EXHIBIT 10.56
REVOLVING CREDIT LOAN AGREEMENT
THIS REVOLVING CREDIT LOAN AGREEMENT (this "Agreement") is made and
delivered this 4th day of March 2008, by and between Mission West Properties,
Inc., a Maryland corporation ("Borrower"), and Heritage Bank of Commerce (the
"Bank").
WITNESSETH
WHEREAS, the Borrower desires to borrow up to Ten Million Dollars
($10,000,000.00) from the Bank from time to time to meet the working capital
needs of the Borrower; and
WHEREAS, the Bank is willing to provide such financing subject to the terms
and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein contained and in reliance upon Borrower's representations and warranties
set forth herein, the Borrower and the Bank agree as follows:
1. DEFINITIONS.
1.1 DEFINED TERMS. As used in this Agreement, the following terms shall
have the following respective meanings:
"Affiliate" shall mean, when used with respect to any person, any other
person which, directly or indirectly, controls or is controlled by or is under
common control with such person. For purposes of this definition, "control"
(including the correlative meanings of the terms "controlled by" and "under
common control with"), with respect to any person, shall mean possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such person, whether through the ownership of voting
securities or by contract or otherwise.
"Agreement" is defined in the first paragraph of this Agreement.
"Average Annual Rate of Interest" is defined the weighted average of the
annual interest rate on variable and fixed rate debt as reflected in the Form
10-K, Item 7A.
"Bank" is defined in the first paragraph of this Agreement.
"Bankruptcy Code" shall mean Title 11 of the United States Code, as
amended, or any successor act or code.
"Borrower" is defined in the first paragraph of this Agreement.
"Business Day" shall mean a day on which the Bank is open to carry on its
normal commercial lending business.
"Commitment" shall mean the Bank's agreement to lend to Borrower in
accordance with and subject to the terms of this Agreement.
"Commitment Amount" shall mean, as of any applicable date of determination,
Ten Million Dollars and no cents ($10,000,000.00).
"Consolidated" or "consolidated" shall mean, when used with reference to
any financial term in this Agreement, the aggregate for two or more persons of
the amounts signified by such term for all such persons determined on a
consolidated basis in accordance with GAAP as defined below. Unless otherwise
specified herein, reference to "consolidated" financial statements or data of
the Borrower includes consolidation with its Subsidiaries (as defined below) in
accordance with GAAP.
"Controversy" is defined in Section 8.16.
"Cost Award" is defined in Section 8.16.
"Cost Statement of Decision" is defined in Section 8.16.
"Debt" shall mean, as of any applicable date of determination, all items of
indebtedness, obligation or liability of a person, whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, joint or
several, that should be classified as liabilities in accordance with GAAP.
"Debt Coverage Ratio" shall mean, as of any applicable date of
determination, the ratio of: (1) the sum of Borrower's Net Operating Income,
divided by (2) annual debt service on total outstanding mortgage debt plus total
open line of credit commitments amortized over 25 years at the "Average Annual
Rate of Interest." The Debt Coverage Ratio shall be determined by the Bank as of
each Fiscal Quarter (as defined below) and on the basis of the preceding twelve
(12) month period (actual or based on annualized quarters) as follows: (i) as to
each Fiscal Quarter ending on March 31, June 30, and September 30, from
Borrower's SEC Form 10-Q filed with the Securities and Exchange Commission
relating to such quarter, with such quarterly year to date results annualized;
and (ii) as to each Fiscal Quarter ending on December 31, from Borrower's SEC
Form 10-K relating to the year ending on such date. Notwithstanding the
foregoing, the Bank may also rely on other information that Borrower is
obligated to provide to the Bank pursuant to Section 5.1 of this Agreement.
Exhibit C hereto includes an example of the calculation of Debt Coverage Ratio
as defined herein from Borrower's SEC Form 10-K for the period ending September
30, 2007, and is provided for example purposes only.
"Debt to Tangible Net Worth Ratio" shall mean, as of any applicable date of
determination, the ratio of (1) Borrower's Debt, divided by (2) Borrower's
Tangible Net Worth. The Debt to Tangible Net Worth Ratio shall be determined by
the Bank as of each Fiscal Quarter (as defined below) and on the basis of the
preceding twelve (12) month period (actual or based on annual quarters) as
follows: (i) as to each Fiscal Quarter ending on March 31, June 30, and
September 30, from Borrower's SEC Form 10-Q filed with the Securities and
Exchange Commission relating to the quarter ending on such date; and (ii) as to
each Fiscal Quarter ending on December 31, from Borrower's SEC Form 10-K
relating to the year ending on such date. Notwithstanding the foregoing, the
Bank may also rely on other information that Borrower is obligated to provide to
the Bank pursuant to Section 6.1 of this Agreement. Exhibit C hereto includes an
example of the calculation of Debt to Tangible Net Worth Ratio as defined herein
from Borrower's SEC Form 10-Q for the period ending September 30, 2007, and is
provided for example purposes only.
"Default" shall mean a condition or event which, with the giving of notice
or the passage of time, or both, would become an Event of Default as defined
below.
"Default Rate" shall mean, as of the applicable date or time of
determination, the Variable Rate, as defined below, plus five percent (5%), or,
if the Bank exercises its option under Section 2.13 of this Agreement to change
the rate of interest to the Prime Variable Rate, then the Prime Variable Rate,
as defined below, plus five percent (5%).
"Effective Date" shall mean the date this Agreement becomes effective as
set forth in Section 8.1 herein.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, or any successor act or code.
"Event of Default" shall mean any of those conditions or events listed in
Section 7.1 of this Agreement.
"Financial Statements" shall mean all those consolidated balance sheets,
consolidated earnings statements and other consolidated financial data which
have been furnished to the Bank for the purposes of, or in connection with, this
Agreement and the transactions contemplated hereby, including without limit the
following: the Borrower's SEC Form 10-K for the period ending December 31, 2007.
"Fiscal Quarter" shall mean each three month period ending on March 31,
June 30, September 30, and December 31 of each year.
"Funding Date" shall mean, with respect to any Revolving Loan made by the
Bank hereunder, the date of the funding of such Revolving Loan by Bank.
"GAAP" shall mean, as of any applicable date of determination, generally
accepted accounting principles consistently applied in the United States.
"Indebtedness" shall mean all loans, advances, indebtedness, obligations
and liabilities of Borrower to the Bank under this Agreement, together with all
other indebtedness, obligations and liabilities whatsoever of the Borrower to
the Bank, whether matured or unmatured, liquidated or unliquidated, direct or
indirect, absolute or contingent, joint or several, due or to become due, now
existing or hereafter arising.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time and hereafter, and any successor statute.
"Legal Rate" shall mean the maximum interest rate allowed by law to be paid
by the Borrower or received by the Bank with respect to the Indebtedness
represented by the Note.
"Lender" shall mean any bank, financial institution, finance company,
insurance or other financial institution or any other person who extends or has
extended any credit or loan or line of credit to any other person.
"LIBOR" shall mean the one-month London Inter-Bank Offered Rate, rounded
up, if necessary, to the nearest whole 1/100 of 1%.
"Loan" shall mean the Revolving Loans.
"Loan Documents" shall mean this Agreement, the Note, and all other
agreements, instruments and documents (together with all amendments and
supplements thereto and replacements thereof) now or hereafter executed by
Borrower that evidence or secure all or any portion of the Indebtedness or
Borrower's obligations hereunder.
"Material Adverse Effect" or "Materially Adverse Effect" shall mean, with
respect to a Person, a material adverse effect upon the condition (financial or
otherwise), operations, performance or properties or assets of such Person.
"Net Operating Income" shall mean total revenues less expenses adding back
interest expense and adding back depreciation expense.
"Note" shall mean the Revolving Credit Note.
"Notice of Borrowing" shall mean a notice substantially in the form of
Exhibit B hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any person
succeeding to the present powers and functions of the Pension Benefit Guaranty
Corporation.
"Person" or "person" shall mean any individual, corporation, partnership,
joint venture, association, trust, unincorporated association, joint stock
company, government, municipality, political subdivision or agency, or other
entity.
"Prime Variable Rate" shall mean that variable rate of interest equal to
the Prime Rate as published in the Wall Street Journal minus 3/4 percent (3/4%),
per annum, with the interest rate to be initially calculated by the Bank as of
approximately 10:00 a.m. San Jose, California time on the date on which the Bank
exercises its option under Section 2.13 if such option date is the first day of
the month, or, if not, as of approximately 10:00 a.m. San Jose, California time
as the first day of the month during which such option date occurs, and with the
interest rate to thereafter fluctuate with changes in such Prime Rate with such
fluctuations to be effective, and the interest rate to be adjusted, on the first
day of each month.
"Revolving Credit Note" shall mean a promissory note conforming to Section
2.4 of this Agreement and in the form and content of Exhibit A to this
Agreement.
"Revolving Loan" shall mean advances or loans made by the Bank to the
Borrower under this Agreement.
"Section" when used to refer to a portion of this Agreement shall mean the
section to which reference is made plus all subparts and subsections thereof.
"Solvent" shall mean, as to any person at the time of determination, that
such person (a) owns property and assets the value of which (both at fair
valuation and at present fair salable value) is greater than the amount required
to pay all of such person's liabilities (including contingent liabilities and
debts); (b) is able to pay all of its debts as such debts mature; and (c) has
capital sufficient to carry on its business and transactions and all business
and transactions in which it is about to engage.
