Exhibit 10.3
SECOND AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
dated as of November 26, 1997
among
AMB PROPERTY, L.P.
The Banks Listed Herein
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
as Agent
and
COMMERZBANK AKTIENGESELLSCHAFT, LOS ANGELES BRANCH
FLEET NATIONAL BANK
NATIONSBANK OF TEXAS, N.A. and
PNC BANK, NATIONAL ASSOCIATION
as Co-Agents
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS......................................................2
SECTION 1.1. Definitions......................................................2
SECTION 1.2. Accounting Terms and Determinations.............................24
SECTION 1.3. Types of Borrowings.............................................25
ARTICLE II
THE CREDITS...................................................................25
SECTION 2.1. Commitments to Lend............................................25
SECTION 2.2. Notice of Borrowing............................................25
SECTION 2.3. Notice to Banks; Funding of Loans..............................26
SECTION 2.4. Notes..........................................................27
SECTION 2.5. Maturity of Loans..............................................28
SECTION 2.6. Interest Rates.................................................28
SECTION 2.7. Fees...........................................................29
SECTION 2.8. Mandatory Expiration...........................................30
SECTION 2.9. Mandatory Prepayment...........................................30
SECTION 2.10. Optional Prepayments...........................................31
SECTION 2.11. General Provisions as to Payments..............................32
SECTION 2.12. Funding Losses.................................................33
SECTION 2.13. Computation of Interest and Fees...............................33
SECTION 2.14. Use of Proceeds................................................33
ARTICLE III
CONDITIONS....................................................................34
SECTION 3.1. Closing........................................................34
SECTION 3.2. Borrowings.....................................................37
SECTION 3.3. Borrowing Base Properties......................................39
SECTION 3.4. Conditions Precedent to New Acquisitions
and Additional Real Property Assets............................40
ARTICLE IV
REPRESENTATIONS AND WARRANTIES................................................42
SECTION 4.1. Existence and Power............................................42
SECTION 4.2. Power and Authority............................................42
SECTION 4.3. No Violation...................................................42
SECTION 4.4. Financial Information..........................................43
SECTION 4.5. Litigation.....................................................44
SECTION 4.6. Compliance with ERISA..........................................44
SECTION 4.7. Environmental Matters..........................................44
SECTION 4.8. Taxes..........................................................45
SECTION 4.9. Full Disclosure................................................45
SECTION 4.10. Solvency.......................................................46
i
Page
----
SECTION 4.11. Use of Proceeds; Margin Regulations............................46
SECTION 4.12. Governmental Approvals.........................................46
SECTION 4.13. Investment Company Act; Public Utility
Holding Company Act............................................46
SECTION 4.14. Closing Date Transactions......................................46
SECTION 4.15. Representations and Warranties in Loan
Documents......................................................46
SECTION 4.16. Patents, Trademarks, Etc.......................................47
SECTION 4.17. Ownership of Property..........................................47
SECTION 4.18. No Default.....................................................47
SECTION 4.19. Licenses, Etc..................................................47
SECTION 4.20. Compliance With Law............................................48
SECTION 4.21. No Burdensome Restrictions.....................................48
SECTION 4.22. Brokers' Fees..................................................48
SECTION 4.23. Labor Matters..................................................48
SECTION 4.24. Insurance......................................................48
SECTION 4.25. Organizational Documents.......................................48
SECTION 4.26. Principal Offices..............................................48
ARTICLE V
AFFIRMATIVE AND NEGATIVE COVENANTS............................................49
SECTION 5.1. Information....................................................49
SECTION 5.2. Payment of Obligations.........................................53
SECTION 5.3. Maintenance of Property; Insurance.............................53
SECTION 5.4. Conduct of Business and Maintenance of
Existence......................................................53
SECTION 5.5. Compliance with Laws...........................................53
SECTION 5.6. Inspection of Property, Books and
Records........................................................54
SECTION 5.7. Existence......................................................54
SECTION 5.8. Certain Requirements for the Borrowing
Base Properties................................................54
SECTION 5.9. Financial Covenants............................................54
SECTION 5.10. Restriction on Fundamental Changes.............................56
SECTION 5.11. Liens; Release of Liens........................................57
SECTION 5.12. Sale of Borrowing Base Properties..............................57
SECTION 5.13. Changes in Business............................................58
SECTION 5.14. Fiscal Year; Fiscal Quarter....................................58
SECTION 5.15. Margin Stock...................................................58
SECTION 5.16. Restrictions on Recourse Debt..................................58
SECTION 5.17. Covenant Restrictions..........................................58
ARTICLE VI
DEFAULTS......................................................................58
SECTION 6.1. Events of Default...............................................58
SECTION 6.2. Rights and Remedies.............................................61
SECTION 6.3. Notice of Default...............................................62
ii
Page
----
ARTICLE VII
THE AGENT.....................................................................62
SECTION 7.1. Appointment and Authorization...................................62
SECTION 7.2. Agent and Affiliates............................................63
SECTION 7.3. Action by Agent.................................................63
SECTION 7.4. Consultation with Experts.......................................63
SECTION 7.5. Liability of Agent..............................................63
SECTION 7.6. Indemnification.................................................64
SECTION 7.7. Credit Decision.................................................64
SECTION 7.8. Successor Agent.................................................64
ARTICLE VIII
CHANGE IN CIRCUMSTANCES.......................................................65
SECTION 8.1. Basis for Determining Interest Rate Inadequate or Unfair........65
SECTION 8.2. Illegality......................................................65
SECTION 8.3. Increased Cost and Reduced Return...............................66
SECTION 8.4. Taxes...........................................................68
SECTION 8.5. Base Rate Loans Substituted for Affected
Euro-Dollar Loans...............................................70
ARTICLE IX
MISCELLANEOUS.................................................................70
SECTION 9.1. Notices.........................................................70
SECTION 9.2. No Waivers......................................................70
SECTION 9.3. Expenses; Indemnification.......................................71
SECTION 9.4. Sharing of Set-Offs.............................................72
SECTION 9.5. Amendments and Waivers..........................................73
SECTION 9.6. Successors and Assigns..........................................73
SECTION 9.7. Collateral......................................................75
SECTION 9.8. Governing Law; Submission to
Jurisdiction....................................................76
Section 9.9. Marshalling; Recapture..........................................76
SECTION 9.10. Counterparts; Integration;
Effectiveness...................................................77
SECTION 9.11. WAIVER OF JURY TRIAL............................................77
SECTION 9.12. Survival........................................................77
SECTION 9.13. Domicile of Loans...............................................77
SECTION 9.14. Limitation of Liability.........................................77
SECTION 9.15. Recourse........................................................77
SECTION 9.16. Confidentiality.................................................78
iii
Page
----
EXHIBITS AND SCHEDULES
Exhibit A - Note
Exhibit B - Borrowing Base Properties
Exhibit C - Assignment and Assumption Agreement
Exhibit D - Form of Borrowing Base Property Certifi
cate
Exhibit E - Form of Subsidiary Guaranty
Schedule 4.17(a) - Real Property Assets
Schedule 4.17(b) - Liens
iv
SECOND AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
dated as of November 26, 1997 by and among AMB PROPERTY, L.P., a Delaware
limited partnership (the "Borrower"), the BANKS listed on the signature pages
hereof and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent and COMMERZBANK
AKTIENGESELLSCHAFT, LOS ANGELES BRANCH, FLEET NATIONAL BANK, NATIONSBANK OF
TEXAS, N.A. and PNC BANK, NATIONAL ASSOCIATION, as Co-Agents.
R E C I T A L S
WHEREAS, certain of the Banks previously agreed to make
available to AMB Current Income Fund, Inc. a revolving credit facility upon the
terms and conditions set forth in that certain Revolving Credit Agreement, dated
as of October 25, 1996, as amended by that certain First Amendment to Revolving
Credit Agreement, dated as of January 17, 1997 and as amended and restated in
its entirety pursuant to that certain Amended and Restated Revolving Credit
Agreement, dated as of August 8, 1997 (as so amended and amended and restated,
the "Existing Credit Agreement");
WHEREAS, the Borrower assumed the rights, duties and
obligations of AMB Current Income Fund, Inc. under the Existing Credit Agreement
pursuant to that certain Assumption Agreement dated as of November 26, 1997; and
WHEREAS, the Borrower and the Banks wish to amend and restate
the provisions of the Existing Credit Agreement in their entirety, as
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained herein, the parties hereby amend and restate
the Existing Credit Agreement and agree as follows:
A G R E E M E N T
I. The Existing Credit Agreement is hereby amended, restated,
replaced and modified so that all of
the terms and conditions of the aforesaid Existing Credit Agreement shall be
restated and replaced in their entirety as set forth herein, and the Borrower
agrees to comply with and be subject to all of the terms, covenants and
conditions of this Agreement.
II. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors and assigns, and
shall be deemed to be effective as of the date hereof.
III. Any reference to the Existing Credit Agreement in any
other instrument or document executed in connection with the Existing Credit
Agreement shall be deemed to refer to this Agreement.
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. The following terms, as used herein,
have the following meanings:
"Acquisition Price" means (i) the purchase price of a Real
Property Asset as set forth in the applicable purchase and sale agreement, (ii)
increases or reductions to such purchase price as provided in such purchase and
sale agreement or the final closing statement, and (iii) reasonable closing
costs to the extent incurred by Borrower or any Consolidated Subsidiary of
Borrower in connection with such acquisition, including but not limited to,
brokerage fees, attorneys fees and expenses, due diligence expenses, appraisal
fees, engineering and environmental fees, title insurance premiums, survey
preparation costs, and recording fees.
"Adjusted EBITDA" means EBITDA minus (i) an adjustment to
exclude the effects of straight-lining of rents, and minus (ii) an amount equal
to appropriate reserves for replacements of not less than $.50 per square foot
per annum for each Real Property Asset that is primarily a retail use property
and not less than $.35 per square foot per annum for each Real Property Asset
that is primarily an industrial use property.
2
"Adjusted London Interbank Offered Rate" has the meaning set
forth in Section 2.6(b).
"Adjustment Date" shall mean the earlier to occur of (i) the
date that the General Partner and/or the Borrower receives a public credit
rating for its unsecured senior long term indebtedness from either S&P or
Moody's and (ii) the date which is nine months following the Closing Date.
"Administrative Questionnaire" means, with respect to each
Bank, an administrative questionnaire in the form prepared by the Agent and
submitted to the Agent (with a copy to the Borrower) duly completed by such
Bank.
"Agent" means Morgan Guaranty Trust Company of New York in its
capacity as agent for the Banks hereunder, and its successors in such capacity.
"Agreement" means this Second Amended and Restated Revolving
Credit Agreement, as the same may from time to time hereafter be modified,
supplemented or amended, as permitted herein.
"Applicable Interest Rate" means (i) with respect to any Fixed
Rate Indebtedness, the fixed interest rate applicable to such Fixed Rate
Indebtedness at the time in question, and (ii) with respect to any Floating Rate
Indebtedness, the lesser of (x) the rate at which the interest rate applicable
to such Floating Rate Indebtedness could be fixed, at the time of calculation,
by Borrower entering into an unsecured interest rate swap agreement (or, if such
rate is incapable of being fixed by entering into an unsecured interest rate
swap agreement at the time of calculation, a reasonably determined fixed rate
equivalent), or (y) the rate at which the interest rate applicable to such
Floating Rate Indebtedness is actually capped, at the time of calculation, if
Borrower has entered into an interest rate cap agreement with respect thereto.
"Applicable Lending Office" means, with respect to any Bank,
(i) in the case of its Domestic Loans, its Domestic Lending Office and (ii) in
the case of its Euro-Dollar Loans, its Euro-Dollar Lending Office.
3
"Applicable Margin" means, prior to the Adjustment Date, 1.10%
with respect to each Euro-Dollar Loan and 0.125% with respect to each Base Rate
Loan. From and after the Adjustment Date, the Applicable Margin with respect to
each Euro-Dollar Loan and each Base Rate Loan shall mean the respective
percentages per annum determined, at any time, based on the range into which the
Borrower's Credit Rating (if any) then falls, in accordance with the table set
forth below. Any change in the Borrower's Credit Rating shall be effective
immediately as of the date on which any of the Rating Agencies announces a
change in the Borrower's Credit Rating or the date on which the Borrower (or, as
applicable, the General Partner) has no Credit Rating, whichever is applicable.
In the event that the Borrower (or, as applicable, the General Partner) receives
two (2) Credit Ratings that are not equivalent, the Applicable Margin shall be
determined by the lower of such two (2) Credit Ratings. In the event that
Borrower (or, as applicable, the General Partner) receives more than two (2)
Credit Ratings and such Credit Ratings are not equivalent, the Applicable Margin
shall be determined by the lower of the two (2) highest ratings, provided that
each of said two (2) highest ratings shall be Investment Grade Ratings and at
least one of which shall be an Investment Grade Rating from S&P or Moody's. In
the event that only one of the Rating Agencies shall have set Borrower's Credit
Rating, then the Applicable Margin shall be based on such rating only.
Range of Applicable
Borrower's Margin for Applicable
Credit Rating Base Rate Margin for Euro
(S&P/Moody's Loans Dollar Loans
Ratings) (% per annum) (% per annum)
- -------------- ------------- ---------------
BBB+/Baa1 0.000 0.90
BBB/Baa2 0.000 1.00
BBB-/Baa3 0.125 1.15
Non-Invest-
ment Grade or
no rating 0.250 1.20
"Approved Bank" shall mean a bank which has (i)(a) a minimum
net worth of $500,000,000 and/or (b) total assets of $10,000,000,000, and (ii) a
minimum long term debt rating
4
of (a) BBB+ or higher by S&P, and (b) Baa1 or higher by Moody's.
"Approved Uses" has the meaning set forth in Section 2.14.
"Assignee" has the meaning set forth in Section 9.6(c).
"Bank" means each bank listed on the signature pages hereof,
each Assignee which becomes a Bank pursuant to Section 9.6(c), and their
respective successors.
"Bankruptcy Code" means Title 11 of the United States Code,
entitled "Bankruptcy", as amended from time to time, and any successor statute
or statutes.
"Base Rate" means, for any day, a rate per annum equal to the
higher of (i) the Prime Rate for such day or (ii) the sum of 1/2 of 1% plus the
Federal Funds Rate for such day.
"Base Rate Loan" means a Loan to be made by a Bank as a Base
Rate Loan in accordance with the applicable Notice of Borrowing or pursuant to
Article VIII.
"Benefit Arrangement" means at any time an employee benefit
plan within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Borrower" means AMB Property, L.P., a Delaware limited
partnership.
"Borrower's Credit Rating" means the rating assigned by the
Rating Agencies to the General Partner's or the Borrower's senior unsecured long
term indebtedness.
"Borrowing" means a borrowing hereunder consisting of Loans
made to the Borrower at the same time by the Banks pursuant to Article II. A
Borrowing is (i) a "Domestic Borrowing" if such Loans are Domestic Loans or (ii)
a "Euro-Dollar Borrowing" if such Loans are Euro-Dollar Loans.
"Borrowing Base Net Operating Cash Flow" means as of any date
of determination with respect to the Borrowing
5
Base Properties, Property Income for the previous four consecutive quarters
including the quarter then ended, but less (x) Property Expenses with respect to
the Borrowing Base Properties for the previous four consecutive quarters
including the quarter then ended, and (y) appropriate reserves for replacements
of not less than $.50 per square foot per annum for each Borrowing Base Property
that is primarily a retail use property and not less than $.35 per square foot
per annum for each Borrowing Base Property that is primarily an industrial use
property. For purposes of Section 5.1(m) hereof, the calculation of Borrowing
Base Net Operating Cash Flow shall be made separately as to each Borrowing Base
Property.
"Borrowing Base Properties" has the meaning set forth in
Section 3.3.
"Borrowing Base Properties Value" means the aggregate of the
Gross Asset Values of the Borrowing Base Properties.
"Capital Expenditures" means, for any period, the sum of all
expenditures (whether paid in cash or accrued as a liability) which are
capitalized on the balance sheet of the Borrower in accordance with GAAP, but
exclusive, however, with respect to any Real Property Asset acquired by the
Borrower or a Consolidated Subsidiary within the previous twelve months, of
those expenditures which the Borrower makes, or reasonably projects (as of the
date of determination) to make, within twelve months after the date of such
acquisition and excluding all expenditures made with respect to the acquisition
of such Real Property Asset by the Borrower or such Consolidated Subsidiary.
"Cash and Cash Equivalents" means (i) cash, (ii) direct
obligations of the United States Government, including, without limitation,
treasury bills, notes and bonds, (iii) interest bearing or discounted
obligations of Federal agencies and Government sponsored entities or pools of
such instruments offered by Approved Banks and dealers, including, without
limitation, Federal Home Loan Mortgage Corporation participation sale
certificates, Government National Mortgage Association modified pass-through
certificates, Federal National Mortgage Association bonds and notes, Federal
Farm Credit System securities, (iv) time deposits, domestic and Eurodollar
certificates of deposit, bankers acceptances, commercial paper rated at least
A-1 by S&P and
6
P-1 by Moody's Investors Service, Inc., and/or guaranteed by an Aa rating by
Moody's Investors Service, Inc., an AA rating by S&P, or better rated credit,
floating rate notes, other money market instruments and letters of credit each
issued by Approved Banks, (v) obligations of domestic corporations, including,
without limitation, commercial paper, bonds, debentures, and loan
participations, each of which is rated at least AA by S&P, and/or Aa2 by Moody's
Investors Service, Inc., and/or unconditionally guaranteed by an AA rating by
S&P, an Aa2 rating by Moody's, or better rated credit, (vi) obligations issued
by states and local governments or their agencies, rated at least MIG-1 by
Moody's Investors Service, Inc. and/or SP-1 by S&P and/or guaranteed by an
irrevocable letter of credit of an Approved Bank, (vii) repurchase agreements
with major banks and primary government securities dealers fully secured by U.S.
Government or agency collateral equal to or exceeding the principal amount on a
daily basis and held in safekeeping, and (viii) real estate loan pool
participations, guaranteed by a Person with an AA rating given by S&P or an Aa2
rating given by Moody's Investors Service, Inc., or better rated credit.
"Closing Date" means November 26, 1997.
"Code" means the Internal Revenue Code of 1986, as amended, or
any successor statute.
"Combined Gross Asset Value" shall be the aggregate Gross
Asset Value of all Real Property Assets owned, directly or indirectly, by the
Borrower, the General Partner and the Consolidated Subsidiaries; with respect to
Real Property Assets held in Minority Holdings or Joint Ventures or Subsidiaries
which are not Consolidated, only the portion of such Real Property Asset that is
allocable, in accordance with GAAP, to Borrower's interest shall be included in
Combined Gross Asset Value.
"Commitment" means, with respect to each Bank, the amount set
forth opposite the name of such Bank on the signature pages hereof (and for each
Bank which is an Assignee, the amount set forth in the Assumption Agreement
entered into pursuant to Section 9.6(c) as the Assignee's Commitment), as such
amount may be reduced from time to time pursuant to Section 2.10(c) or in
connection with an assignment to an Assignee.
7
"Commitment Fee" has the meaning set forth in Section 2.7(a).
"Commitment Fee Percentage" means, prior to the Adjustment
Date, 0.20%. From and after the Adjustment Date, the Commitment Fee Percentage
shall be the applicable percentage per annum determined, at any time, based on
the range into which Borrower's Credit Rating (if any) then falls, in accordance
with the following table. Any change in the Commitment Fee Percentage shall be
effective immediately as of the date on which any of the Rating Agencies
announces a change in the Borrower's Credit Rating or the date on which the
Borrower (or, as applicable, the General Partner) has no Credit Rating,
whichever is applicable. In the event that Borrower (or, as applicable, the
General Partner) receives two (2) Credit Ratings that are not equivalent, the
Commitment Fee Percentage shall be determined by the lower of such two (2)
Credit Ratings. In the event that Borrower (or, as applicable, the General
Partner) receives more than two (2) Credit Ratings, and such Credit Ratings are
not equivalent, the Commitment Fee Percentage shall be determined by the lower
of the two (2) highest ratings, provided that each of said two (2) highest
ratings shall be Investment Grade Ratings and at least one of which shall be an
Investment Grade Rating from S&P or Moody's. In the event that only one of the
Rating Agencies shall have set Borrower's Credit Rating, then the Commitment Fee
Percentage shall be based on such rating only.
Range of
Borrower's
Credit Rating
(S&P/Moody's Commitment Fee Percentage
Ratings) (% per annum)
- ------------- --------------------------
BBB+/Baa1 0.15
BBB/Baa2 0.20
BBB-/Baa3 0.25
Non-Invest-
ment Grade or
no rating 0.25
"Confirmation of Guaranty" means that certain Confirmation of
Guaranty, dated as of the date hereof, by the General Partner, AMB Property II,
L.P. and Long Gate LLC.
"Consolidated" means "consolidated" in accordance with GAAP.
"Consolidated Subsidiary" means at any date any Subsidiary of
the Borrower that is Consolidated on the financial statements of the Borrower
and the General Partner.
"Consolidated Tangible Net Worth" means at any date the
consolidated stockholders' or partners' equity of
8
the Borrower, the General Partner, and the Consolidated Subsidiaries less their
Consolidated Intangible Assets, all determined as of such date. For purposes of
this definition "Intangible Assets" means with respect to any such intangible
assets, the amount (to the extent reflected in determining such consolidated
stockholders' equity) of (i) all write-ups in the book value of any asset owned
by the Borrower or a Consolidated Subsidiary and (ii) all unamortized debt
discount and expense, unamortized deferred charges, goodwill, patents,
trademarks, service marks, trade names, anticipated future benefit of tax loss
carry-forwards, copy rights, organization or developmental expenses and other
intangible assets.
"Construction Asset Cost" shall mean, with respect to
Development Projects in which construction has begun (as evidenced by obtaining
a permit to commence such construction by the applicable governmental authority)
but has not yet been substantially completed (substantial completion shall be
deemed to mean not less than 90% completion, as such completion shall be
evidenced by a certificate of occupancy or its equivalent and the commencement
of the payment of rent by tenants of such Development Project), the aggregate,
good faith estimated cost of construction of such improvements (including land
acquisition costs).
