EXHIBIT 10.3
QUALIFIED BORROWER GUARANTY
UNCONDITIONAL GUARANTY OF PAYMENT (this "Guaranty"), is made as of
June 1, 2004 by AMB PROPERTY, L.P., a Delaware limited partnership (the
"Guarantor") for the benefit of JPMORGAN CHASE BANK, as Administrative Agent and
J.P. MORGAN EUROPE LIMITED, as Administrative Agent (collectively, the
"Administrative Agent") for the banks (the "Banks") that are from time to time
parties to that certain Second Amended and Restated Revolving Credit Agreement
(the "Credit Agreement"), dated as of the date hereof, among the Guarantor, the
banks listed on the signature pages thereof, the Administrative Agent, Bank of
America, N.A., as Syndication Agent, J.P. Morgan Securities Inc. and Banc of
America Securities LLC, as Joint Lead Arrangers and Joint Bookrunners,
Commerzbank Aktiengesellschaft New York and Grand Cayman Branches, PNC Bank,
National Association, and Wachovia Bank, N.A., as Documentation Agents, Keybank
National Association, The Bank of Nova Scotia, acting through its San Francisco
Agency, and Wells Fargo Bank, N.A., as Managing Agents, and ING Real Estate
Finance (USA) LLC, SouthTrust Bank and Union Bank of California, N.A., as
Co-Agents.
Capitalized terms not otherwise defined in this Guaranty shall have
the meanings ascribed to them in the Credit Agreement.
W I T N E S S E T H:
WHEREAS, pursuant to the terms of the Credit Agreement, a Qualified
Borrower may request that the Banks make one or more loans (each, a "Loan") to
the Qualified Borrower, to be guaranteed by Guarantor by this Guaranty and to be
evidenced by Qualified Borrower Notes (collectively, the "Note"), payable by the
Qualified Borrower to the order of the Banks.
WHEREAS, this Guaranty is the "Qualified Borrower Guaranty" referred
to in the Credit Agreement;
WHEREAS, in order to induce the Administrative Agent and the Banks
to make one or more Loans to one or more Qualified Borrowers, and to satisfy one
of the conditions contained in the Credit Agreement with respect thereto, the
Guarantor has agreed to enter into this Guaranty.
NOW THEREFORE, in consideration of the premises and the direct and
indirect benefits to be derived from the making of the Loans by the Banks to
Qualified Borrowers, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, Guarantor hereby agrees as
follows:
i. Guarantor, on behalf of itself and its successors and assigns,
hereby irrevocably, absolutely, and unconditionally guarantees the full and
punctual payment when due, whether at stated maturity or otherwise, of all
obligations of each and every Qualified Borrower
now or hereafter existing under the Note (whether executed and delivered
simultaneously herewith or subsequently), or under any of the other Loan
Documents (such obligations, whenever arising, being the "Guaranteed
Obligations"), and any and all reasonable costs and expenses (including, without
limitation, reasonable attorneys' fees and disbursements) incurred by the
Administrative Agent in enforcing its rights under this Guaranty.
ii. It is agreed that the obligations of Guarantor hereunder are
primary and this Guaranty shall be enforceable against Guarantor and its
successors and assigns without the necessity for any suit or proceeding of any
kind or nature whatsoever brought by the Administrative Agent against the
relevant Qualified Borrower or its respective successors or assigns or any other
party or against any security for the payment and performance of the Guaranteed
Obligations and without the necessity of any notice of non-payment or
non-observance or of any notice of acceptance of this Guaranty or of any notice
or demand to which Guarantor might otherwise be entitled (including, without
limitation, diligence, presentment, notice of maturity, extension of time,
change in nature or form of the Guaranteed Obligations, acceptance of further
security, release of further security, imposition or agreement arrived at as to
the amount of or the terms of the Guaranteed Obligations, notice of adverse
change in such Qualified Borrower's financial condition and any other fact which
might materially increase the risk to Guarantor), all of which Guarantor hereby
expressly waives; and Guarantor hereby expressly agrees that the validity of
this Guaranty and the obligations of the Guarantor hereunder shall in no way be
terminated, affected, diminished, modified or impaired by reason of the
assertion of or the failure to assert by the Administrative Agent against such
Qualified Borrower or its respective successors or assigns, any of the rights or
remedies reserved to the Administrative Agent pursuant to the provisions of the
Loan Documents. Guarantor hereby agrees that any notice or directive given at
any time to the Administrative Agent which is inconsistent with the waiver in
the immediately preceding sentence shall be void and may be ignored by the
Administrative Agent, and, in addition, may not be pleaded or introduced as
evidence in any litigation relating to this Guaranty for the reason that such
pleading or introduction would be at variance with the written terms of this
Guaranty, unless the Administrative Agent has specifically agreed otherwise in a
writing, signed by a duly authorized officer. Guarantor specifically
acknowledges and agrees that the foregoing waivers are of the essence of this
transaction and that, but for this Guaranty and such waivers, the Banks would
not make Loans and the Fronting Bank would not issue Letters of Credit on behalf
of any Qualified Borrower.