"Subsidiary" shall mean any corporation (whether now existing or hereafter
organized or acquired) in which more than fifty percent (50%) of the outstanding
securities having ordinary voting power for the election of directors, as of any
applicable date of determination, shall be owned directly, or indirectly through
one or more Subsidiaries, by the Borrower.
"Tangible Net Worth" shall be calculated each Fiscal Quarter and shall
mean, as of any applicable date of determination, Total Stockholders' Equity
(but not including Minority Interest) as stated in the Consolidated Balance
Sheet of Borrower in Borrower's SEC Form 10-Q or, as applicable, SEC Form 10-K
(or other financial information that Bank may obtain regarding Borrower or that
may be provided by Borrower to Bank in accordance with), less intangibles
calculated in accordance with GAAP.
"Termination Date" shall mean June 15, 2009.
"Total Loans of Borrower" shall mean, as of the date of any such
determination, the sum of the total outstanding principal balance of all secured
loans to Borrower from any Lender plus the total amount of all the balances and
the credit commitments under any and all unsecured loans, unsecured lines of
credit, unsecured credit facilities of any kind (including but not limited to
the Commitment Amount), and any other commitments evidencing any extension of
unsecured debt to Borrower by any Lender.
"UCC" shall mean Uniform Commercial Code of the State of California
(approved June 8, 1968) as amended.
"Variable Rate" shall mean that variable rate of interest equal to the sum
of the one-month LIBOR plus 1.75 percent (1.75%), per annum, the interest rate
to be initially calculated by the Bank as of approximately 10:00 a.m. San Jose,
California time on the Funding Date if the Funding Date is the first day of a
month, or, if not, as of approximately 10:00 a.m. San Jose, California time on
the first day of the month during which the Funding Date occurs, and with the
interest rate to thereafter fluctuate with changes in such LIBOR with such
fluctuations to be effective, and the interest rate to be adjusted, on the first
day of each month.
1.2 ACCOUNTING TERMS. All accounting terms not specifically defined in this
Agreement shall be construed in accordance with GAAP.
1.3 SINGULAR AND PLURAL. Where the context herein requires, the singular
number shall be deemed to include the plural, the masculine gender shall include
the feminine and neuter genders, and vice versa.
2. COMMITMENT, PROCEDURES, INTEREST AND FEES.
2.1 REVOLVING CREDIT COMMITMENT. Subject to the terms and conditions of
this Agreement and at any time from the Effective Date until the earlier of (a)
the Termination Date, (b) such earlier date on which, pursuant to the terms of
this Agreement and a result of acceleration or otherwise, the Indebtedness is
fully due and payable, or (c) the termination of the Bank's Commitment pursuant
to Section 7.2 of this Agreement or otherwise, the Bank agrees to make Revolving
Loans to the Borrower on a revolving basis up to an aggregate principal amount
outstanding at any time not to exceed the Commitment Amount. Notwithstanding the
foregoing, the Bank shall not be obligated to make the Revolving Loan if: (i)
any of the conditions precedent set forth in Section 3 of this Agreement shall
not have been satisfied or waived by the Bank in accordance with Section 8.4 of
this Agreement, or (ii) such proposed Revolving Loan would cause the aggregate
unpaid principal amount of the Revolving Loans outstanding under this Agreement
to exceed the Commitment Amount on the Funding Date.
2.2 INTEREST RATE. Except as otherwise provided herein (including without
limitation Section 2.5 relating to the Default Rate), each Revolving Loan will
bear interest on the unpaid principal amount thereof at the Variable Rate.
2.3 BORROWING PROCEDURES.
2.3.1 NOTICE OF BORROWING. Whenever Borrower desires to borrow,
Borrower shall provide to the Bank at 150 Almaden Boulevard, San Jose,
California 95113, Attention Roxanne Vane, or to such other persons or
entities as Bank may designate, an original Notice of Borrowing. Such
Notice of Borrowing shall be provided by no later than 11:00 A.M. (San
Jose, California time) for each Revolving Loan requested and not less than
two (2) nor more than five (5) Business Days prior to the noticed Funding
Date of each such Revolving Loan. Each Notice of Borrowing shall specify
(A) the Funding Date (which shall be a Business Day) in respect of the
Revolving Loan, (B) the amount of the proposed Revolving Loan, (C) the
deposit account number of Borrower with Bank to which the funds are to be
directed, and (D) the proposed use of such Revolving Loan. Any Notice of
Borrowing shall be irrevocable. At the time of execution of this Agreement
and as a condition to the Bank's obligations hereunder, Borrower shall
provide the Bank with written documentation satisfactory to the Bank
specifying the names of those employees, officers or agents of Borrower
authorized by Borrower to execute and submit Notices of Borrowing to the
Bank ("Authorized Agent") and a signature exemplar of each such Authorized
Agent, and the Bank shall be entitled to rely on such documentation until
notified in writing by Borrower of any change(s) of the persons so
authorized. Borrower agrees to indemnify, defend and hold the Bank harmless
from and against any and all liabilities, out of pocket costs (including
but not limited to reasonable out of pocket attorneys' fees), claims,
damages and demands arising from or related to Bank's acceptance of
instructions in any Notice of Borrowing executed and submitted an
Authorized Agent, unless caused by the gross negligence or willful
misconduct of the Person to be indemnified.
2.3.2 BANK OBLIGATIONS. Subject to the terms and conditions of this
Agreement including without limitation Section 2.1 and subject to
Borrower's performance of and compliance with the terms hereof including
without limitation Section 2.3.1 herein, the Bank agrees to make the
Revolving Loan pursuant to a Notice of Borrowing on the Funding Date
established by the Notice of Borrowing by crediting the deposit account of
the Borrower with the Bank specified in the Notice of Borrowing in the
amount of such Revolving Loan.
2.4 REVOLVING CREDIT NOTE. The Revolving Loans shall be evidenced by the
Revolving Credit Note, executed by the Borrower, dated the date of this
Agreement, payable to the Bank on the Termination Date (or such earlier date as
the Indebtedness is due under the terms of this Agreement whether by reason of
acceleration or otherwise), and in the principal amount of the original
Commitment Amount. The date and amount of each Revolving Loan made by the Bank
and of each repayment of principal thereon received by the Bank shall be
recorded by the Bank in its records. The aggregate unpaid principal amount so
recorded by the Bank shall constitute the best evidence of the principal amount
owing and unpaid on the Revolving Credit Note, provided, however, that the
failure by the Bank so to record any such amount or any error in so recording
any such amount shall not limit or otherwise affect the obligations of the
Borrower under this Agreement or the Revolving Credit Note to repay the
principal amount of all the Revolving Loans together with all interest accrued
or accruing thereon.
2.5 DEFAULT INTEREST. Upon the occurrence of an Event of Default, all
amounts due and owing by Borrower to the Bank shall bear interest at the Default
Rate.
2.6 INTEREST PAYMENTS. Interest shall be payable by Borrower to the extent
then accrued on the first day of each consecutive calendar month beginning on
April 1, 2008, with all remaining interest due and payable on the Termination
Date (or such earlier date as the Indebtedness is due under the terms of this
Agreement whether by reason of acceleration or otherwise). Any interest not paid
when due shall become part of the principal and bear interest as provided in
this Agreement.
2.7 MAXIMUM RATE. At no time shall the rate of interest payable on the
Revolving Loans or pursuant to the Revolving Credit Note pursuant to the terms
of this Agreement be deemed to exceed the Legal Rate. In the event any interest
is charged or received by the Bank in excess of the Legal Rate, the Borrower
acknowledges that any such excess interest shall be the result of an accidental
and bona fide error, and such excess shall first be applied to reduce the
principal then unpaid hereunder (in inverse order of their maturities if
principal amounts are due in installments); second, applied to reduce any
obligation for other indebtedness of the Borrower to the Bank; and third, any
remaining excess returned to the Borrower.
2.8 TERM. The Indebtedness and the outstanding balance of all Revolving
Loans and all other accrued and unpaid interest, charges and expenses hereunder
and under the Note shall be payable in full on the Termination Date or such
earlier date as the Indebtedness is due under the terms of this Agreement
whether by reason of acceleration pursuant to Section 7.2 or otherwise.
2.9 FEES. Borrower shall pay to Bank the fees described in this Section
2.9. All fees described herein are earned as of the date they are accrued.
2.9.1 MINIMUM ANNUAL FEE. The Borrower shall pay to the Bank a minimum
annual fee of Ten Thousand Dollars and no cents ($10,000.00) (the "Minimum
Annual Fee"). The Minimum Annual Fee shall be payable in advance, in the
manner provided in Section 2.11 herein, on the Effective Date for the first
year hereunder, and on each anniversary of the Effective Date for each
subsequent year. The Minimum Annual Fee shall be pro-rated for any partial
year.
2.9.2 NO FEE AFTER TERMINATION OF BANK OBLIGATIONS. Notwithstanding
Section 2.9.1, the Borrower shall not be obligated to pay any Minimum
Annual Fee earned by the Bank after the date which is ten (10) days after
Borrower has: (i) given written notice to the Bank terminating the Bank's
Commitment and any further obligation by the Bank under this Agreement; and
(ii) paid the Indebtedness in full.
2.9.3 PREPARATION FEES. Simultaneously with the execution of this
Agreement and as a condition to the Bank's obligations hereunder, the
Borrower shall pay to the Bank the amount of the out of pocket expenses
(including without limit reasonable attorneys' fees, whether of inside or
outside counsel, and disbursements) incurred by the Bank in connection with
the preparation of this Agreement and the Loan Documents in the amount of
Nine Thousand Sixty-One Dollars ($9,061.00).