"Contingent Obligation" as to any Person means, without
duplication, (i) any contingent obligation of such Person required to be shown
on such Person's balance sheet in accordance with GAAP, and (ii) any obligation
required to be disclosed in the footnotes to such Person's financial statements
in accordance with GAAP, guaranteeing partially or in whole any non-recourse
Debt, lease, dividend or other obligation, exclusive of contractual indemnities
(including, without limitation, any indemnity or price-adjustment provision
relating to the purchase or sale of securities or other assets) and guarantees
of non-monetary obligations (other than guarantees of completion) which have not
yet been called on or quantified, of such Person or of any other Person. The
amount of any Contingent Obligation described in clause (ii) shall be deemed to
be (a) with respect to a guaranty of interest or interest and principal, or
operating income guaranty, the sum of all payments required to be made
thereunder (which in the case of an operating income guaranty shall be deemed to
be equal to the debt service for the note secured thereby), calculated at the
Applicable Interest Rate, through (i) in the case of an interest or interest and
principal guaranty, the stated date of maturity of the obligation (and
commencing on the date interest could first be payable thereunder), or (ii) in
the case of an operating income guaranty, the date through which such guaranty
will remain in effect, and (b) with respect to all guarantees not covered by the
preceding clause (a), an amount equal to the stated or determinable amount of
the primary obligation in respect of which such guaranty is made or, if not
stated or determinable, the maximum reasonably anticipated liability
9
in respect thereof (assuming such Person is required to perform thereunder) as
recorded on the balance sheet and on the footnotes to the most recent financial
statements of Borrower required to be delivered pursuant to Section 4.4 hereof.
Notwithstanding anything contained herein to the contrary, guarantees of
completion shall not be deemed to be Contingent Obligations unless and until a
claim for payment or performance has been made thereunder by the person entitled
to performance or payment thereunder, at which time any such guaranty of
completion shall be deemed to be a Contingent Obligation in an amount equal to
any such claim. Subject to the preceding sentence, (i) in the case of a joint
and several guaranty given by such Person and another Person (but only to the
extent such guaranty is directly or indirectly recourse to such Person), the
amount of the guaranty, to the extent it is directly or indirectly recourse to
such Person, shall be deemed to be 100% thereof unless and only to the extent
that such other Person has delivered Cash or Cash Equivalents to secure all or
any part of such Person's guaranteed obligations, (ii) in the case of joint and
several guarantees given by a Person in whom Borrower owns an interest (which
guarantees are non-recourse to Borrower), to the extent the guarantees, in the
aggregate, exceed 15% of Combined Gross Asset Value, the amount which is the
lesser of (x) the amount in excess of 15% or (y) the amount of Borrower's
interest therein shall be deemed to be a Contingent Obligation of Borrower, and
(iii) in the case of any other guaranty, (whether or not joint and several) of
an obligation otherwise constituting Debt of such Person, the amount of such
guaranty shall be deemed to be only that amount in excess of the amount of the
obligation constituting Indebtedness of such Person. Notwithstanding any thing
contained herein to the contrary, "Contingent Obligations" shall not be deemed
to include guarantees of Unused Commitments or of construction loans to the
extent the same have not been drawn.
"Debt" of any Person means, without duplication, (A) as shown
on such Person's balance sheet (i) all indebtedness of such Person for borrowed
money or for the deferred purchase price of property and, (ii) all indebtedness
of such Person evidenced by a note, bond, debenture or similar instrument
(whether or not disbursed in full in the case of a construction loan), (B) the
face amount of all letters of credit issued for the account of such Person and,
without duplication, all unreimbursed amounts drawn thereunder, (C) all
Contingent Obligations of such Person, (D) all payment obligations of such
Person under any interest rate protection agreement (including, without
limitation, any interest rate swaps, caps, floors, collars and similar
agreements) and currency swaps and similar agreements which were not entered
into specifically in connection with Debt set forth in clauses (A), (B) or (C)
hereof. For purposes of this Agreement, Debt (other than Contingent Obligations)
of the Borrower shall be deemed to include only Debt of the Borrower, the
General Partner, and their Consolidated
10
Subsidiaries plus the Borrower's and/or the General Partner's respective pro
rata share (without duplication) (such pro rata share being based upon the
Borrower's or the General Partner's percentage ownership interest as shown on
their annual financial statements) of the Debt of any Person in which the
Borrower or the General Partner, directly or indirectly, owns an interest,
provided that such Debt is nonrecourse, both directly and indirectly, to the
Borrower, the General Partner or any Consolidated Subsidiary.
"Debt Service" shall mean, measured as of the last day of each
calendar quarter, an amount equal to the sum of (i) interest (whether accrued,
paid or capitalized) actually payable by the Borrower, the General Partner, and
their Consolidated Subsidiaries, together with the Borrower's and the General
Partner's respective pro rata shares of such interest actually payable by
Minority Holdings and Joint Ventures, on their Debt for the previous four
consecutive quarters including the quarter then ended, plus (ii) scheduled
payments of principal on Debt of the Borrower, the General Partner, and their
Consolidated Subsidiaries (and the Borrower's and the General Partner's
respective pro rata share of such payments on Debt of Minority Holdings and
Joint Ventures), whether or not actually paid (excluding balloon payments) for
the previous four consecutive quarters including the quarter then ended.
"Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
"Development Projects" shall have the meaning set forth in
Section 5.1(l) hereof.
"Domestic Business Day" means any day except a Saturday,
Sunday or other day on which commercial banks in New York City and/or San
Francisco, California are authorized by law to close.
"Domestic Lending Office" means, as to each Bank, its office
located at its address set forth on the signature pages hereto or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to the Borrower and the Agent.
"Domestic Loans" means Base Rate Loans.
"EBITDA" means income from operations of the Borrower, the
General Partner and the Consolidated, Subsidiaries before disposal of properties
and minority interests, plus interest expense, income taxes, depreciation and
amortization.
"Effective Date" means the date this Agreement becomes
effective in accordance with Section 9.10.
11
"Environmental Affiliate" means any partnership, or joint
venture, trust or corporation in which an equity interest is owned by the
Borrower or the General Partner, either directly or indirectly.
"Environmental Approvals" means any permit, license, approval,
ruling, variance, exemption or other authorization required under applicable
Environmental Laws by a court or governmental agency having jurisdiction.
"Environmental Claim" means, with respect to any Person, any
written notice, claim, demand or similar communication by any other Person
having jurisdiction alleging potential liability for investigatory costs,
cleanup costs, governmental response costs, natural resources damage, property
damages, personal injuries, fines or penalties arising out of, based on or
resulting from (i) the presence, or release into the environment, of any
Hazardous Substances at any location, whether or not owned by such Person or
(ii) circumstances forming the basis of any violation, of any applicable
Environmental Law, in each case as to which there is a reasonable possibility of
an adverse determination with respect thereto and which, if adversely
determined, would have a Material Adverse Effect on the Borrower or the General
Partner.
"Environmental Laws" means any and all federal, state, local
and foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
the environment, the effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, Hazardous Substances or
wastes into the environment including, without limitation, ambient air, surface
water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, Hazardous Substances or wastes or the
clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, or any successor statute.
"ERISA Group" means the Borrower, the General Partner, any
Subsidiary and all members of a controlled group of corporations and all trades
or businesses (whether or not incorporated) under common control which, together
with the Borrower, the General Partner or any Subsidiary, are treated as a
single employer under Section 414 of the Internal Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on
which commercial banks are open for international business (including dealings
in dollar deposits) in London.
12
"Euro-Dollar Lending Office" means, as to each Bank, its
office, branch or affiliate located at its address set forth on the signature
pages hereto, or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Euro-Dollar Lending Office by notice to the Borrower
and the Agent.
"Euro-Dollar Loan" means a Loan to be made by a Bank as a
Euro-Dollar Loan in accordance with the applicable Notice of Borrowing.
"Event of Default" has the meaning set forth in Section 6.1.
"Existing Credit Agreement" has the meaning set forth in the
recitals of this Agreement.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if such day is not a
Domestic Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Domestic Business Day as so published on
the next succeeding Domestic Business Day, and (ii) if no such rate is so
published on such next succeeding Domestic Business Day, the Federal Funds Rate
for such day shall be the average rate quoted to Morgan Guaranty Trust Company
of New York on such day on such transactions as determined by the Agent.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System as constituted from time to time.
"Fixed Charges" means with respect to any fiscal period, the
sum of (a) interest expense according to GAAP (including capitalized interest)
payable during such period, plus (b) the aggregate of all scheduled principal
payments on Debt according to GAAP payable during that fiscal period and for
Debt guaranteed under a Contingent Obligation (but excluding balloon payments of
principal due upon the stated maturity of a Debt), plus (c) the aggregate of all
dividends payable on the Borrower's, the General Partner's or any Consolidated
Subsidiary's preferred partnership interests or preferred stock (as applicable),
to the extent such charges are paid or incurred, as applicable, by Borrower, the
General Partner, and their Consolidated Subsidiaries or, with respect to
Minority Holdings and Joint Ventures, in each case to the extent of Borrower's,
the General Partner's or the applicable Consolidated Subsidiary's allocable
share of such payments. For the purposes of this definition, (i) interest on
Fixed Rate Indebtedness shall be the actual
13
interest payable on such Debt and (ii) interest on Floating Rate Indebtedness
shall be assumed to be the greater of (A) the actual interest payable on such
Debt or (B) an assumed interest rate per annum to be approved by the Agent for
tax-exempt Debt and an assumed interest rate of nine percent (9%) per annum for
non-tax-exempt Debt, except that, if any of the foregoing in (A) or (B) above is
subject to an interest rate cap agreement purchased by the Borrower, the General
Partner or a Consolidated Subsidiary, the interest rate shall be assumed to be
the lower of the actual interest payable on such Debt or the capped rate of such
interest rate cap agreement. In no event shall any dividends payable on the
General Partner's or any Consolidated Subsidiary's common stock be included in
Fixed Charges.
"Fixed Rate Indebtedness" means all Debt which accrues
interest at a fixed rate.
"Floating Rate Indebtedness" means all Debt which is not Fixed
Rate Indebtedness and which is not a Contingent Obligation or an Unused
Commitment.
"Funds From Operations" means net income (computed in
accordance with GAAP) before extraordinary items, excluding gains (or losses)
from debt restructuring and sales of property, plus depreciation and
amortization, and after adjustments for unconsolidated partnerships and joint
ventures. Adjustments for unconsolidated partnerships and joint ventures will be
calculated to reflect funds from operations on the same basis.
"GAAP" means generally accepted accounting principles
recognized as such in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
Board or in such other statements by such other entity as may be approved by a
significant segment of the accounting profession, which are applicable to the
circumstances as of the date of determination.
"General Partner" means AMB Property Corporation, a Maryland
corporation qualified as a real estate investment trust and the sole general
partner of the Borrower.
"General Partner Guaranty" means the Unconditional Guaranty
Agreement of the General Partner dated as of November 26, 1997 delivered to the
Agent in connection with assumption of the Existing Credit Agreement by the
Borrower.
"Gross Asset Value" shall mean (i) with respect to a Real
Property Asset that was acquired, directly or indirectly, within the twelve (12)
months prior to the date of determination, (A) prior to the first full quarter
following such acquisition, the Acquisition Price of such Real Property Asset
plus any Capital Expenditures actually incurred by the Borrower or its
Subsidiary in connection with such Real
14
Property Asset (which, for the purpose of this definition shall include any
expenditures that would have been considered Capital Expenditures except that
they were made with respect to the acquisition by the Borrower or its
Consolidated Subsidiaries of any interest in a Real Property Asset within twelve
months after the date such interest in asset was acquired) and (B) from and
after the first full quarter following such acquisition, the lesser of (x) the
amount in clause (i)(A) above and (y) the Net Operating Cash Flow applicable to
such Real Property Asset (provided that such Net Operating Cash Flow shall be
calculated on an annualized basis based upon the actual amount of Net Operating
Cash Flow for the period of Borrower's ownership of such Real Property Asset),
in each case capitalized at an annual interest rate of 9.5% if such Real
Property Asset is primarily a retail use property and 9.25% if such Real
Property Asset is primarily an industrial use property; and (ii) with respect to
a Real Property Asset that was acquired, directly or indirectly by the Borrower
more than twelve (12) months prior to the date of determination, the Net
Operating Cash Flow applicable to such Real Property Asset capitalized at an
annual interest rate of 9.5% if such Real Property Asset is primarily a retail
use property and 9.25% if such Real Property Asset is primarily an industrial
use property.
"Guaranty" shall mean each of the General Partner Guaranty and
any Subsidiary Guaranty.
"Hazardous Substances" means any toxic, radioactive, caustic
or otherwise hazardous substance, identified as such as a matter of
Environmental Law, including petroleum, its derivatives, by-products and other
hydrocarbons, or any substance having any constituent elements displaying any of
the foregoing characteristics.
"Improved Asset" means a Real Property Asset upon which
material construction of material improvements has commenced or upon which
material improvements have been constructed.
"Indemnitee" has the meaning set forth in Section 9.3(b).
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing, the period commencing on the date of such Borrowing and ending one,
two, three or six months thereafter, as the Borrower may elect in the applicable
Notice of Borrowing; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Euro-Dollar Business Day;
15
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) if any Interest Period includes a date on which a payment
of principal of the Loans is required to be made under Section 2.9 but
does not end on such date, then (i) the principal amount (if any) of
each Euro-Dollar Loan required to be repaid on such date shall have an
Interest Period ending on such date and (ii) the remainder (if any) of
each such Euro-Dollar Loan shall have an Interest Period determined as
set forth above.
(2) with respect to each Base Rate Borrowing, the period commencing on the date
of such Borrowing and ending 30 days thereafter; provided that:
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (b) below) which would otherwise end on a
day which is not a Euro-Dollar Business Day shall be extended to the
next succeeding Euro-Dollar Business Day; and
(b) if any Interest Period includes a date on which a payment
of principal of the Loans is required to be made under Section 2.9 but
does not end on such date, then (i) the principal amount (if any) of
each Base Rate Loan required to be repaid on such date shall have an
Interest Period ending on such date and (ii) the remainder (if any) of
each such Base Rate Loan shall have an Interest Period determined as
set forth above.
"Investment Grade Rating" means a rating for a Person's senior
long-term unsecured debt of BBB- or better from S&P, and a rating of Baa3 or
better from Moody's, if ratings from both Rating Agencies are obtained.
"Joint Ventures" means partnerships, corporations or other
entities held or owned jointly by the Borrower or a Consolidated Subsidiary of
Borrower and one or more Persons which Persons are not Consolidated with
Borrower.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind, or any other type
of preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement, the
Borrower or any Subsidiary shall be deemed to own subject to a Lien any asset
which it has acquired or holds subject to the interest of a vendor or lessor
under
16
any conditional sale agreement, capital lease or other title retention agreement
relating to such asset.
"Loan" means a Domestic Loan or a Euro-Dollar Loan and "Loans"
means Domestic Loans or Euro-Dollar Loans or any combination of the foregoing.
"Loan Amount" shall mean the amount of Five Hundred Million
Dollars ($500,000,000).
"Loan Documents" means this Agreement, the Notes, the General
Partner Guaranty and the Subsidiary Guaranties.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.6(b).
"Mandatory Prepayment Event" has the meaning set forth in
Section 2.9(c).
"Margin Stock" shall have the meaning provided such term in
Regulation U and Regulation G of the Federal Reserve Board.
"Material Adverse Effect" means a material adverse effect upon
(i) the business, operations, properties or assets of the Borrower, the General
Partner, and their Consolidated Subsidiaries or (ii) the ability of the Borrower
to pay debt service on the Loans, as such debt service becomes due from time to
time.
"Material Plan" means at any time a Plan or Plans having
aggregate Unfunded Liabilities in excess of $5,000,000.
"Maturity Date" shall have the meaning set forth in Section
2.8.
"Maximum Loan Amount" means the Loan Amount, as the Loan
Amount may be reduced pursuant to Section 2.10(c).
"Minority Holdings" means partnerships and corporations held
or owned by the Borrower which are not Consolidated with Borrower on Borrower's
financial statements.
"Moody's" means Moody's Investors Service, Inc. and its
successors.
"Morgan" means Morgan Guaranty Trust Company of New York, in
its individual capacity.
"Multiemployer Plan" means at any time an employee pension
benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any
member of the ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made contributions,
including for these purposes any Person which
17
ceased to be a member of the ERISA Group during such five year period.
"Net Operating Cash Flow" means, as of any date of
determination, with respect to all Real Property Assets, Minority Holdings and
Joint Ventures of Borrower, the General Partner, and their Consolidated
Subsidiaries (with respect to Minority Holdings and Joint Ventures, the
Borrower's, the General Partner's or the applicable Consolidated Subsidiary's
allocable share only), Property Income for the previous four consecutive
quarters including the quarter then ended, but less (x) Property Expenses with
respect to all such Real Property Assets, Minority Holdings and Joint Ventures
(with respect to Minority Holdings and Joint Ventures, the Borrower's, the
General Partner's or the applicable Consolidated Subsidiary's allocable share
only) for the previous four consecutive quarters including the quarter then
ended and (y) appropriate reserves for replacements of not less than $.50 per
square foot per annum for each Real Property Asset that is primarily a retail
use property and not less than $.35 per square foot per annum for each Real
Property Asset that is primarily an industrial use property.
"New Acquisitions" has the meaning set forth in Section 2.14.
"Non-Recourse Debt" means Debt of a Person for which the right
of recovery of the obligee thereof is limited to recourse against the Real
Property Assets securing such Debt (subject to such limited exceptions as fraud,
misappropriation, misapplication and environmental indemnities as are usual and
customary in similar transactions at the time such Debt is incurred).
"Notes" means promissory notes of the Borrower, substantially
in the form of Exhibit A hereto, evidencing the obligation of the Borrower to
repay the Loans, as the same may be amended, supplemented, modified or restated
from time to time, and "Note" means any one of such promissory notes issued
hereunder.
"Notice of Borrowing" has the meaning set forth in Section
2.2.
"Obligations" means all obligations, liabilities and
indebtedness of every nature of the Borrower, from time to time owing to any
Bank under or in connection with this Agreement or any other Loan Document.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
18
"Parent" means, with respect to any Bank, any Person
controlling such Bank.
"Participant" has the meaning set forth in Section 9.6(b).
"Permitted Liens" means (a) Liens to secure the performance of
statutory obligations, surety or appeal bonds, performance bonds, completion
bonds, government contracts or other obligations of a like nature, including
Liens in connection with workers' compensation, unemployment insurance and other
types of statutory obligations or to secure the performance of tenders, bids,
leases, contracts (other than for the repayment of Debt) and other similar
obligations incurred in the ordinary course of business; (b) Liens for taxes,
assessments or governmental charges or claims that are not yet delinquent or
that are being contested in good faith by appropriate proceedings promptly
instituted and diligently concluded; provided, that any reserve or other
appropriate provision as shall be required in conformity with GAAP shall have
been made therefor; (c) Liens on property of either Borrower or any Subsidiary
thereof in favor of the Federal or any state government to secure certain
payments pursuant to any contract, statute or regulation; (d) easements
(including, without limitation, reciprocal easement agreements and utility
agreements), rights of way, covenants, consents, reservations, encroachments,
variations and zoning and other restrictions, charges or encumbrances (whether
or not recorded), which do not interfere materially with the ordinary conduct of
the business of the Borrower or any Subsidiary thereof and which do not
materially detract from the value of the property to which they attach or
materially impair the use thereof by the Borrower or Subsidiary; (e) statutory
Liens of carriers, warehousemen, mechanics, suppliers, materialmen, repairmen or
other Liens imposed by law and arising in the ordinary course of business, for
sums not then due and payable (or which, if due and payable are being contested
in good faith and with respect to which adequate reserves are being maintained
to the extent required by GAAP); (f) Liens not otherwise permitted by this
definition and incurred in the ordinary course of business of the Borrower or
any Subsidiary with respect to obligations which do not exceed $100,000 in
principal amount with respect to any Separate Parcel and do not exceed
$1,000,000 in principal amount in the aggregate, in each case at any one time
outstanding; and (g) the interests of lessees and lessors under leases of real
or personal property made in the ordinary course of business which would not
have a material adverse effect on the Borrower, the General Partner, and their
Consolidated Subsidiaries taken as a whole.
19
"Person" means an individual, a corporation, a partnership, an
association, a trust, limited liability company or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"Plan" means at any time an employee pension benefit plan
(other than a Multiemployer Plan) which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Internal
Revenue Code and either (i) is maintained, or contributed to, by any member of
the ERISA Group for employees of any member of the ERISA Group or (ii) has at
any time within the preceding five years been maintained, or contributed to, by
any Person which was at such time a member of the ERISA Group for employees of
any Person which was at such time a member of the ERISA Group.
"Plan Asset Regulations" means the Department of Labor
Regulation Section 2510.3-101, 29 C.F.R. Section 2510.3-101.
"Prime Rate" means the rate of interest publicly announced by
Morgan Guaranty Trust Company of New York in New York City from time to time as
its Prime Rate.
"Pro-Forma Debt Service" means as of any date of
determination, an amount equal to the greater of (x) the product of: (A) the
average Unsecured Debt outstanding at the end of each of the previous four
quarters, including the quarter then ended, as set forth on the Borrower's
balance sheet, and (B) the Treasury Rate plus 1.75%, plus an amount equal to the
principal that would be required to be repaid by applying a 25 year mortgage
style amortization schedule thereto; and (y) Debt Service for Unsecured Debt for
the previous four quarters including the quarter then ended.
"Property Expenses" means, when used with respect to any Real
Property Asset, the costs of maintaining such Real Property Asset, including,
without limitation, taxes, insurance, repairs and maintenance, but excluding
depreciation, amortization and interest costs and Capital Expenditures.
"Property Income" means, when used with respect to any Real
Property Asset, revenues therefrom (including, without limitation, lease
termination fees appropriately amortized), less deferred rents receivable,
calculated, in each case, in accordance with GAAP.
"Rated Unsecured Debt" means, Investment Grade Debt which is
Unsecured Debt and which has an Investment Grade Rating.
20
"Rating Agencies" means, collectively, S&P and Moody's, Duff &
Phelps Credit Rating Co., and Fitch Investor Services, or any successor to the
foregoing.
"Real Property Assets" means the real property assets or
interests therein (including interests in participating mortgages in which the
Borrower's interest therein is characterized as equity according to GAAP)
currently owned, directly or indirectly by the Borrower or its Consolidated
Subsidiaries (including the form the real property asset is held, such as a
partnership, limited liability company or corporation) and listed on Schedule
4.17(a) annexed hereto, as such may be modified from time to time to reflect
sales, transfers, assignments, conveyances, acquisitions and purchases of real
property assets.
"Recourse Debt" means Debt of a Person that is not
Non-Recourse Debt.