iii. Guarantor hereby waives, and covenants and agrees that it will
not at any time insist upon, plead or in any manner whatsoever claim or take the
benefit or advantage of, any and all appraisal, valuation, stay, extension,
marshaling-of-assets or redemption laws, or right of homestead or exemption,
whether now or at any time hereafter in force, which may delay, prevent or
otherwise affect the performance by Guarantor of its obligations under, or the
enforcement by the Administrative Agent of, this Guaranty. Guarantor further
covenants and agrees not to set up or claim any defense, counterclaim, offset,
set-off or other objection of any kind to any action, suit or proceeding in law,
equity or otherwise, or to any demand or claim that may be instituted or made by
the Administrative Agent other than the defense of the actual timely payment and
performance by the relevant Qualified Borrower of the Guaranteed Obligations
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hereunder; provided, however, that the foregoing shall not be deemed a waiver of
Guarantor's right to assert any compulsory counterclaim, if such counterclaim is
compelled under local law or rule of procedure, nor shall the foregoing be
deemed a waiver of Guarantor's right to assert any claim which would constitute
a defense, setoff, counterclaim or crossclaim of any nature whatsoever against
Administrative Agent or any Bank in any separate action or proceeding. Guarantor
represents, warrants and agrees that, as of the date hereof, its obligations
under this Guaranty are not subject to any counterclaims, offsets or defenses of
any kind against the Administrative Agent, the Banks or the Fronting Bank.
iv. The provisions of this Guaranty are for the benefit of the
Administrative Agent on behalf of the Banks and their successors and permitted
assigns, and nothing herein contained shall impair as between any Qualified
Borrower and the Administrative Agent the obligations of such Qualified Borrower
under the Loan Documents.
v. This Guaranty shall be a continuing, unconditional and
absolute guaranty and the liability of Guarantor hereunder shall in no way be
terminated, affected, modified, impaired or diminished by reason of the
happening, from time to time, of any of the following, all without notice or the
further consent of Guarantor:
(1) any assignment, amendment, modification or waiver
of or change in any of the terms, covenants,
conditions or provisions of any of the Guaranteed
Obligations or the Loan Documents or the
invalidity or unenforceability of any of the
foregoing; or
(2) any extension of time that may be granted by the
Administrative Agent to any Qualified Borrower,
any guarantor, or their respective successors or
assigns, heirs, executors, administrators or
personal representatives; or
(3) any action which the Administrative Agent may take
or fail to take under or in respect of any of the
Loan Documents or by reason of any waiver of, or
failure to enforce any of the rights, remedies,
powers or privileges available to the
Administrative Agent under this Guaranty or
available to the Administrative Agent at law,
equity or otherwise, or any action on the part of
the Administrative Agent granting indulgence or
extension in any form whatsoever; or
(4) any sale, exchange, release, or other disposition
of any property pledged, mortgaged or conveyed, or
any property in which the Administrative Agent
and/or the Banks have been granted a lien or
security interest to secure any indebtedness of
any Qualified Borrower to the Administrative Agent
and/or the Banks; or
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(5) any release of any person or entity who may be
liable in any manner for the payment and
collection of any amounts owed by any Qualified
Borrower to the Administrative Agent and/or the
Banks; or
(6) the application of any sums by whomsoever paid or
however realized to any amounts owing by any
Qualified Borrower to the Administrative Agent
and/or the Banks under the Loan Documents in such
manner as the Administrative Agent shall determine
in its sole discretion; or
(7) any Qualified Borrower's or the Guarantor's
voluntary or involuntary liquidation, dissolution,
sale of all or substantially all of their
respective assets and liabilities, appointment of
a trustee, receiver, liquidator, sequestrator or
conservator for all or any part of any Qualified
Borrower's or Guarantor's assets, insolvency,
bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement,
composition or readjustment, or the commencement
of other similar proceedings affecting any
Qualified Borrower or Guarantor or any of the
assets of any of them, including, without
limitation, (i) the release or discharge of any
Qualified Borrower or Guarantor from the payment
and performance of their respective obligations
under any of the Loan Documents by operation of
law, or (ii) the impairment, limitation or
modification of the liability of any Qualified
Borrower or Guarantor in bankruptcy, or of any
remedy for the enforcement of the Guaranteed
Obligations under any of the Loan Documents, or
Guarantor's liability under this Guaranty,
resulting from the operation of any present or
future provisions of the Bankruptcy Code or other
present or future federal, state or applicable
statute or law or from the decision in any court;
or
(8) any improper disposition by any Qualified Borrower
of the proceeds of the Loans, it being
acknowledged by Guarantor that the Administrative
Agent shall be entitled to honor any request made
by any Qualified Borrower for a disbursement of
such proceeds and that the Administrative Agent
shall have no obligation to see the proper
disposition by such Qualified Borrower of such
proceeds.
