently a
Lender, such entity's (or in the case of a bank which is a subsidiary, such
bank's parent's) senior unsecured long-term indebtedness must be rated BBB or
higher by S&P, Baa2 or higher by Moody's, or the equivalent or higher of either
such rating by another rating agency acceptable to the Agent.
"Environmental Laws" means any Applicable Law relating to environmental
protection or the manufacture, storage, disposal or clean-up of Hazardous
Materials including, without limitation, the following: Clean Air Act, 42 U.S.C.
ss. 7401 et seq.; Federal Water Pollution Control Act, 33 U.S.C. ss. 1251 et
seq.; Solid Waste Disposal Act, 42 U.S.C. ss. 6901 et seq.; Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. ss. 9601 et
seq.; National Environmental Policy Act, 42 U.S.C. ss. 4321 et seq.; regulations
of the Environmental Protection Agency and any applicable rule of common law and
any judicial interpretation thereof relating primarily to the environment or
Hazardous Materials.
"Equity Interest" means, with respect to any Person, any share of
capital stock of (or other ownership or profit interests in) such Person, any
warrant, option or other right for the purchase or other acquisition from such
Person of any share of capital stock of (or other ownership or profit interests
in) such Person, any security convertible into or exchangeable for any share of
capital stock of (or other ownership or profit interests in) such Person or
warrant, right or option for the purchase or other acquisition from such Person
of such shares (or such other interests), and any other ownership or profit
interest in such Person (including, without limitation, partnership, member or
trust interests therein), whether voting or nonvoting, and whether or not such
share, warrant, option, right or other interest is authorized or otherwise
existing on any date of determination.
"Equity Issuance" means any issuance or sale by a Person of any Equity
Interest.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
in effect from time to time.
"ERISA Group" means the Borrower, any Subsidiary and all members of a
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.
"Event of Default" means any of the events specified in Section 9.1.,
provided that any requirement for notice or lapse of time or any other condition
has been satisfied.
"Existing Credit Agreement" means that certain Credit Agreement dated
as of December 28, 2000, by and among the Borrower, the Parent, the financial
institutions from time to time party thereto as "Lenders", Wells Fargo, as
Agent, and the other parties thereto.
I-6
"Fair Market Value" means, with respect to any asset, the price which
could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of which is under pressure
or compulsion to complete the transaction. Fair Market Value shall be determined
by the Board of Directors of the Parent acting in good faith conclusively
evidenced by a board resolution thereof delivered to the Agent or, with respect
to any asset valued at up to $5,000,000, such determination may be made by the
chief financial officer of the Parent evidenced by an officer's certificate
delivered to the Agent.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward 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 Reserve Bank of New York on the Business Day next succeeding such day,
provided that (a) if such day is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate quoted to the
Agent by federal funds dealers selected by the Agent on such day on such
transaction as determined by the Agent.
"Fees" means the fees and commissions provided for or referred to in
Section 3.6. (excluding fees payable under the last sentence of Section 3.6.(c)
and any fees referred to in Section 3.6.(h)).
"FIRREA" means the Financial Institution Recovery, Reform and
Enforcement Act of 1989, as amended.
"Floating Rate Indebtedness" means all Indebtedness of a Person which
bears interest at a variable rate during the scheduled life of such Indebtedness
and for which such Person has not obtained Interest Rate Agreements which
effectively cause such variable rates to be equivalent to fixed rates less than
or equal to 10.0% per annum.
"Funds From Operations" means, with respect to a Person and for a given
period, (a) net income (loss) of such Person determined on a consolidated basis
for such period minus (or plus) (b) gains (or losses) from debt restructuring
and sales of property during such period plus (c) depreciation with respect to
such Person's real estate assets and amortization (other than amortization of
deferred financing costs) of such Person for such period, all after adjustment
for unconsolidated partnerships and joint ventures. Adjustments for
unconsolidated entities will be calculated to reflect funds from operations on
the same basis.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, which are applicable to the circumstances as of the date of
determination.
I-7
"Governmental Approvals" means all authorizations, consents, approvals,
permits, licenses and exemptions of, registrations and filings with, and reports
to, all Governmental Authorities.
"Governmental Authority" means any national, state or local government
(whether domestic or foreign), any political subdivision thereof or any other
governmental, quasi-governmental, judicial, public or statutory instrumentality,
authority, body, agency, bureau or entity (including, without limitation, the
Federal Deposit Insurance Corporation, the Comptroller of the Currency or the
Federal Reserve Board, any central bank or any comparable authority) or any
arbitrator with authority to bind a party at law.