"Reference Bank" means the principal London offices of Morgan
Guaranty Trust Company of New York.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Required Banks" means at any time Banks having at least
66-2/3% of the aggregate amount of the Commitments or, if the Commitments shall
have been terminated, holding Notes evidencing at least 66-2/3% of the aggregate
unpaid principal amount of the Loans.
"Required Occupancy Level" means, with respect to any
Borrowing Base Property, that during any twelve (12) month period, no less than
an average of 85% of the rentable square feet of such Borrowing Base Property is
occupied by tenants pursuant to written leases for which no default has occurred
beyond applicable notice and cure periods.
"Secured Debt" means Debt of a Person that is secured by a
Lien.
"Separate Parcel" means a Real Estate Asset that is a single,
legally subdivided, separately zoned parcel that can be legally transferred or
conveyed separate and distinct from any other Real Estate Asset without benefit
of any other Real Estate Asset.
"Solvent" as to any Person shall mean that such Person is not
"insolvent" within the meaning of Section 101(32) of the Bankruptcy Code or
Section 271 of the Debtor and Creditor Law of the State of New York.
21
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by the Borrower or the General
Partner.
"Subsidiary Guaranty" shall mean a guaranty, in substantially
the form of Exhibit E attached hereto, executed by each Subsidiary Guarantor.
"Subsidiary Guarantor" means AMB Property II, L.P., Long Gate
LLC, and any other Wholly-Owned Subsidiary of the Borrower that owns a Borrowing
Base Property and provides a Subsidiary Guaranty as required pursuant to Section
3.3 hereof.
"S&P" means Standard & Poors Ratings Group and its successors.
"Term" has the meaning set forth in Section 2.8.
"Termination Event" shall mean (i) a "reportable event", as
such term is described in Section 4043 of ERISA (other than a "reportable event"
not subject to the provision for 30-day notice to the PBGC), or an event
described in Section 4062(e) of ERISA, (ii) the withdrawal by any member of the
ERISA Group from a Multiemployer Plan during a plan year in which it is a
"substantial employer" (as defined in Section 4001(a)(2) of ERISA), or the
incurrence of liability by any member of the ERISA Group under Section 4064 of
ERISA upon the termination of a Multiemployer Plan, (iii) the filing of a notice
of intent to terminate any Plan under Section 4041 of ERISA, other than in a
standard termination within the meaning of Section 4041 of ERISA, or the
treatment of a Plan amendment as a distress termination under Section 4041 of
ERISA, (iv) the institution by the PBGC of proceedings to terminate, impose
liability (other than for premiums under Section 4007 of ERISA) in respect of,
or cause a trustee to be appointed to administer, any Plan or (v) any other
event or condition that might reasonably constitute grounds for the termination
of, or the appointment of a trustee to administer, any Plan or the imposition of
any liability or encumbrance or Lien on the Real Property Assets or any member
of the ERISA Group under ERISA.
"Title Company" means, with respect to each Borrowing Base
Property, a title insurance company of recognized national standing.
"Title Commitment" means, for each Borrowing Base Property, an
ALTA fee or leasehold title commitment or title
22
policy issued by the Title Company at the time of acquisition by the Borrower
or, if applicable, a Wholly-Owned Subsidiary.
"Total Liabilities" means, without duplication, all
liabilities (determined in accordance with GAAP) and all other Debt (to the
extent such Debt is not a "liability" as determined in accordance with GAAP) of
the Borrower, the General Partner, and their Consolidated Subsidiaries and
Borrower's pro rata share of liabilities (including the pro rata share of Debt)
of Minority Holdings and Joint Ventures, based on Borrower's percentage
ownership of such Minority Holdings and Joint Ventures.
"Treasury Rate" means, as of any date, a rate equal to the
annual yield to maturity on the U.S. Treasury Constant Maturity Series with a
ten year maturity, as such yield is reported in Federal Reserve Statistical
Release H.15 -- Selected Interest Rates, published most recently prior to the
date the applicable Treasury Rate is being determined. Such yield shall be
determined by straight line linear interpolation between the yields reported in
Release H.15, if necessary. In the event Release H.15 is no longer published,
the Agent shall select, in its reasonable discretion, an alternate basis for the
determination of Treasury yield for U.S. Treasury Constant Maturity Series with
ten year maturities.
"UCC Searches" has the meaning set forth in Section 3.1(m).
"Unfunded Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the value of all benefit liabilities
under such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the
fair market value of all Plan assets allocable to such liabilities under Title
IV of ERISA (excluding any accrued but unpaid contributions), all determined as
of the then most recent valuation date for such Plan, but only to the extent
that such excess represents a potential liability of a member of the ERISA Group
to the PBGC or any other Person under Title IV of ERISA.
"Unimproved Assets" means Real Property Assets (i) upon which
no material construction of material improvements has been commenced and (ii)
which are either not contiguous to an Improved Asset or, if contiguous to an
Improved Asset, were not acquired at the same time as the Improved Asset, or if
contiguous to an Improved Asset and acquired at the same time as an Improved
Asset, the net operating income (capitalized in accordance with industry
standard) of the Improved Asset was, at time of acquisition, insufficient to
23
support the acquisition price of such Improved Asset plus an 8% rate of return
on the investment; all Unimproved Assets will continue to be deemed Unimproved
Assets until such time as the chief financial officer or chief accounting
officer of Borrower shall certify to the Agent that material construction of
material improvements has commenced thereon.
"Unimproved Land Value" means the aggregate Gross Asset Value
of Unimproved Assets.
"United States" means the United States of America, including
the states and the District of Columbia, but excluding its territories and
possessions.
"Unsecured Assets" means assets of a Person which are not
subject to a Lien (other than Permitted Liens).
"Unsecured Debt" means Debt of a Person which is not secured
by a Lien.
"Unsecured Senior Debt" means the Obligations and other
Unsecured Debt of the Borrower, the General Partner and their Consolidated
Subsidiaries.
"Unused Commitments" means an amount equal to all unadvanced
funds (other than unadvanced funds in connection with any construction loan)
which any third party is obligated to advance to the Borrower or otherwise,
pursuant to any loan document, written instrument or otherwise.
"Unused Facility" shall mean the amount, calculated daily, by
which the Commitments exceed the sum of the outstanding principal amount of the
Loans.
"Wholly-Owned Subsidiary" shall mean a Consolidated Subsidiary
that is 100% owned, directly or indirectly, by the Borrower; provided that a
Consolidated Subsidiary shall also be deemed to be a "Wholly-Owned Subsidiary"
hereunder if the General Partner also wholly owns, directly or indirectly, a
minority position in such Consolidated Subsidiary (in addition to the General
Partner's indirect interest in such Consolidated Subsidiary as a result of the
General Partner's ownership interest in the Borrower) and the Borrower owns all
the remaining interests in such Consolidated Subsidiary.
SECTION 1.2. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP as in effect from time to time, applied on a basis
consistent (except for changes concurred in by the
24
Borrower's independent public accountants) with the most recent audited
Consolidated financial statements of the Borrower, the General Partner, and
their Consolidated Subsidiaries delivered to the Banks; provided that, if the
Borrower notifies the Agent that the Borrower wishes to amend any covenant in
Article V to eliminate the effect of any change in GAAP on the operation of such
covenant (or if the Agent notifies the Borrower that the Required Banks wish to
amend Article V for such purpose), then the Borrower's compliance with such
covenant shall be determined on the basis of GAAP in effect immediately before
the relevant change in GAAP became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Borrower
and the Required Banks.
SECTION 1.3. Types of Borrowings. The term "Borrowing" denotes
the aggregation of Loans of one or more Banks to be made to the Borrower
pursuant to Article II on a single date and for a single Interest Period.
Borrowings are classified for purposes of this Agreement by reference to the
pricing of Loans comprising such Borrowing (e.g., a "Euro-Dollar Borrowing" is a
Borrowing comprised of Euro-Dollar Loans).
ARTICLE II
THE CREDITS
SECTION 2.1. Commitments to Lend. During the Term, each Bank
severally agrees, on the terms and conditions set forth in this Agreement, to
make loans to the Borrower pursuant to this Section from time to time in amounts
such that the aggregate principal amount of Loans by such Bank at any one time
outstanding shall not exceed the amount of its Commitment. The aggregate amount
of Loans to be made hereunder shall not exceed the Maximum Loan Amount. At no
time shall there be more than ten (10) Euro-Dollar Loans outstanding. Each
Borrowing under this subsection (a) shall be in an aggregate principal amount of
not less than $5,000,000, or an integral multiple of $1,000,000 in excess
thereof (except that any such Borrowing may be in the aggregate amount available
in accordance with Section 3.2(c)) and shall be made from the several Banks
ratably in proportion to their respective Commitments. Upon the expiration of
the Term, the Banks shall have no further obligation to make loans to Borrower.
Within the foregoing limits, the Borrower may borrow under this Section, repay,
or to the extent required by Section 2.9 or permitted by Section 2.10, prepay
Loans and reborrow at any time during the Term.
SECTION 2.2. Notice of Borrowing. The Borrower shall give the
Agent notice (a "Notice of Borrowing") not
25
later than 1:00 p.m. (New York City time) (y) one (1) Domestic Business Day
before each Base Rate Borrowing, or (z) three (3) Euro-Dollar Business Days
before each Euro-Dollar Borrowing, as applicable, specifying:
(a) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Domestic Borrowing or a Euro-Dollar Business Day
in the case of a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
(c) whether the Loans comprising such Borrowing are to be Base
Rate Loans or Euro-Dollar Loans, and
(d) in the case of a Euro-Dollar Borrowing, the duration of
the Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period, except that no Interest Period shall extend
beyond the Maturity Date, as such may be extended pursuant to Section 2.8
hereof.
SECTION 2.3. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the Agent shall
promptly notify each Bank of the contents thereof and of such Bank's share (if
any) of such Borrowing and such Notice of Borrowing shall thereafter only be
revocable by the Borrower no later than (y) with respect to a Base Rate
Borrowing, 5:00 p.m. (New York City time) one Domestic Business Day before each
Base Rate Borrowing or (z) with respect to a Euro-Dollar Borrowing, 3:00 p.m.
(New York City time) three (3) Euro-Dollar Business Days before each Euro-Dollar
Borrowing. Upon the expiration of such applicable time periods, the Notice of
Borrowing shall not thereafter be revocable by Borrower.
(b) Not later than 2:00 p.m. (New York City time) on the date
of each Borrowing as indicated in the Notice of Borrowing, each Bank
participating therein shall (except as provided in subsection (c) of this
Section) make available its share of such Borrowing, in Federal or other funds
immediately available in New York City, to the Agent at its address referred to
in Section 9.1. Unless the Agent determines that any applicable condition
specified in Article III has not been satisfied, the Agent will make the funds
so received from the Banks available to the Borrower at the Agent's aforesaid
address.
(c) Unless the Agent shall have received notice from a Bank
prior to the date of any Borrowing that such Bank will not make available to the
Agent such Bank's share of such Borrowing, the Agent may assume that such Bank
has
26
made such share available to the Agent on the date of such Borrowing in
accordance with subsection (b) of this Section 2.3 and the Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so made
such share available to the Agent, such Bank and the Borrower severally agree to
repay to the Agent forthwith within ten (10) days after demand therefore such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Agent, at (i) in the case of the Borrower, a rate per annum equal
to the higher of the Federal Funds Rate and the interest rate applicable thereto
pursuant to Section 2.6 and (ii) in the case of such Bank, the Federal Funds
Rate. If such Bank shall repay to the Agent such corresponding amount, such
amount so repaid shall constitute such Bank's Loan included in such Borrowing
for purposes of this Agreement. The failure of any Bank to make any Loan on a
date of Borrowing hereunder shall not relieve any other Bank of any obligation
hereunder to make a Loan on such date. Notwithstanding the foregoing and any
other provision to the contrary contained herein, if any Bank shall have failed
to fund its share of a previously requested Loan on the applicable date of
Borrowing and Borrower provides a new Notice of Borrowing as a result of such
failure to fund, then, if necessary to make such Borrowing, Borrower shall be
permitted a single additional Loan (beyond that permitted by Section 2.1, if a
Euro-Dollar Loan) and the $5,000,000 minimum Borrowing limit elsewhere referred
to in the Credit Agreement shall not apply to such new Borrowing.
SECTION 2.4. Notes.
(a) The Loans of each Bank shall be evidenced by a single Note
payable to the order of such Bank for the account of its Applicable Lending
Office in an amount equal to the aggregate unpaid principal amount of such
Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the Agent,
request that its Loans of a particular type be evidenced by a separate Note in
an amount equal to the aggregate unpaid principal amount of such Bank's Loans.
Each such Note shall be in substantially the form of Exhibit A hereto with
appropriate modifications to reflect the fact that it evidences solely Loans of
the relevant type for such Bank. Each reference in this Agreement to the "Note"
of such Bank shall be deemed to refer to and include any or all of such Notes,
as the context may require.
(c) Upon receipt of each Bank's Note pursuant to Section
3.1(a), the Agent shall forward such Note to such
27
Bank. Each Bank shall record the date, amount, type and maturity of each Loan
made by it and the date and amount of each payment of principal made by the
Borrower with respect thereto, and may, if such Bank so elects in connection
with any transfer or enforcement of its Note, endorse on the schedule forming a
part thereof appropriate notations to evidence the foregoing information with
respect to each such Loan then outstanding; provided that the failure of any
Bank to make any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Notes. Each Bank is hereby
irrevocably authorized by the Borrower so to endorse its Note and to attach to
and make a part of its Note a continuation of any such schedule as and when
required which continuation shall be deemed correct absent manifest error.
SECTION 2.5. Maturity of Loans. Each Loan included in any
Borrowing shall mature, and the principal amount thereof shall be due and
payable, on the last day of the Interest Period applicable to such Borrowing.
SECTION 2.6. Interest Rates.
(a) Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof for each day from the date such Loan is made until the
date it is repaid at a rate per annum equal to the Base Rate plus the Applicable
Margin for Base Rate Loans for such day. Such interest shall be payable for each
Interest Period on the last day thereof.
(b) Each Euro-Dollar Loan shall bear interest on the
outstanding principal amount thereof, for each day during the Interest Period
applicable thereto, at a rate per annum equal to the sum of the Applicable
Margin for Euro-Dollar Loans for such day plus the Adjusted London Interbank
Offered Rate applicable to such Interest Period. Such interest shall be payable
for each Interest Period on the last day thereof and, if such Interest Period is
longer than three months, at intervals of three months after the first day
thereof.
The "Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained (rounded
upward, if necessary, to the next higher 1/100 of 1%) by dividing (i) the
applicable London Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar
Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Interest
Period means the average (rounded upward, if necessary, to the next higher 1/16
of 1%) of the respective rates per annum at which deposits in dollars are
offered to
28
the Reference Bank in the London interbank market at approximately 11:00 a.m.
(London time) two Euro-Dollar Business Days before the first day of such
Interest Period in an amount approximately equal to the principal amount of the
Euro-Dollar Loan of the Reference Bank to which such Interest Period is to apply
and for a period of time comparable to such Interest Period.
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member bank of
the Federal Reserve System in New York City with deposits exceeding five billion
dollars in respect of "Eurocurrency liabilities" (or in respect of any other
category of liabilities which includes deposits by reference to which the
interest rate on Euro-Dollar Loans is determined or any category of extensions
of credit or other assets which includes loans by a non-United States office of
any Bank to United States residents). The Adjusted London Interbank Offered Rate
shall be adjusted automatically on and as of the effective date of any change in
the Euro-Dollar Reserve Percentage.
(c) In the event that, and for so long as, any Event of
Default shall have occurred and be continuing, the outstanding principal amount
of the Loans, and, to the extent permitted by applicable law, overdue interest
in respect of all Loans, shall bear interest at the annual rate of the sum of
the Prime Rate and four percent (4%).
(d) The Agent shall determine each interest rate applicable to
the Loans hereunder. The Agent shall give prompt notice to the Borrower and the
participating Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(e) The Reference Bank agrees to use its best efforts to
furnish quotations to the Agent as contemplated by this Section. If the
Reference Bank does not furnish a timely quotation, the provisions of Section
8.1 shall apply.
SECTION 2.7. Fees.
(a) Commitment Fee. During the Term, the Borrower shall pay
Agent for the account of the Banks ratably in proportion to their respective
Commitments a commitment fee (the "Commitment Fee") accruing at a per annum rate
equal to the then applicable Commitment Fee Percentage on the daily average
undrawn Commitments. The Commitment Fee
29
shall be payable quarterly in arrears on each October 31, January 31, April 30,
and July 31 during the Term.
(b) Fees Non-Refundable. All fees set forth in this Section
2.7 shall be deemed to have been earned as such fees accrue in accordance with
the provisions of this Agreement and shall be non-refundable when paid. The
obligation of the Borrower to pay such fees in accordance with the provisions of
this Agreement shall be binding upon the Borrower and shall inure to the benefit
of the Agent and the Banks regardless of whether any Loans are actually made.
SECTION 2.8. Mandatory Expiration. The term (the "Term") of
the Commitments shall terminate and expire on the date which is the third
anniversary of the Closing Date (or, if such date is not a Domestic Business
Day, then the next succeeding Domestic Business Day) (the "Maturity Date"). Upon
the date of the termination of the Term, any Loans then outstanding (together
with accrued interest thereon) shall be due and payable.
SECTION 2.9. Mandatory Prepayment.
(a) In the event that a Borrowing Base Property (or any
Separate Parcel that originally formed a part of a Borrowing Base Property) is
sold, transferred or released from the restrictions of Section 5.11 hereof, in
accordance with this Agreement, the Borrower shall simultaneously with such
sale, transfer or release, prepay an amount equal to in the event of a sale or
transfer, 100% of the net proceeds of such sale or transfer or in the event of a
release, such amount as shall be required for the Borrower to remain in
compliance with this Agreement. Notwithstanding the foregoing, a simultaneous
like-kind exchange under Section 1031 of the Internal Revenue Code will not be
subject to the provisions of this Section 2.9(a) provided that the exchanged
property has qualified as a New Acquisition and any "boot" associated therewith
shall be applied to prepayment of the Loans. Sale of a property in violation of
this Section 2.9 shall constitute an Event of Default.
(b) Any prepayment pursuant to this Section 2.9 shall be
applied first to any Base Rate Loans then outstanding, then to any Euro-Dollar
Loans with the shortest remaining Interest Periods. In connection with the
prepayment of a Euro-Dollar Loan prior to the maturity thereof, the Borrower
shall also pay any applicable expenses pursuant to Section 2.12. Each such
prepayment shall be applied to prepay ratably the Loans of the Banks.
Notwithstanding the foregoing, in the event any Mandatory Prepayment Event would
result in the Borrower incurring expenses pursuant to Section 2.12, at
Borrower's written request to be delivered on the date of any prepayment
pursuant to this Section 2.9 (if
30
Borrower fails to deliver such a request, then such expenses pursuant to Section
2.12, if any, shall be immediately due and payable), the Agent shall create an
interest-bearing escrow account with Agent or Agent's designee to receive funds
that would have been applied to pre-pay Euro-Dollar Loans prior to the end of
the applicable Interest Periods, which funds will be held by Agent or Agent's
designee until the earlier of (x) an Event of Default hereunder (in which event
such funds shall be immediately applied without notice to the outstanding
Euro-Dollar Loans) or (y) such time as an Interest Period shall end whereupon
the Agent shall apply such funds to pay the Euro-Dollar Loan relating to such
expiring Interest Period or (z) Agent has received a Notice of Borrowing with
respect to such escrowed funds together with a certificate of the Borrower's
chief financial officer or chief accounting officer certifying that upon the
distribution of such funds to Borrower as new Loans, the Borrower will be in
compliance with the requirements of Section 5.9 and containing information
required by Section 5.1(c)(i) and (ii) hereof to establish such compliance.
(c) Any event referred to in Section 2.9(a) that results in a
required prepayment of the Loans pursuant to this Section 2.9 shall be referred
to as a "Mandatory Prepayment Event".
SECTION 2.10. Optional Prepayments.
(a) The Borrower may, upon at least five (5) Domestic Business
Days' notice to the Agent, prepay any Base Rate Borrowing in whole at any time,
or from time to time in part in amounts aggregating not less than One Million
Dollars ($1,000,000) or any larger multiple of One Million Dollars ($1,000,000),
by paying the principal amount to be prepaid together with accrued interest
thereon to the date of prepayment. Each such optional prepayment shall be
applied to prepay ratably the Loans of the several Banks included in such
Borrowing.
(b) Except as provided in Section 8.2, the Borrower may not
prepay all or any portion of the principal amount of any Euro-Dollar Loan prior
to the maturity thereof unless the Borrower shall also pay any applicable
expenses pursuant to Section 2.12. Notice of such prepayment shall be delivered
to Agent by Borrower, upon at least five (5) Domestic Business Days notice. Each
such optional prepayment shall be in the amounts set forth in Section 2.10(a)
above and shall be applied to prepay ratably the Loans of the Banks included.
(c) The Borrower may cancel all or any portion of the
Commitments by the delivery to Agent of a notice of cancellation within the
applicable time periods and minimum
31
amounts set forth in Sections 2.10(a) and (b) above if there are Loans then
outstanding or, if there are no Loans outstanding at such time, upon at least
five (5) Domestic Business Days notice to Agent, whereupon, in either event,
such Commitments so designated by Borrower shall terminate on the date set forth
in such notice of cancellation, and, if there are any Loans then outstanding in
excess of the Commitments after giving effect to such termination, Borrower
shall prepay such Loans outstanding on such date in accordance with the
requirements of Section 2.10(a) and (b).
(d) Upon receipt of a notice of prepayment or cancellation
from Borrower pursuant to this Section, the Agent shall promptly notify each
Bank of the contents there of and of such Bank's ratable share (if any) of such
prepayment or cancellation and such notice shall thereafter be revocable by the
Borrower no later than 10:00 a.m. (New York City time) three (3) Domestic
Business Days before the date originally set forth by Borrower in the applicable
notice of prepayment or cancellation as the prepayment or cancellation date.
Upon the expiration of such time period, the notice of prepayment or
cancellation shall be irrevocable.
(e) Any amounts prepaid pursuant to Sections 2.10(a) or (b)
may be reborrowed. Any amounts cancelled pursuant to Section 2.10(c) may not be
reborrowed.
SECTION 2.11. General Provisions as to Payments.
(a) The Borrower shall make each payment of principal of, and
interest on, the Loans and of fees required hereunder, not later than 1:00 p.m.