2.9.4 BASIS OF COMPUTATION. The amount of all interest and fees
hereunder shall be computed for the actual number of days elapsed in the
period in which interest accrues on the basis of a year consisting of three
hundred sixty (360) days.
2.10 MANDATORY PAYMENTS AND PREPAYMENTS.
2.10.1 MANDATORY PAYMENTS. In addition to all other payments required
to be made under the Loan Documents, Borrower shall pay to the Bank the
amount, if any, by which the aggregate unpaid principal amount of all
Revolving Loans from time to time exceeds the Commitment Amount, together
with all interest accrued and unpaid on the amount of such excess. Such
payment shall be immediately due and owing without notice or demand upon
the occurrence of any such excess, provided, however, that any mandatory
payment made under this Section 2.10.1 shall not reduce the Commitment
Amount.
2.10.2 OPTIONAL PREPAYMENTS AND CONVERSIONS. The Borrower, at any time
and from time to time, may prepay the unpaid principal amount of the
Revolving Loans. Any optional prepayment made under this Section 2.10.2
shall not reduce the Commitment Amount.
2.11 BASIS OF PAYMENTS. All sums payable by the Borrower to the Bank under
this Agreement or the Loan Documents shall be paid immediately by Borrower when
due directly to the Bank at its principal office set forth in Section 8.12
hereof in immediately available United States funds, without condition, set off,
deduction or counterclaim. In its sole discretion, the Bank may charge any and
all deposit or other accounts (including without limit an account evidenced by a
certificate of deposit) of the Borrower with the Bank for all or a part of any
Indebtedness when due; provided, however, that this authorization shall not
affect the Borrower's obligation to pay, when due, any Indebtedness whether or
not account balances are sufficient to pay amounts due. Whenever any payment to
be made by Borrower hereunder shall be stated to be due on a day which is not a
Business Day, payments shall be made on the next succeeding Business Day and
such extension of time shall be included in the computation of the payment of
interest hereunder and of any of the fees specified in Section 2.9. Borrower
acknowledges and agrees that the fees described in Section 2.9 represent
compensation for services rendered and to be rendered separate and apart from
the lending of money or the provision of credit and do
not constitute compensation for the use, detention or forbearance of money, and
the obligation of Borrower to pay the fees described herein shall be in addition
to, and not in lieu of, the obligation of Borrower to pay interest, other fees
and expenses otherwise described in this Agreement. If Borrower fails to make
any payment of fees or expenses specified or referred to in this Agreement owing
to Bank, including without limitation those referred to in Section 2.9, or
otherwise under this Agreement, or any separate fee agreement between Borrower
or Bank relating to this Agreement, when due, the amount shall bear interest
until paid at the Default Rate.
2.12 RECEIPT OF PAYMENTS. Any payment of the Indebtedness made by mail will
be deemed tendered and received only upon actual receipt by the Bank at the
address designated for such payment, whether or not the Bank has authorized
payment by mail or any other manner, and shall not be deemed to have been made
in a timely manner unless received on the date due for such payment, time being
of the essence. Borrower expressly assumes all risks of loss or liability
resulting from non-delivery or delay of delivery of any item of payment
transmitted by mail or in any other manner. Acceptance by the Bank of any
payment in an amount less than the amount then due shall be deemed an acceptance
on account only, and the failure to pay the entire amount then due shall be and
continue to be a Default or Event of Default as provided in Section 7.1, and at
any time thereafter and until the entire amount then due has been paid, the Bank
shall be entitled to exercise any and all rights conferred upon it herein upon
the occurrence of a Default or Event of Default as provided in Section 7.1.
Borrower waives the right to direct the application of any and all payments at
any time or times hereafter received by the Bank from or on behalf of the
Borrower. Borrower agrees that the Bank shall have the continuing exclusive
right to apply and to reapply any and all payments received at any time or times
hereafter against the Indebtedness in such manner as the Bank may deem
advisable, notwithstanding any entry by the Bank upon any of its books and
records. Borrower expressly agrees that to the extent that the Bank receives any
payment of benefit and such payment or benefit, or any part thereof, is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or is required to be repaid to a trustee, receiver, or any other party under any
bankruptcy act, state or federal law, common law or equitable cause, then to the
extent of such payment or benefit, the Indebtedness or part thereof intended to
be satisfied shall be revived and continued in full force and effect as if such
payment or benefit had not been made and, further any such repayment by the
Bank, to the extent that the Bank did not directly receive a corresponding cash
payment, shall be added to and be additional Indebtedness payable upon demand by
the Bank.
2.13 LIBOR UNLAWFUL OR UNAVAILABLE. Should the Bank in its sole discretion
binding on Borrower determine that the introduction of or any change in any law
or the interpretation of any law makes it unlawful for the Bank to make or
maintain Revolving Loans bearing interest based on LIBOR or that LIBOR has
become unavailable as an index, then, at the Bank's option and upon its exercise
of such option, the interest rate on any outstanding Revolving Loans shall
thenceforth bear interest at the Prime Variable Rate.
3. CONDITIONS TO OBLIGATIONS OF BANK.
3.1 Conditions Precedent to Effectiveness of Agreement and Obligations of
Bank. At Bank's sole and absolute option and for its benefit, the effectiveness
of this Agreement and Bank's obligations hereunder are conditioned upon the
satisfaction of each and all of the following conditions on or before March 4,
2008:
3.1.1 BORROWER DOCUMENTS EXECUTED AND FILED AND FEES PAID. The
Borrower shall have executed (or caused to be executed) and delivered to
the Bank the following in form and substance acceptable to Bank:
3.1.1.1 This Agreement;
3.1.1.2 The Revolving Credit Note;
3.1.1.3 Copy of Borrower's Bylaws, including all amendments
thereto and restatements thereof, which shall have been certified by
the Secretary or Assistant Secretary of the Borrower as of the Funding
Date first occurring as being complete, accurate and in effect; and
3.1.1.4 A copy of resolutions of the Board of Directors of the
Borrower authorizing the execution, delivery and performance of this
Agreement, the borrowing hereunder, the Revolving Credit Note and any
other documents contemplated by this Agreement, which shall have been
certified by the Secretary or Assistant Secretary of the Borrower as
of the Funding Date first occurring as being complete, accurate and in
effect.
3.1.2 PAYMENT OF FEES. Borrower shall have paid the Minimum Annual Fee
and the Preparation Fees in accordance with Sections 2.9.1 and 2.9.3.
3.1.3 APPROVAL OF BANK COUNSEL. All actions, proceedings, instruments
and documents required to carry out the transactions contemplated by this
Agreement or incidental thereto and all other related legal matters shall
have been satisfactory to and approved by legal counsel for the Bank, and
said counsel shall have been furnished with such certified copies of
actions and proceedings and such other instruments and documents as they
shall have reasonably requested.
3.2 CONDITIONS PRECEDENT TO ALL DISBURSEMENTS. The obligations of the
Bank to make any Revolving Loan on any Funding Date, including, but not
limited to, the Funding Date first occurring, are subject to the
occurrence, prior to or on the Funding Date related to such Revolving Loan,
of each of the following conditions as well as other conditions set forth
in this Agreement:
3.2.1 BANK SATISFACTION. The Bank shall not know or have any
reason to believe that, as of such Funding Date:
3.2.1.1 Any Default or Event of Default has occurred and is
continuing;
3.2.1.2 Any warranty or representation set forth in Section
4 of this Agreement shall not be true and correct; or
3.2.1.3 Any provision of law, any order of any court or any
regulation, rule or interpretation thereof shall have had any
Material Adverse Effect on Borrower's financial condition, or on
the validity or enforceability of this Agreement, the Revolving
Credit Note or any other Loan Document.
3.3 OTHER DOCUMENTS TO BE PROVIDED BY BORROWER. No later than thirty
(30) days after the Effective Date, Borrower shall provide to Bank the
following documents:
3.3.1 Copy of Borrower's Articles of Incorporation including all
amendments thereto and restatements thereof, and all other charter
documents of the Borrower, all of which shall have been certified by
the Maryland Department of Corporations or similar governmental
authority in the state in which Borrower is organized and
incorporated, as of a date within thirty days of the Funding Date
first occurring;
3.3.2 Certified copy of Borrower's Good Standing certificate from
the California Secretary of State, dated as of a date within thirty
days of the Funding Date first occurring.
4. WARRANTIES AND REPRESENTATIONS.
On a continuing basis from the date of this Agreement until the later of
(a) the Termination Date or (b) the date on which the Indebtedness is paid in
full and the Borrower has performed all of its other obligations hereunder,
Borrower represents and warrants to the Bank that:
4.1 CORPORATE EXISTENCE AND POWER. (a) Borrower is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Maryland and in good standing under the laws of, and is authorized to do
business in, the State of California, (b) Borrower has the power and authority
to own its properties and assets and to carry out its business as now being
conducted and is qualified to do business and in good standing in every
jurisdiction wherein such qualification is necessary, (c) Borrower has the power
and authority to execute, deliver and perform this Agreement, to borrow money in
accordance with its terms, to execute, deliver and perform the Revolving Credit
Note and other documents contemplated hereby, and to do any and all other things
required of it hereunder, (d) Borrower is a qualified real estate investment
trust as defined in Section 856 of the Internal Revenue Code (or any successor
provision thereto) and has no knowledge of any circumstance that is likely to
lead to its failure to qualify as such a real estate investment trust; (e) the
execution, delivery and performance of the Loan Documents will not result in
Borrower being disqualified as such a real estate investment trust; and (f)
Borrower has made and will timely make all filings with and obtained all
consents of the Securities and Exchange Commission required under the Securities
Act of 1933 (as amended from time to time) or the Security Exchange Act of 1934
(as amended from time to time) in connection with the execution, delivery and
performance by Borrower of the Loan Documents.