"Gross Asset Value" means, at a given time, the sum (without
duplication) of (a) Operating Real Estate Value at such time, plus (b) all cash
and cash equivalents (excluding cash and cash equivalents the disposition of
which is restricted (other than restrictions on cash held in an exchange account
by a "qualified intermediary" in connection with the sale of a property pursuant
to and qualifying for tax treatment under Section 1031 of the Internal Revenue
Code)), and all accounts receivable net of reserves, of the Parent and its
Subsidiaries at such time, plus (c) the current book value of all real property
of the Parent and its Subsidiaries upon which construction is then in progress
and all land held by any of them for development, plus (d) with respect to
Development Properties, development costs incurred to date with respect to such
Properties plus (e) with respect to Major Redevelopment Properties, (i) the Net
Operating Income for all Major Redevelopment Properties of the Parent and its
Subsidiaries for the four fiscal-quarter period most recently ended (excluding
Major Redevelopment Properties acquired or disposed of by the Parent or any
Subsidiary during such fiscal quarter) divided by 9.25% plus (ii) redevelopment
costs incurred to date with respect to such Properties plus (f) predevelopment
costs incurred to date with respect to Properties to the extent such
predevelopment costs are disclosed as a line item in the Parent's publicly filed
financial statements, plus (g) the purchase price paid by the Parent or any
Subsidiary (less any amounts paid to the Parent or such Subsidiary as a purchase
price adjustment, held in escrow, retained as a contingency reserve, or in
connection with other similar arrangements) for any Property acquired by the
Parent or such Subsidiary during the immediately preceding two fiscal quarters
of the Parent, plus (h) with respect to each Unconsolidated Affiliate of the
Parent, the greater of the Parent's (i) Ownership Share or (ii) Recourse Share
of the book value of construction in process as of the end of the Parent's
fiscal quarter most recently ended, plus (i) the contractual purchase price of
Properties of the Parent and its Subsidiaries subject to purchase obligations,
repurchase obligations, forward commitments and unfunded obligations to the
extent such obligations and commitments are included in determinations of Total
Liabilities. If obligations under a contract to purchase or otherwise acquire
unimproved or fully developed real property are included when determining Total
Liabilities and the seller under such contract does not have the right to
specifically enforce such contract, then only an amount equal to the aggregate
amount of due diligence deposits, earnest money payments and other similar
payments made under the contract which, at such time, would be subject to
forfeiture upon termination of the contract, shall be included in Gross Asset
Value. To the extent that the current book value of land held for development
would account for in excess of 5.0% of Gross Asset Value (determined without
giving effect to this sentence), such excess shall be excluded in determining
Gross Asset Value.
I-8
"Guarantor" means any Person that is party to the Guaranty as a
"Guarantor" and shall in any event include the Parent.
"Guaranty", "Guaranteed" or to "Guarantee" as applied to any obligation
means and includes: (a) a guaranty (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), directly or
indirectly, in any manner, of any part or all of such obligation, or (b) an
agreement, direct or indirect, contingent or otherwise, and whether or not
constituting a guaranty, the practical effect of which is to assure the payment
or performance (or payment of damages in the event of nonperformance) of any
part or all of such obligation whether by: (i) the purchase of securities or
obligations, (ii) the purchase, sale or lease (as lessee or lessor) of property
or the purchase or sale of services primarily for the purpose of enabling the
obligor with respect to such obligation to make any payment or performance (or
payment of damages in the event of nonperformance) of or on account of any part
or all of such obligation, or to assure the owner of such obligation against
loss, (iii) the supplying of funds to or in any other manner investing in the
obligor with respect to such obligation, (iv) repayment of amounts drawn down by
beneficiaries of letters of credit, or (v) the supplying of funds to or
investing in a Person on account of all or any part of such Person's obligation
under a Guaranty of any obligation or indemnifying or holding harmless, in any
way, such Person against any part or all of such obligation. As the context
requires, "Guaranty" shall also mean the guaranty executed and delivered
pursuant to Section 5.1. and substantially in the form of Exhibit G.
"Hazardous Materials" means all or any of the following: (a) substances
that are defined or listed in, or otherwise classified pursuant to, any
applicable Environmental Laws as "hazardous substances", "hazardous materials",
"hazardous wastes", "toxic substances" or any other formulation intended to
define, list or classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity or
"TLCP" toxicity, "EP toxicity"; (b) oil, petroleum or petroleum derived
substances, natural gas, natural gas liquids or synthetic gas and drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources; (c)
any flammable substances or explosives or any radioactive materials; and (d)
asbestos in any form or (e) electrical equipment which contains any oil or
dielectric fluid containing levels of polychlorinated biphenyls in excess of
fifty parts per million.
"Indebtedness" means, with respect to a Person, at the time of
computation thereof, all of the following (without duplication): (a) obligations
of such Person in respect of money borrowed; (b) obligations of such Person
(other than trade debt incurred in the ordinary course of business), whether or
not for money borrowed (i) represented by notes payable, or drafts accepted, in
each case representing extensions of credit, (ii) evidenced by bonds,
debentures, notes or similar instruments, or (iii) constituting purchase money
indebtedness, conditional sales contracts, title retention debt instruments or
other similar instruments, upon which interest charges are customarily paid or
that are issued or assumed as full or partial payment for property; (c) all
master lease obligations; (d) Capitalized Lease Obligations of such Person; (e)
all reimbursement obligations of such Person under any letters of credit or
acceptances that have been presented for payment; (f) all Indebtedness of other
Persons which (i) such Person has Guaranteed (other than Guarantees which are
solely Guarantees of performance and not of payment and other Guarantees of such
Person for liabilities arising from reasonable and customary exceptions to
Nonrecourse Indebtedness, such as for fraud, willful misrepresentation,
misapplication of funds (including misappropriation of security deposits and
failure to apply rents to operating expenses or debt service), indemnities
relating to environmental matters and waste of property constituting security
for such Nonrecourse Indebtedness, post-default interest, attorney's fees and
other costs of collection to the extent not covered by the value of the property
constituting security for such Nonrecourse Indebtedness and other similar
exceptions to recourse liability) or is otherwise recourse to such Person or
(ii) is secured by a Lien on any property of such Person; provided, that such
Indebtedness shall be limited to the value of such property so encumbered; and
(g) the Recourse Share of all Indebtedness of any partnership of which such
Person is a general partner. For purposes of this definition preferred equity of
a Person shall not be considered to be Indebtedness.