(New York City time) on the date when due, in Federal or other funds immediately
available in New York City, to the Agent at its address referred to in Section
9.1. The Agent will promptly distribute to each Bank its ratable share of each
such payment received by the Agent for the account of the Banks. Whenever any
payment of principal of, or interest on, the Base Rate Loans or of fees required
hereunder shall be due on a day which is not a Domestic Business Day, the date
for payment thereof shall be extended to the next succeeding Domestic Business
Day. Whenever any payment of principal of, or interest on, the Euro-Dollar Loans
shall be due on a day which is not a Euro-Dollar Business Day, the date for
payment thereof shall be extended to the next succeeding Euro-Dollar Business
Day unless such Euro-Dollar Business Day falls in another calendar month, in
which case the date for payment thereof shall be the next preceding Euro-Dollar
Business Day. If the date for any payment of principal is extended by operation
of law or otherwise, interest thereon shall be payable for such extended time.
32
(b) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks hereunder
that the Borrower will not make such payment in full, the Agent may assume that
the Borrower has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Bank on such due date an amount equal to the amount then due such Bank. If and
to the extent that the Borrower shall not have so made such payment, each Bank
shall repay to the Agent forthwith on demand such amount distributed to such
Bank together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate.
SECTION 2.12. Funding Losses. If the Borrower makes any
payment of principal with respect to any Euro-Dollar Loan (pursuant to Article
II, VI or VIII or otherwise) on any day other than the last day of the Interest
Period applicable thereto, or the last day of an applicable period fixed
pursuant to Section 2.6(b), or if the Borrower fails to borrow any Euro-Dollar
Loans, after notice has been given to any Bank in accordance with Section 2.3(a)
and not revoked as permitted in this Agreement, then and only then shall
Borrower reimburse each Bank within 15 days after demand therefor for any
resulting loss or expense reasonably incurred by it (or by an existing or
prospective Participant in the related Loan), including (without limitation) any
loss incurred in obtaining, liquidating or employing deposits from third
parties, but excluding loss of margin for the period after any such payment or
failure to borrow, provided that such Bank shall have delivered to the Borrower
a certificate signed by an authorized officer of such Bank as to the amount of
such loss or expense reasonably incurred, which certificate shall be conclusive
in the absence of manifest error.
SECTION 2.13. Computation of Interest and Fees. Interest based
on the Prime Rate hereunder shall be computed on the basis of a year of 365 days
(or 366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest and
fees shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
SECTION 2.14. Use of Proceeds. The Borrower shall use the
proceeds of the Loans solely for (i) the acquisition by Borrower (either
directly or indirectly through Subsidiaries) of real estate properties (or
interests therein) which are primarily industrial (including
warehouse/distribution, light industrial and light assembly)
33
or retail (including neighborhood or community shopping centers and similar
sub-regional properties) with land adjacent or incidental thereto (the "New
Acquisitions"), (ii) such other costs and expenses attendant with such
acquisitions and improvements, including, without limitation, closing costs,
attorneys' fees and expenses and other professional fees, architectural fees,
due diligence expenses, title insurance premiums, survey preparation costs,
recording fees, appraisal fees, engineering and environmental fees, licensing
and regulatory filing fees, brokerage commissions, leasing commissions,
reasonable tenant improvement costs, (iii) construction, renovation,
rehabilitation and alteration of Real Property Assets or other Capital
Expenditures, and (iv) general working capital needs of Borrower or Consolidated
Subsidiaries of Borrower not to exceed a maximum amount of $50,000,000 with
respect to such working capital needs (collectively, "Approved Uses").
ARTICLE III
CONDITIONS
SECTION 3.1. Closing. The closing hereunder shall occur on the date
(the "Closing Date") when each of the following conditions is satisfied (or
waived by the Agent), each document to be dated the Closing Date unless
otherwise indicated:
(a) the Borrower shall have executed and delivered to the Agent a Note
for the account of each Bank dated on or before the Closing Date complying with
the provisions of Section 2.4;
(b) the Borrower and Agent shall have executed and delivered to the
Agent a duly executed original of this Agreement;
(c) the General Partner, AMB Property II, L.P. and Long Gate LLC shall
each have executed and delivered the Confirmation of Guaranty;
(d) Agent shall have received an enforceability opinion of Latham &
Watkins, New York and California counsel for the Borrower, and opinions as to
the due authority, execution and delivery of the Loan Documents (other than any
Subsidiary Guaranty) by Latham & Watkins and Ballard Spahr Andrews & Ingersoll,
in each case reasonably acceptable to the Agent, the Banks and their counsel;
(e) Agent shall have received all documents Agent may reasonably
request relating to the existence of the Borrower, the General Partner and any
Subsidiary Guarantor, the
34
authority for and the validity of this Agreement and the other Loan Documents,
and any other matters relevant hereto, all in form and substance reasonably
satisfactory to the Agent. Such documentation shall include, without limitation,
the partnership agreement and certificate of limited partnership of Borrower,
the articles of incorporation and by-laws of the General Partner and the
organizational and formation documents of any Subsidiary Guarantor, each as
amended, modified or supplemented to the Closing Date, certified to be true,
correct and complete by a senior officer of the Borrower as of a date not more
than twenty (20) days prior to the Closing Date, together with a good standing
certificate from the Secretary of State (or the equivalent thereof) of the State
or States in which Borrower, the General Partner and any Subsidiary Guarantor
are incorporated and from the Secretary of State (or the equivalent thereof) of
each other State in which a Borrowing Base Property is located and in which any
of the Borrower, the General Partner or a Subsidiary Guarantor is required to be
qualified to transact business, each to be dated not more than twenty (20) days
prior to the Closing Date;
(f) Agent shall have received all certificates, agreements and other
documents referred to in this Section 3.1 and Section 3.2, unless otherwise
specified, in sufficient counterparts, satisfactory in form and substance to the
Agent in its sole discretion;
(g) Borrower, the General Partner and each Subsidiary Guarantor shall
have taken all actions required to authorize the execution and delivery of this
Agreement and the other Loan Documents to which it is a party and the
performance thereof by the Borrower, the General Partner and such Subsidiary
Guarantors, as applicable;
(h) Agent shall be satisfied that the Borrower is not subject to any
present or contingent Environmental Claim which could have a Material Adverse
Effect;
(i) Agent shall have received a pro forma Consolidated balance sheet of
the Borrower, the General Partner, and their Consolidated Subsidiaries for the
period ended September 30, 1997;
(j) if applicable, Agent shall have received wire transfer instructions
in connection with any Loans to be made on the Closing Date;
(k) Agent shall have received, for its and any other Bank's account,
(i) all fees due and payable pursuant to Section 2.7 hereof on or before the
Closing Date, and (ii) the reasonable fees and expenses accrued through the
Closing Date of Skadden, Arps, Slate, Meagher & Flom LLP;
35
(l) Agent shall have received copies of all consents, licenses and
approvals, if any, required in connection with the execution, delivery and
performance by the Borrower, the General Partner and any Subsidiary Guarantor,
and the validity and enforceability, of the Loan Documents, or in connection
with any of the transactions contemplated thereby, and such consents, licenses
and approvals shall be in full force and effect in all material respects;
(m) Agent shall have received satisfactory reports of UCC
(collectively, the "UCC Searches"), tax lien, and judgment searches conducted by
a search firm reasonably acceptable to Agent with respect to the Borrowing Base
Properties, the Borrower, the General Partner and any Subsidiary Guarantor, such
searches to be conducted by Borrower's counsel in each of the locations
specified by the Agent;
(n) the Agent shall have received with respect to each Borrowing Base
Property that was not a Borrowing Base Property under the Existing Credit
Agreement, a copy of the engineer's inspection report obtained in connection
with the acquisition of such Borrowing Base Property;
(o) the Agent shall have received with respect to each Borrowing Base
Property that was not a Borrowing Base Property under the Existing Credit
Agreement, (i) a description of the Borrowing Base Property, (ii) two years of
historical cash flow operating statements with respect to such Borrowing Base
Property, if available, (iii) five years of cash flow projections (including
capital expenditures), (iv) a map and site plan, (v) an investment memorandum
prepared by the Borrower (or a predecessor of the Borrower) in connection with
the acquisition of the Borrowing Base Property (which memorandum shall include,
but not be limited to, an analysis prepared by the Borrower or such predecessor
of the credit quality and viability of each existing tenant of such Borrowing
Base Property which occupies more than 15% of such Borrowing Base Property or
accounts for more than 15% of the base rentals of such Borrowing Base Property),
and (vi) to the extent obtained by the Borrower or, as applicable, a
predecessor, in connection with such acquisition, evidence of zoning compliance
(which evidence can include a "lawyer's letter" from a local counsel engaged by
Borrower at the time of acquisition);
(p) the Agent shall have received certificates of insurance with
respect to each Borrowing Base Property demonstrating the coverage required
under this Agreement;
(q) the Agent shall have received with respect to each Borrowing Base
Property that was not a Borrowing Base Property under the Existing Credit
Agreement, a copy of the Title Commitment obtained by the Borrower or, as
applicable,
36
the Wholly-Owned Subsidiary that owns or leases each such Borrowing Base
Property in connection with the acquisition of each such Borrowing Base
Property;
(r) the Agent shall have received a compliance certificate from
Borrower's chief financial officer or chief accounting officer certifying
compliance with Section 5.9 hereof containing such information as is required by
Section 5.1(c)(i) and (ii);
(s) the Agent shall have received with respect to each Borrowing Base
Property that was not a Borrowing Base Property under the Existing Credit
Agreement, a copy of the environmental report obtained by the Borrower or the
Wholly-Owned Subsidiary that owns or leases each such Borrowing Base Property in
connection with the acquisition of each such Borrowing Base Property;
(t) the Agent shall have received with respect to each Borrowing Base
Property such additional information with respect to each Borrowing Base
Property, the tenants of such Borrowing Base Property, and, if applicable, the
Wholly-Owned Subsidiary that owns such Borrowing Base Property, as the Agent or
any Bank shall reasonably request; and
(u) the Agent shall have received a certificate of the chief financial
officer or the chief accounting officer of the Borrower certifying that the
"Formation Transactions," as defined in the Form S-11 filed with the Securities
and Exchange Commission in connection with the initial public offering of the
common stock of the General Partner, shall have been consummated.
Agent shall promptly notify Borrower and the Banks of the Closing Date.
SECTION 3.2. Borrowings. The obligation of any Bank to make a Loan on
the occasion of any Borrowing is subject to the satisfaction of the following
conditions:
(a) the Closing Date shall have occurred on or prior to November 26,
1997;
(b) receipt by Agent of a Notice of Borrowing as required by Section
2.2;
(c) immediately after such Borrowing, the aggregate outstanding
principal amount of the Loans will not exceed the Maximum Loan Amount;
(d) immediately after such Borrowing, the aggregate outstanding
principal amount of the Loans will not exceed the aggregate amount of the
Commitments (as reduced pursuant
37
to Section 2.10(c)) and with respect to each Bank, such Bank's pro rata portion
of the Loans will not exceed such Bank's Commitment (as reduced pursuant to
Section 2.10(c)).
(e) immediately before and after such Borrowing, no Default or Event of
Default shall have occurred and be continuing both before and after giving
effect to the making of such Loans;
(f) the representations and warranties of the Borrower contained in
this Agreement shall be true and correct in all material respects on and as of
the date of such Borrowing both before and after giving effect to the making of
such Loans;
(g) no law or regulation shall have been adopted, no order, judgment or
decree of any governmental authority shall have been issued, and no litigation
shall be pending or threatened, which does or, with respect to any threatened
litigation, seeks to enjoin, prohibit or restrain, the making or repayment of
the Loans or the consummation of the transactions contemplated by this
Agreement;
(h) no event, act or condition shall have occurred after the Closing
Date which, in the reasonable judgment of the Agent or the Banks, as the case
may be, has had or is likely to have a Material Adverse Effect;
(i) the Agent shall have theretofore received duly and validly executed
Subsidiary Guaranties from each Wholly-Owned Subsidiary that owns a Borrowing
Base Property;
(j) receipt by the Agent of a certificate of the chief financial
officer or the chief accounting officer of the Borrower certifying that as of
the date of such Borrowing, the Borrower is in compliance Section 5.9 and
containing such information as is required by Section 5.1(c) (i) and (ii); and
(k) receipt by the Agent of a certificate of the chief financial
officer or the chief accounting officer of the Borrower certifying that Borrower
shall receive the proceeds of the Loan and will use the proceeds of such Loan
for Approved Uses and briefly describing such Approved Uses.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the facts specified in clauses
(c), (d), (e), (f), (g) and (i) of this Section.
38
SECTION 3.3. Borrowing Base Properties.
(a) For purposes of this Agreement, the term "Borrowing Base
Properties" shall mean (i) the Real Property Assets listed in Exhibit B attached
hereto and made a part hereof, each of which shall be 100% owned in fee (or
leasehold in the case of assets listed as such on Exhibit B) by the Borrower or
any Wholly-Owned Subsidiary of the Borrower and each of which is not subject to
any Lien (other than Permitted Liens), subject to adjustment as set forth
herein, together with (ii) each New Acquisition or Real Property Asset submitted
by Borrower for inclusion as a "Borrowing Base Property" hereunder and made a
"Borrowing Base Property" pursuant to the terms hereof and of Section 3.4. Each
Borrowing Base Property (1) shall be 100% owned in fee or leasehold by the
Borrower or a Wholly-Owned Subsidiary of the Borrower, (2) shall not be subject
to a Lien (other than Permitted Liens), and (3) shall not be an interest in a
participating mortgage, all as certified by Borrower pursuant to a certificate
in substantially the form of Exhibit D attached hereto delivered to Agent at the
time that Borrower submits a New Acquisition or Real Property Asset for
inclusion as a Borrowing Base Property. In addition, with respect to any
proposed Borrowing Base Property which is owned by a Wholly-Owned Subsidiary of
Borrower, Borrower shall cause such Wholly-Owned Subsidiary to deliver to the
Agent a Subsidiary Guaranty at the time that such New Acquisition or Real
Property Asset is submitted for inclusion as a Borrowing Base Property.
(b) Except as set forth in clause (c) below, Real Property
Assets (i) which have been released from this Agreement and the other Loan
Documents as of such date in accordance with Sections 5.11 or Section 5.12 or
any other provision of this Agreement, or (ii) which have failed to maintain the
Required Occupancy Level for any twelve month period, shall be excluded as
"Borrowing Base Properties" for purposes of this Agreement.
(c) Notwithstanding the foregoing clause (b), Separate Parcels
which, for a period of no longer than twelve months, do not maintain the
Required Occupancy Level but which otherwise satisfy the requirements set forth
in Section 3.3(a) or Section 3.4 for inclusion as Borrowing Base Properties may
be included as Borrowing Base Properties provided that the aggregate Gross Asset
Value for such Separate Parcels shall not constitute more than ten percent (10%)
of the aggregate Gross Asset Value of the remaining Borrowing Base Properties,
as of any date of determination. In the event that the aggregate Gross Asset
Value of such Separate Parcels would, as of any date, constitute more than ten
percent of the Gross Asset Value of the remaining Borrowing Base Properties,
only those Separate Parcels for
39
which the aggregate Gross Asset Value would constitute 10% or less shall be
deemed to be included as Borrowing Base Properties hereunder.
SECTION 3.4. Conditions Precedent to New Acquisitions and Additional
Real Property Assets.
(a) Until such time as Borrower or the General Partner shall
receive at least one (1) Investment Grade Rating from either S&P or Moody's, any
New Acquisition or Real Property Asset desired by Borrower to be included as a
Borrowing Base Property will require the approval of the Required Banks. The
approval right set forth in this clause (a) shall be of no force or effect for
so long as Borrower's Credit Rating is an Investment Grade Rating.
Notwithstanding the foregoing, if Borrower or the General Partner receives a
rating that is not an Investment Grade Rating from either S&P or Moody's, until
such time as Borrower or the General Partner has received an Investment Grade
Rating from each of S&P and Moody's, any New Acquisition or Real Property Asset
desired by Borrower to be included as a Borrowing Base Property will require the
approval of the Required Banks.
(b) For so long as the approval of the Required Banks is
required pursuant to clause (a) above, the Borrower shall submit to the Agent
the materials set forth below (the "Due Diligence Package") relating to each New
Acquisition or Real Property Asset that the Borrower desires to be added to the
Borrowing Base Properties. The Due Diligence Package shall include (i) a
description of the Real Property Asset or New Acquisition, (ii) two years of
historical cash flow operating statements, if available, (iii) five years of
cash flow projections (including capital expenditures), (iv) a map and site
plan, (v) if such New Acquisition or Real Property Asset was acquired by the
Borrower (or a predecessor of the Borrower) within the prior twelve month
period, an investment memorandum prepared by the Borrower or such predecessor in
connection with the acquisition of the Borrowing Base Property by Borrower or
such predecessor (which memorandum shall include, but not be limited to, an
analysis prepared by the Borrower or such predecessor of the credit quality and
viability of each existing tenant of such Borrowing Base Property which occupies
more than 15% of such Borrowing Base Property or accounts for more than 15% of
the base rentals of such Borrowing Base Property), (vi) to the extent obtained
by the Borrower or, as applicable, a Wholly-Owned Subsidiary in connection with
any New Acquisition, evidence of zoning compliance (which evidence can include a
"lawyer's letter" from a local counsel engaged by Borrower at the time of
acquisition), (vii) a copy of the engineer's inspection report obtained by the
Borrower or, if applicable, a Wholly-Owned Subsidiary in connection with the
acquisition of such New Acquisition or Real Property Asset,
40
(viii) a copy of the Title Commitment obtained by the Borrower or, if
applicable, a Wholly-Owned Subsidiary that owns or leases (or will own or lease)
each such New Acquisition or Real Property Asset, (ix) a copy of the
environmental report obtained by the Borrower or, if applicable, a Wholly-Owned
Subsidiary, in connection with the acquisition of each such Borrowing Base
Property and (x) such additional information with respect to each New
Acquisition or Real Property Asset, the tenants of such New Acquisition or Real
Property Asset, and if applicable, the Wholly-Owned Subsidiary that owns or
leases such New Acquisition or Real Property Asset, as the Agent or any Bank
shall reasonably request. The Borrower shall permit the Agent at all reasonable
times and upon reasonable prior notice to make an inspection of such New
Acquisition or Real Property Asset.
(c) Notwithstanding the foregoing clause (b), the Due
Diligence Package with respect to any Real Property Asset to be added as a
Borrowing Base Property within thirty (30) days after the Closing Date shall
include only (i) a description of the Real Property Asset, (ii) two years of
historical cash flow operating statements, if available, (iii) five years of
cash flow projections (including capital expenditures), (iv) a map and site
plan, and (v) if such Real Property Asset was acquired by the Borrower (or a
predecessor of the Borrower) within the prior twelve month period, an investment
memorandum prepared by the Borrower (or such predecessor) in connection with the
acquisition of the Borrowing Base Property by Borrower or such predecessor
(which memorandum shall include, but not be limited to, an analysis prepared by
the Borrower or such predecessor of the credit quality and viability of each
existing tenant of such Borrowing Base Property which occupies more than 15% of
such Borrowing Base Property or accounts for more than 15% of the base rentals
of such Borrowing Base Property) and (vi) such additional information with
respect to such Real Property Asset, the tenants of such Real Property Asset,
and, if applicable, the Wholly-Owned Subsidiary that owns or leases such New
Acquisition or Real Property Asset, as the Agent or any Bank shall reasonably
request. The Borrower shall permit the Agent at all reasonable times and upon
reasonable prior notice to make an inspection of such Real Property Asset.
(d) The Borrower shall distribute a copy of each item
constituting the Due Diligence Package by overnight mail to each of the Banks
for their review and approval. Failure to respond to the Agent in writing by any
Bank within ten (10) Domestic Business Days after receipt of the Due Diligence
Package, shall be deemed to be an approval by such Bank of such New Acquisition
or Real Property Asset for inclusion as a Borrowing Base Property.
41
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and each of the other Banks which may
become a party to this Agreement to make the Loans, the Borrower makes the
following representations and warranties as of the Closing Date. Such
representations and warranties, shall survive the effectiveness of this
Agreement, the execution and delivery of the other Loan Documents and the making
of the Loans.
SECTION 4.1. Existence and Power. The General Partner is a real estate
investment trust, duly formed, validly existing and in good standing as a
corporation under the laws of Maryland. The Borrower is a limited partnership
duly formed, validly existing and in good standing under the laws of Delaware.
Each of the Borrower, the General Partner and each Subsidiary Guarantor has all
powers and all material governmental licenses, authorizations, consents and
approvals required to own its property and assets and carry on its business as
now conducted or as it presently proposes to conduct and has been duly qualified
and is in good standing in every jurisdiction in which the failure to be so
qualified and/or in good standing is likely to have a Material Adverse Effect.
SECTION 4.2. Power and Authority. Each of the Borrower, the General
Partner and each Subsidiary Guarantor has the partnership or corporate (as
applicable) power and authority to execute, deliver and carry out the terms and
provisions of each of the Loan Documents to which it is a party and has taken
all necessary corporate action to authorize the execution and delivery on behalf
of, as applicable, the Borrower, the General Partner and such Subsidiary
Guarantor and the performance by the Borrower, the General Partner and such
Subsidiary Guarantor of such Loan Documents to which it is a party. Each of the
Borrower, the General Partner and each Subsidiary Guarantor has duly executed
and delivered each Loan Document to which it is a party, and each such Loan
Document constitutes the legal, valid and binding obligation of such party,
enforceable 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.
SECTION 4.3. No Violation. Neither the execution, delivery or
performance by or on behalf of the Borrower, the General Partner or any
Subsidiary Guarantor of the Loan Documents to which it is a party, nor
compliance by the Borrower, the General Partner or any Subsidiary Guarantor with
42
the terms and provisions thereof nor the consummation of the transactions
contemplated by the Loan Documents, (i) will contravene any applicable provision
of any material law, statute, rule, regulation, order, writ, injunction or
decree of any court or governmental instrumentality or (ii) will conflict, in
any material respect, with or result in any breach of, any of the terms,
covenants, conditions or provisions of, or constitute a material default under,
or result in the creation or imposition of (or the obligation to create or
impose) any Lien upon any of the property or assets of the Borrower, the General
Partner or any of their Consolidated Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, subscription agreement or other agreement or
other instrument to which the Borrower, the General Partner, any Subsidiary
Guarantor (or of any partnership of which any such party is a partner) or any of
their Consolidated Subsidiaries is a party or by which it or any of its property
or assets is bound or to which it is subject, or (iii) will cause a default by
the Borrower, the General Partner or any Subsidiary Guarantor under any
subscription agreement or any other organizational document of any Person in
which the Borrower, the General Partner or any Consolidated Subsidiary has an
interest, or cause a default under the partnership agreement, articles of
incorporation or by laws (as applicable) of the Borrower, the General Partner or
any Consolidated Subsidiary.