4.2 AUTHORIZATION AND APPROVALS. The execution, delivery and performance of
this Agreement, the borrowings hereunder and the execution, delivery and
performance of the Revolving Credit Note, and other documents contemplated
hereby (a) have been duly authorized by all requisite corporate action of the
Borrower, (b) do not require registration with or consent or approval of, or
other action by, any federal, state or other governmental authority or
regulatory body, or, if such registration, consent or approval is required, the
same has been obtained and disclosed in writing to the Bank, (c) will not
violate any provision of law, any order of any court or other agency of
government, the Articles of Incorporation and Bylaws of Borrower, any provision
of any indenture, note, agreement or other instrument to which the Borrower is a
party, or by which it or any of its properties or assets are bound, (d) will not
be in conflict with, result in a breach of or constitute (with or without notice
or passage of time) a default under any such indenture, note, agreement or other
instrument, and (e) will not result in the creation or imposition of any lien,
charge or encumbrance of any nature whatsoever upon any of the properties or
assets of the Borrower (other than in favor of the Bank and as contemplated
hereby).
4.3 VALID AND BINDING AGREEMENT. This Agreement is, and the Revolving
Credit Note, and all other documents contemplated hereby will be, when
delivered, valid, binding, and enforceable obligations of the Borrower, in
accordance with their terms.
4.4 ACTIONS, SUITS OR PROCEEDINGS. There are no actions, suits or
proceedings, at law or in equity, and no proceedings before any arbitrator or by
or before any governmental commission, board, bureau, or other administrative
agency, pending, or, to the best knowledge of the Borrower, threatened against
or affecting the Borrower or any of its Subsidiaries or any properties or rights
of the Borrower or any of its Subsidiaries, which, if adversely determined,
could materially impair the right of the Borrower or any of its Subsidiaries to
carry on business substantially as now conducted or could have a Material
Adverse Effect upon the financial condition of the Borrower or any of its
Subsidiaries.
4.5 ACCOUNTING PRINCIPLES. All consolidated and consolidating balance
sheets, earnings statements and other financial data furnished to the Bank for
the purposes of, or in connection with, this Agreement and the transactions
contemplated by this Agreement, have been prepared in accordance with GAAP, and
do or will fairly present the financial condition of the Borrower and its
Subsidiaries, as of the dates, and the results of their operations for the
periods, for which the same are furnished to the Bank. Without limiting the
generality of the foregoing, the Financial Statements have been prepared in
accordance with GAAP (except as disclosed therein) and fairly present the
financial condition of the Borrower and its Subsidiaries as of the dates, and
the results of its operations for the fiscal periods, for which the same are
furnished to the Bank. The Borrower has no material contingent obligations,
liabilities for taxes, long-term leases or unusual forward or long-term
commitments not disclosed by, or reserved against in, the Financial Statements.
4.6 FINANCIAL CONDITION. The Borrower is solvent, able to pay its debts as
they mature, has capital sufficient to carry on its business and has assets the
fair market value of which exceed its liabilities, and the Borrower will not be
rendered insolvent, under-capitalized or unable to pay maturing debts by the
execution or performance of this Agreement or the other documents contemplated
hereby. There has been no material adverse change in the business, properties or
condition (financial or otherwise) of the Borrower or any of its Subsidiaries
since the date of the latest Financial Statements.
4.7 CONDITIONS PRECEDENT. As of each Funding Date, all appropriate
conditions precedent referred to in Section 3 hereof have been satisfied or,
alternatively, have been waived in writing by the Bank.
4.8 TAXES. Borrower and its Subsidiaries have each filed by the due date
therefor (including any extensions) all federal, state and local tax returns and
other reports it is required by law to file, has paid or caused to be paid all
taxes, assessments and other governmental charges that are shown to be due and
payable under such returns, and has made adequate provision for the payment of
such taxes, assessments or other governmental charges which have accrued but are
not yet payable. The Borrower has no knowledge of any material deficiency or
assessment in connection with any taxes, assessments or other governmental
charges not adequately disclosed in the Financial Statements.
4.9 COMPLIANCE WITH LAWS. Borrower and its Subsidiaries have each complied
with all applicable laws, to the extent that failure to comply would materially
interfere with the conduct of the business of the Borrower or any of its
Subsidiaries.
4.10 INDEBTEDNESS. Except as disclosed in the Financial Statements or other
public filings, neither Borrower nor any of its Subsidiaries has any
indebtedness for money borrowed or any direct or indirect obligations under any
leases (whether or not required to be capitalized under GAAP) or any agreements
of guarantee or surety except for the endorsement of negotiable instruments by
the Borrower and its Subsidiaries in the ordinary course of business for deposit
or collection.
4.11 MATERIAL AGREEMENTS. Except as disclosed in the Financial Statements
or other public filings, neither the Borrower or any of its Subsidiaries has any
material leases, contracts or commitments of any kind (including, without
limitation, employment agreements, collective bargaining agreements, powers of
attorney, distribution contracts, patent or trademark licenses, contracts for
future purchase or delivery of goods or rendering of services, bonus, pension
and retirement plans, or accrued vacation pay, insurance and welfare
agreements); to the best knowledge of Borrower, all parties to such agreements
have complied with the provisions of such leases, contracts or commitments; and
to the best knowledge of the Borrower, no party to such agreements is in default
thereunder, nor has there occurred any event which with notice or the passage of
time, or both, would constitute such a default.
4.12 MARGIN STOCK. Neither the Borrower nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any "margin stock"
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System, and no part of the proceeds of any loan hereunder will be used,
directly or indirectly, to purchase or carry any margin stock or to extend
credit to others for the purpose of purchasing or carrying any margin stock or
for any other purpose which might violate the provisions of Regulation G, T, U
or X of the said Board of Governors. The Borrower does not own any margin stock.
4.13 PENSION FUNDING. Neither the Borrower nor any of its Subsidiaries has
incurred any accumulated funding deficiency within the meaning of ERISA or
incurred any liability to the PBGC in connection with any employee benefit plan
established or maintained by the Borrower or any of its Subsidiaries and no
reportable event or prohibited transaction, as defined in ERISA, has occurred
with respect to such plans.
4.14 MISREPRESENTATION. No warranty or representation by the Borrower
contained herein or in any certificate or other document furnished by the
Borrower pursuant hereto contains any untrue statement of material fact or omits
to state a material fact necessary to make such warranty or representation not
misleading in light of the circumstances under which it was made. There is no
fact which the Borrower has not disclosed to the Bank in writing which
materially and adversely affects nor, so far as the Borrower can now foresee, is
likely to prove to affect materially and adversely the business, operations,
properties, prospects, profits or condition (financial or otherwise) of the
Borrower or any of its Subsidiaries or ability of the Borrower to perform this
Agreement.
4.15 NO CONFLICTING AGREEMENTS. Neither the Borrower nor any of its
Subsidiaries is in default under any shareholder agreement, preferred stock
agreement or any other agreement to which it is a party or by which it or any of
its property is bound, the effect of which might have a Material Adverse Effect
on the business or operations of the Borrower or any of its Subsidiaries. No
provision of the Certificate of Incorporation, Articles of Incorporation,
By-Laws or preferred stock, if any, of the Borrower, and no provision of any
existing mortgage, indenture, note, contract, agreement, statute (including,
without limitation, any applicable usury or similar law), rule, regulation,
judgment, decree or order binding on the Borrower or affecting the property of
the Borrower conflicts with, or requires any consent under, or would in any way
prevent the execution, delivery or carrying out of the terms of, this Agreement
and the documents contemplated hereby, and the taking of any such action will
not constitute a default under, or result in the creation or imposition of, or
obligation to create any lien upon the property of the Borrower pursuant to the
terms of any such mortgage, indenture, note, contract or agreement.
5. AFFIRMATIVE COVENANTS. On a continuing basis from the date of this
Agreement until the later of (a) the Termination Date or (b) the date on
which the Indebtedness is paid in full and the Borrower has performed all
of its other obligations hereunder, the Borrower covenants and agrees that
it will:
5.1 FINANCIAL AND OTHER INFORMATION. Borrower shall maintain or cause to be
maintained a system of accounting established and administered in accordance
with sound business practices and consistent with past practice to permit
preparation of quarterly and annual financial statements in conformity with
GAAP, and Borrower shall deliver or cause to be delivered to Bank the following
information and/or documents:
5.1.1 ANNUAL FINANCIAL REPORTS. On an annual basis (starting with the
fiscal year ending December 31, 2007) and within ten (10) days after filing
of the same with the Securities and Exchange Commission, furnish to the
Bank a copy of Borrower's SEC Form 10-K filed or to be filed by Borrower
with the Securities and Exchange Commission or, if such statement is not
available for any reason, financial statements of the Borrower on a
consolidated basis containing the balance sheet of the Borrower as of the
close of such fiscal year, statements of income and retained earnings and a
statement of cash flows for each such fiscal year, and such other comments
and financial details as are usually included in SEC Form 10-K and
certified by Borrower's chief financial officer or chief accounting
officer. Such reports shall be prepared in accordance with GAAP by
independent certified public accountants of recognized standing selected by
the Borrower and shall contain unqualified opinions as to the fairness of
the statements therein contained.