I-9
"Interest Expense" means, with respect to a Person and for any period,
(a) all paid, accrued or capitalized interest expense (including, without
limitation, interest expense attributable to Capitalized Lease Obligations but
excluding capitalized interest funded from a construction loan) of such Person
and in any event shall include all letter of credit fees and all interest
expense with respect to any Indebtedness in respect of which such Person is
wholly or partially liable whether pursuant to any repayment, interest carry,
performance Guarantee or otherwise, plus (b) to the extent not already included
in the foregoing clause (a) the greater of such Person's (i) Ownership Share or
(ii) Recourse Share of all paid, accrued or capitalized interest expense (as
limited above) for such period of Unconsolidated Affiliates of such Person.
"Interest Period" means with respect to any LIBOR Loan, the period
commencing on the date of the borrowing, Conversion or Continuation of such Loan
and ending on the last day of the period selected by the Borrower pursuant to
the provisions below. The duration of each Interest Period shall be one, two,
three or six months as the Borrower may, in an appropriate Notice of Borrowing,
Notice of Continuation or Notice of Conversion, select. In addition to such
periods, the Borrower may request Interest Periods for LIBOR Loans having
durations of at less than one month no more than 12 times during any 12-month
period beginning during the term of this Agreement but only for the purpose of
managing the number of Interest Periods outstanding with respect to LIBOR Loans.
In no event shall (a) an Interest Period of a Revolving Loan extend beyond the
Revolving Credit Termination Date or (b) an Interest Period of a Term Loan
extend beyond the Term Loan Maturity Date. Whenever the last day of any Interest
Period would otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding Business
Day; provided, however, that if such extension would cause the last day of such
Interest Period to occur in the next following calendar month, the last day of
such Interest Period shall occur on the next preceding Business Day.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
contractual agreement or arrangement entered into with a nationally recognized
financial institution then having a Credit Rating of BBB- or higher by S&P or
Baa3 or higher by Moody's for the purpose of protecting against fluctuations in
interest rates.
I-10
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended.
"Investment" means, with respect to any Person and whether or not such
investment constitutes a controlling interest in such Person: (a) the purchase
or other acquisition of any share of capital stock, evidence of Indebtedness or
other security issued by any other Person; (b) any loan, advance or extension of
credit to, or contribution (in the form of money or goods) to the capital of,
any other Person; (c) any Guaranty of the Indebtedness of any other Person; (d)
any other investment in any other Person; and (e) any commitment or option to
make an Investment in any other Person.
"Lender" means each financial institution from time to time party
hereto as a "Lender", together with its respective successors and permitted
assigns.
"Lending Office" means, for each Lender and for each Type of Loan, the
office of such Lender specified as such on its signature page hereto or in the
applicable Assignment and Acceptance Agreement, or such other office of such
Lender as such Lender may notify the Agent in writing from time to time.
"LIBOR" means, for any LIBOR Loan for any Interest Period therefor, the
average rate of interest per annum (rounded upwards, if necessary, to the next
highest 1/100th of 1%) at which deposits in immediately available funds in
Dollars are offered to the Agent (at approximately 9:00 a.m., two Business Days
prior to the first day of such Interest Period) by first class banks in the
interbank Eurodollar market where the Eurodollar operations of the Agent are
customarily conducted, for delivery on the first day of such Interest Period,
such deposits being for a period of time equal or comparable to such Interest
Period (or, if such Interest Period is shorter than one month, then such period
of time shall be based on a period of one month) and in an amount equal to or
comparable to the principal amount of the LIBOR Loan to which such Interest
Period relates. Each determination of LIBOR by the Agent shall, in absence of
demonstrable error, be conclusive and binding.
"LIBOR Loan" means a Loan bearing interest at a rate based on LIBOR.
"Lien" as applied to the property of any Person means: (a) any security
interest, encumbrance, mortgage, deed to secure debt, deed of trust, pledge,
lien, charge or lease constituting a Capitalized Lease Obligation, conditional
sale or other title retention agreement, or other security title or encumbrance
of any kind in respect of any property of such Person, or upon the income or
profits therefrom; (b) any arrangement, express or implied, under which any
property of such Person is transferred, sequestered or otherwise identified for
the purpose of subjecting the same to the payment of Indebtedness or performance
of any other obligation in priority to the payment of the general, unsecured
creditors of such Person; (c) the filing of any financing statement under the
Uniform Commercial Code or its equivalent in any jurisdiction, excluding any
financing statement filed to give notice of the existence of an operating lease;
and (d) any agreement by such Person to grant, give or otherwise convey any of
the foregoing.
I-11
"Loan" means a Revolving Loan or a Term Loan.
"Loan Document" means this Agreement, each Note, the Guaranty, any fee
letter and each other document or instrument now or hereafter executed and
delivered by a Loan Party in connection with, pursuant to or relating to this
Agreement.
"Loan Party" means each of the Borrower, the Parent and each other
Guarantor. Schedule 1.1. sets forth the Loan Parties in addition to the Borrower
and the Parent as of the Agreement Date.
"Major Redevelopment Property" means a Property (a) on which existing
improvements comprising 33% or more of the net rentable square footage of such
Property or which is responsible for 33% or more of the Net Operating Income of
such Property are undergoing renovation and redevelopment and either (i)
construction has commenced or (ii) the owner of such Property (or an Affiliate)
has entered into a binding construction contract; and (b) either (i) which has
not achieved an Occupancy Rate of 85% or more or (ii) on which the improvements
(other than tenant improvements on unoccupied space) related to the renovation
and redevelopment have not been completed. The term "Major Redevelopment
Property" shall include real property of the type described in the immediately
preceding sentence to be (but not yet) acquired upon completion of redevelopment
pursuant to a contract in which the seller of such real property is required to
renovate prior to, and as a condition precedent to, such acquisition.