SECTION 4.4. Financial Information.
(a) The Consolidated balance sheet of the Borrower, the General
Partner, and their Consolidated Subsidiaries dated December 31, 1996 and the
related Consolidated statements of the Borrower's financial position for the
fiscal year then ended, audited by Arthur Andersen & Co., L.L.P., a copy of
which has been delivered to the Agent fairly present, in conformity with GAAP,
the Consolidated financial position of the Borrower, the General Partner, and
their Consolidated Subsidiaries of such date and their results of operations and
cash flows for such fiscal year.
(b) The Consolidated balance sheet of the Borrower, the General
Partner, and their Consolidated Subsidiaries for the period ending September 30,
1997, a copy of which has been delivered to the Agent, fairly present, in
conformity with GAAP, the Consolidated financial position of the Borrower, the
General Partner, and their Consolidated Subsidiaries as of such date and their
Consolidated results of operations and cash flows for such period.
(c) Since September 30, 1997, (i) there has been no material adverse
change in the business, financial position or results of operations of the
Borrower, the General Partner, and their Consolidated Subsidiaries and (ii)
except
43
as previously disclosed to the Agent, none of the Borrower, the General Partner
or any of their Consolidated Subsidiaries has incurred any material indebtedness
or guaranty.
SECTION 4.5. Litigation. There is no material action, suit or
proceeding pending against, or to the actual knowledge of the Borrower, after
due inquiry, threatened against or adversely affecting, (i) the Borrower, the
General Partner or any of their Subsidiaries, (ii) the Loan Documents or any of
the transactions contemplated by the Loan Documents or (iii) any of its assets,
before any court or arbitrator or any governmental body, agency or official in
which there is a reasonable possibility of an adverse decision which could,
individually, or in the aggregate materially adversely affect the business,
Consolidated financial position or Consolidated results of operations of the
Borrower, the General Partner or their Consolidated Subsidiaries or which in any
manner draws into question the validity of this Agreement or the other Loan
Documents.
SECTION 4.6. Compliance with ERISA.
(a) The transactions contemplated by the Loan Documents will not
constitute a nonexempt prohibited transaction (as such term is defined in
Section 4975 of the Code or Section 406 of ERISA) that could subject the Agent
or the Banks to any tax or penalty or prohibited transactions imposed under
Section 4975 of the Code or Section 502(i) of ERISA.
(b) Each member of the ERISA Group has fulfilled its obligations under
the minimum funding standards of ERISA and the Internal Revenue Code with
respect to each Plan and is in compliance in all material respects with the
presently applicable provisions of ERISA and the Internal Revenue Code with
respect to each Plan. No member of the ERISA Group has (i) sought a waiver of
the minimum funding standard under Section 412 of the Internal Revenue Code in
respect of any Plan, (ii) failed to make any contribution or payment to any Plan
or Multiemployer Plan or in respect of any Benefit Arrangement, or made any
amendment to any Plan or Benefit Arrangement, which has resulted or could result
in the imposition of a Lien or the posting of a bond or other security under
ERISA or the Internal Revenue Code or (iii) incurred any liability under Title
IV of ERISA other than a liability to the PBGC for premiums under Section 4007
of ERISA.
SECTION 4.7. Environmental Matters. In the ordinary course of its
business, the Borrower conducts a periodic review of the effect of Environmental
Laws on the business, operations and properties of the Borrower and its
Subsidiaries, including, without limitation, the Real Property
44
Assets, in the course of which it seeks to identify and evaluate applicable
liabilities and costs (including, without limitation, any capital or operating
expenditures required as a matter of Environmental Law for clean-up or closure
of properties presently or previously owned, any capital or operating
expenditures required as a matter of Environmental Law to achieve or maintain
compliance with Environmental Law or as a condition of any license, permit or
contract to which Borrower is a party or a beneficiary, any related constraints
on operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted thereat, any costs or liabilities in connection with off-site disposal
of wastes or Hazardous Substances, and any actual or potential liabilities to
third parties, including employees, and any related costs and expenses). On the
basis of this review, the Borrower has reasonably concluded that such associated
potential liabilities and costs, including the costs of compliance with
Environmental Laws, are unlikely to have a Material Adverse Effect.
SECTION 4.8. Taxes. The Borrower, the General Partner and their
Subsidiaries have filed all United States Federal income tax returns and all
other material tax returns which are required to be filed by them and have paid
all taxes due and payable pursuant to such returns or pursuant to any assessment
received by the Borrower or any Subsidiary. The charges, accruals and reserves
on the books of the Borrower, the General Partner and their Subsidiaries in
respect of taxes or other governmental charges are, in the reasonable judgment
of the Borrower, adequate.
SECTION 4.9. Full Disclosure. All information heretofore furnished by
or on behalf of the Borrower, the General Partner and their Subsidiaries to the
Agent or any Bank for purposes of or in connection with this Agreement or any
transaction contemplated hereby is, and all such information hereafter furnished
by the Borrower or the General Partner or any Subsidiary Guarantor to the Agent
or any Bank will be, true and accurate in all material respects on the date as
of which such information is stated. The Borrower and the General Partner have
disclosed to the Banks in writing any and all facts which, in Borrower's and the
General Partner's reasonable judgment, materially and adversely affect or may
affect (to the extent the Borrower and the General Partner can now reasonably
foresee), the business, operations or financial condition of the Borrower, the
General Partner, and their Consolidated Subsidiaries, taken as a whole, or the
ability of the Borrower or the General Partner or any Subsidiary Guarantor to
perform its obligations under this Agreement or the other Loan Documents in any
material respect.
45
SECTION 4.10. Solvency. On the Closing Date and after giving effect to
the transactions contemplated by the Loan Documents occurring on the Closing
Date, each of Borrower, the General Partner and any Subsidiary Guarantor will be
Solvent.
SECTION 4.11. Use of Proceeds; Margin Regulations. All proceeds of the
Loans will be used by the Borrower only in accordance with the provisions of
this Agreement. No part of the proceeds of any Loan will be used by the Borrower
to purchase or carry any Margin Stock or to extend credit to others for the
expressed purpose of purchasing or carrying any Margin Stock. Neither the making
of any Loan nor the use of the proceeds thereof will violate or be inconsistent
with the provisions of Regulations G, T, U or X of the Federal Reserve Board.
SECTION 4.12. Governmental Approvals. No order, consent, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection with
the execution, delivery and performance of any Loan Document or the consummation
of any of the transactions contemplated thereby other than those that have
already been duly made or obtained and remain in full force and effect.
SECTION 4.13. Investment Company Act; Public Utility Holding Company
Act. The Borrower is not (x) an "investment company" or a company "controlled"
by an "investment company", within the meaning of the Investment Company Act of
1940, as amended, (y) a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of either a "holding company" or a
"subsidiary company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended, or (z) subject to any other federal or state law or
regulation which purports to restrict or regulate its ability to borrow money.
SECTION 4.14. Closing Date Transactions. On the Closing Date and
immediately prior to the making of the Loans, the transactions (other than the
making of the Loans) intended to be consummated on the Closing Date will have
been consummated in accordance with all applicable laws. All material consents
and approvals of, and all material filings and registrations with, and all other
material actions by, any Person required in order to make or consummate such
transactions have been obtained, given, filed or taken and are in full force and
effect.
SECTION 4.15. Representations and Warranties in Loan Documents. All
representations and warranties made by the Borrower in the Loan Documents are
true and correct in all
46
material respects as of the date of this Agreement and as of any date that
Borrower is expressly obligated to confirm the same under this Agreement.
SECTION 4.16. Patents, Trademarks, Etc. The Borrower, the General
Partner, and their Consolidated Subsidiaries have obtained and hold in full
force and effect all patents, trademarks, service marks, trade names, copyrights
and other such rights, free from burdensome restrictions, which are necessary
for the operation of their business as presently conducted, the impairment of
which is likely to have a Material Adverse Effect. To the Borrower's knowledge,
no material product, process, method, substance, part or other material
presently sold by or employed by the Borrower or its Consolidated Subsidiaries
in connection with such business infringes any patent, trademark, service mark,
trade name, copyright, license or other such right owned by any other Person.
There is not pending or, to the Borrower's or the General Partner's knowledge,
threatened any claim or litigation against or affecting the Borrower, the
General Partner or their Consolidated Subsidiaries contesting any of their
respective rights to sell or use any such product, process, method, substance,
part or other material.
SECTION 4.17. Ownership of Property. Schedule 4.17(a) attached hereto
and made a part hereof sets forth all the real property owned or leased by the
Borrower and Persons in which the Borrower, directly or indirectly, owns an
interest as of the Closing Date. As of the Closing Date, the Borrower and such
Persons have good and insurable fee simple title (or leasehold title if so
designated on Schedule 4.17(a) to all of such real property, subject to
customary encumbrances and liens as of the date of this Agreement. As of the
date of this Agreement, there are no mortgages, deeds of trust, indentures, debt
instruments or other agreements creating a Lien against any of the Real Property
Assets except as disclosed on Schedule 4.17(b).
SECTION 4.18. No Default. No Default or Event of Default exists under
or with respect to any Loan Document. The Borrower (nor the General Partner nor
any Consolidated Subsidiary) is not in default in any material respect beyond
any applicable grace period under or with respect to any other material
agreement, instrument or undertaking to which it is a party or by which it or
any of its property is bound in any respect, the existence of which default is
likely to result in a Material Adverse Effect.
SECTION 4.19. Licenses, Etc. Each of the Borrower, the General Partner
and each of their Consolidated Subsidiaries) has obtained and holds in full
force and effect, all material franchises, licenses, permits, certificates,
authorizations, qualifications, accreditations, ease-
47
ments, rights of way and other consents and approvals which are necessary for
the operation of its business as presently conducted, the absence of which is
likely to have a Material Adverse Effect.
SECTION 4.20. Compliance With Law. The Borrower, the General Partner
and each of their Consolidated Subsidiaries and each of the Real Property Assets
is in compliance with all material laws, rules, regulations, orders, judgments,
writs and decrees, including, without limitation, all building and zoning
ordinances and codes, the failure to comply with which is likely to have a
Material Adverse Effect.
SECTION 4.21. No Burdensome Restrictions. The Borrower, the General
Partner and each of their Consolidated Subsidiaries is not a party to any
agreement or instrument or subject to any other obligation or any charter or
corporate or partnership restriction, as the case may be, which, individually or
in the aggregate, is likely to have a Material Adverse Effect except in the
event of a default there under.
SECTION 4.22. Brokers' Fees. Neither the Borrower nor the General
Partner has dealt with any broker or finder with respect to the transactions
contemplated by the Loan Documents or otherwise in connection with this
Agreement.
SECTION 4.23. Labor Matters. There are no collective bargaining
agreements or Multiemployer Plans covering any employees of the Borrower, the
General Partner, or any of their Consolidated Subsidiaries.
SECTION 4.24. Insurance. The Borrower, the General Partner and each of
its Consolidated Subsidiaries currently maintains all insurance which is
required to be maintained by Section 5.3 hereof.
SECTION 4.25. Organizational Documents. The documents delivered
pursuant to Section 3.1(e) constitute, as of the Closing Date, all of the
organizational documents (together with all amendments and modifications
thereof) of the Borrower. The Borrower represents that it has delivered to the
Agent true, correct and complete copies of each of the documents set forth in
Section 3.1(e).
SECTION 4.26. Principal Offices. The principal office, chief executive
office and principal place of business of each of the Borrower, the General
Partner and each Subsidiary Guarantor is 505 Montgomery Street, San Francisco,
California.
48
ARTICLE V
AFFIRMATIVE AND NEGATIVE COVENANTS
The Borrower covenants and agrees that, so long as any Bank has any
Commitment hereunder or any Obligations remain unpaid:
SECTION 5.1. Information. The Borrower will deliver to each of the
Banks:
(a) as soon as reasonably available and in any event within 95 days
after the end of each fiscal year of the Borrower, a Consolidated balance sheet
of the Borrower, the General Partner, and their Consolidated Subsidiaries as of
the end of such fiscal year and the related Consolidated statements of
operations for such fiscal year prepared by Arthur Andersen & Co., L.L.P. or
other independent public accountants of nationally recognized standing;
(b) as soon as available and in any event within 50 days after the end
of each of the first three quarters of each fiscal year of the Borrower, (i) a
Consolidated balance sheet of the Borrower, the General Partner, and their
Consolidated Subsidiaries as of the end of such quarter and the related
Consolidated statements of operations for such quarter and for the portion of
the Borrower's fiscal year ended at the end of such quarter, all certified
(subject to normal year-end adjustments) as to fairness of presentation, GAAP
and consistency by the chief financial officer or the chief accounting officer
of the Borrower; (ii) an acquisition status report, with respect to each Real
Property Asset acquired during such quarter, in form reasonably satisfactory to
the Agent, setting forth all acquisition activity during such quarterly period,
including a description of such Real Property Asset and the Acquisition Price
thereof and (iii) such other information reasonably requested by the Agent or
any Bank;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the chief
financial officer or the chief accounting officer of the Borrower (i) setting
forth in reasonable detail the calculations required to establish whether the
Borrower was in compliance with the requirements of Section 5.9 on the date of
such financial statements; (ii) stating whether any Default, Event of Default or
Mandatory Prepayment Event exists on the date of such certificate and with
respect to a Mandatory Prepayment Event, whether it existed at any time during
the period covered by such financial statements, and, if any Default, Event of
Default or Mandatory Prepayment Event then exists, setting forth the details
thereof and the action which the Borrower is taking
49
or proposes to take with respect thereto; and (iii) certifying (x) that such
financial statements fairly present the financial condition and the results of
operations of the Borrower on the dates and for the periods indicated, on the
basis of GAAP, with respect to the Borrower subject, in the case of interim
financial statements, to normally recurring year-end adjustments, and (y) that
such officer has reviewed the terms of the Loan Documents and has made, or
caused to be made under his or her supervision, a review in reasonable detail of
the business and condition of the Borrower during the period beginning on the
date through which the last such review was made pursuant to this Section 5.1(c)
(or, in the case of the first certification pursuant to this Section 5.1(c), the
Closing Date) and ending on a date not more than ten (10) Domestic Business Days
prior to the date of such delivery and that (1) on the basis of such financial
statements and such review of the Loan Documents, no Event of Default existed
under Section 6.1(b) with respect to Section 5.9 at or as of the date of said
financial statements, and (2) on the basis of such review of the Loan Documents
and the business and condition of the Borrower, to the actual knowledge of such
officer, no Default or Event of Default under any other provision of Section 6.1
occurred or, if any such Default or Event of Default has occurred and is then
continuing, specifying the nature and extent thereof and, if continuing, the
action the Borrower proposes to take in respect thereof and (3) on the basis of
such review of the Loan Documents and the business and condition of the
Borrower, no Mandatory Prepayment Event then exists or has existed during the
period since the last review pursuant to this Section 5.1(c). Such certificate
shall set forth the calculations required to establish the matters described in
clause (i) above;
(d) (i) within seven (7) days after the chief financial officer or
chief accounting officer of the Borrower, the General Partner, or any
Consolidated Subsidiary of any of the foregoing obtains knowledge of any Default
or a Mandatory Prepayment Event, if such Default or Mandatory Prepayment Event
is then continuing, a certificate of such officer setting forth the details
thereof and the action which the Borrower is taking or proposes to take with
respect thereto; (ii) promptly and in any event within ten(10) days after the
chief financial officer or chief accounting officer of the Borrower, the General
Partner or any Consolidated Subsidiary of any of the foregoing obtains knowledge
thereof, notice of (x) any litigation or governmental proceeding pending or
actions threatened against the Borrower, the General Partner, any Consolidated
Subsidiary or the Real Property Assets as to which there is a reason able
possibility of an adverse determination and which, if adversely determined, is
likely to individually or in the aggregate, result in a Material Adverse Effect,
and (y) any
50
other event, act or condition which is likely to result in a Material Adverse
Effect;
(e) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statement so mailed;
(f) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their
equivalents) which the General Partner shall have filed with the Securities and
Exchange Commission;
(g) promptly and in any event within ten (10) Domestic Business Days
after the Borrower obtains actual knowledge of any of the following events, a
certificate of the Borrower, executed by an officer of the Borrower, specifying
the nature of such condition and the Borrower's or, if the Borrower has actual
knowledge thereof, the Environmental Affiliate's proposed initial response
thereto: (i) the receipt by the Borrower, or, if the Borrower has actual
knowledge thereof, any of the Environmental Affiliates of any written
communication, whether from a governmental authority, citizens group, employee
or otherwise, that alleges that the Borrower, or, if the Borrower has actual
knowledge thereof, any of the Environmental Affiliates, is not in compliance
with applicable Environmental Laws, and such noncompliance is likely to have a
Material Adverse Effect, (ii) the Borrower shall obtain actual knowledge that
there exists any Environmental Claim pending or threatened against the Borrower
or any Environmental Affiliate or (iii) the Borrower obtains actual knowledge of
any release, emission, discharge or disposal of any Hazardous Substances that is
likely to form the basis of any Environmental Claim against the Borrower or any
Environmental Affiliate;
(h) within ten (10) Domestic Business Days after receipt of any
material notices or correspondence from any company or agent for any company
providing insurance coverage to the Borrower relating to any material loss of
the Borrower, copies of such notices and correspondence;
(i) no less than ten (10) Domestic Business Days prior to a sale,
transfer or conveyance of any Borrowing Base Property, Borrower shall deliver a
certificate of the chief financial officer or the chief accounting officer of
the Borrower certifying that such officer has reviewed the terms of the Loan
Documents and has made, or caused to be made under his or her supervision, a
review in reasonable detail of the business and condition of the Borrower during
the period beginning on the date through which the last such review was made
pursuant to Section 5.1(c) hereof and ending
51
on a date not more than twenty (20) Domestic Business Days prior to the date of
such delivery and that (1) on the basis of such review of the Loan Documents and
assuming such sale, transfer or conveyance is actually consummated, no Mandatory
Prepayment Event exists and no Event of Default exists under Section 6.1(b) with
respect to Section 5.9 at or as of the date of said sale, transfer or conveyance
and (2) on the basis of such review of the Loan Documents and the business and
condition of the Borrower and assuming the Transfer is actually consummated, to
the actual knowledge of such officer, no Default or Event of Default under any
other provision of Section 6.1 occurred or, if any such Default or Event of
Default has occurred and is then continuing, specifying the nature and extent
thereof and, if continuing, the action the Borrower proposes to take in respect
thereof;
(j) within 50 days after the end of each quarter of each fiscal year of
Borrower, an updated Schedule 4.17(a) and 4.17(b), certified by the chief
financial officer or chief accounting officer of the Borrower as true, correct
and complete as of the date such updated schedules are delivered;
(k) within 50 days after June 30 and December 31, a statement
containing a listing of all new construction projects and Real Property Assets
then undergoing significant rehabilitation (collectively, "Development
Projects");
(l) within 30 days after filing of the annual income tax return with
the Internal Revenue Service, a certificate of the chief financial officer or
chief accounting officer of the Borrower certifying that General Partner is
properly classified and continues to qualify as a real estate investment trust
under the Internal Revenue Code and has taken all actions consistent with
maintaining such status;
(m) simultaneously with delivery of the information required by
Sections 5.1(a) and (b), a statement of Borrowing Base Net Operating Cash Flow
with respect to each Borrowing Base Property and a list of all Borrowing Base
Properties;
(n) promptly upon receipt thereof, any notice or communication from any
Rating Agency regarding any change in Borrower's Credit Rating;
(o) from time to time such additional information regarding the
financial position or business of the Borrower and its Subsidiaries as the
Agent, at the request of any Bank, may reasonably request in writing; and
52
(p) within 50 days after the end of each quarter of each fiscal year of
Borrower, a certificate of the chief financial officer or chief accounting
officer of Borrower certifying whether or not each Borrowing Base Property has
maintained the Required Occupancy Level for the previous twelve month period (as
of the end of such quarter).
SECTION 5.2. Payment of Obligations. The Borrower, the General Partner
and each of their Consolidated Subsidiaries will pay and discharge, at or before
maturity, all its respective material obligations and liabilities, including,
without limitation, any obligation pursuant to any agreement by which it or any
of its properties is bound and any tax liabilities, except where such tax
liabilities may be contested in good faith by appropriate proceedings, and will
maintain in accordance with GAAP, appropriate reserves for the accrual of any of
the same.
SECTION 5.3. Maintenance of Property; Insurance.
(a) The Borrower will keep (or cause to be kept through its leases at
the respective Real Property Assets), and will cause each Subsidiary to keep,
all property useful and necessary in its business, including without limitation
the Real Property Assets, in good repair, working order and condition, ordinary
wear and tear excepted.
(b) The Borrower currently maintains, or causes its tenants to
maintain, insurance at 100% replacement cost insurance coverage (subject to
customary deductibles) in respect of each of the Real Property Assets, as well
as commercial general liability insurance (including "builders' risk") against
claims for personal, and bodily injury and/or death, to one or more persons, or
property damage, as well as workers' compensation insurance, in each case with
respect to the Real Property Assets with insurers having an A.M. Best
policyholders' rating of not less than A-IX in amounts that prudent owner of
assets such as the Real Property Assets would maintain.
SECTION 5.4. Conduct of Business and Maintenance of Existence. The
Borrower and the General Partner will continue to engage in, and will cause each
Subsidiary Guarantor to continue to engage in, business of the same general type
as now conducted by the Borrower, the General Partner or such Subsidiary
Guarantor, as applicable, and will preserve, renew and keep in full force and
effect, its corporate existence and its respective rights, privileges and
franchises necessary or desirable in the normal conduct of business.
SECTION 5.5. Compliance with Laws. The Borrower and the General Partner
will comply (and will cause each of
53
their Subsidiaries to comply) in all material respects with all applicable laws,
ordinances, rules, regulations, and requirements of governmental authorities
(including, without limitation, Environmental Laws, and all zoning and building
codes with respect to the Real Property Assets, all laws, rules and regulations
with respect to the General Partner's status as a real estate investment trust
under the Code and ERISA and the rules and regulations thereunder) except where
the necessity of compliance therewith is contested in good faith by appropriate
proceedings.
SECTION 5.6. Inspection of Property, Books and Records. The Borrower
and the General Partner will keep (and will cause each of their Subsidiaries to
keep) proper books of record and account in which full, true and correct entries
shall be made of all material financial matters and transactions in relation to
its business and activities; and will permit representatives of any Bank at such
Bank's expense to visit and inspect any of its properties (subject to the terms
of the applicable leases), including without limitation the Real Property
Assets, to examine and make abstracts from any of its books and records and to
discuss its affairs, finances and accounts with its officers, employees and
independent public accountants, all at such reasonable times and as often as may
reasonably be desired.