5.1.2 QUARTERLY FINANCIAL STATEMENTS. On a quarterly basis (starting
with the quarter ending March 31, 2008) and within ten (10) days after
filing of the same with the Securities and Exchange Commission, furnish to
Bank a copy of Borrower's SEC Form 10-Q filed or to be filed by Borrower
with the Securities and Exchange Commission or, if such statement is not
available for any reason, financial statements of the Borrower on a
consolidated basis containing the balance sheet of the Borrower as of the
end of each such period, statements of income and retained earnings of the
Borrower and a statement of cash flows of the Borrower for the portion of
the fiscal year up to the end of such period, and such other comments and
financial details as are usually included in SEC Form 10-Q and certified by
Borrower's chief financial officer or chief accounting officer. These
statements shall be prepared in accordance with GAAP and shall be in such
detail as the Bank may reasonably require, and the accuracy of the
statements shall be certified by the chief executive or financial officer
of the Borrower.
5.1.3 ADVERSE EVENTS; LITIGATION. Promptly inform the Bank of the
occurrence of any Default or Event of Default, or of any other occurrence
which has or could reasonably be expected to have a Materially Adverse
Effect upon the Borrower, or upon any of Borrower's Subsidiaries, or upon
the Borrower's ability to comply with its obligations hereunder. Borrower
shall promptly inform Bank in writing upon obtaining knowledge of (i) the
institution of, or threat of, any material action, proceeding, governmental
investigation or arbitration against or affecting Borrower not previously
disclosed by Borrower in writing to Bank, or (ii) any material development
in any action, suit, proceeding, governmental investigation or arbitration
already disclosed, which has a Material Adverse Affect on Borrower, and
shall provide such information as Bank may reasonably request to enable
Bank and its counsel to evaluate such matters.
5.1.4 SHAREHOLDER REPORTS. Promptly furnish to the Bank upon becoming
available a copy of all financial statements, reports, notices, proxy
statements and other communications sent by the Borrower or any of its
Subsidiaries to their stockholders, and all regular and periodic reports
filed by the Borrower or any of its Subsidiaries with any securities
exchange, the Securities and Exchange Commission, the Corporations and
Securities Bureau of the Department of Corporations of the State of
California or like agency for the State of Maryland or any governmental
authorities succeeding to any or all of the functions of such Commission or
Bureau.
5.1.5 MANAGEMENT LETTERS. Furnish to the Bank, promptly upon receipt
thereof, copies of all management letters and other reports of substance
submitted to the Borrower or any of its Subsidiaries by independent
certified public accountants in connection with any annual or interim audit
of the financial records of the Borrower or any of its Subsidiaries.
5.1.6 OTHER INFORMATION AS REQUESTED. Promptly furnish to the Bank
such other information regarding the operations, business affairs and
financial condition of the Borrower and its Subsidiaries as the Bank may
reasonably request from time to time, and permit the Bank, its employees,
attorneys and agents, to inspect all of the books, records and properties
of the Borrower and its Subsidiaries at any reasonable time.
5.1.7 INSURANCE. Keep its insurable properties and the insurable
properties of its Subsidiaries adequately insured and maintain (a)
insurance against fire and other risks customarily insured against under an
"all-risk" policy and such additional risks customarily insured against by
companies engaged in the same or a similar business to that of the Borrower
or its Subsidiaries, as the case may be, (b) necessary workers'
compensation insurance, (c) public liability and product liability
insurance, and (d) such other insurance as may be required by law or as may
be reasonably required in writing by the Bank, all of which insurance shall
be in such amounts, containing such terms, in such form, for such purposes,
prepaid for such time period, and written by such companies as may be
satisfactory to the Bank. Notwithstanding anything to the contrary herein,
Borrower is not required, unless otherwise required by applicable law, to
maintain earthquake or flood or terrorist insurance. The Borrower will
promptly deliver to the Bank, at the Bank's request, evidence satisfactory
to the Bank that such insurance has been so procured. If the Borrower fails
to maintain satisfactory insurance as herein provided, the Bank shall have
the option to do so, and the Borrower agrees to repay the Bank upon demand,
with interest at the Variable Rate, all amounts so expended by the Bank.
5.2 TAXES. Pay promptly and within the time that they can be paid without
late charge, penalty or interest all taxes, assessments and similar imposts and
charges of every kind and nature lawfully levied, assessed or imposed upon the
Borrower or its Subsidiaries, and their property, except to the extent being
contested in good faith and, if requested by the Bank, bonded in an amount and
manner satisfactory to the Bank.
5.3 MAINTAIN CORPORATION AND BUSINESS. Do or cause to be done all things
necessary to preserve and keep in full force and effect the Borrower's and each
of its Subsidiaries' corporate existence, rights and franchises and comply with
all applicable laws; maintain its good standing in all states and jurisdictions
in which it is currently authorized to conduct business; continue to conduct and
operate its and each of its Subsidiaries' business substantially as conducted
and operated during the present and preceding calendar year; at all times
maintain, preserve and protect all franchises and trade names and preserve all
the remainder of its and its Subsidiaries' property and keep the same in good
repair, working order and condition; and from time to time make, or cause to be
made, all needed and proper repairs, renewals, replacements, betterments and
improvements thereto so that the business carried on in connection therewith may
be properly and advantageously conducted at all times.
5.4 CONTINUED STATUS AS A REIT; PROHIBITED TRANSACTIONS. Borrower will: (i)
continue to be a real estate investment trust as defined in Section 856 of the
Internal Revenue Code (or any successor provision thereto), (ii) will not revoke
its election to be a real estate investment trust; (iii) will not engage in any
"prohibited transactions" as defined in Section 857(b) of the Internal Revenue
Code (or any successor provision thereto) that the Bank reasonably believes
could lead to Borrower's disqualification as a real estate investment trust as
defined in Section 856 of the Internal Revenue Code (or any successor provision
thereto); (iv) will continue to be entitled to a dividend paid deduction meeting
the requirements of Section 857 of the Internal Revenue Code; and will otherwise
comply with all provisions and requirements of Internal Revenue Code Sections
856 and 857 to maintain its real estate investment trust status under Section
856.
5.5 FAILURE OF BORROWER TO QUALIFY AS REAL ESTATE INVESTMENT TRUST.
Borrower shall promptly inform Bank in writing, and in any event within forty
eight (48) hours after Borrower has actual knowledge, of the following
circumstances or occurrences: (i) Borrower failing to continue to qualify as a
real estate investment trust as defined in Section 856 of the Internal Revenue
Code (or any successor provision thereof); (ii) any act by Borrower causing or
which will cause its election to be taxed as a real estate investment trust to
be terminated; (iii) any act causing Borrower to be subject to the taxes imposed
by Section 857(b)(6) of the Internal Revenue Code (or any successor provision
thereto), or (iv) Borrower failing to be entitled to a dividends paid deduction
which meets the requirements of Section 857 of the Internal Revenue Code.
5.6 AMEX LISTED COMPANY. The common stock of Borrower shall at all times be
listed for trading and be traded on the American Stock Exchange or any
alternative recognized stock exchange.
5.7 COMPLIANCE WITH SECURITIES LAWS. Borrower shall comply in all material
respects with all rules and regulations with the Securities Exchange Commission
and file all reports required by the Securities Exchange Commission relating to
Borrower's publicly held securities.
5.8 MAINTAIN TANGIBLE NET WORTH. On a consolidated basis, Borrower shall
maintain a Tangible Net Worth of not less than Ninety Million Dollars
($90,000,000.00), not including minority interests.
5.9 MAINTAIN DEBT COVERAGE RATIO. On a consolidated basis, Borrower shall
maintain a Debt Coverage Ratio of at least 1.75 to 1.00.
5.10 MAINTAIN DEBT TO TANGIBLE NET WORTH RATIO. On a consolidated basis,
Borrower shall maintain a Debt to Tangible Net Worth Ratio of no more than 5.00
to 1.00.
5.11 MAINTAIN OPERATING ACCOUNTS. Borrower shall maintain all of its
operating accounts with Bank.
5.12 ERISA. (a) At all times meet and cause each of the Subsidiaries to
meet the minimum funding requirements of ERISA with respect to the Borrower's
and Subsidiaries' employee benefit plans subject to ERISA; (b) promptly after
the Borrower knows or has reason to know (i) of the occurrence of any event,
which would constitute a reportable event instituted or will institute
proceedings to terminate an employee pension plan, deliver to the Bank a
certificate of the chief financial officer of the Borrower setting forth details
as to such event or proceedings and the action which the Borrower proposes to
take with respect thereto, together with a copy of any notice of such event
which may be required to be filed with the PBGC; and (c) furnish to the Bank (or
cause the plan administrator to furnish the Bank) a copy of the annual return
(including all schedules and attachments) for each plan covered by ERISA, and
filed with the Internal Revenue Service by the Borrower not later than ten (10)
days after such report has been so filed.
5.13 USE OF LOAN PROCEEDS. Use the proceeds of the Revolving Loans
hereunder only for the purposes set forth in the recitals to this Agreement and
as set forth in the Notice of Borrowing relating to each Revolving Loan.
6. NEGATIVE COVENANTS.
On a continuing basis from the date of this Agreement until the later of
(a) the Termination Date or (b) the date on which the Indebtedness is paid in
full and the Borrower has performed all of its other obligations hereunder, the
Borrower covenants and agrees that it will not, and will not permit any
Subsidiary to:
6.1 STOCK ACQUISITION. Purchase, redeem, retire or otherwise acquire any of
the shares of its capital stock, or make any commitment to do so.
6.2 EXTENSION OF CREDIT. Make loans, advances or extensions of credit to
any Person, except for sales on open account and otherwise in the ordinary
course of business.