"Material Adverse Effect" means a materially adverse effect on (a) the
business, assets, liabilities, financial condition, results of operations or
business prospects of the Borrower and its Subsidiaries taken as a whole, (b)
the ability of the Borrower or any other Loan Party to perform its obligations
under any Loan Document to which it is a party, (c) the validity or
enforceability of any of the Loan Documents, (d) the rights and remedies of the
Lenders and the Agent under any of such Loan Documents or (e) the timely payment
of the principal of or interest on the Loans or other amounts payable in
connection therewith.
"Material Plan" means at any time a Benefit Plan or Benefit Plans
having aggregate Unfunded Liabilities in excess of $1,000,000.
"Moody's" means Moody's Investors Service, Inc.
"Mortgage" means a mortgage, deed of trust, deed to secure debt or
similar security instrument made or to be made by a Person owning an interest in
real estate granting a Lien on such interest in real estate as security for the
payment of Indebtedness.
"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.
I-12
"Multi-Family Disposition" means the disposition by the Borrower of
multi-family Properties contemplated by that certain Purchase and Sale Agreement
dated as of March 3, 2003 by and between the Borrower and MPM Acquisition Corp.
"Negative Pledge" means, with respect to a given asset, any provision
of a document, instrument or agreement (other than any Loan Document) which
prohibits or purports to prohibit the creation of any Lien on such asset as
security for Indebtedness of the Person owning such asset or any other Person.
"Net Operating Income" means, for any Property and for a given period,
the sum of the following (without duplication): (a) rents and other revenues
received in the ordinary course from such Property (including proceeds of rent
loss insurance but excluding pre-paid rents and revenues and security deposits
except to the extent applied in satisfaction of tenants' obligations for rent)
minus (b) all expenses paid or accrued related to the ownership, operation or
maintenance of such Property, including but not limited to taxes, assessments
and other similar charges, insurance, utilities, payroll costs, maintenance,
repair and landscaping expenses, marketing expenses, and general and
administrative expenses (including an appropriate allocation for legal,
accounting, advertising, marketing and other expenses incurred in connection
with such Property, but specifically excluding general overhead expenses of the
Borrower and the Parent) minus (c) the Reserve for Replacements for such
Property as of the end of such period minus (d) the greater of (i) the actual
property management fee paid during such period and (ii) an imputed management
fee in the amount of three percent (3.0%) of the gross revenues for such
Property for such period.
"Net Proceeds" shall mean, (a) in the case of (i) a Disposition, the
aggregate amount of all cash received (including without limitation, all cash
payments received by way of deferred payment of principal or interest pursuant
to a note or installment receivable or otherwise, but only as and when
received), directly or indirectly, by the Parent, the Borrower or any other
Subsidiary in connection with such Disposition or (ii) in the case of any
Casualty Event, the aggregate amount of cash proceeds of insurance, condemnation
awards and other compensation received by the Parent, the Borrower or any other
Subsidiary in respect of such Casualty Event, in each case net of (x) the amount
of any out-of-pocket legal fees, title and recording tax expenses, commissions
and other customary fees and expenses actually incurred by the Parent, the
Borrower or any other Subsidiary in connection with such Disposition or Casualty
Event, (y) any income taxes reasonably estimated in good faith to be payable by
the Parent, the Borrower or any other Subsidiary in connection with such
Disposition or Casualty Event and other taxes thereon to the extent such other
taxes are actually paid by the Parent, the Borrower or any other Subsidiary, and
(z) any repayments by the Parent, the Borrower or any other Subsidiary of
Indebtedness (other than Indebtedness under any of the Loan Documents) to the
extent that such Indebtedness is secured by a Lien on the property that is the
subject of such Disposition or Casualty Event; and (b) in the case of an Equity
Issuance or Debt Issuance, the aggregate amount of all cash received by the
Parent, the Borrower or any other Subsidiary in respect of such Equity Issuance
or Debt Issuance net of (i) investment banking fees, legal fees, accountants
fees, underwriting discounts and commissions and other customary fees and
expenses actually incurred by the Parent, the Borrower or any other Subsidiary
in connection with such Equity Issuance or Debt Issuance and (ii) in the case of
a Debt Issuance of Secured Indebtedness (the "New Debt"), any repayments by the
Parent, the Borrower or any other Subsidiary of existing Indebtedness to the
extent that such existing Indebtedness is secured by a Lien on the property that
is to secure such New Debt.
I-13
"Nonrecourse Indebtedness" means, with respect to a Person,
Indebtedness for borrowed money in respect of which recourse for payment (except
for reasonable and customary exceptions for fraud, willful misrepresentation,
misapplication of funds (including misappropriation of security deposits and
failure to apply rents to operating expenses or debt service), indemnities
relating to environmental matters and waste of property constituting security
for such Nonrecourse Indebtedness, post-default interest, attorney's fees and
other costs of collection to the extent not covered by the value of the property
constituting security for such Nonrecourse Indebtedness and other similar
exceptions to nonrecourse liability, and completion guarantees for Development
Properties and Major Redevelopment Properties) is contractually limited to
specific assets of such Person encumbered by a Lien securing such Indebtedness.
"Note" means a Revolving Note or a Term Note.