SECTION 5.7. Existence. The Borrower and the General Partner and each
Subsidiary Guarantor shall do or cause to be done, all things reasonably
necessary to preserve and keep in full force and effect its existence and its
tradenames, licenses, permits, certificates, authorizations, qualifications,
accreditations, easements, rights of way and other rights, consents and
approvals the nonexistence of which is likely to have a Material Adverse Effect.
SECTION 5.8. Certain Requirements for the Borrowing Base Properties. At
all times (based upon the average occupancy level for the prior twelve month
period) (i) no single tenant shall account for more than 5% of the aggregate
base rents from the Borrowing Base Properties and (ii) no single Separate Parcel
shall account for more than 15% of the aggregate base rents from the Borrowing
Base Properties, taken as a whole. Notwithstanding the foregoing, (a) the
government of the United States of America and its agencies (including, without
limitation, the General Services Administration) shall be excluded from the
restriction set forth in the first sentence of this Section 5.8 and (b) single
tenants that hold Investment Grade Ratings and are approved by the Agent, in its
sole discretion, may account for up to 10% of the aggregate base rents from the
Borrowing Base Properties.
54
SECTION 5.9. Financial Covenants.
(a) Total Liabilities. Total Liabilities will at no time exceed fifty
percent (50%) of the Combined Gross Asset Value, plus the sum of Cash and Cash
Equivalents held by the Borrower, the General Partner or any Consolidated
Subsidiary plus accounts receivable of the Borrower, the General Partner or any
Consolidated Subsidiary, less Intangible Assets (as defined in the definition of
Consolidated Tangible Net Worth) and deferred rents.
(b) Dividends. Neither the Borrower, the General Partner nor any
Consolidated Subsidiary will declare any dividends in excess of 95% of its Funds
From Operations, except that the General Partner may declare dividends in excess
thereof (i) to maintain its status as a real estate investment trust under the
Code or (ii) to distribute 100% of its taxable income (computed in accordance
with the Code).
(c) Limits on Negative Pledge. None of the Borrower, the General
Partner or any Subsidiary will agree to limits on Liens on Unsecured Assets of
the Borrower, the General Partner or such Subsidiary, except as may otherwise be
required pursuant to the terms of this Agreement.
(d) Fixed Rate Indebtedness. All Non-Recourse Debt of the Borrower, the
General Partner and any Subsidiaries shall be Fixed Rate Indebtedness.
(e) Debt Maturity Dates. The stated maturity or termination dates of
any Debt of the Borrower, the General Partner or any Subsidiary shall not be
prior to the Maturity Date; except that Borrower, the General Partner and their
Subsidiaries may incur Debt with earlier maturity or termination dates provided
that the aggregate outstanding amount of such Debt at any one time shall not
exceed five percent (5%) of Combined Gross Asset Value.
(f) Limitation on Secured Debt. Secured Debt of the Borrower, the
General Partner and the Consolidated Subsidiaries shall at no time exceed
thirty-five percent (35%) of Combined Gross Asset Value.
(g) Limitation on Unimproved Land Investment. Unimproved Land Value of
the Borrower, the General Partner, and the Consolidated Subsidiaries, together
with the Borrower's and the General Partner's pro rata shares with respect to
Minority Holdings and Joint Ventures, shall at no time exceed five percent (5%)
of Combined Gross Asset Value.
(h) Minimum Consolidated Tangible Net Worth. Consolidated Tangible Net
Worth of the Borrower, the General
55
Partner, and the Consolidated Subsidiaries shall at no time be less than 75% of
the Consolidated Tangible Net Worth of the Borrower, the General Partner, and
the Consolidated Subsidiaries as of the Closing Date, which amount shall be in
creased by an amount equal to ninety percent (90%) of the net proceeds of any
public or private sale by the Borrower of common or preferred stock subsequent
to the Closing Date.
(i) Limitation on Construction Asset Costs. Construction Asset Costs of
the Borrower, the General Partner and their Subsidiaries shall at no time exceed
five percent (5%) of Combined Gross Asset Value.
(j) Limitation on Joint Ventures. The aggregate Gross Asset Value of
Real Property Assets held in Joint Ventures shall at no time exceed thirty-five
percent (35%) of Combined Gross Asset Value.
(k) Fixed Charge Coverage. The ratio of Adjusted EBITDA to Fixed
Charges (for any period of four consecutive fiscal quarters), as of the last day
of any quarter, shall be equal to or greater than 2:1.
(l) Borrowing Base Properties Minimum Debt Service Coverage. As of the
last day of each calendar quarter, the ratio of Borrowing Base Net Operating
Cash Flow to Pro-Forma Debt Service shall be equal to or greater than 2:1.
(m) Borrowing Base Properties Value Unsecured Debt Ratio. The ratio of
Borrowing Base Properties Value to Unsecured Senior Debt shall at no time be
less than 2:1.
SECTION 5.10. Restriction on Fundamental Changes. (a) The Borrower
shall not enter into any merger or consolidation, unless the Borrower is the
surviving entity, or liquidate, wind-up or dissolve (or suffer any liquidation
or dissolution), discontinue its business or convey, lease, sell, transfer or
otherwise dispose of, in one transaction or series of transactions, all or any
substantial part of its business or property, whether now or hereafter acquired.
Subject to other provisions of this Agreement, nothing in this Section 5.10
shall be deemed to prohibit (i) the leasing of portions of the Real Property
Assets or an entire Real Property Asset in the ordinary course of business for
occupancy by the tenants thereunder or (ii) the sale of such Real Property
Assets in the ordinary course of Borrower's business or (iii) the sale of
additional equity interests in the General Partner pursuant to a public or
privately placed equity offering of common or preferred stock or (iv) the
issuance of additional limited partnership interests in the Borrower, subject to
Section 6.1 hereof.
56
(b) The Borrower shall not amend its partnership agreement or
certificate of limited partnership and the General Partner shall not amend its
articles of incorporation, by-laws, or other organizational documents without
the Agent's consent, which shall not be unreasonably withheld or delayed.
SECTION 5.11. Liens; Release of Liens. None of the Borrower, the
General Partner or any of their Subsidiaries (including any Subsidiary
Guarantor) shall at any time during the Term directly or indirectly create,
incur, assume or permit to exist any Lien for borrowed monies or any other Lien
(except for Permitted Liens) unless the same is being contested in good faith or
the same is discharged, bonded off or paid within thirty (30) days of filing of
such Lien, on or with respect to any Borrowing Base Property. Notwithstanding
the foregoing, the Borrower may obtain a release from the terms of this
Agreement of any Borrowing Base Property provided that such Borrower has
complied with Section 2.9(a) and prior to or simultaneously with such release
(i) such Borrower shall pay to the Agent any amounts due pursuant to Section
2.9(a), and (ii) Borrower delivers to the Agent a certificate from its chief
financial officer or chief accounting officer certifying that at the time of the
release all of the covenants contained in Sections 5.8 through 5.12, 5.16
through 5.17 are and after giving effect to the transaction shall continue to be
true and accurate in all respects. In the event that Borrower notifies the Agent
that a Separate Parcel that originally formed a part of a Borrowing Base
Property be released from the terms of this Agreement and Borrower otherwise
complies with the provisions hereof with respect thereto, the value of such
Separate Parcel (and the remaining portion of the Borrowing Base Property) will
be determined by Agent at the time of the release in its sole discretion.
SECTION 5.12. Sale of Borrowing Base Properties. Prior to the sale or
transfer of any Borrowing Base Property, the Borrower shall (i) deliver prior
written notice to the Agent, (ii) deliver to the Agent a certificate from its
chief financial officer or chief accounting officer certifying that at the time
of such sale or other disposal (based on pro-forma calculations for the previous
period assuming that such Borrowing Base Property was not a Borrowing Base
Property for the relevant period) all of the covenants contained in Sections 5.8
through 5.12, 5.16 through 5.17 are and after giving effect to the transaction
shall continue to be true and accurate in all respects, and (iii) pay to the
Agent an amount equal to that required pursuant to Section 2.9(a). In the event
that Borrower notifies the Agent that a Separate Parcel that originally formed a
part of a Borrowing Base Property is to be sold or transferred, the value of the
remaining portion of the Borrowing Base Property will be
57
determined by Agent at the time of sale or transfer in its sole discretion.
SECTION 5.13. Changes in Business. None of the Borrower, the General
Partner or any Subsidiary Guarantor shall enter into any business which is
substantially different from that conducted by such entity on the Closing Date,
after giving effect to the transactions contemplated by the Loan Documents.
SECTION 5.14. Fiscal Year; Fiscal Quarter. Neither the Borrower nor the
General Partner shall change its fiscal year or any of its fiscal quarters,
without Agent's prior written consent, which consent shall not be unreasonably
withheld or delayed.
SECTION 5.15. Margin Stock. None of the proceeds of the Loan will be
used by Borrower or the General Partner, directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of buying or carrying any
Margin Stock.
SECTION 5.16. Restrictions on Recourse Debt. Until such time as
Borrower (or the General Partner, as applicable) shall receive at least one (1)
Investment Grade Rating, from either S&P or Moody's, none of the Borrower, the
General Partner, or any Consolidated Subsidiary shall create, incur or guaranty
any Recourse Debt unless such Recourse Debt is Unsecured Debt which has an
Investment Grade Rating. Notwithstanding the foregoing, if Borrower (or the
General Partner, as applicable) receives a rating that is not In vestment Grade
from either S&P or Moody's, until such time as Borrower (or the General Partner,
as applicable) has received an Investment Grade Rating from each of S&P and
Moody's, none of the Borrower, the General Partner, or any Consolidated
Subsidiary shall create, incur or guaranty any Recourse Debt unless such
Recourse Debt is Unsecured Debt which has an Investment Grade Rating.
SECTION 5.17. Covenant Restrictions. No Debt of Borrower, the General
Partner, or any Consolidated Subsidiary incurred after the date hereof shall
contain any covenant or restriction which is more restrictive than any covenant
or restriction contained in this Agreement or any other Loan Documents.
ARTICLE VI
DEFAULTS
58
SECTION 6.1. Events of Default. If one or more of the
following events ("Events of Default") shall have occurred
and be continuing:
(a) the Borrower shall fail to (i) pay when due any principal on any
Loan, or (ii) pay when due any interest on any Loan or any fees or any other
amount payable hereunder and such failure shall continue for three (3) Domestic
Business Days;
(b) the Borrower shall fail to observe or perform any covenant
contained in Section 5.3, or Sections 5.8 to 5.17 inclusive;
(c) the Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clause (a) or
(b) above) for 30 days after written notice thereof has been given to the
Borrower by the Agent at the request of any Bank;
(d) any representation, warranty, certification or statement made by
the Borrower in this Agreement or in any certificate, financial statement or
other document delivered pursuant to this Agreement shall prove to have been
incorrect in any material respect when made (or deemed made);
(e) The Borrower, the General Partner or any Consolidated Subsidiary
shall default in the payment when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) of any amount owing in respect
of any Debt (other than the Obligations) and such default shall continue beyond
the giving of any required notice and the expiration of any applicable grace
period; or the Borrower shall default in the performance or observance of any
material obligation or material conditions with respect to any such Debt or any
other event shall occur or condition exist beyond the giving of any required
notice and the expiration of any applicable grace period, if the effect of such
default, event or condition is to accelerate the maturity of any such
indebtedness or to permit (without any further requirement of notice or lapse of
time) the holder or holders thereof, or any trustee or agent for such holders,
to accelerate the maturity of any such indebtedness, or any such indebtedness
shall become or be declared to be due and payable prior to its stated maturity
other than as a result of a regularly scheduled payment.
(f) the Borrower or the General Partner or any Subsidiary Guarantor
shall commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee,
59
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due;
(g) an involuntary case or other proceeding shall be commenced against
the Borrower, the General Partner or any Subsidiary Guarantor seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of 60 days; or an order for relief shall be entered against the Borrower
under the federal bankruptcy laws as now or hereafter in effect;
(h) one or more judgments or decrees in an aggregate amount of Five
Million Dollars ($5,000,000) or more shall be entered by a court or courts of
competent jurisdiction against the Borrower, the General Partner or any Consoli-
dated Subsidiaries (other than any judgment as to which, and only to the extent,
a reputable insurance company has acknowledged coverage of such claim in writing
or has acknowledged in writing its willingness to defend any such claim under a
reservation of rights) and (i) any such judgments or decrees shall not be
stayed, discharged, paid, bonded or vacated within twenty (20) days or (ii)
enforcement proceedings shall be commenced by any creditor on any such
judgments or decrees;
(i) (i) a judgment or decree with respect to any Environmental Claim
shall have been entered against the Borrower or any Environmental Affiliate or
any Real Property Asset by a court of competent jurisdiction, (ii) any release,
emission, discharge or disposal of any Hazardous Substances shall have occurred,
and such event is reasonably likely to form the basis of an Environmental Claim
by a government agency with jurisdiction against the Borrower or any
Environmental Affiliate or any Real Property Asset thereof, or (iii) the
Borrower or the Environmental Affiliates shall have failed to obtain any
Environmental Approval necessary for the ownership, or operation of its
business, property or assets or any such Environmental Approval shall be
revoked, terminated, or otherwise cease to be in full force and effect, in each
case, if the existence of such condition has had or is reasonably likely to have
a Material Adverse Effect;
60
(j) the General Partner shall cease to qualify as a real estate
investment trust under the Code;
(k) the Borrower shall cease to be managed by the General Partner or a
Subsidiary of the General Partner;
(l) there shall be a change in the majority of the Board of Directors
of the General Partner during any twelve month period;
(m) any Person (including affiliates of such Person) shall acquire more
than twenty percent (20%) of the common shares of the General Partner;
(n) any Person (including affiliates of such Person) shall acquire more
than twenty percent (20%) of the limited partnership interests of the Borrower;
(o) if, any Termination Event with respect to a Plan shall occur as a
result of which Termination Event or Events any member of the ERISA Group has
incurred or may incur any liability to the PBGC or any other Person and the sum
(determined as of the date of occurrence of such Termination Event) of the
insufficiency of such Plan and the insufficiency of any and all other Plans
with respect to which such a Termination Event shall occur and be continuing
(or, in the case of a Multi-Employer Plan with respect to which a Termination
Event described in clause (ii) of the definition of Termination Event shall
occur and be continuing, the liability of the Borrower and the ERISA Affiliates
related thereto) is equal to or greater than $1,000,000 and in the case of a
Termination Event with respect to a Plan of any ERISA Affiliate other than any
Borrower, the liability therefor could reasonably be asserted against any member
of the ERISA Group; or
(p) if any member of the ERISA Group shall commit a failure described
in Section 402(f)(1) of ERISA or Section 412(n)(1) of the Code and the amount of
the lien determined under Section 402(f)(3) of ERISA or Section 412(n)(3) of the
Code that could reasonably be expected to be imposed on any member of the ERISA
Group or their assets in respect of such failure shall be equal to or greater
than $1,000,000.
SECTION 6.2. Rights and Remedies. (a) Upon the occurrence of any Event
of Default described in Sections 6.1(f) or (g), the Commitments shall
immediately terminate and the unpaid principal amount of, and any and all
accrued interest on, the Loans and any and all accrued fees and other
Obligations hereunder shall automatically become immediately due and payable,
with all additional interest from time to time accrued thereon and without
presentation, demand, or protest or other requirements of any kind
61
(including, without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and notice of
acceleration), all of which are hereby expressly waived by the Borrower; and
upon the occurrence and during the continuance of any other Event of Default,
the Agent may and at the direction of the Required Banks shall (until the Agent
receives such written direction, it may, but shall not be obligated to, take
such action, or refrain from taking such action with respect to such Event of
Default as it shall deem advisable in its sole discretion), by written notice
to the Borrower, terminate the Commitments, and may, and at the direction of the
Required Banks shall (until the Agent receives such written direction, it may,
but shall not be obligated to, take such action, or refrain from taking such
action with respect to such Event of Default as it shall deem advisable in its
sole discretion), in addition to the exercise of all rights and remedies
permitted Agent and the Banks at law or equity, declare the unpaid principal
amount of and any and all accrued and unpaid interest on the Loans and any and
all accrued fees and other Obligations hereunder to be, and the same shall
thereupon be, immediately due and payable with all additional interest from time
to time accrued thereon and without presentation, demand, or protest or other
requirements of any kind other than as provided in the Loan Documents
(including, without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and notice of
acceleration), all of which are hereby expressly waived by the Borrower to the
extent permitted by law.
(b) Notwithstanding anything to the contrary contained in this
Agreement or in any other Loan Document, the Agent and the Banks each agree that
any exercise or enforcement of the rights and remedies granted the Agent or the
Banks under this Agreement or at law or in equity with respect to this Agreement
or any other Loan Documents shall be commenced and maintained by the Agent on
behalf of the Banks.
SECTION 6.3. Notice of Default. The Agent shall give notice to the
Borrower under Section 6.1(c) promptly upon being requested to do so by any Bank
and shall thereupon notify all the Banks thereof.
ARTICLE VII
THE AGENT
SECTION 7.1. Appointment and Authorization. Each Bank irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement and the other Loan Documents as are
62
delegated to the Agent by the terms hereof or thereof, together with all such
powers as are reasonably incidental thereto. Only Agent (and not one or more of
the Banks) shall have the authority to deal directly with the Borrower under
this Agreement and each Bank acknowledges that all notices, demands or requests
from such Bank to Borrower must be forwarded to Agent for delivery to the
Borrower. Each Bank acknowledges that Borrower has no obligation to act or
refrain from acting on instructions or demands of one or more Banks absent
written instructions from Agent in accordance with its rights and authority
hereunder.
SECTION 7.2. Agent and Affiliates. Morgan shall have the same rights
and powers under this Agreement as any other Bank and may exercise or refrain
from exercising the same as though it were not the Agent, and Morgan and its
affiliates may accept deposits from, lend money to, and generally engage in any
kind of business with the Borrower or any Subsidiary or affiliate of the
Borrower as if it were not the Agent hereunder, and the term "Bank" and "Banks"
shall include Morgan in its individual capacity.
SECTION 7.3. Action by Agent. The obligations of the Agent hereunder
are only those expressly set forth herein. Without limiting the generality of
the foregoing, the Agent shall not be required to take any action with respect
to any Default, except as expressly provided in Article VI.
SECTION 7.4. Consultation with Experts. The Agent may consult with
legal counsel (who may be counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
SECTION 7.5. Liability of Agent. Neither the Agent nor any of its
affiliates nor any of their respective directors, officers, agents or employees
shall be liable for any action taken or not taken by it in connection herewith
(i) with the consent or at the request of the Required Banks or (ii) in the
absence of its own gross negligence or willful misconduct. Neither the Agent nor
any of its directors, officers, agents or employees shall be responsible for or
have any duty to ascertain, inquire into or verify (i) any statement, warranty
or representation made in connection with this Agreement or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or agree-
ments of the Borrower; (iii) the satisfaction of any condition specified in
Article III, except receipt of items required to be delivered to the Agent; or
(iv) the validity, effectiveness or genuineness of this Agreement, the other
Loan Documents or any other instrument or writing furnished in connection
herewith. The Agent shall not incur any
63
liability by acting in reliance upon any notice, consent, certificate,
statement, or other writing (which may be a bank wire, telex or similar writing)
believed by it to be genuine or to be signed by the proper party or parties.
SECTION 7.6. Indemnification. Each Bank shall, ratably in accordance
with its Commitment, indemnify the Agent, its affiliates and their respective
directors, officers, agents and employees (to the extent not reimbursed by the
Borrower as may be required under this Agreement) against any cost, expense
(including counsel fees and disbursements), claim, demand, action, loss or
liability (except such as result from such indemnitees' gross negligence or
willful misconduct) that such indemnitees may suffer or incur in connection with
this Agreement, the other Loan Documents or any action taken or omitted by such
indemnitees hereunder.
SECTION 7.7. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under this Agreement.
SECTION 7.8. Successor Agent. The Agent may resign at any time by
giving notice thereof to the Banks and the Borrower. Upon any such resignation,
the Required Banks shall have the right to appoint a successor Agent and,
provided that no Event of Default shall have occurred and be continuing, the
appointment of such successor Agent shall be subject to the consent of Borrower,
which shall not be unreasonably withheld or delayed provided that any such
successor Agent is then a Bank hereunder. Furthermore, in the event that at any
time Morgan is the Agent and Morgan assigns its entire interest as a Bank
hereunder to an Assignee as permitted by Section 9.6(c) hereof, which Assignee
is not an affiliate of Morgan, then Morgan shall offer to resign as Agent, which
resignation shall only become effective if the Required Banks accept such
resignation in writing within twenty (20) Domestic Business Days after it has
been tendered by Morgan. If the Required Banks do not timely accept such
resignation, then the resignation shall be deemed to be withdrawn and Morgan
shall continue as Agent pursuant to the terms hereof. In addition, upon the
affirmative vote of the Required Banks that Agent has acted (or failed to act)
with gross negligence or committed an act of willful misconduct in its capacity
as agent for the Banks hereunder, the Agent shall immediately tender its
resigna-
64
tion. If no successor Agent shall have been so appointed by the Required Banks,
and shall have accepted such appointment, within 30 days after the retiring
Agent gives notice of resignation, then the retiring Agent may, on behalf of the
Banks, appoint a successor Agent, which shall be a commercial bank organized or
licensed under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $50,000,000. Upon the
acceptance of its appointment as the Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the rights
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
the Agent.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.1. Basis for Determining Interest Rate Inadequate or Unfair.
If on or prior to the first day of any Interest Period for any Euro-Dollar
Borrowing:
(a) the Agent is advised by the Reference Bank that deposits in dollars
(in the applicable amounts) are not being offered to the Reference Bank in the
relevant market for such Interest Period, or
(b) Banks having 50% or more of the aggregate amount of the Commitments
advise the Agent that the Adjusted London Interbank Offered Rate as determined
by the Agent will not adequately and fairly reflect the cost to such Banks of
funding their Euro-Dollar Loans for such Interest Period, the Agent shall
forthwith give notice thereof to the Borrower and the Banks, whereupon until
the Agent notifies the Borrower that the circumstances giving rise to such
suspension no longer exist, the obligations of the Banks to make Europa-Dollar
Loans shall be suspended. Unless the Borrower notifies the Agent at least two
Domestic Business Days before the date of any Euro-Dollar Borrowing for which a
Notice of Borrowing has previously been given that it elects not to borrow on
such date, such Borrowing shall instead be made as a Base Rate Borrowing.