6.3 SUBORDINATE INDEBTEDNESS. Subordinate any indebtedness due to Borrower
from a Person to indebtedness or other creditors of such Person.
6.4 PROPERTY TRANSFER, MERGER OR LEASE-BACK. (a) Sell, transfer or
otherwise dispose of properties and assets having an aggregate book value of
more than Five Hundred Million Dollars ($500,000,000) (whether in one
transaction or in a series of transactions) except as to the sale of inventory
in the ordinary course of business; (b) change its name, consolidate with or
merge into any other corporation or entity, permit another corporation or entity
to merge into it, enter into any reorganization or recapitalization or
reclassify its capital stock, or (c) enter into any sale-leaseback transaction
where Borrower is lessee.
6.5 PENSION PLAN. (a) Allow any fact, condition or event to occur or exist
with respect to any employee pension or profit sharing plans established or
maintained by it which might constitute grounds for termination of any such plan
or for the court appointment of a trustee to administer any such plan, or (b)
permit any such plan to be the subject of termination proceedings (whether
voluntary or involuntary) from which termination proceedings there may result a
liability of the Borrower or any of its Subsidiaries to the PBGC which, in the
opinion of the Bank, will have a materially adverse effect upon the operations,
business, property, assets, financial condition or credit of the Borrower or any
of its Subsidiaries.
6.6 MISREPRESENTATION. Furnish the Bank with any certificate or other
document that contains any untrue statement of a material fact or omits to state
a material fact necessary to make such certificate or document not misleading in
light of the circumstances under which it was furnished.
6.7 MARGIN STOCK. Apply any of the proceeds of the Note or of any loan in
any manner which might cause the extension of credit or the application of such
proceeds to violate Regulation G, U or X (or any regulations, interpretations or
rulings thereunder) or any other regulation of the Federal Reserve Board or to
violate the Securities Exchange Act of 1934 (as amended to the date hereof and
from time to time hereafter) or the Securities Act of 1933 (as amended to the
date hereof and from time to time hereafter).
6.8 AMENDMENT OF CONSTITUENT DOCUMENTS. Amend or re-state its articles of
incorporation or by-laws without the prior written consent of Bank, except (i)
to increase authorized capital, (ii) as required by applicable law or applicable
tax requirements, or (iii) as prudent to maintain qualification as a real estate
investment trust as defined in Section 856 of the Internal Revenue Code or any
successor provision thereto.
6.9 ORGANIZATION OF BORROWER. Cease to remain a Maryland corporation.
6.10 UNSECURED BORROWINGS. No additional outside unsecured loans other than
trades payable incurred in the ordinary course of business.
7. EVENTS OF DEFAULT, ENFORCEMENT, APPLICATION OF PROCEEDS.
7.1 EVENTS OF DEFAULT. The occurrence of any of the following conditions or
events shall constitute an Event of Default hereunder if either: (i) the
condition or event is continuing for more than ten (10) days after the Bank
sends written notice thereof, or (ii) the condition or event is reasonably
deemed by the Bank to require immediate action to protect its rights hereunder:
7.1.1 FAILURE TO PAY MONIES DUE. If the Borrower shall fail to pay,
when due, any principal or interest or other sums due under the Revolving
Credit Note or this Agreement or any taxes, insurance or other amount
payable by the Borrower under this Agreement or if the Borrower or any of
its Subsidiaries shall fail to pay, when due, any indebtedness, obligation
or liability whatsoever of the Borrower or any of its Subsidiaries to the
Bank.
7.1.2 BREACH OF COVENANTS. If Borrower shall fail to satisfy or
perform any of the covenants in this Agreement including without limitation
Section 5 and Section 6.
7.1.3 MISREPRESENTATION. If any warranty or representation of the
Borrower in connection with or contained in this Agreement or any Loan
Document, or if any financial data or other information now or hereafter
furnished to the Bank by or on behalf of the Borrower, shall prove to be
false, incorrect or misleading in any material respect.
7.1.4 SOLVENCY; MATERIAL ADVERSE CHANGE. If Borrower shall cease to be
Solvent, or there shall have occurred any Material Adverse Effect in the
business, operations, properties, assets or condition (financial or
otherwise) of Borrower.
7.1.5 OTHER DEFAULTS. If the Borrower or any of its Subsidiaries shall
default in the payment when due of any of its indebtedness (other than to
the Bank) or in the observance or performance of any term, covenant or
condition in any agreement or instrument evidencing, securing or relating
to such indebtedness, and such default be continued for a period sufficient
to permit acceleration of the indebtedness, irrespective of whether there
has been acceleration by the holder thereof. Notwithstanding the foregoing,
such a default shall not constitute an Event of Default hereunder if all
persons to whom the indebtedness is owed have fully and completely and in
writing waived the default. In addition, if a default occurs and continues
to exist on an indebtedness of the Borrower that is secured by real
property and is fully non-recourse to the Borrower, such default may not
represent a default under this agreement if Bank, it its sole discretion,
determines that Borrower is in compliance and can maintain compliance going
forward with all the financial covenants of this Agreement.
7.1.6 JUDGMENTS. If there shall be rendered against the Borrower or
any of its Subsidiaries one or more judgments or decrees involving an
aggregate liability of Five Million Dollars ($5,000,000.00) or more, which
has or have become non-appealable and shall remain undischarged,
unsatisfied by insurance, not reserved in full by the Borrower prior to the
judgment or unstayed for more than thirty (30) days, whether or not
consecutive; or if a writ of attachment or garnishment against the property
of the Borrower or any of its Subsidiaries shall be issued and levied in an
action claiming Five Million Dollars ($5,000,000.00) or more and not
released or appealed and bonded in an amount and manner satisfactory to the
Bank within twenty-five (25) days after such issuance and levy.
7.1.7 BUSINESS SUSPENSION, BANKRUPTCY, ETC. If the Borrower or any of
its Subsidiaries shall voluntarily suspend transaction of its business; or
if the Borrower or any of its Subsidiaries shall not pay its debts as they
mature or shall make a general assignment for the benefit of creditors, or
proceedings in bankruptcy, or for reorganization or liquidation of the
Borrower or any of its Subsidiaries under the Bankruptcy Code or under any
other state or federal law for the relief of debtors shall be commenced or
shall be commenced against the Borrower or any of its Subsidiaries and
shall not be discharged within twenty-five (25) days of commencement; or a
receiver, trustee or custodian shall be appointed for the Borrower or any
of its Subsidiaries or for any substantial portion of their respective
properties or assets.
7.1.8 CHANGE OF MANAGEMENT OR OWNERSHIP. If the Borrower or a
controlling portion of its voting stock or a substantial portion of its
assets comes under the practical, beneficial or effective control of one or
more persons other than Carl Berg, whether by reason of death, merger,
consolidation, sale or purchase of stock or assets or otherwise; and Ray
Marino, who is the President and COO of the Borrower, shall no longer
remain in such offices, whether by reason of death, resignation or
otherwise; and any such change of control or office holder may adversely
affect, in the sole judgment of the Bank, the ability of the Borrower to
carry on its business as conducted before such change.
7.1.9 INADEQUATE FUNDING OR TERMINATION OF EMPLOYEE BENEFIT PLAN(S).
If the Borrower or any of its Subsidiaries shall fail to meet its minimum
funding requirements under ERISA with respect to any employee benefit plan
established or maintained by it, or if any such plan shall be subject of
termination proceedings (whether voluntary or involuntary) and there shall
result from such termination proceedings a liability of Borrower or any of
its Subsidiaries to the PBGC which in the opinion of the Bank will have a
materially adverse effect upon the operations, business, property, assets
financial condition or credit of the Borrower or any of its Subsidiaries,
as the case may be.
7.1.10 OCCURRENCE OF CERTAIN REPORTABLE EVENTS. If there shall occur,
with respect to any pension plan maintained by the Borrower or any of its
Subsidiaries any reportable event (within the meaning of Section 4043(b) of
ERISA) which the Bank shall determine constitutes a ground for the
termination of any such plan, and if such event continues for thirty (30)
days after the Bank gives written notice to the Borrower, provided that
termination of such plan or appointment of such trustee would, in the
opinion of the Bank, have a materially adverse effect upon the operations,
business, property, assets, financial condition or credit of the Borrower
or any of its Subsidiaries, as the case may be.
7.2 ACCELERATION OF INDEBTEDNESS; REMEDIES. Upon the occurrence of an Event
of Default, at the Bank's option, the Bank shall have no further obligation to
advance funds to Borrower and the Commitment shall terminate. Upon the
occurrence of an Event of Default, all Indebtedness shall be due and payable in
full immediately at the option of the Bank without presentation, demand,
protest, notice of dishonor or other notice of any kind, all of which are hereby
expressly waived. Upon the occurrence of an Event of Default, the Bank shall
have and may exercise any one or more of the rights and remedies for which
provision is made hereunder or under any other document contemplated hereby or
for which provision is provided by law or in equity, including, without
limitation, the right to set off against the Indebtedness any amount owing by
the Bank to the Borrower and/or any property of the Borrower in possession of
the Bank. Any amounts collected by the Bank after an Event of Default may be
applied, at the Bank's option and in any order against outstanding principal,
interest, fees and/or costs.
7.3 CUMULATIVE REMEDIES. The remedies provided for herein are cumulative to
the remedies for collection of the Indebtedness as provided by law, in equity or
by any document contemplated hereby. Nothing herein contained is intended, nor
shall it be construed, to preclude the Bank from pursuing any other remedy for
the recovery of any other sum to which the Bank may be or become entitled for
the breach of this Agreement by the Borrower.