(9) Guarantor hereby agrees that if at any time all or
any part of any payment at any time received by
the Administrative Agent from any Qualified
Borrower under any of the Notes or other Loan
Documents or Guarantor under or with respect to
this Guaranty is or must be rescinded or returned
by the Administrative Agent for
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any reason whatsoever (including, without
limitation, the insolvency, bankruptcy or
reorganization of any Qualified Borrower or
Guarantor), then Guarantor's obligations hereunder
shall, to the extent of the payment rescinded or
returned, be deemed to have continued in existence
notwithstanding such previous receipt by the
Administrative Agent, and Guarantor's obligations
hereunder shall continue to be effective or
reinstated, as the case may be, as to such
payment, as though such previous payment to the
Administrative Agent had never been made.
(10) Until this Guaranty is terminated pursuant to the
terms hereof, the Guarantor (i) shall have no
right of subrogation against any Qualified
Borrower or any entity comprising same by reason
of any payments or acts of performance by
Guarantor in compliance with the obligations of
Guarantor hereunder; (ii) hereby waives any right
to enforce any remedy which Guarantor now or
hereafter shall have against any Qualified
Borrower or any entity comprising same by reason
of any one or more payment or acts of performance
in compliance with the obligations of Guarantor
hereunder; and (iii) from and after an Event of
Default (as defined in the Credit Agreement)
subordinates any liability or indebtedness of any
Qualified Borrower or any entity comprising same
now or hereafter held by Guarantor to the
obligations of each Qualified Borrower under the
Loan Documents.
vi. Guarantor hereby represents, warrants and covenants on its own
behalf to the Administrative Agent with the knowledge that the Administrative
Agent is relying upon the same, as follows:
(1) Guarantor will be familiar with the financial
condition of each Qualified Borrower;
(2) Guarantor has determined that it is in its best
interest to enter into this Guaranty;
(3) this Guaranty is necessary and convenient to the
conduct, promotion and attainment of Guarantor's
business, and is in furtherance of Guarantor's
business purposes;
(4) the benefits to be derived by Guarantor from each
Qualified Borrower's access to funds made possible
by the Loan Documents are at least equal to the
obligations of Guarantor undertaken pursuant to
this Guaranty;
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(5) the Guarantor is solvent and has full partnership
power and legal right to enter into this Guaranty
and to perform its obligations under the terms
hereof and (i) Guarantor is organized and validly
existing under the laws of its state of formation,
(ii) Guarantor has complied with all provisions of
applicable law in connection with all aspects of
this Guaranty, and (iii) the person executing this
Guaranty on behalf of Guarantor has all the
requisite power and authority to execute and
deliver this Guaranty; and
(6) this Guaranty has been duly executed by Guarantor
and constitutes the legal, valid and binding
obligation of Guarantor, enforceable against it in
accordance with its terms except as enforceability
may be limited by applicable insolvency,
bankruptcy or other laws affecting creditors'
rights generally or general principles of equity
whether such enforceability is considered in a
proceeding in equity or at law.