SECTION 8.2. Illegality. If, on or after the date of this Agreement,
the adoption of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank
65
or comparable agency charged with the interpretation or administration thereof,
or compliance by any Bank (or its Euro-Dollar Lending Office) with any request
or directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for any
Bank (or its Euro-Dollar Lending Office) to make, maintain or fund its
Euro-Dollar Loans and such Bank shall so notify the Agent, the Agent shall
forthwith give notice thereof to the other Banks and the Borrower, whereupon
until such Bank notifies the Borrower and the Agent that the circumstances
giving rise to such suspension no longer exist, the obligation of such Bank to
make Euro-Dollar Loans shall be suspended. Before giving any notice to the Agent
pursuant to this Section, such Bank shall designate a different Euro-Dollar
Lending Office if such designation will avoid the need for giving such notice
and will not, in the judgment of such Bank, be otherwise disadvantageous to such
Bank. If such Bank shall determine that it may not lawfully continue to maintain
and fund any of its outstanding Euro-Dollar Loans to maturity and shall so
specify in such notice, the Borrower shall immediately prepay in full the then
outstanding principal amount of each such Euro-Dollar Loan, together with
accrued interest thereon. Concurrently with prepaying each such Euro-Dollar
Loan, the Borrower shall borrow a Base Rate Loan in an equal principal amount
from such Bank (on which interest and principal shall be payable
contemporaneously with the related Euro-Dollar Loans of the other Banks), and
such Bank shall make such a Base Rate Loan.
SECTION 8.3. Increased Cost and Reduced Return.
(a) If, on or after the date hereof, the adoption of any applicable
law, rule or regulation, or any change in any applicable law, rule or
regulation, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency shall
impose, modify or deem applicable any reserve (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal Reserve
System (but excluding with respect to any Euro-Dollar Loan any such requirement
reflected in an applicable Euro-Dollar Reserve Percentage)), special deposit,
insurance assessment or similar requirement against assets of, deposits with or
for the account of, or credit extended by, any Bank (or its Applicable Lending
Office) or shall impose on any Bank (or its Applicable Lending Office) or on the
London interbank market any other condition affecting its Euro-Dollar Loans, its
Note, or its obligation to make Euro-Dollar Loans, and
66
the result of any of the foregoing is to increase the cost to such Bank (or its
Applicable Lending Office) of making or maintaining any Euro-Dollar Loan, or to
reduce the amount of any sum received or receivable by such Bank (or its
Applicable Lending Office) under this Agreement or under its Note with respect
thereto, by an amount deemed by such Bank to be material, then, within 15 days
after demand by such Bank (with a copy to the Agent), the Borrower shall pay to
such Bank such additional amount or amounts as will compensate such Bank for
such increased cost or reduction; provided, however, that such amounts shall be
no greater than that which such Bank is generally charging other borrowers simi-
larly situated to Borrower.
(b) If any Bank shall have determined that, after the date hereof, the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change in any such law, rule or regulation, or any change in the inter-
pretation or administration thereof by any governmental authority, central bank
or comparable agency charged with the interpretation or administration thereof,
or any request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable agency, has
or would have the effect of reducing the rate of return on capital of such Bank
(or its Parent) as a consequence of such Bank's obligations hereunder to a
level below that which such Bank (or its Parent) could have achieved but for
such adoption, change, request or directive (taking into consideration its
policies with respect to capital adequacy) by an amount deemed by such Bank to
be material, then from time to time, within 15 days after demand by such Bank
(with a copy to the Agent), the Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank (or its Parent) for such
reduction; provided, however, that such amount shall be no greater than that
which such Bank is generally charging other borrowers similarly situated to
Borrower.
(c) Each Bank will promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Bank to compensation pursuant to this Section and will designate a
different Applicable Lending Office if such designation will avoid the need for,
or reduce the amount of, such compensation and will not, in the judgment of
such Bank, be otherwise disadvantageous to such Bank. A certificate of any Bank
claiming compensation under this Section and setting forth the additional amount
or amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods.
67
(d) Notwithstanding anything to the contrary contained herein, no Bank
shall demand compensation for any increased cost, reduction or capital referred
to above in Section 8.3(a) or (b) if it shall not at the time be the general
policy and practice of such Bank to demand such compensation in similar
circumstances from similarly situated borrowers.
SECTION 8.4. Taxes.
(a) Any and all payments by the Borrower to or for the account of any
Bank or the Agent hereunder or under any other Loan Document shall be made free
and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Bank and the
Agent, taxes imposed on its income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which such Bank or the Agent (as the case may
be) is organized or any political subdivision thereof and, in the case of each
Bank, taxes imposed on its income, and franchise or similar taxes imposed on it,
by the jurisdiction of such Bank's Applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Note to any Bank or the
Agent, (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 8.4) such Bank or the Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law and (iv) the Borrower shall
furnish to the Agent, at its address referred to in Section 9.1, the original or
a certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, or charges or
similar levies which arise from any payment made hereunder or under any Note or
from the execution or delivery of, or otherwise with respect to, this Agreement
or any Note (hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Bank and the Agent for the
full amount of Taxes or Other Taxes (including, without limitation, any Taxes
or Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section 8.4) paid by such Bank or the Agent (as the case may
68
be) and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto. This indemnification shall be made within 15
days from the date such Bank or the Agent (as the case may be) makes demand
therefor.
(d) Each Bank organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Bank listed on the signature pages hereof and on
or prior to the date on which it becomes a Bank in the case of each other Bank,
and from time to time thereafter if requested in writing by the Borrower (but
only so long as such Bank remains lawfully able to do so), shall provide the
Borrower with Internal Revenue Service form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying that such
Bank is entitled to benefits under an income tax treaty to which the United
States is a party which reduces the rate of withholding tax on payments of
interest or certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States. If the form provided by a Bank at the time such Bank first becomes a
party to this Agreement indicates a United States interest withholding tax rate
in excess of zero, withholding tax at such rate shall be considered excluded
from "Taxes" as defined in Section 8.4(a).
(e) For any period with respect to which a Bank has failed to provide
the Borrower with the appropriate form pursuant to Section 8.4(d) (unless such
failure is due to a change in treaty, law or regulation occurring subsequent to
the date on which a form originally was required to be provided), such Bank
shall not be entitled to indemnification under Section 8.4(a) with respect to
Taxes imposed by the United States; provided, however, that should a Bank, which
is otherwise exempt from or subject to a reduced rate of withholding tax, become
subject to Taxes because of its failure to deliver a form required hereunder,
the Borrower shall take such steps as such Bank shall reasonably request to
assist such Bank to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or for the
account of any Bank pursuant to this Section 8.4, then such Bank will change the
jurisdiction of its Applicable Lending Office so as to eliminate or reduce any
such additional payment which may thereafter accrue if such change, in the
judgment of such Bank, is not otherwise disadvantageous to such Bank.
(g) If circumstances subsequently change so that it is no longer
unlawful for an affected Bank to make or maintain Euro-Dollar Loans as
contemplated hereunder, such Bank will,
69
as soon as reasonably practicable after such Bank becomes aware of such change
in circumstances, notify the Borrower and the Agent and upon receipt of such
notice, the obligations of such Bank to make or continue Euro-Dollar Loans or
to convert Base Rate Loans into Euro-Dollar Loans shall be reinstated.
SECTION 8.5. Base Rate Loans Substituted for Affected Euro-Dollar
Loans. If (i) the obligation of any Bank to make Euro-Dollar Loans has been
suspended pursuant to Section 8.2 or (ii) any Bank has demanded compensation
under Section 8.3 or 8.4 with respect to its Euro-Dollar Loans and the Borrower
shall, by at least five Euro-Dollar Business Days' prior notice to such Bank
through the Agent, have elected that the provisions of this Section shall apply
to such Bank, then, unless and until such Bank notifies the Borrower that the
circumstances giving rise to such suspension or demand for compensation no
longer exist:
(a) all Loans which would otherwise be made by such Bank as Euro-Dollar
Loans shall be made instead as Base Rate Loans (on which interest and principal
shall be payable contemporaneously with the related Euro-Dollar Loans of the
other Banks), and
(b) after each of its Euro-Dollar Loans has been repaid, all payments
of principal which would otherwise be applied to repay such Euro-Dollar Loans
shall be applied to repay its Base Rate Loans instead.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, facsimile,
facsimile transmission or similar writing) and shall be given to such party: (x)
in the case of the Borrower or the Agent, at its address or facsimile number set
forth on the signature pages hereof, (y) in the case of any Bank, at its address
or facsimile number set forth in its Administrative Questionnaire or (z) in the
case of any party, such other address or facsimile number as such party may
hereafter specify for the purpose by notice to the Agent and the Borrower. Each
such notice, request or other communication shall be effective (i) if given by
facsimile, when such facsimile is transmitted to the facsimile number specified
in this Section and the appropriate answer back is received, (ii) if given by
mail, 72 hours after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid or
70
(iii) if given by any other means, when delivered at the address specified in
this Section; provided that notices to the Agent under Article II or Article
VIII shall not be effective until received.
SECTION 9.2. No Waivers. No failure or delay by the Agent or any Bank
or Borrower in exercising any right, power or privilege hereunder or under any
Note shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 9.3. Expenses; Indemnification.
(a) The Borrower shall pay (i) all reasonable out-of-pocket expenses of
the Agent, including, without limitation, appraisal fees, engineering fees, and
fees and disbursements of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for
the Agent, as well as fees and disbursements of internal counsel, in connection
with the preparation, syndications and administration of this Agreement, the
Loan Documents and the documents and instruments referred to therein, and
further modifications or syndications of the Facility in connection therewith,
the administration of the Loans, any waiver or consent hereunder or any
amendment or modification hereof or any Default or Event of Default hereunder,
and (ii) if an Event of Default occurs, all reasonable out-of-pocket expenses
incurred by the Agent and each Bank, including fees and disbursements of counsel
for the Agent and each of the Banks, in connection with the enforcement of the
Loan Documents and the instruments referred to therein and such Event of
Default and collection, bankruptcy, insolvency and other enforcement proceedings
resulting therefrom.
(b) The Borrower agrees to indemnify the Agent and each Bank, their
respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each an "Indemnitee") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such Indemnitee in connection
with any investigative, administrative or judicial proceeding (whether or not
such Indemnitee shall be designated a party thereto) that may at any time
(including, without limitation, at any time following the payment of the
Obligations) be imposed on, asserted against or incurred by any Indemnitee as a
result of, or arising out of, or in any way related to or by reason of, (i) any
of the transactions contemplated by the Loan Documents or the execution,
delivery or performance of any Loan Document, (ii) any violation by the Bor-
71
rower or the Environmental Affiliates of any applicable Environmental Law, (iii)
any Environmental Claim arising out of the management, use, control, ownership
or operation of property or assets by the Borrower or any of the Environmental
Affiliates, including, without limitation, all on-site and off-site activities
involving Hazardous Substances, (iv) the breach of any environmental
representation or warranty set forth herein, (v) the grant to the Agent and the
Banks of any Lien in any property or assets of the Borrower or any stock or
other equity interest in the Borrower, and (vi) the exercise by the Agent and
the Banks of their rights and remedies (including, without limitation,
foreclosure) under any agreements creating any such Lien (but excluding, as to
any Indemnitee, any such losses, liabilities, claims, damages, expenses,
obligations, penalties, actions, judgments, suits, costs or disbursements
incurred by reason of (i) the gross negligence or willful misconduct of such
Indemnitee as finally determined by a court of competent jurisdiction, (ii) the
breach of this Agreement by such Indemnitee, as finally determined by a court of
competent jurisdiction and (iii) any investigative, administrative or judicial
proceeding imposed or asserted against any Indemnitee by any bank regulatory
agency or by any equity holder of such Indemnitee). The Borrower's obligations
under this Section shall survive the termination of this Agreement and the
payment of the Obligations.
(c) The Borrower shall pay, and hold the Agent and each of the Banks
harmless from and against, any and all present and future U.S. stamp, recording,
transfer and other similar foreclosure related taxes with respect to the
foregoing matters and hold the Agent and each Bank harmless from and against any
and all liabilities with respect to or resulting from any delay or omission
(other than to the extent attributable to such Bank) to pay such taxes.
SECTION 9.4. Sharing of Set-Offs. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance of
any Event of Default, each Bank is hereby authorized at any time or from time to
time, without presentment, demand, protest or other notice of any kind to the
Borrower or to any other Person, any such notice being hereby expressly waived,
to set off and to appropriate and apply any and all deposits (general or
special, time or demand, provisional or final) and any other indebtedness at any
time held or owing by such Bank (including, without limitation, by branches and
agencies of such Bank wherever located) to or for the credit or the account of
the Borrower against and on account of the Obligations of the Borrower then due
and payable to such Bank under this Agreement or under any of the other Loan
Documents, including, without limitation, all interests in
72
Obligations purchased by such Bank. Each Bank agrees that if it shall, by
exercising any right of set-off or counterclaim or otherwise, receive payment
of a proportion of the aggregate amount of principal and interest due with
respect to any Note held by it which is greater than the proportion received by
any other Bank in respect of the aggregate amount of principal and interest due
with respect to any Note held by such other Bank, the Bank receiving such
proportionately greater payment shall purchase such participations in the Notes
held by the other Banks, and such other adjustments shall be made, as may be
required so that all such payments of principal and interest with respect to
the Notes held by the Banks shall be shared by the Banks pro rata; provided that
nothing in this Section shall impair the right of any Bank to exercise any right
of set-off or counterclaim it may have and to apply the amount subject to such
exercise to the payment of indebtedness of the Borrower other than its
indebtedness under the Notes. The Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a participation in a
Note, whether or not acquired pursuant to the foregoing arrangements, may
exercise rights of set-off or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were a direct
creditor of the Borrower in the amount of such participation. Notwithstanding
anything to the contrary contained herein, any Bank may, by separate agreement
with the Borrower, waive its right to set off contained herein or granted by law
and any such written waiver shall be effective against such Bank under this
Section 9.4.
SECTION 9.5. Amendments and Waivers. Any provision of this Agreement or
the Notes or other Loan Documents may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrower and the Required
Banks (and, if the rights or duties of the Agent are affected thereby, by the
Agent); provided that no such amendment or waiver shall, unless signed by all
the Banks, (i) increase or decrease the Commitment of any Bank (except for a
ratable decrease in the Commitments of all Banks) or subject any Bank to any
additional obligation, or increase the Maximum Loan Amount, (ii) reduce the
principal of or rate of interest on any Loan or any fees hereunder, except as
provided below, (iii) postpone the date fixed for any payment of principal of
or interest on any Loan or any fees hereunder or for any reduction or
termination of any Commitment, (iv) change the percentage of the Commitments or
of the aggregate unpaid principal amount of the Notes, or the number of Banks,
which shall be required for the Banks or any of them to take any action under
this Section or any other provision of this Agreement, (v) release any guarantor
or any Guaranty, (vi) modify any Guaranty, or (vii) modify this Section 9.5.
73
SECTION 9.6. Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns,
except that the Borrower may not assign or otherwise transfer any of its rights
under this Agreement or the other Loan Documents without the prior written
consent of all Banks except as permitted by Section 5.10 hereof.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment
or any or all of its Loans. In the event of any such grant by a Bank of a par-
ticipating interest to a Participant, whether or not upon notice to the Borrower
and the Agent, such Bank shall remain responsible for the performance of its
obligations hereunder, and the Borrower and the Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement. Any agreement pursuant to which any Bank may
grant such a participating interest shall provide that such Bank shall retain
the sole right and responsibility to enforce the obligations of the Borrower
hereunder including, without limitation, the right to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
participation agreement may provide that such Bank will not agree to any
modification, amendment or waiver of this Agreement described in clause (i),
(ii), (iii) or (iv) of Section 9.5 without the consent of the Participant. The
Borrower agrees that each Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of Article VIII with
respect to its participating interest. An assignment or other transfer which is
not permitted by subsection (c) or (d) below shall be given effect for purposes
of this Agreement only to the extent of a participating interest granted in
accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part of all, of its
rights and obligations under this Agreement, the Notes and the other Loan Docu-
ments, and such Assignee shall assume such rights and obligations, pursuant to
an Assignment and Assumption Agreement in substantially the form of Exhibit C
hereto executed by such Assignee and such transferor Bank, with (and subject to)
the subscribed consent of the Borrower and the Agent which consent shall not be
unreasonably withheld; provided that if an Assignee is an affiliate of such
transferor Bank, no such consent shall be required provided that the rating of
such affiliate's senior unsecured indebtedness shall be at least investment
grade at such time (although nothing
74
contained herein shall limit the right of any Bank to assign its interest herein
as aforesaid to any successor by merger or consolidation); provided further,
until such time as an Event of Default has occurred and subject to the
provisions of subsection (d) of this Section 9.6 and any reduction pursuant to
Section 2.10(c) hereof, at all times during the Term, Morgan or an affiliate of
Morgan shall retain a minimum Commitment of $10,000,000 unless (i) required by
law, regulation, administrative decree or court order to divest all or any part
of such Commitment or (ii) a lesser amount is consented to by Borrower; and
provided further that, upon the occurrence and during the continuation of an
Event of Default, a Bank may assign its interest herein to an affiliate,
regardless of rating and furthermore that Borrower shall have no right to
consent to any Assignee. Upon execution and delivery of such instrument and
payment by such Assignee to such transferor Bank of an amount equal to the
purchase price agreed between such transferor Bank and such Assignee, such
Assignee shall be a Bank party to this Agreement and shall have all the rights
and obligations of a Bank with a Commitment as set forth in such instrument of
assumption, and the transferor Bank shall be released from its obligations
hereunder to a corresponding extent, and no further consent or action by any
party shall be required. Upon the consummation of any assignment pursuant to
this subsection (c), the transferor Bank, the Agent and the Borrower shall make
appropriate arrangements so that, if required, a new Note is issued to the
Assignee. In connection with any such assignment, the transferor Bank shall pay
to the Agent an administrative fee for processing such assignment in the amount
of $2,500. If the Assignee is not incorporated under the laws of the United
States of America or a state thereof, it shall deliver to the Borrower and the
Agent certification as to exemption from deduction or withholding of any United
States federal income taxes in accordance with Section 8.4.
(d) Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Note to a Federal Reserve Bank. No such assignment
shall release the transferor Bank from its obligations hereunder. Promptly upon
being notified in writing of such transfer, Agent shall notify Borrower thereof.
(e) No Assignee, Participant or other transferee of any Bank's rights
shall be entitled to receive any greater payment under Section 8.3 or 8.4 than
such Bank would have been entitled to receive with respect to the rights trans-
ferred, unless such transfer is made with the Borrower's prior written consent
or by reason of the provisions of Section 8.2, 8.3 or 8.4 requiring such Bank to
designate a different Applicable Lending Office under certain circum-
75
stances or at a time when the circumstances giving rise to such greater payment
did not exist.
SECTION 9.7. Collateral. Each of the Banks represents to the Agent and
each of the other Banks that it in good faith is not relying upon any "margin
stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 9.8. Governing Law; Submission to Jurisdiction. (a) THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
(b) Any legal action or proceeding with respect to this Agreement or
any other Loan Document and any action for enforcement of any judgment in
respect thereof may be brought in the courts of the State of New York or of the
United States of America for the Southern District of New York, and, by
execution and delivery of this Agreement, the Borrower hereby accepts for itself
and in respect of its property, generally and unconditionally, the non-exclusive
jurisdiction of the aforesaid courts and appellate courts from any thereof. The
Borrower irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the hand delivery, or
mailing of copies thereof by registered or certified mail, postage prepaid, to
the Borrower at its address set forth below. The Borrower hereby irrevocably
waives, to the extent permitted by applicable law, any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Loan Document brought in the courts referred to above and hereby further
irrevocably waives, to the extent permitted by applicable law, and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum. Nothing herein shall
affect the right of the Agent, any Bank or any holder of a Note to serve process
in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against the Borrower in any other jurisdiction.
Section 9.9. Marshalling; Recapture. Neither the Agent nor any Bank
shall be under any obligation to marshall any assets in favor of the Borrower or
any other party or against or in payment of any or all of the Obligations. To
the extent any Bank receives any payment by or on behalf of the Borrower, which
payment or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to the Borrower
or its estate, trustee, receiver, custodian or any other party
76
under any bankruptcy law, state or federal law, common law or equitable cause,
then to the extent of such payment or repayment, the Obligation or part thereof
which has been paid, reduced or satisfied by the amount so repaid shall be
reinstated by the amount so repaid and shall be included within the liabilities
of the Borrower to such Bank as of the date such initial payment, reduction or
satisfaction occurred.
SECTION 9.10. Counterparts; Integration; Effectiveness. This Agreement
may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. This Agreement constitutes the entire agreement and
understanding among the parties hereto and supersedes any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof. This Agreement shall become effective upon receipt by the Agent of
counterparts hereof signed by each of the parties hereto (or, in the case of any
party as to which an executed counterpart shall not have been received, receipt
by the Agent in form satisfactory to it of telegraphic, telex or other written
confirmation from such party of execution of a counterpart hereof by such
party).
SECTION 9.11. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE AGENT AND
THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 9.12. Survival. All indemnities set forth herein shall survive
the execution and delivery of this Agreement and the other Loan Documents and
the making and repayment of the Loans hereunder.
SECTION 9.13. Domicile of Loans. Each Bank may transfer and carry its
Loans at, to or for the account of any domestic or foreign branch office,
subsidiary or affiliate of such Bank.
SECTION 9.14. Limitation of Liability. No claim may be made by the
Borrower or any other Person against the Agent or any Bank or the affiliates,
directors, officers, employees, attorneys or agent of any of them for any
consequential or punitive damages in respect of any claim for breach of
contract or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement or by the other Loan Documents, or
any act, omission or event occurring in connection therewith; and the Borrower
hereby waives, releases and agrees not to sue upon any claim for any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.
77
SECTION 9.15. Recourse. All obligations, covenants and agreements of
Borrower contained in or evidenced by this Agreement, the Notes and any Loan
Document shall be fully recourse to Borrower and each and every asset of
Borrower. Notwithstanding the foregoing, no recourse under or upon any
obligation, covenant, or agreement contained in this Agreement or the Note or
any Loan Document shall be had against any officer, director, limited partner,
shareholder or employee of Borrower or of the General Partner (each, a
"Non-Recourse Party") and no such Non-Recourse Party shall be personally liable
for payment of the Loans or other amounts due in respect thereof (all such
liability being expressly waived and released by each Bank and the Agent). In no
event shall the foregoing limitation on recourse with respect to any
Non-Recourse Party be deemed to limit (a) the liability of the General Partner
under the General Partner Guaranty, which shall be fully recourse to the General
Partner and each and every asset of the General Partner or (b) the liability of
any Subsidiary Guarantor under any Subsidiary Guaranty, which shall be fully
recourse to each such Subsidiary Guarantor and each and every asset of each such
Subsidiary Guarantor.