8. MISCELLANEOUS.
8.1 EFFECTIVENESS. This Agreement shall become effective when Borrower and
Bank have duly executed and delivered signature pages of this Agreement to each
other, and, at Bank's sole and absolute option and for its benefit, all the
conditions contained in Section 3.1 are satisfied.
8.2 INDEPENDENT RIGHTS. No single or partial exercise of any right, power
or privilege hereunder, or any delay in the exercise thereof, shall preclude
other or further exercise of the rights of the parties to this Agreement.
8.3 COVENANT INDEPENDENCE. Each covenant in this Agreement shall be deemed
to be independent of any other covenant, and an exception or illegality of one
covenant shall not create an exception or illegality in another covenant.
8.4 WAIVERS AND AMENDMENTS. No forbearance, delay or omission on the part
of the Bank in enforcing any of its rights under this Agreement or any of the
Loan Documents, nor any renewal, extension or rearrangement of any payment or
covenant to be made or performed by the Borrower hereunder, shall constitute or
be construed as a waiver of any of the terms of, or remedies of Bank under, this
Agreement or any of the Loan Documents or of any such right. No Default or Event
of Default shall be waived by the Bank except in a writing signed and delivered
by an officer of the Bank, and no waiver of any other Default or Event of
Default shall operate as a waiver of any Default or Event of Default or of the
same Default or Event of Default on a future occasion. No other amendment,
modification or waiver of, or consent with respect to, any provision of this
Agreement or the Note or any other Loan Documents contemplated hereby shall be
effective unless the same shall be in writing and signed and delivered by a duly
authorized officer of the Bank and the President or CEO of the Borrower.
8.5 GOVERNING LAW. This Agreement, and each and every term and provision
hereof, shall be governed by and construed in accordance with the internal law
of the State of California. If any provisions of this Agreement shall for any
reason be held invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provision hereof, but this Agreement shall be
construed as if such invalid or unenforceable provisions had never been
contained herein.
8.6 SURVIVAL OF WARRANTIES, ETC. All of the Borrower's covenants,
agreements, representations and warranties made in connection with this
Agreement and any document contemplated hereby shall survive the borrowing and
the delivery of the Note hereunder and shall be deemed to have been relied upon
by the Bank, notwithstanding any investigation heretofore or hereafter made by
the Bank. All statements contained in any certificate or other document
delivered to the Bank at any time by or on behalf of the Borrower pursuant
hereto or in connection with the transactions contemplated hereby shall
constitute representations and warranties by the Borrower in connection with
this Agreement.
8.7 COSTS AND EXPENSES. The Borrower agrees that it will reimburse the
Bank, upon demand, for all reasonable fees and out-of-pocket costs incurred by
the Bank in connection with (i) collecting or attempting to collect the
Indebtedness or any part
thereof, (ii) maintaining or defending the Bank's security interests or liens,
if any (or the priority thereof), (iii) the enforcement of the Bank's rights or
remedies under this Agreement or the other documents contemplated hereby, (iv)
the preparation or making of any amendments, modifications, waivers or consents
with respect to this Agreement or the other documents contemplated hereby,
and/or (v) any other matters or proceedings arising out of or in connection with
any lending arrangement between the Bank and the Borrower, which costs and
expenses include without limit payments made by the Bank for taxes, insurance,
assessments, or other costs or expenses which the Borrower is required to pay
under this Agreement or the other documents contemplated hereby; audit expenses;
court costs and reasonable attorneys' fees (whether in-house or outside counsel
is used, whether legal assistants are used, and whether such costs are incurred
in formal or informal collection actions, federal bankruptcy proceedings, of
Borrower or affecting any collateral or rights of Bank, whether an involuntary
or voluntary bankruptcy case, including, without limitation, all attorneys' fees
and costs incurred in connection with motions for relief from stay, cash
collateral motions, nondischargeability motions, preferential liability motions,
fraudulent conveyance liability motions, fraudulent transfer liability motions
and all other motions brought by Borrower, Bank or third parties in any way
relating to Bank's rights with respect to such Borrower or third party and/or
affecting any collateral securing any obligation owed to Bank by Borrower, or
any third party, probate proceedings, on appeal or otherwise); and all other
costs and expenses of the Bank incurred in connection with any of the foregoing.
8.8 ATTORNEYS' FEES AND COSTS. Bank may hire or pay someone else to help
collect the Note if Borrower does not pay. In such event, Borrower agrees to pay
all reasonable fees and out-of-pocket costs incurred by Bank in connection with
collecting the Note. In addition, the prevailing party (the "Prevailing Party")
in any litigation, arbitration, bankruptcy proceeding, or other formal or
informal resolution (collectively, a "Proceeding") brought by Bank or any party
to this Agreement of any claims brought to enforce the terms of this Agreement
or any of the Loan Documents based upon, arising from, or in any way related to
this Agreement or the transactions contemplated herein, including without
limitation contract claims, tort claims, breach of duty claims, and all other
common law or statutory claims (collectively, the "Claims"), shall be entitled
to recover from such other party all its fees and costs incurred in connection
with the Proceeding, including without limitation all its attorneys' fees and
costs, whether incurred by in-house counsel or outside counsel, all its expert
witness and/or consultant's fees and costs, all its paralegal fees and costs,
and all its other costs and expenses, regardless of whether such costs are
otherwise statutorily recoverable (collectively, the "Fees and Costs"), and
including without limitation all the Fees and Costs incurred by the Prevailing
Party in connection with proceedings in bankruptcy for relief from and/or
modification of automatic stay, for orders of nondischargeability, and/or
regarding use of cash collateral, claims, and/or plans. The Prevailing Party
shall also be entitled to recover from such other party all its costs incurred
in enforcing the judgment or award giving rise to the Prevailing Party's status
as the Prevailing Party. Each party hereto acknowledges that it is on notice
that, in the event that the other party retain the services of one or more
experts in connection with the Proceeding, such other party will seek to recover
the fees and costs of such expert or experts hereunder, and that, if such party
becomes the Prevailing Party in the Proceeding, such party shall be entitled to
recover such fees and costs hereunder, whether such fees and costs are sought
before trial, during trial, or by post-trial motion or memorandum of costs. The
parties to this Agreement waive the provisions of Civil Code section 1717(b)(2),
and agree that, in the event of a unilateral voluntary dismissal, the dismissed
party shall be deemed the Prevailing Party entitled to the recovery of all of
its Fees and Costs.
8.9 PAYMENTS ON SATURDAYS, ETC. Whenever any payment to be made hereunder
shall be stated to be due on a Saturday, Sunday or any other day which is not a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension, if any, shall be included in computing interest in connection
with such payment.
8.10 BINDING EFFECT. This Agreement shall inure to the benefit of and shall
be binding upon the parties hereto and their respective successors and assigns;
provided, however, that the Borrower may not assign or transfer its rights or
obligations hereunder without the prior written consent of the Bank. Borrower
authorizes Bank, without notice or demand and without affecting Borrower's
liability hereunder, to assign, without notice, the Loan Documents or the
Indebtedness in whole or in part and Bank's rights thereunder to anyone at any
time or to transfer one or more participation interests in the Loan Documents or
the Indebtedness in whole or in part to one or more purchasers and provide
information to prospective purchasers relating to Borrower. The Bank agrees,
upon written request by Borrower, to provide the identity of any current
participants.
8.11 MAINTENANCE OF RECORDS. The Borrower will keep all of its records
concerning its business operations and accounting at its principal place of
business. The Borrower will give the Bank prompt written notice of any change in
its principal place of business, or in the location of its records.
8.12 NOTICES. All notices and communications provided for herein or in any
document contemplated hereby or required by law to be given shall be in writing
and shall be served (i) personally in which case the notice or communication is
effective immediately, (ii) by overnight mail by a national, reputable carrier,
in which case the notice or communication is effective upon deposit with such
carrier, (ii) by certified mail in which case the notice or communication is
effective upon mailing, or (iv) by first class mail, postage prepaid in which
case the notice or communication is effective two (2) days after mailing, with
all notices or communications to be delivered, mailed, or sent as aforesaid as
follows: (a) If the Borrower, to: Mission West Properties, Inc., 10050 Bandley
Drive, Cupertino, CA 95014 Attention Carl E. Berg and Raymond V. Marino, and (b)
if to the Bank, to: Heritage Bank of Commerce, 150 Almaden Boulevard, San Jose,
CA 95113, Attention Ms. Roxanne Vane, or to such other address as a party shall
have designated to the other in writing in accordance with this section.
8.13 COUNTERPARTS. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures were upon the same
instrument.
8.14 HEADINGS. Article and section headings in this Agreement are included
for the convenience of reference only and shall not constitute a part of this
Agreement for any purpose.
8.15 RELEASE AND DISCHARGE. Upon full payment of the Indebtedness and
performance by the Borrower of all its other obligations hereunder, except as
otherwise provided in this Agreement including without limitation in Section
2.12, the parties shall thereupon automatically each be fully, finally and
forever released and discharged from any claim, liability or obligation in
connection with this Agreement and the Loan Documents.
8.16 JUDICIAL REFERENCE. The parties hereto agree as follows:
8.16.1 Any controversy, claim, action, or dispute (a "Controversy")
arising out of or related to this Agreement or the Loan Documents, whether
based on contract, tort, or otherwise, and including without limitation the
determination of the prevailing party and award of fees and costs under
this Agreement, shall be decided by a general reference proceeding pursuant
to Code of Civil Procedure Section 638 et. seq. (All references herein to
sections of the Code of Civil Procedure shall be deemed to refer to the
statute, as it may be amended from time to time.)
