FIRST AMENDED AND RESTATED
CREDIT AND GUARANTY AGREEMENT
among
THE MACERICH PARTNERSHIP, L.P.,
A DELAWARE LIMITED PARTNERSHIP,
AS THE BORROWER,
THE ENTITIES FROM TIME TO TIME PARTIES HERETO
AS GUARANTORS,
THE MACERICH COMPANY,
A MARYLAND CORPORATION,
THE BANKS AND OTHER FINANCIAL INSTITUTIONS
THAT EITHER NOW OR IN THE FUTURE
ARE PARTIES HERETO
and
▇▇▇▇▇ FARGO BANK,
NATIONAL ASSOCIATION,
AS THE AGENT
June 25, 1998
$150,000,000
CONTENTS
ARTICLE 1. DEFINITIONS AND RELATED MATTERS ................................ 1
Section 1.1. Definitions ...................................... 1
Section 1.2. Related Matters .................................. 28
ARTICLE 2. AMOUNT AND TERMS OF THE CREDIT FACILITIES ...................... 29
Section 2.1. Credit Facilities ................................ 29
Section 2.2. Letters of Credit ................................ 36
Section 2.3. Use of Proceeds .................................. 38
Section 2.4. Interest; Conversion/Continuation ................ 38
Section 2.5. Note, Etc. ....................................... 41
Section 2.6. Fees ............................................. 41
Section 2.7. Termination, Reduction and Extension of
Commitment ....................................... 42
Section 2.8. Repayments and Prepayments ....................... 42
Section 2.9. Manner of Payment ................................ 43
Section 2.10. Pro Rata Treatment ............................... 43
Section 2.11. Mandatory Suspension and Conversion of
Fixed Rate Advances .............................. 44
Section 2.12. Increased Regulatory Costs ....................... 44
Section 2.13. Fixed Rate Price Adjustment ...................... 45
Section 2.14. Purchase, Sale and Matching of Funds ............. 46
ARTICLE 3. GUARANTY ....................................................... 46
Section 3.1. Guaranty ......................................... 46
Section 3.2. Continuing and Irrevocable Guaranty .............. 47
Section 3.3. Nature of Guaranty ............................... 47
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Section 3.4. Authorization .................................... 48
Section 3.5. Certain Waivers .................................. 49
Section 3.6. Subrogation; Certain Agreements .................. 50
Section 3.7. Bankruptcy No Discharge .......................... 50
Section 3.8. Maximum Liability of Guarantor ................... 51
Section 3.9. Financial Benefit ................................ 51
ARTICLE 4. CONDITIONS PRECEDENT TO ADVANCES AND LETTERS OF CREDIT ........ 52
Section 4.1. Conditions Precedent to Closing Date ............. 52
Section 4.2. Conditions Precedent to Advances and Letters of
Credit ........................................... 52
Section 4.3. Additional Conditions Precedent and
Provisions Applicable to Certain Acquisition
Advances ......................................... 53
ARTICLE 5. REPRESENTATIONS AND WARRANTIES ................................. 55
Section 5.1. Organization, Authority and Tax Status of
the Borrower; Enforceability, Etc. ............... 55
Section 5.2. Organization, Authority and REIT Status of
the REIT; Enforceability, Etc. ................... 56
Section 5.3. Organization, Authority and Tax Status of
Guarantors; Enforceability, Etc. ................. 57
Section 5.4. Consolidated Entities and Unconsolidated
Joint Ventures; Management Companies ............. 57
Section 5.5. No Conflict, Etc. ................................ 58
Section 5.6. Financial Information ............................ 58
Section 5.7. No Material Adverse Changes ...................... 59
Section 5.8. Litigation ....................................... 59
Section 5.9. Agreements; Applicable Law ....................... 59
Section 5.10. Governmental Regulation .......................... 60
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Section 5.11. Margin Regulations ............................... 60
Section 5.12. Employee Benefit Plans ........................... 60
Section 5.13. Title to Property; Liens ......................... 60
Section 5.14. Licenses, Trademarks, Etc. ....................... 61
Section 5.15. Environmental Condition .......................... 61
Section 5.16. Absence of Certain Restrictions .................. 62
Section 5.17. Disclosure ....................................... 62
ARTICLE 6. AFFIRMATIVE COVENANTS OF THE BORROWER PARTIES .................. 62
Section 6.1. Financial Statements and Other Reports ........... 62
Section 6.2. Records and Inspection ........................... 64
Section 6.3. Corporate Existence, Etc. ........................ 65
Section 6.4. Payment of Taxes and Charges ..................... 65
Section 6.5. Maintenance of Properties ........................ 65
Section 6.6. Maintenance of Insurance ......................... 65
Section 6.7. Conduct of Business .............................. 65
Section 6.8. Exchange Listing; Tax Status of Borrower Parties . 65