SECTION 9.16. Confidentiality. Each Bank and the Agent agrees that it
shall maintain confidentiality with regard to nonpublic information concerning
the Borrower or the General Partner obtained from the Borrower or the General
Partner pursuant to this Agreement, provided that the Banks and the Agent shall
not be precluded from making disclosure regarding such information: (i) to the
Banks' and Agent's counsel, accountants and other professional advisors (who
are, in each case, subject to this confidentiality agreement), (ii) to
officers, directors, employees, agents and partners of each Bank, and the Agent
who need to know such information (who are, in each case, subject to this
confidentiality agreement), (iii) in response to a subpoena or order of a court
or governmental agency, (iv) to any entity participating or considering
participating in any credit made under this Agreement, provided, the Banks and
Agent shall require that any such entity be subject to this Section 9.16,
however, Banks and Agent shall have no duty to monitor any participating entity
and shall have no liability in the event that any participating entity violates
this Section 9.16, (v) in connection with the enforcement of this Agreement, the
Notes or the other Loan Documents, or (vi) as required by law, GAAP or
applicable regulation. In connection with enforcing its rights pursuant to this
Section 9.16, Borrower and the General Partner shall be entitled to the
equitable remedies of specific performance and injunctive relief against the
Agent or any Bank which shall breach the confidentiality provisions of this
Section 9.16.
78
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
AMB PROPERTY, L.P.,
a Delaware limited partnership
By: AMB PROPERTY CORPORATION, a Maryland
corporation and its sole general
partner
By:_____________________________
Name:
Title:
505 Montgomery Street
San Francisco, CA 94111
Attention: Chief Financial Officer
Facsimile No.: (415) 394-9001
Commitment Agent and Bank
- ---------- --------------
$55,000,000 MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By:_____________________________
Name: Timothy O'Donovan
Title: Vice President
c/o J.P. Morgan Services Inc.
500 Stanton Christiana Road
Newark, DE 19713-2107
Attention: Jennifer Van Landingham
Telecopy: (302) 634-4222
DOMESTIC AND EURO-DOLLAR
LENDING OFFICE:
c/o J.P. Morgan Services Inc.
500 Stanton Christiana Road
Newark, DE 19713-2107
Attention: Jennifer Van Landingham
Telecopy: (302) 634-4222
Signature Page to AMB Property, L.P. Second Amended and Restated
Credit Agreement
Commitment Co-Agent and Bank
- ---------- -----------------
$50,000,000 COMMERZBANK AKTIENGESELLSCHAFT, LOS AN
GELES BRANCH
By:_____________________________
Name:
Title:
By:_____________________________
Name:
Title:
DOMESTIC AND EURO-DOLLAR
LENDING OFFICE:
Commerzbank AG
660 S. Figueroa Street
Los Angeles, California
Attention: Steve Larsen
Telecopy: (213) 623-8223
and to:
Commerzbank AG
Two World Financial Center
New York, NY 10281-1050
Attention: David Schwartz, Vice President
Telecopy: 212-266-7530
Signature Page to AMB Property, L.P. Second Amended and Restated
Credit Agreement
Commitment Co-Agent and Bank
- ---------- -----------------
$50,000,000 FLEET NATIONAL BANK
By:_____________________________
Name:
Title:
DOMESTIC AND EURO-DOLLAR
LENDING OFFICE:
Fleet Bank
111 Westminster Street
Providence, RI 02903
Attention: Debbie Fox
Telecopy: (401) 278-5166
Signature Page to AMB Property, L.P. Second Amended and Restated
Credit Agreement
Commitment Co-Agent and Bank
- ---------- -----------------
$50,000,000 NATIONSBANK OF TEXAS, N.A.
By:_____________________________
Name:
Title:
DOMESTIC AND EURO-DOLLAR LENDING OFFICE:
NationsBank of Texas, N.A.
901 Main Street, 51st Floor
Dallas, Texas 75202-3714
Attn: David Howard
Telecopy: (214) 508-0085
Signature Page to AMB Property, L.P. Second Amended and Restated
Credit Agreement
Commitment Co-Agent and Bank
- ---------- -----------------
$50,000,000 PNC BANK, NATIONAL ASSOCIATION
By:_____________________________
Name:
Title:
DOMESTIC AND EURO-DOLLAR LENDING OFFICE:
PNC Bank
One PNC Plaza
249 Fifth Avenue
Pittsburgh, PA 15222-2707
Attn: David Martens
Telecopy: (412) 762-6500
Signature Page to AMB Property, L.P. Second Amended and Restated
Credit Agreement
Commitment Bank
- ---------- ----
$45,000,000 BANK OF AMERICA, National Trust and Sav
ings Association
By:_____________________________
Name:
Title:
DOMESTIC AND EURO-CURRENCY
LENDING OFFICE:
Bank of America NT & SA
CRESG National 9105
50 California Street, 11th floor
San Francisco, California 94111
Attn: Laurence Hughes
Telecopy: (415) 445-4154
Signature Page to AMB Current Income Fund, Inc. Second Amended and
Restated Credit Agreement
Commitment Bank
- ---------- ----
$35,000,000 DRESDNER BANK AG, NEW YORK AND GRAND
CAYMAN BRANCHES
By:_____________________________
Name:
Title:
By:_____________________________
Name:
Title:
DOMESTIC AND EURO-DOLLAR
LENDING OFFICE:
Dresdner Bank AG
333 South Grand Avenue, Suite 1700
Los Angeles, CA 90071
Attention: Vitol Wiacek
Telecopy: (213) 473-5450
Signature Page to AMB Property, L.P. Second Amended and Restated
Credit Agreement
Commitment Bank
- ---------- ----
$25,000,000 THE BANK OF NOVA SCOTIA, acting through
its San Francisco Agency
By:_____________________________
Name: Paul Stiplosek
Title: Relationship Manager
DOMESTIC AND EURO-DOLLAR
LENDING OFFICE:
Bank of Nova Scotia
580 California Street, 48th floor
San Francisco, CA 94104
Attn: Office Head, Real Estate Banking
Telecopy: (415) 397-0791
Signature Page to AMB Property, L.P. Second Amended and Restated
Credit Agreement
Commitment Bank
- ---------- ----
$30,000,000 CORESTATES BANK, N.A.
By:_____________________________
Name:
Title:
DOMESTIC AND EURO-DOLLAR LENDING OFFICE:
CoreStates Bank
FC 1-8-10-67
1339 Chestnut Street
Philadelphia, PA 19107-7618
Attn: R. Scott Relick, Vice President
Telecopy: 215-786-6381
Signature Page to AMB Property, L.P. Second Amended and Restated
Credit Agreement
Commitment Bank
- ---------- ----
$25,000,000 THE INDUSTRIAL BANK OF JAPAN, LIMITED
LOS ANGELES AGENCY
By:_____________________________
Name:
Title:
By:_____________________________
Name:
Title:
DOMESTIC AND EURO-DOLLAR LENDING OFFICE:
Industrial Bank of Japan, Limited
350 South Grand Avenue, Suite 1500
Los Angeles, CA 90071
Attn: Hiroshi Maekawa
Telecopy: 213-488-9840
Signature Page to AMB Property, L.P. Second Amended and Restated
Credit Agreement
Commitment Bank
- ---------- ----
$15,000,000 UNION BANK OF CALIFORNIA, N.A.
By:_____________________________
Name:
Title:
By:_____________________________
Name:
Title:
DOMESTIC AND EURO-DOLLAR LENDING OFFICE:
Union Bank of California, N.A.
San Francisco Corporate Office
350 California Street, 7th Floor
San Francisco, CA 94104
Attn: Diana Giacomini
Telecopy: 415-433-7438
Signature Page to AMB Property, L.P. Second Amended and Restated
Credit Agreement
Commitment Bank
- ---------- ----
$30,000,000 BANKERS TRUST COMPANY
By:_____________________________
Name:
Title:
DOMESTIC AND EURO-DOLLAR LENDING OFFICE:
BT Alex Brown Company
BT Plaza
130 Liberty Street
New York, New York 10006
Attn: Kathleen McCabe
Fax: (212) 669-0752
Signature Page to AMB Property, L.P. Second Amended and Restated
Credit Agreement
Commitment Bank
- ---------- ----
$40,000,000 SOCIETE GENERALE, Southwest Agency
By:_____________________________
Name: Robert N. Delph
Title: Vice President
DOMESTIC AND EURO-DOLLAR LENDING OFFICE:
Societe Generale
Trammell Crow Center
2001 Ross Avenue, Suite 4800
Dallas, Texas 75201
Attn: Robert N. Delph
Telecopy: (214) 979-2727
Total Commitments
$500,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By:_____________________________
Name: Timothy O'Donovan
Title: Vice President
c/o J.P. Morgan Services Inc.
500 Stanton Christiana Road
Newark, DE 19713-2107
Attn: Jennifer Van Landingham
Telecopy: (302) 634-4222
FUNDING INSTRUCTIONS:
Morgan Guaranty Trust Company of
New York
60 Wall Street
New York, New York 10260-0060
ABA # 021 000 238
For Credit to: Loan Department
Account Number 999-99-090
Reference: AMB Property, L.P.
EXHIBIT A
FORM OF NOTE
NOTE
$ ________________ New York, New York
____________, 199_
For value received, AMB Property, L.P., a Delaware limited partnership
(the "Borrower"), promises to pay to the order of ____________ (the "Bank"), for
the account of its Applicable Lending Office, the unpaid principal amount of
each Loan made by the Bank to the Borrower pursuant to the Credit Agreement
referred to below on the last day of the Interest Period relating to such Loan.
The Borrower promises to pay interest on the unpaid principal amount of each
such Loan on the dates and at the rate or rates provided for in the Credit
Agreement. All such payments of principal and interest shall be made in lawful
money of the United States in Federal or other immediately available funds at
the office of Morgan Guaranty Trust Company of New York, 60 Wall Street, New
York, New York.
All Loans made by the Bank, the respective types and maturities thereof
and all repayments of the principal thereof shall be recorded by the Bank and,
if the Bank so elects in connection with any transfer or enforcement hereof,
appropriate notations to evidence the foregoing information with respect to
each such Loan then outstanding may be endorsed by the Bank on the schedule
attached hereto, or on a continuation of such schedule attached to and made a
part hereof; provided that the failure of the Bank to make any such recordation
or endorsement shall not affect the obligations of the Borrower hereunder or
under the Credit Agreement.
This note is one of the Notes referred to in the Second Amended and
Restated Revolving Credit Agreement dated as of November 26, 1997 among the
Borrower, the banks listed on the signature pages thereof and Morgan Guaranty
Trust Company of New York, as Agent and Commerzbank Aktiengesellschaft, Los
Angeles Branch, Fleet National Bank, NationsBank of Texas, N.A. and PNC Bank,
N.A., as Co-Agents (as the same may be amended from time to time, the "Credit
Agreement"). Terms defined in the Credit Agreement are used
A-1
herein with the same meanings. Reference is made to the Credit Agreement for
provisions for the prepayment hereof and the acceleration of the maturity
hereof.
All obligations, covenants and agreements contained or
evidenced in this Note, shall be fully recourse to Borrower and each and every
asset of Borrower. Notwithstanding the foregoing, no recourse under or upon any
obligation, covenant, agreement contained in this Note shall be had against any
Non-Recourse Party (as defined in the Credit Agreement) and no such Non-Recourse
Party shall be personally liable for payment of the Loans or other amounts due
in respect thereof (all such liability being expressly waived and released by
each Bank and the Agent). In no event shall the foregoing limitation on recourse
with respect to any Non-Recourse Party be deemed to limit (a) the liability of
the General Partner under the General Partner Guaranty, which shall be fully
recourse to the General Partner and each and every asset of the General Partner
or (b) the liability of any Subsidiary Guarantor under any Subsidiary Guaranty,
which shall be fully recourse to each such Subsidiary Guarantor and each and
every asset of each such Subsidiary Guarantor.
AMB PROPERTY, L.P.
By: AMB PROPERTY CORPORATION, a
Maryland corporation and its
sole general partner
By: _____________________________
Name:
Title:
A-2
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
- --------------------------------------------------------------------------------
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A-3
EXHIBIT B
See Attached.
B-1
EXHIBIT C
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of __________, 199_ among [ASSIGNOR] (the "Assignor"),
[ASSIGNEE] (the "Assignee"), AMB PROPERTY, L.P. (the "Borrower") and MORGAN
GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the "Assignment")
relates to the Second Amended and Restated Revolving Credit Agreement dated as
of November 26, 1997 (the "Credit Agreement") among the Borrower, the Assignor
and the other Banks party thereto, as Banks, and the Agent;
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to make Loans to the Borrower in an aggregate principal amount at any
time outstanding not to exceed $__________;
WHEREAS, Loans made to the Borrower by the Assignor under the Credit
Agreement in the aggregate principal amount of $____________ are outstanding at
the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of the
rights of the Assignor under the Credit Agreement in respect of a portion of
its Commitment thereunder in an amount equal to $__________ (the "Assigned
Amount"), together with a corresponding portion of its outstanding Loans, and
the Assignee proposes to accept assignment of such rights and assume the
corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined herein
shall have the respective meanings set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to the Assignee all
of the rights of the Assignor under the Credit Agreement to the extent of the
Assigned Amount, and the Assignee hereby accepts such assignment from the
Assignor and assumes all of the obligations of the
C-1
Assignor under the Credit Agreement to the extent of the Assigned Amount,
including the purchase from the Assignor of the corresponding portion of the
principal amount of the Loans made by the Assignor outstanding at the date
hereof. Upon the execution and delivery hereof by the Assignor, the Assignee,
the Borrower and the Agent and the payment of the amounts specified in Section 3
required to be paid on the date hereof (i) the Assignee shall, as of the date
hereof, succeed to the rights and be obligated to perform the obligations of a
Bank under the Credit Agreement with a Commitment in an amount equal to the
Assigned Amount, and (ii) the Commitment of the Assignor shall, as of the date
hereof, be reduced by a like amount and the Assignor released from its
obligations under the Credit Agreement to the extent such obligations have been
assumed by the Assignee. The assignment provided for herein shall be without
recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and sale contemplated
in Section 2 hereof, the Assignee shall pay to the Assignor on the date hereof
in Federal funds the amount heretofore agreed between them.* It is understood
that Commitment Fees accrued to the date hereof are for the account of the
Assignor and such fees accruing from and including the date hereof are for the
account of the Assignee. Each of the Assignor and the Assignee hereby agrees
that if it receives any amount under the Credit Agreement which is for the
account of the other party hereto, it shall receive the same for the account of
such other party to the extent of such other party's interest therein and shall
promptly pay the same to such other party.
SECTION 4. Consent of the Borrower and the Agent. This Agreement is conditioned
upon the consent of the Borrower and the Agent to the extent required by Section
9.6(c) of the Credit Agreement. The execution of this Agreement by the Borrower
and the Agent is evidence of this consent (if such consent is required).
Pursuant to Section 9.6(c), the Borrower agrees to execute and deliver a Note
payable to the order of the Assignee to evidence the assignment and assumption
provided for herein.
SECTION 5. Non-Reliance on Assignor. The Assignor makes no representation or
warranty in connection with, and shall
- --------------
Amount should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee, net of any portion of any
upfront fee to be paid by the Assignor to the Assignee. It may be preferable in
an appropriate case to specify these amounts generically or by formula rather
than as a fixed sum.
C-2
have no responsibility with respect to, the solvency, financial condition, or
statements of the Borrower, or the validity and enforceability of the
obligations of the Borrower in respect of the Credit Agreement or any Note. The
Assignee acknowledges that it has, independently and without reliance on the
Assignor, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement and will continue to be responsible for making its own independent
appraisal of the business, affairs and financial condition of the Borrower.
SECTION 6. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York
SECTION 7. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date
first above written.
[ASSIGNOR]
By:_______________________
Title:
[ASSIGNEE]
By:________________________
Title:
AMB Property, L.P.
By: AMB PROPERTY CORPORATION, a Maryland
corporation and its sole general partner
By:_____________________________
Title:
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By:________________________
Title:
C-3
EXHIBIT D
FORM OF BORROWING BASE PROPERTY CERTIFICATE
[Date]
To: Morgan Guaranty Trust Company of New York ("Agent"), as Agent for the
Banks party to Second Amended and Restated Revolving Credit Agreement
dated as of November 26, 1997 (the "Credit Agreement") among AMB
Property, L.P., and the Banks party thereto, as banks, the Agent and
Commerzbank Aktiengesellschaft, Los Angeles Branch, Fleet National
Bank, NationsBank of Texas, N.A. and PNC Bank, National Association, as
Co-Agents
Re: [INSERT DESCRIPTION OF THE NEW ACQUISITION OR REAL PROPERTY
ASSET TO BE ADDED TO BORROWING BASE] (the "New Borrowing Base
Property")
The undersigned requests that the above-described New Borrowing Base
Property be added to the "Borrowing Base Properties" under the terms of the
Credit Agreement. Capitalized terms used but not defined herein shall have the
meaning ascribed thereto in the Credit Agreement.
Pursuant to Section 3.3(a) of the Credit Agreement, the undersigned
hereby certifies as follows with respect to the New Borrowing Base Property:
1. The New Borrowing Base Property is 100% owned in [insert
form of ownership: fee/leasehold] by Borrower or a Wholly-Owned Subsidiary of
Borrower.
2. The New Borrowing Base Property is not subject to any Lien,
other than Permitted Liens.
3. The New Borrowing Base Property is not an interest in a
participating mortgage.
Insert if New Borrowing Base Property is owned by any Wholly-Owned Sub-
sidiary which is a distinct corporate or partnership entity (exclusive of mere
title holding entities, such as land trusts): The Wholly-Owned Subsidiary that
owns the New Borrowing Base Property has delivered to the Agent a Subsidiary
Guaranty with respect thereto, as required by Section 3.3 of the Credit
Agreement.
The undersigned acknowledges and agrees that the Agent and the Banks
will be relying on the foregoing certifications in adding the New Borrowing Base
Property as a Borrowing Base Property under the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has caused this
certificate to be duly executed as of the date first above written.
AMB Property, L.P.
By: AMB Property Corporation,
its general partner
By:______________________
Title:___________________
D-1
EXHIBIT E
FORM OF SUBSIDIARY GUARANTY
E-1
SCHEDULE 4.17(a)
REAL PROPERTY ASSETS
Acer Distribution Center
Activity Distribution Center*
Alvarado Business Center
Amwiler-Gwinnett Industrial Portfolio*
Applewood Village Shopping Center
Arapahoe Village Shopping Center*
Ardenwood Corporate Park*
Artesia Industrial Portfolio*
Atlanta South
Aurora Marketplace
Bayhill Shopping Center
Beacon Industrial Park
Bensenville*
Blue Lagoon*
Brentwood Commons*
Cabot Business Park
Chancellor*
Chicago Industrial*
Civic Center Plaza*
Corbins Corner Shopping Center
Corporate Square
Crossroads Industrial
Docks Corner
Dowe Industrial
Eastgate Plaza
Elk Grove Village Industrial
Executive Drive
Fairway Drive Industrial
Five Points Shopping Center
Granada Village*
Harvest Business Park*
Hewlett Packard Distribution*
International Multifoods
Itasca Industrial Portfolio
Kendall Mall*
Kent Centre
Kingsport Industrial Park*
L.A. County Industrial Portfolio
La Jolla Village*
Lake Michigan Industrial Portfolio
Lakeshore Plaza Shopping Center*
Latham Farms*
Lincoln Industrial Center
Linder Skokie
Lisle Industrial
Long Gate Shopping Center
Lonestar*
Manhattan Village Shopping Center
Melrose Park
Mendota Heights*
Metric Center
Milmont Page
Minneapolis Distribution Portfolio
Minneapolis Industrial*
Minneapolis Industrial Portfolio IV*
Moffett Business Center*
Moffett Park R & D Portfolio
Norcross/Brookhollow Portfolio
Northpointe Commerce
Northwest Distribution Center
O'Hare Industrial Portfolio
Pacific Business Center*
Palm Aire
Patuxent
Penn James Office Warehouse
Pennsy Drive
Pleasant Hill Shopping Center
Rancho San Diego Village Shopping Center
Randall's Houston Retail Portfolio
Riverview Plaza Shopping Center
Rockford Road Plaza
Shoppes At Lago Mar*
Silverado Plaza Shopping Center*
South Bay Industrial*
Southfield Southwest Pavilion
Stadium Business Park*
Systematics
Texas Industrial Portfolio
The Plaza At Delray*
Twin Cities
Twin Oaks Shopping Center
Two South Middlesex
Valwood*
Weslayan Plaza
West North Carrier*
Windsor Court
Woodlawn Point Shopping Center*
Ygnacio Plaza*
Zanker/Charcot Industrial
* See Schedule 4.17(b)
2
SCHEDULE 4.17(b)
LIENS
Activity Distribution Center $ 5,362,000
Amwiler-Gwinnett Industrial Portfolio 14,341,000
Arapahoe Village Shopping Center 10,839,000
Ardenwood Corporate Park 10,000,000
Artesia Industrial Portfolio 54,100,000
Bensenville 41,853,000
Blue Lagoon 11,897,000
Brentwood Commons 5,109,000
Chancellor 2,966,000
Chicago Industrial 3,267,000
Civic Center Plaza 13,668,000
Granada Village 14,669,000
Harvest Business Park 3,661,000
Hewlett Packard Distribution 3,412,000
Kendall Mall 24,780,000
Kingsport Industrial Park 17,584,000
La Jolla Village 18,006,000
Lakeshore Plaza Shopping Center 13,970,000
Latham Farms 37,761,000
Lonestar 17,000,000
Mendota Heights 668,000
Minneapolis Industrial 7,477,000
Minneapolis Industrial Portfolio IV 8,287,000
Moffett Business Center 12,857,000
Pacific Business Center 9,898,000
Shoppes at Lago Mar 5,878,000
Silverado Plaza Shopping Center 4,906,000
South Bay Industrial 19,516,000
Stadium Business Park 4,875,000
The Plaza at Delray 23,000,000
Valwood 4,036,000
West North Carrier 3,267,000
Woodlawn Point Shopping Center 4,659,000
Ygnacio Plaza 7,827,000
1