"Notice of Borrowing" means a notice in the form of Exhibit H to be
delivered to the Agent pursuant to Section 2.1.(c) evidencing the Borrower's
request for a borrowing of Loans.
"Notice of Continuation" means a notice in the form of Exhibit I to be
delivered to the Agent pursuant to Section 2.7. evidencing the Borrower's
request for the Continuation of a LIBOR Loan.
"Notice of Conversion" means a notice in the form of Exhibit J to be
delivered to the Agent pursuant to Section 2.8. evidencing the Borrower's
request for the Conversion of a Loan from one Type to another Type.
"Obligations" means, individually and collectively: (a) the aggregate
principal balance of, and all accrued and unpaid interest on, all Loans and (b)
all other indebtedness, liabilities, obligations, covenants and duties of the
Borrower owing to the Agent or any Lender of every kind, nature and description,
under or in respect of this Agreement, any of the other Loan Documents,
including, without limitation, the Fees, any other fees payable under any Loan
Document and indemnification obligations, whether direct or indirect, absolute
or contingent, due or not due, contractual or tortious, liquidated or
unliquidated, and whether or not evidenced by any promissory note.
"Occupancy Rate" means, with respect to a Property at any time, the
ratio, expressed as a percentage, of (a) the net rentable square footage of such
Property actually occupied by tenants paying rent (including each tenant in
occupancy during a free rent period negotiated under the terms of its lease and
space provided to and accepted by a tenant for performance by the tenant of
fit-up work) pursuant to binding leases as to which no monetary default has
occurred and is continuing to (b) the aggregate net rentable square footage of
such Property. When determining the Occupancy Rate of a Property, a tenant will
be deemed to be in occupancy provided such tenant (A) is paying rent to the
extent required under the lease, (B) has taken physical possession of its leased
space, and (C) if not already open for business, the Borrower reasonably
anticipates that such tenant will be open for business within 90 days of the
date such tenant first took possession of such space.
I-14
"Off Balance Sheet Liabilities" means, with respect to any Person, (a)
any repurchase obligation or liability of such Person with respect to any
accounts or notes receivable sold, transferred or otherwise disposed of by such
Person, (b) any repurchase obligation or liability of such Person with respect
to property or assets leased by such Person as lessee and (c) all obligations of
such Person under any synthetic lease, tax retention operating lease, off
balance sheet loan or similar off balance sheet financing, if in the case of
this clause (c), the transaction giving rise to such obligation (i) is
considered indebtedness for borrowed money for tax purposes but is classified as
an operating lease or (ii) does not (and is not required to pursuant to GAAP)
appear as a liability on the balance sheet of such Person. The obligations or
liabilities of a Person as lessee under any operating lease shall not be
included within this definition so long as the terms of such operating lease do
not require any payment by or on behalf of such Person at the scheduled
termination date of such operating lease, pursuant to a required purchase by or
on behalf of such Person of the property or assets subject to such operating
lease.
"Operating Real Estate Value" means, as of a given date, the Net
Operating Income for all Properties (excluding Development Properties and Major
Redevelopment Properties) of the Parent, its Subsidiaries and its Unconsolidated
Affiliates for the four fiscal-quarter period most recently ended divided by
9.25%. For purposes of determining Operating Real Estate Value (a) Net Operating
Income from Properties acquired by the Parent, any Subsidiary or any
Unconsolidated Affiliate during the immediately preceding two fiscal quarters of
the Parent or disposed of by any such Person during the immediately preceding
fiscal quarter of the Parent, shall be excluded, (b) the calculation of Net
Operating Income from Properties owned by the Parent, any Subsidiary or any
Unconsolidated Affiliate for more than two but less than four fiscal quarters
shall be appropriately annualized, (c) Net Operating Income from Properties upon
which construction is then in progress shall be excluded, and (d) with respect
to a Property owned by an Unconsolidated Affiliate, only the greater of the
Parent's (i) Ownership Share or (ii) Recourse Share of the Net Operating Income,
as applicable, of such Property shall be used when determining Operating Real
Estate Value.
"Ownership Share" means, with respect to any Subsidiary of a Person or
any Unconsolidated Affiliate of a Person, the greater of (a) such Person's
relative nominal direct and indirect ownership interest (expressed as a
percentage) in such Subsidiary or Unconsolidated Affiliate or (b) such Person's
relative direct and indirect economic interest (calculated as a percentage) in
such Subsidiary or Unconsolidated Affiliate determined in accordance with the
applicable provisions of the declaration of trust, articles or certificate of
incorporation, articles of organization, partnership agreement, joint venture
agreement or other applicable organizational document of such Subsidiary or
Unconsolidated Affiliate.
I-15
"Parent" has the meaning set forth in the introductory paragraph hereof
and shall include the Parent's successors and permitted assigns.
"Participant" has the meaning given that term in Section 11.5.(c).
"Partnership Agreement" means that certain First Amended and Restated
Agreement of Limited Partnership Agreement of PREIT Associates, L.P. dated as of
September 30, 1997, by and among Pennsylvania Real Estate Investment Trust, as
the general partner and the limited partners whose names are set forth therein,
as amended and in effect on the Agreement Date.
"PBGC" means the Pension Benefit Guaranty Corporation and any successor
agency.