Section 6.9. Subordination .................................... 66
Section 6.10. Remedial Action Regarding Hazardous Materials .... 67
Section 6.11. Year 2000 Covenant ............................... 67
ARTICLE 7. NEGATIVE COVENANTS OF THE BORROWER PARTIES ..................... 68
Section 7.1. Unsecured Debt and Claims ........................ 68
Section 7.2. Investments; Asset Mix ........................... 68
Section 7.3. Financial Covenants .............................. 70
Section 7.4. Minimum Unencumbered Pool ........................ 71
Section 7.5. Aggregate Leased Area of Real Properties in
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Unencumbered Pool ................................ 71
Section 7.6. Restriction on Fundamental Changes ............... 71
Section 7.7. Transactions with Affiliates ..................... 72
Section 7.8. Restricted Payments .............................. 72
Section 7.9. ERISA ............................................ 73
Section 7.10. Amendments of Charter and Bylaws ................. 73
Section 7.11. Payments with Respect to Permitted Subordinated
Debentures ....................................... 73
Section 7.12. Acquisitions of Real Properties .................. 74
ARTICLE 8. EVENTS OF DEFAULT .............................................. 74
Section 8.1. Events of Default ................................ 74
Section 8.2. Remedies ......................................... 76
Section 8.3. Rescission ....................................... 77
ARTICLE 9. THE AGENT AND THE LENDERS .................................... 80
Section 9.1. Authorization and Action ......................... 80
Section 9.2. Exculpation; Agent's Reliance; Etc. .............. 81
Section 9.3. Agent and Affiliates ............................. 81
Section 9.4. Lender Credit Decision ........................... 81
Section 9.5. Indemnification .................................. 82
Section 9.6. Successor Agent .................................. 82
Section 9.7. Excess Payments .................................. 82
Section 9.8. Lender Parties ................................... 83
Section 9.9. Default By The Borrower; Acceleration ............ 83
Section 9.10. Payments; Availability of Funds; Certain
Notices .......................................... 83
Section 9.11. Obligations of Lender Parties Several;
Enforcement
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by the Agent ......................... 85
Section 9.12. Reply of Lenders ................................. 86
ARTICLE 10. MISCELLANEOUS .................................................. 86
Section 10.1. Expenses; Indemnity .............................. 86
Section 10.2. Waivers; Modifications in Writing ................ 87
Section 10.3. Cumulative Remedies; Failure or Delay ............ 88
Section 10.4. Notices, Etc. .................................... 88
Section 10.5. Successors and Assigns ........................... 89
Section 10.6. Confidentiality .................................. 90
Section 10.7. Choice of Forum .................................. 90
Section 10.8. Changes in Accounting Principles ................. 90
Section 10.9. Survival of Agreements, Representations
and Warranties ................................... 91
Section 10.10. Execution in Counterparts ....................... 91
Section 10.11. Complete Agreement .............................. 91
Section 10.12. Limitation of Liability ......................... 91
Section 10.13. Unsecured Advances; No Lien ..................... 92
Section Amendment and Restatement .............................. 92
Section 10.14. Waiver of Trial by Jury ........................ 93
v
FIRST AMENDED AND RESTATED
CREDIT AND GUARANTY AGREEMENT
FIRST AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT, dated as of June
25, 1998 (as amended from time to time, this "AGREEMENT"), by and among THE
MACERICH PARTNERSHIP, L.P., a Delaware limited partnership (the "BORROWER"), THE
ENTITIES FROM TIME TO TIME PARTIES HERETO AS GUARANTORS, THE MACERICH COMPANY, a
Maryland corporation (the "REIT"), THE BANKS AND OTHER FINANCIAL INSTITUTIONS
THAT EITHER NOW OR IN THE FUTURE ARE PARTIES HERETO (collectively, the "LENDERS"
and each individually, a "LENDER"), and ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
(including in its capacity as an issuer of Letters of Credit, the "AGENT BANK"),
as agent and representative for the Lenders (the Agent Bank in such capacity or
any successor in such capacity is referred to herein as the "AGENT"). The
Lenders (including the Agent Bank) and the Agent are collectively referred to
herein as the "LENDER PARTIES" and each individually as a "LENDER PARTY."
R E C I T A L S
A. The Borrower, the Guarantors, the REIT, the Agent and the Agent Bank
have entered into a Credit and Guaranty Agreement dated as of February 26,
1998 (the "EXISTING CREDIT AGREEMENT").