8.16.2 Pursuant to Code of Civil Procedure Section 638(a), the referee
shall hear and determine any and all of the issues relating to the
Controversy, whether of fact or of law, and shall report a statement of
decision.
8.16.3 The Court shall appoint a single referee and that such referee
shall be selected and appointed pursuant to Code of Civil Procedure Section
640(b), subject to Code of Civil Procedure Sections 640(c) and 641.
8.16.4 Pursuant to Code of Civil Procedure Section 643(b), the referee
shall report his/her statement of decision in writing to the court within
twenty (20) days after the hearing, if any, has been concluded and the
matter has been submitted.
8.16.5 Pursuant to Code of Civil Procedure Section 644(a), the
decision of the referee upon the whole issue must stand as the decision of
the court, and, upon filing of the statement of decision with the clerk of
the court, or with the judge where there is no clerk, judgment (the
"Judgment") may be entered thereon in the same manner as if the action had
been tried by the court.
8.16.6 The referee shall retain authority and jurisdiction and shall
decide all issues of fact and law relating to the awarding of fees and
costs pursuant to this Agreement or otherwise, including without limitation
reasonable attorneys' fees. The referee shall report his/her statement of
decision relating to such issues (the "Cost Statement of Decision") in
writing to the court within twenty (20) days after the hearing on such
issues, if any, has been concluded and the matter has been submitted; and
the Cost Statement of Decision of the referee upon the whole issue must
stand as the decision of the court, and, upon filing of the Cost Statement
of Decision with the clerk of the court, or with the judge where there is
no clerk, fees and costs shall be awarded (the "Cost Award") in accordance
with the Cost Statement of Decision by modification of the Judgment or
entry of such other appropriate order.
8.16.7 Pursuant to Code of Civil Procedure Section 645.1(a), the
payment of the referee's fees shall be paid as follows:
8.16.7.1 Subject to Subsection 8.16.7.2 below, the referee's fees
incurred prior to the Cost Award shall be shared equally by the
parties.
8.16.7.2 Upon entry of the Cost Award, the referee's fees
(including without limitation those paid pursuant to Subsection
8.16.7.1 above) as well as all other awarded fees and costs shall be
payable as set forth in the Judgment or order containing the Cost
Award.
8.16.8 Any party may, without thereby waiving the right to general
reference set forth herein, apply directly to the court for provisional
relief including without limitation attachment, receivership, or
injunction, and/or may file a complaint to allow the recordation of a lis
pendens or a motion to expunge lis pendens. The court, at its discretion,
may transfer any such proceeding for provisional relief to the referee for
disposition.
8.16.9 Nothing herein shall be construed to prevent the exercise
and/or enforcement of remedies that do not require the initiation and/or
pendency of a civil action, including without limitation any remedy of
setoff, notification of account debtors, or foreclosure under a power of
sale, pursuant to the provisions of the Uniform Commercial Code, or
pursuant to other applicable law.
EACH PARTY TO THIS AGREEMENT HEREBY WAIVES HIS/HER/ITS RIGHT TO A JURY TRIAL IN
CONNECTION WITH ANY CONTROVERSY.
NOTICE: BY INITIALING IN THE SPACE BELOW, YOU ARE AGREEING TO HAVE ANY
CONTROVERSY AS DEFINED ABOVE DECIDED BY A REFEREE IN A GENERAL REFERENCE
PROCEEDING AS SET FORTH ABOVE, AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT
POSSESS TO HAVE THE DISPUTE DECIDED BY A JURY.
EACH OF THE UNDERSIGNED HAS READ AND UNDERSTANDS THE FOREGOING PROVISION,
VOLUNTARILY AGREES TO EACH AND ALL OF ITS TERMS, AND EXPRESSLY AND HEREBY WAIVES
A TRIAL BY JURY IN CONNECTION WITH ANY CONTROVERSY AS DEFINED ABOVE.
INITIALS INITIALS INITIALS RV INITIALS RM
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8.16.10 Further Assurances. Immediately following reasonable request
by the Bank, the Borrower shall provide to the Bank such further documents,
instruments, and assurances as may be requested from time to time by Bank
in connection with this Agreement or any documents executed in connection
herewith.
8.16.11 Integrated Agreement. This is an integrated agreement. Except
as set forth specifically otherwise herein and except for the Loan
Documents, it supersedes all prior representations and agreements, if any,
between the parties to this Agreement and other respective legal counsel
relating to the subject matter hereof. This Agreement and the exhibits
hereto and the other Loan Documents when executed contain the entire and
only understanding between the parties, and may not be altered, amended or
extinguished, except by a writing which expressly refers to this instrument
and is signed subsequent to the execution of this instrument by the parties
to this Agreement.
The balance of this page is intentionally left blank.
IN WITNESS WHEREOF, the Borrower and the Bank have caused this Agreement to be
executed by their duly authorized officers as of the day and year first written
above.
MISSION WEST PROPERTIES, INC.
A Maryland corporation
By: /s/ Raymond V. Marino
-------------------------------------------
Print Name: Raymond V. Marino
-----------------------------------
Its: President & COO
------------------------------------------
HERITAGE BANK OF COMMERCE
By: /s/ Roxanne Vane
-------------------------------------------
Its: Senior Vice President
------------------------------------------
REVOLVING CREDIT NOTE
$10,000,000.00 San Jose, California
March 4, 2008
FOR VALUE RECEIVED, the undersigned promises to pay to the order of
HERITAGE BANK OF COMMERCE (the "Bank") at 150 Almaden Boulevard, San Jose,
California (or such other place as Bank may designate), on June 15, 2009 (the
"Termination Date"), the principal sum or so much of the principal sum of Ten
Million Dollars ($10,000,000.00) as may from time to time have been advanced and
be outstanding under that certain Revolving Credit Loan Agreement dated March 4,
2008, between the undersigned and the Bank (the "Agreement") plus all accrued
but unpaid interest thereon. Capitalized terms used herein without definition
shall have the same meanings as in the Agreement.
The unpaid principal amount of this Note shall bear interest at the rate
provided in the Agreement, which Agreement, as it may be amended from time to
time, is by this reference incorporated herein and made a part hereof. Interest
shall be payable to the extent accrued on the first day of each consecutive
calendar month, beginning March 4, 2008, with all remaining interest due and
payable on the Termination Date.
This Note is a Master Note under which sums must be repaid from time to
time, and under which Revolving Loans may be made by the Bank up to the
Commitment Amount, pursuant to the terms and conditions of the Agreement, and
the books and records of the Bank shall constitute prima facie evidence of the
amount of the Indebtedness at any time owing hereunder or under the Agreement,
provided, however, that the failure by the Bank so to record any such amount or
any error in so recording any such amount shall not limit or otherwise affect
the obligations of the Borrower under this Note or the Agreement to repay the
principal amount of all the Revolving Loans outstanding together with all
interest accrued or accruing thereon.
The unpaid principal amount of all Revolving Loans, unless accelerated in
accordance with the terms of the Agreement, if not paid sooner, will be due and
payable, together with all accrued and unpaid interest and all other amounts due
and unpaid under the Agreement, on the Termination Date.
Interest on the Revolving Loans is payable in arrears on the first day of
each month during the term of the Agreement and as set forth in the Agreement.
The Agreement provides for the payment by Borrower of various other charges and
fees in addition to interest charges as more fully set forth in the Agreement.
All payments of any amount becoming due under this Note shall be made in
the manner provided in Section 2.11 of the Agreement.
Reference is made to the Agreement for, among other things, the conditions
under which this Note may or must be paid in whole or in part prior to the
Termination Date (whether accelerated or otherwise).
If an Event of Default (as defined in the Agreement) occurs and is not
cured within the time provided for by the Agreement, the Bank may exercise any
one or more of the rights and remedies granted by the Agreement or any of the
Loan Documents or available under applicable law, including without limit the
right to accelerate this Note or the Indebtedness, and may set off against the
principal of and interest on this Note or against any other Indebtedness (i) any
amount owing by the Bank to the undersigned, (ii) any property of the
undersigned at any time in the possession of the Bank or any Affiliate (as that
term is defined in the Agreement) of the Bank and (iii) any amount in any
deposit or other account (including without limit an account evidenced by a
certificate of deposit) of the undersigned with the Bank or any Affiliate of the
Bank.
The undersigned and its successors and assigns and all accommodations
parties, guarantors and endorsers (i) waive presentment, demand, protest and
notice of dishonor, (ii) agree that no extension or indulgence to the
undersigned or release or non-enforcement of any security, with or without
notice, shall affect the obligations of any accommodation party, guarantor or
indorser, and (iii) agree to reimburse the holder of this Note for any and all
costs and expenses incurred in collecting or attempting to collect any and all
principal and interest under this Note (including, but not limited to, court
costs and attorney fees, whether in-house or outside counsel is used and whether
such costs and expenses are incurred in formal or informal collection actions,
federal bankruptcy proceedings, appellate proceedings, probate proceedings, or
otherwise, all as more specifically set forth in Sections 8.7 and 8.8 of the
Agreement). This Note shall be governed by and construed in accordance with the
laws of the State of California.
IN WITNESS WHEREOF, this Note has been delivered and accepted at Cupertino,
California and the undersigned has executed this Note as of the 4th day of
March, 2008.
MISSION WEST PROPERTIES, INC.
A Maryland corporation
By: /s/ Raymond V. Marino
-------------------------------
Print Name: Raymond V. Marino
------------------------
Its: President & COO
-------------------------------