"Permitted Liens" means (a) Liens securing taxes, assessments and other
charges or levies imposed by any Governmental Authority (excluding any Lien
imposed pursuant to any of the provisions of ERISA or pursuant to any
Environmental Laws) or the claims of materialmen, mechanics, carriers,
warehousemen or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, which are not at the time required to be paid
or discharged under Section 7.7.; (b) Liens consisting of deposits or pledges
made, in the ordinary course of business, in connection with, or to secure
payment of, obligations under workmen's compensation, unemployment insurance or
similar Applicable Laws; (c) Liens consisting of encumbrances in the nature of
zoning restrictions, easements, and rights or restrictions of record on the use
of real property, which do not materially detract from the value of such
property or impair the use thereof in the business of such Person; (d) the
rights of tenants under leases or subleases not interfering with the ordinary
conduct of business of the Borrower and (e) Liens in favor of the Agent for the
benefit of the Lenders.
"Person" means an individual, corporation, partnership, limited
liability company, association, trust or unincorporated organization, or a
government or any agency or political subdivision thereof.
"Post-Default Rate" means, in respect of any principal of any Loan or
any other Obligation that is not paid when due (whether at stated maturity, by
acceleration, by optional or mandatory prepayment or otherwise), a rate per
annum equal to 5.0% plus the Base Rate as in effect from time to time.
"Preferred Stock" means, with respect to any Person, shares of capital
stock of, or other Equity Interests in, such Person which are entitled to
preference or priority over any other capital stock of, or other Equity Interest
in, such Person in respect of the payment of dividends or distribution of assets
upon liquidation or both.
"Property" means a parcel (or group of related parcels) of real
property developed (or which is to be developed) principally for retail,
industrial or residential multi-family use.
I-16
"Rating Agencies" means each of Moody's and S&P.
"Recourse Share" means, with respect to any Person, the portion
(calculated as a percentage) of the total Indebtedness of another Person
guaranteed by such Person, or which is otherwise recourse to such Person (other
than Indebtedness consisting of Guarantees which are solely Guarantees of
performance and not of payment and other Guarantees of such Person for
liabilities arising from reasonable and customary exceptions to Nonrecourse
Indebtedness, such as for fraud, willful misrepresentation, misapplication of
funds (including misappropriation of security deposits and failure to apply
rents to operating expenses or debt service), indemnities relating to
environmental matters and waste of property constituting security for such
Nonrecourse Indebtedness, post-default interest, attorney's fees and other costs
of collection to the extent not covered by the value of the property
constituting security for such Nonrecourse Indebtedness and other similar
exceptions to recourse liability).
"Register" has the meaning given that term in Section 11.5.(e).
"Regulatory Change" means, with respect to any Lender, any change
effective after the Agreement Date (or with respect to any Lender that becomes a
party to this Agreement after the Agreement Date, any change effective after the
date on which such Lender becomes a party hereto) in Applicable Law (including
without limitation, Regulation D of the Board of Governors of the Federal
Reserve System) or the adoption or making after such date of any interpretation,
directive or request applying to a class of banks, including such Lender, of or
under any Applicable Law (whether or not having the force of law and whether or
not failure to comply therewith would be unlawful) by any Governmental Authority
or monetary authority charged with the interpretation or administration thereof
or compliance by any Lender with any request or directive regarding capital
adequacy.
"REIT" means a Person qualifying for treatment as a "real estate
investment trust" under the Internal Revenue Code.
"Requisite Lenders" means, as of any date, Lenders having at least
66-2/3% of the aggregate amount of the Commitments, or, if the Commitments have
been terminated or reduced to zero, Lenders holding at least 66-2/3% of the
principal amount of the Loans; provided, however, if at the time of
determination there are fewer than 3 Lenders, "Requisite Lenders" shall mean all
Lenders.
"Reserve for Replacements" means, for any period and with respect to
any Property, an amount equal to (a)(i) if such Property is an apartment
complex, $250 per apartment unit; or (ii) for any retail or industrial Property,
the greater of (x)(A) the aggregate square footage of all completed space of
such Property times (B) $0.15 in the case of a retail Property or $0.10 in the
case of an industrial Property or (y) the actual capital expenditures made with
respect to such Property during such period (excluding capital expenditures in
respect of non-recurring items) times (b) the number of days in such period
divided by (c) 365. The Properties included in the calculation of Reserve for
Replacements shall not include those Properties or portions thereof with respect
to which or to the extent that a third party (a) owns the improvements thereon,
(b) is a party to a ground lease with the Parent, the Borrower or a Subsidiary
with respect to the land therein and (c) is contractually obligated to make all
repairs and capital improvements and replacements thereof.
I-17
"Restricted Payment" means: (a) any dividend or other distribution,
direct or indirect, on account of any shares or similar units of any class of
stock or other equity interest of the Parent or any of its Subsidiaries now or
hereafter outstanding, except a dividend payable solely in shares or similar
units of such class of stock or other equity interest to the holders thereof;
(b) any redemption, conversion, exchange, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
shares or similar units of any class of stock or other equity interest of the
Parent or any of its Subsidiaries now or hereafter outstanding; (c) any payment
or prepayment of principal of, premium, if any, or interest on, redemption,
conversion, exchange, purchase, retirement, defeasance, sinking fund or similar
payment with respect to, any Subordinated Debt; and (d) any payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares or similar units of any class of stock or other
equity interest of the Parent or any of its Subsidiaries now or hereafter
outstanding.
"Revolving Commitment" means, as to each Lender, such Lender's
obligation to make Revolving Loans pursuant to Section 2.1.(a) in an amount up
to, but not exceeding, the amount set forth for such Lender on its signature
page hereto as such Lender's Revolving Commitment or as set forth in the
applicable Assignment and Acceptance Agreement, as the same may be reduced or
increased from time to time pursuant to the terms of this Agreement.