The foregoing representations and warranties shall be deemed to be made as
of the date hereof and as the date of the making any Loan or the issuance of any
Letter of Credit to or for the account on any Qualified Borrower.
vii. Each of Guarantor and the Administrative Agent acknowledges and
agrees that this Guaranty is a guaranty of payment and not of collection and
enforcement in respect of any obligations which may accrue to the Administrative
Agent and/or the Banks from each Qualified Borrower under the provisions of any
Loan Document.
viii. Subject to the terms and conditions of the Credit Agreement,
and in conjunction therewith, the Administrative Agent may assign any or all of
its rights under this Guaranty.
ix. Guarantor agrees, upon the written request of the Administrative
Agent, to execute and deliver to the Administrative Agent, from time to time,
any modification or amendment hereto or any additional instruments or documents
reasonably considered necessary by the Administrative Agent or its counsel to
cause this Guaranty to be, become or remain valid and effective in accordance
with its terms, provided, that, any such modification, amendment, additional
instrument or document shall not increase Guarantor's obligations or diminish
its rights hereunder and shall be reasonably satisfactory as to form to
Guarantor and to Guarantor's counsel.
x. The representations and warranties of the Guarantor set forth in
this Guaranty shall survive until this Guaranty shall terminate in accordance
with the terms hereof.
xi. This Guaranty together with the Credit Agreement, each Note now
or hereafter executed and delivered by any Qualified Borrower, and the other
Loan Documents
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contain the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior agreements relating to such subject
matter and may not be modified, amended, supplemented or discharged except by a
written agreement signed by Guarantor and the Administrative Agent.
xii. If all or any portion of any provision contained in this
Guaranty shall be determined to be invalid, illegal or unenforceable in any
respect for any reason, such provision or portion thereof shall be deemed
stricken and severed from this Guaranty and the remaining provisions and
portions thereof shall continue in full force and effect.
xiii. This Guaranty may be executed in counterparts which together
shall constitute the same instrument.
xiv. All notices, requests and other communications to any party
hereunder shall be in writing (including bank wire, telex, facsimile
transmission followed by telephonic confirmation or similar writing) and shall
be addressed to such party at the address set forth below or to such other
address as may be identified by any party in a written notice to the others:
If to a
Qualified Borrower: At the address identified therefor by
Borrower at the time such Qualified Borrower
delivers its Note or, if no such address is
so identified, at the address of Borrower
set forth in the Credit Agreement for
notices.
If to
Guarantor: At the address set forth in the Credit
Agreement for notices.
With Copies of
Notices to the
Qualified Borrower
or Guarantor to: Piper Rudnick LLP
203 North LaSalle Street, Suite 1800
Chicago, Illinois 60601
Attention: James M. Phipps, Esq.
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If to the Administrative Agent: JPMorgan Chase Bank
707 Travis Street, 6th Floor North
Houston, Texas 77002
Attention: Susan M. Tate
and to: JPMorgan Chase Bank
1111 Fannin Street, 10th Floor
Houston, Texas 77002
Attention: Loan and Agency Services
With Copies to: Skadden, Arps, Slate, Meagher & Flom LLP
4 Times Square
New York, New York 10036
Attention: Martha Feltenstein, Esq.
Each such notice, request or other communication shall be effective
(i) if given by telex or facsimile transmission, when such telex or facsimile is
transmitted to the telex number or facsimile number specified in this Section
and the appropriate answerback or facsimile confirmation is received, (ii) if
given by certified registered mail, return receipt requested, with first class
postage prepaid, addressed as aforesaid, upon receipt or refusal to accept
delivery, (iii) if given by a nationally recognized overnight carrier, 24 hours
after such communication is deposited with such carrier with postage prepaid for
next day delivery, or (iv) if given by any other means, when delivered at the
address specified in this Section.
xv. This Guaranty shall be binding upon Guarantor and its successors
and assigns and shall inure to the benefit of the Administrative Agent and its
successors and assigns.
xvi. The failure of the Administrative Agent to enforce any right or
remedy hereunder, or promptly to enforce any such right or remedy, shall not
constitute a waiver thereof, nor give rise to any estoppel against the
Administrative Agent, nor excuse Guarantor from its obligations hereunder. Any
waiver of any such right or remedy to be enforceable against the Administrative
Agent must be expressly set forth in a writing signed by the Administrative
Agent.
xvii. (1) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE CONSTRUED
IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK.