B. As of the Closing Date, (I) the Existing Credit Agreement is
being amended and restated as set forth herein, (II) all outstanding
Advances (the "EXISTING COMMITTED ADVANCES") under the Existing
Credit Agreement will be considered "Committed Advances" under this
Agreement, (III) the outstanding Letter of Credit under the Existing
Credit Agreement (the "EXISTING LETTER OF CREDIT") will be considered
"Committed Advances" and a "Letter of Credit" under this Agreement,
(IV) the Agent Bank is assigning a portion of its Commitment
hereunder (the "ASSIGNED COMMITMENT") and a corresponding portion of
the Existing Committed Advances and participations in the Existing
Letter of Credit (the "TRANSFERRED PARTICIPATIONS") to certain
additional lenders (the "NEW LENDERS") and (IV) the New Lenders are
assuming the Agent Bank's obligations under the Assigned Commitment
and the Transferred Participations, all of which transactions will
occur contemporaneously.
ARTICLE 1.
DEFINITIONS AND RELATED MATTERS
SECTION 1.1. DEFINITIONS. The following terms with initial capital letters
have the following meanings:
"ABSOLUTE RATE" means, in connection with any Absolute Rate Auction,
the rate of interest per annum (expressed in multiples of 1/1000th of one
percent) offered for any Bid Advance to be made pursuant to Section 2.1.2.
"ABSOLUTE RATE AUCTION" means a solicitation of a Competitive Bid
setting forth Absolute Rates pursuant to Section 2.1.2.3.1.
"ABSOLUTE RATE BID ADVANCE" means a Bid Advance that bears
interest at an Absolute Rate.
"ACQUISITION" is defined in Section 4.3.1.
"ACQUISITION ADVANCES" is defined in Section 4.3.1.3.
"ACQUISITION AGREEMENT" is defined in Section 4.3.1.6.
"ADVANCE" means a Committed Advance or a Bid Advance.
"AFFILIATE" means, with respect to any Person, any other Person
that, directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such first Person. Unless
otherwise indicated, "Affiliate" refers to an Affiliate of any Borrower Party.
Notwithstanding the foregoing, in no event shall any Lender Party or any
Affiliate of any Lender Party be deemed to be an Affiliate of the Borrower.
"AGENT" is defined in the Preamble.
"AGENT BANK" is defined in the Preamble.
"AGENT'S ACCOUNT" means the account identified on SCHEDULE 1.1B as
the Agent's Account or such account as the Agent may hereafter designate by
notice to the Borrower and each Lender.
"AGENT'S OFFICE" means the office of the Agent identified as such on
SCHEDULE 1.1.B, or such other office as the Agent may hereafter designate by
notice to the Borrower and each Lender.
"AGREEMENT" is defined in the Preamble and includes all
Schedules and Exhibits.
"APPLICABLE LAW" means all applicable provisions of all (i)
constitutions, treaties, statutes, laws, rules, regulations and ordinances of
any Governmental Authority, (ii) Governmental Approvals and (iii) orders,
decisions, judgments, awards and decrees of any Governmental Authority.
"APPLICABLE LENDING OFFICE" means, with respect to any Lender, (i)
in the case of any payment with respect to Fixed Rate Advances or Fixed Rate Bid
Advances, the Lender's LIBO Lending Office, and (ii) in the case of any payment
with respect to Base Rate Advances or
2
Absolute Rate Bid Advances or any other payment under the Loan Documents, the
Lender's Domestic Lending Office.
"APPLICABLE LIBO MARGIN" means, in respect of Fixed Rate Advances
that are Committed Advances, at any date, (i) 0.950% per annum if the ratio of
Total Liabilities to Gross Asset Value (expressed as a percentage) as of the
last day of the Fiscal Quarter most recently ended is less than 45.0%, (ii)
1.000% per annum if the ratio of Total Liabilities to Gross Asset Value
(expressed as a percentage) as of the last day of the Fiscal Quarter most
recently ended is greater than or equal to 45.0% but less than 55.0%, (iii)
1.100% per annum if the ratio of the Total Liabilities to Gross Asset Value
(expressed as a percentage) as of the last day of the Fiscal Quarter most
recently ended is greater than or equal to 55.0% but less than 60.0%, or (iv)
1.150% per annum if none of clause (i), (ii) or (iii) applies (including if the
Compliance Certificate showing that any of clause (i), (ii) or (iii), as the
case may be, is satisfied is not delivered when required hereby), PROVIDED in
the case of any of clause (i), (ii) or (iii), at least four Business Days shall
have expired from the day on which the Borrower shall have delivered a
Compliance Certificate showing that any of clause (i), (ii) or (iii) is
satisfied and PROVIDED, FURTHER, that any change in the Applicable LIBO Margin
resulting from the change in the ratio of Total Liabilities to Gross Asset Value
shall not take effect until the fifth Business Day after the Compliance
Certificate with respect to a Fiscal Quarter is (or is required to be)
delivered.