"Revolving Credit Termination Date" means October 27, 2003 or such
later date to which such date may be extended in accordance with Section 2.10.
"Revolving Loan" means a loan made by a Lender to the Borrower pursuant
to Section 2.1.(a).
"Revolving Note" has the meaning given that term in Section 2.9.(a).
"Rouse Acquisition" means the acquisition by the Parent, indirectly
through Subsidiaries, from affiliates of The Rouse Company, of the Rouse
Properties pursuant to the applicable Agreements of Purchase and Sale dated as
of March 7, 2003 by and among certain Subsidiaries of the Parent, as buyers, and
certain affiliates of The Rouse Company, as sellers.
"Rouse Properties" means each of the retail Properties commonly known
as Cherry Hill Mall in Camden County, New Jersey, Moorestown Mall in Burlington
County, New Jersey, Plymouth Meeting Mall in Montgomery County, Pennsylvania,
The Gallery I in Philadelphia, Pennsylvania, Exton Mall (including the Kmart
property) in Chester County, Pennsylvania and Echelon Mall in Camden County, New
Jersey.
I-18
"S&P" means Standard & Poor's Rating Services, a division of The
McGraw-Hill Companies, Inc.
"Secured Indebtedness" means, with respect to a Person as of any given
date, the aggregate principal amount of all Indebtedness of such Person
outstanding at such date and that is secured in any manner by any Lien, and in
the case of the Parent, shall include (without duplication) the Parent's
Ownership Share of the Secured Debt of its Unconsolidated Affiliates.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, together with all rules and regulations issued thereunder.
"Solvent" means, when used with respect to any Person, that (a) the
fair value and the fair salable value of its assets (excluding any Indebtedness
due from any affiliate of such Person) are each in excess of the fair valuation
of its total liabilities (including all contingent liabilities); and (b) such
Person is able to pay its debts or other obligations in the ordinary course as
they mature and (c) that the Person has capital not unreasonably small to carry
on its business and all business in which it proposes to be engaged.
"Subordinated Debt" means Indebtedness for money borrowed of the
Parent, the Borrower or any other Subsidiary that is subordinated in right of
payment and otherwise to the Loans and the other Obligations (or in the case of
a Subsidiary that is a Guarantor, all obligations of such Subsidiary under or in
respect of the Guaranty) in a manner satisfactory to the Agent in its sole and
absolute discretion.
"Subsidiary" means, for any Person, any corporation, partnership or
other entity of which at least a majority of the securities or other ownership
interests having by the terms thereof ordinary voting power to elect a majority
of the board of directors or other persons performing similar functions of such
corporation, partnership or other entity (without regard to the occurrence of
any contingency) is at the time directly or indirectly owned or controlled by
such Person or one or more Subsidiaries of such Person or by such Person and one
or more Subsidiaries of such Person.
"Substantial Amount" means, at the time of determination thereof, an
amount in excess of 30.0% of total consolidated assets (exclusive of
depreciation) at such time of the Parent and its Subsidiaries determined on a
consolidated basis.
"Tangible Net Worth" means, for any Person and as of a given date, such
Person's total consolidated stockholder's equity plus, in the case of the
Parent, accumulated depreciation and amortization, minus (to the extent
reflected in determining stockholders' equity of such Person): (a) the amount of
any write-up in the book value of any assets reflected in any balance sheet
resulting from revaluation thereof or any write-up in excess of the cost of such
assets acquired, and (b) the aggregate of all amounts appearing on the assets
side of any such balance sheet for patents, patent applications, copyrights,
trademarks, trade names, goodwill and other like assets which would be
classified as intangible assets under GAAP, all determined on a consolidated
basis.
I-19
"Taxes" has the meaning given that term in Section 3.11.
"Term Commitment" means, as to each Lender, such Lender's obligation to
make Term Loans pursuant to Section 2.1.(b) in an amount up to, but not
exceeding, the amount set forth for such Lender on its signature page hereto as
such Lender's Term Commitment or as set forth in the applicable Assignment and
Acceptance Agreement, as the same may be reduced or increased from time to time
pursuant to the terms of this Agreement.
"Term Loan" means a loan made by a Lender to the Borrower pursuant to
Section 2.1.(b).
"Term Loan Facility Expiration Date" means July 25, 2003.
"Term Loan Maturity Date" means October 27, 2003 or such later date to
which such date may be extended in accordance with Section 2.10.
"Term Note" has the meaning given that term in Section 2.9.(b).
"Total Budgeted Cost Until Stabilization" means, with respect to a
Development Property or a Major Redevelopment Property, and at any time, the
aggregate amount of all costs budgeted to be paid, incurred or otherwise
expended or accrued by the Parent, the Borrower, a Subsidiary or an
Unconsolidated Affiliate with respect to such Property to achieve an Occupancy
Rate of 100%, including without limitation, all amounts budgeted with respect to
all of the following: (a) acquisition of land and any related improvements; (b)
a reasonable and appropriate reserve for construction interest; (c) a reasonable
and appropriate operating deficit reserve; (d) tenant improvements; (e) leasing
commissions and infrastructure costs and (f) other hard and soft costs
associated with the development or redevelopment of such Property. With respect
to any Property to be developed in more than one phase, the Total Budgeted Cost
Until Stabilization shall exclude budgeted costs (other than costs relating to
acquisition of land and related improvements) to the extent relating to any
phase for which (i) construction has not yet commenced and (ii) a binding
construction contract has not been entered into by the Parent, the Borrower, any
other Subsidiary or any Unconsolidated Affiliate, as the case may be. The
calculation of Total Budgeted Cost Until Stabilization herein shall be net of
the aggregate sale proceeds of a sale of a pad site within a Development
Property or Major Redevelopment Property that are payable pursuant to a binding
sale contract with a third party approved by the Agent.