(2) Any legal action or proceeding with respect to this
Guaranty and any action for enforcement of any judgment
in respect thereof may be brought in the courts of the
State of New York or of the United States of America for
the Southern District of New York, and, by
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execution and delivery of this Guaranty, Guarantor
hereby accepts for itself and in respect of its
property, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts and
appellate courts from any thereof. Guarantor irrevocably
consents to the service of process out of any of the
aforementioned courts in any such action or proceeding
by the mailing of copies thereof by registered or
certified mail, postage prepaid, to Guarantor at the
address for notices set forth herein. Guarantor hereby
irrevocably waives any objection which it may now or
hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in
connection with this Guaranty brought in the courts
referred to above and hereby further irrevocably waives
and agrees not to plead or claim in any such court that
any such action or proceeding brought in any such court
has been brought in an inconvenient forum. Nothing
herein shall affect the right of the Administrative
Agent to serve process in any other manner permitted by
law or to commence legal proceedings or otherwise
proceed against Guarantor in any other jurisdiction.
(3) EACH OF THE GUARANTOR AND THE ADMINISTRATIVE AGENT
HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY AND ALL
CLAIMS OR CAUSES OF ACTION BASED UPON OR ARISING OUT OF
THIS GUARANTY. IT IS HEREBY ACKNOWLEDGED BY GUARANTOR
THAT THE WAIVER OF A JURY TRIAL IS A MATERIAL INDUCEMENT
FOR THE ADMINISTRATIVE AGENT TO ACCEPT THIS GUARANTY AND
THAT THE LOANS MADE BY THE BANKS ARE MADE IN RELIANCE
UPON SUCH WAIVER. GUARANTOR FURTHER WARRANTS AND
REPRESENTS THAT SUCH WAIVER HAS BEEN KNOWINGLY AND
VOLUNTARILY MADE, FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, THIS GUARANTY MAY
BE FILED BY THE ADMINISTRATIVE AGENT IN COURT AS A
WRITTEN CONSENT TO A NON-JURY TRIAL.
(4) Guarantor hereby further covenants and agrees with the
Administrative Agent that Guarantor may be joined in any
action against the Qualified Borrower in connection with
the Loan Documents and that recovery may be had against
Guarantor in such action or in any independent action
against Guarantor (with respect to the Guaranteed
Obligations), without the Administrative Agent first
pursuing or exhausting any remedy or claim against the
Qualified Borrower or its successors or assigns.
Guarantor also agrees that,
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in an action brought with respect to the Guaranteed
Obligations in any jurisdiction, it shall be
conclusively bound by the judgment in any such action by
the Administrative Agent (wherever brought) against any
Qualified Borrower or its successors or assigns, as if
Guarantor were a party to such action, even though
Guarantor was not joined as a party in such action.
(5) Guarantor hereby agrees to pay all reasonable expenses
(including, without limitation, attorneys' fees and
disbursements) which may be incurred by the
Administrative Agent in connection with the enforcement
of its rights under this Guaranty, whether or not suit
is initiated.
xvii. Subject to the terms of Section 5(i) hereof, this Guaranty
shall terminate and be of no further force or effect upon the full performance
and payment of the Guaranteed Obligations hereunder. Upon termination of this
Guaranty in accordance with the terms of this Guaranty, the Administrative Agent
promptly shall deliver to Guarantor such documents as Guarantor or Guarantor's
counsel reasonably may request in order to evidence such termination.
xviii. All of the Administrative Agent's rights and remedies under
each of the Loan Documents or under this Guaranty are intended to be distinct,
separate and cumulative and no such right or remedy therein or herein mentioned
is intended to be in exclusion of or a waiver of any other right or remedy
available to the Administrative Agent.
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IN WITNESS WHEREOF, the undersigned has cause this
Guaranty to be duly executed and delivered as of the date first set forth above.
GUARANTOR:
AMB PROPERTY, L.P.,
a Delaware limited partnership
By: AMB Property Corporation, a Maryland
corporation and its sole general partner
By: /s/ Gayle P. Starr
______________________________
Name: Gayle P. Starr
Title: Senior Vice President
ACCEPTED:
JPMORGAN CHASE BANK,
as Administrative Agent
By: /s/ Susan Tate
_____________________
Name: Susan Tate
Title: Vice President
J.P. MORGAN EUROPE LIMITED, as Administrative Agent
By: /s/ S. Gillies By: /s/ N. Mall
_____________________ _____________________
Name: S. Gillies Name: N. Mall
Title: Associate Title: Associate