I-20
"Total Liabilities" means, as to any Person as of a given date, all
liabilities which would, in conformity with GAAP, be properly classified as a
liability on the consolidated balance sheet of such Person as of such date, and
in any event shall include (without duplication): (a) all Indebtedness of such
Person (whether or not Nonrecourse Indebtedness and whether or not secured by a
Lien), including without limitation, Capitalized Lease Obligations and the full
stated amount of undrawn letters of credit issued for the account of such
Person, but excluding (i) letters of credit secured with cash collateral, (ii)
letters of credit issued solely in lieu of a non-payment performance obligation,
(iii) letters of credit securing a refundable obligation under a binding
contract and (iv) that certain Letter of Credit issued under the Existing Credit
Agreement in the stated amount of $5,000,000 and naming The Equitable Life
Assurance Society of the United States as the beneficiary; (b) all accounts
payable (including tenant deposits accounted for as payables but excluding
tenant deposits held as restricted cash and not included in the calculation of
Gross Asset Value pursuant to clause (b) of the definition of such term) and
accrued expenses of such Person; (c) all purchase and repurchase obligations and
forward commitments of such Person to the extent such obligations or commitments
are evidenced by a binding purchase agreement (forward commitments shall include
without limitation forward equity commitments); (d) all unfunded obligations of
such Person; (e) all lease obligations of such Person (including ground leases)
to the extent required under GAAP to be classified as a liability on the balance
sheet of such Person; (f) all Contingent Obligations and Off Balance Sheet
Liabilities of such Person; (g) all liabilities of any Unconsolidated Affiliate
of such Person, which liabilities such Person has Guaranteed or is otherwise
obligated on a recourse basis; and (h) the greater of such Person's (i)
Ownership Share or (ii) Recourse Share of the Indebtedness of any Unconsolidated
Affiliate of such Person, including Nonrecourse Indebtedness of such Person. For
purposes of clauses (c) and (d) of this definition, the amount of Total
Liabilities of a Person at any given time in respect of a contract to purchase
or otherwise acquire unimproved or fully developed real property shall be equal
to (i) the total purchase price payable by such Person under the contract if, at
such time, the seller of such real property would be entitled to specifically
enforce the contract against such Person, otherwise, (ii) the aggregate amount
of due diligence deposits, earnest money payments and other similar payments
made by such Person under the contract which, at such time, would be subject to
forfeiture upon termination of the contract. For purposes of this definition, if
the assets of a Subsidiary of a Person consist solely of Equity Interests in one
Unconsolidated Affiliate of such Person and such Person is not otherwise
obligated in respect of the Indebtedness of such Unconsolidated Affiliate, then
only such Person's Ownership Share of the Indebtedness of such Unconsolidated
Affiliate shall be included as Total Liabilities of such Person. For purposes of
this definition, the Total Liabilities of the Parent associated with the Blue
Route shall, at any time prior to and including March 31, 2001, equal the
Parent's Ownership Share of the Indebtedness of the Blue Route. For purposes of
determining the Total Liabilities of the Parent and the Subsidiaries, the amount
of any Indebtedness assumed by the Parent or any Subsidiary at the time of an
acquisition which the Parent is required under GAAP to reflect at fair value on
a balance sheet, shall be equal to outstanding principal balance of such
Indebtedness and not the fair value of such Indebtedness as would be reflected
on the Parent's balance sheet.
"Trust Agreement" means that certain Pennsylvania Real Estate
Investment Trust Trust Agreement, as amended and restated as of December 16,
1997, among the trustees a party thereto, as amended and in effect on the
Agreement Date.
"Type" with respect to any Loan, refers to whether such Loan is a LIBOR
Loan or Base Rate Loan.
I-21
"Unconsolidated Affiliate" means, with respect to any Person, any other
Person in whom such Person holds an Investment, which Investment is accounted
for in the financial statements of such Person on an equity basis of accounting
and whose financial results would not be consolidated in accordance with GAAP
with the financial results of such Person on the consolidated financial
statements of such Person.
"Unfunded Liabilities" means, with respect to any Benefit Plan at any
time, the amount (if any) by which (a) the value of all benefit liabilities
under such Benefit Plan, determined on a plan termination basis using the
assumptions prescribed by the PBGC for purposes of Section 4044 of ERISA,
exceeds (b) the fair market value of all Benefit 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 Benefit 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.
"Wells Fargo" means Wells Fargo Bank, National Association, and its
successors and permitted assigns.
"Wholly Owned Subsidiary" means any Subsidiary of a Person all of the
equity securities or other ownership interests (other than, in the case of a
corporation, directors' qualifying shares) of which are at the time directly or
indirectly owned or controlled by such Person or one or more other Subsidiaries
of such Person or by such Person and one or more other Subsidiaries of such
Person. In the case of the Parent, the term "Wholly Owned Subsidiary" shall also
include any Subsidiary of the Parent (a) of which the Parent owns or controls,
directly, or indirectly through one or more other Subsidiaries, substantially
all of the equity securities or other ownership interests and (b) over which the
Parent possesses sufficient control to warrant treating such Subsidiary as if it
were otherwise a Wholly Owned Subsidiary, in each case, as determined by the
Agent.
I-22