"APPLICABLE LIBO RATE" means, (i) in respect of Fixed Rate Advances
that are Committed Advances, the rate of interest, rounded upward (if necessary)
to the nearest whole multiple of .01%, equal to the sum of (x) the Applicable
LIBO Margin, PLUS (y) the LIBO Rate, which LIBO Rate is divided by 1.00 minus
the Reserve Percentage, and (ii) in respect of Fixed Rate Bid Advances, the rate
of interest, rounded upward (if necessary) to the nearest whole multiple of
.01%, equal to the sum of (x) the LIBO Bid Margin, PLUS (y) the LIBO Rate, which
LIBO Rate is divided by 1.00 MINUS the Reserve Percentage; which, in the case of
either clause (i) or clause (ii) , may be expressed as follows:
Applicable LIBO Rate = Applicable LIBO Margin + LIBO Rate / (1 - Reserve
OR Percentage)
LIBO Bid Margin, as the
case may be
"ASSIGNED COMMITMENT" is defined in the Recitals.
"ASSIGNMENT" and "ASSIGNMENT AND ACCEPTANCE" are defined in
Section 10.5.2.
"BANKRUPTCY CODE" means Title 11 of the United States Code (11
U.S.C. Section 101 ET SEQ.), as amended from time to time.
"BANKRUPTCY REMOTE ENTITY" means a Consolidated Entity (i) one
hundred percent of the Capital Stock of which is owned, directly or indirectly,
by the Borrower or the REIT and (ii) which is a so-called "bankruptcy remote
special purpose vehicle" or "bankruptcy
3
remote SPV" that meets the published criteria in effect from time to time of
S&P, ▇▇▇▇▇'▇, ▇▇▇▇ & ▇▇▇▇▇▇ Credit Rating Co. or Fitch Investors Service Inc.
"BASE RATE" means a fluctuating interest rate per annum as shall be
in effect from time to time, which rate per annum shall at all times be equal to
the higher of:
(i) the then effective Prime Rate; or
(ii) the then effective Federal Funds Rate PLUS 0.50%.
Each change in the interest rate on Advances based on a change in the Base Rate
shall be effective as of the effective date of such change in the Base Rate.
"BASE RATE ADVANCE" means any Committed Advance that constitutes or,
when made, will constitute, part of the Base Rate Portion.
"BASE RATE PORTION" means, at any time, the portion or portions of
the unpaid principal balance of all Committed Advances bearing interest at a
rate determined by reference to the Base Rate.
"BID ADVANCE" means an Advance by a Lender pursuant to the Bid
Facility, which may be either an Absolute Rate Bid Advance or a Fixed Rate Bid
Advance.
"BID ADVANCE LIMIT" means the lesser of (i) Seventy-Five Million
Dollars ($75,000,000) or (ii) the aggregate amount of the Commitments of all
Lenders.
"BID ADVANCE NOTE" means a promissory note made by Borrower payable
to the order of any Lender, in the amount of the lesser of (i) the Bid Advance
Limit or (ii) the aggregate amount of the Bid Advances from time to time
outstanding to such Lender, which note is substantially in the form of EXHIBIT
A-2, as amended from time to time.
"BID FACILITY" means the credit facility for the requesting and
making of Bid Advances described in Section 2.1.2.
"BOARD OF DIRECTORS" means the Board of Directors, as constituted
from time to time, of the REIT (in the case of actions to be taken by the REIT,
the Borrower or any other Borrower Party or Consolidated Entity of which the
REIT is the general partner or manager) or of any other Borrower Party or
Consolidated Entity (as in the case of actions to be taken by such Borrower
Party or Consolidated Entity or by any other Borrower Party or Consolidated
Entity of which such Borrower Party or Consolidated Entity is the general
partner or manager).
"BORROWER" is defined in the Preamble and includes its
successors and permitted assigns.
"BORROWER ACCOUNT" means the account of the Borrower identified as
such on SCHEDULE 10.4., or such other account as the Borrower may hereafter
designate by notice to the
4
Agent (including in connection with a Credit Sweep Program), PROVIDED that if
such account is maintained with any Person other than the Agent Bank, such
designation shall not be effective unless and until a Funds Transfer Agreement
and all documents contemplated thereby are executed and delivered by the
Borrower to the Agent Bank.
"BORROWER PARTY" means the Borrower, any Guarantor or the REIT.
Notwithstanding anything herein to the contrary, recourse to the REIT for
payment and performance of the Obligations is limited as set forth in Section
10.12.
"BORROWING" means a contemporaneous borrowing of Advances or
the issuance of a Letter of Credit, as applicable.
"BULLET PAYMENT" means any payment of the entire unpaid balance of
any Debt at its final maturity other than the final payment with respect to a
loan that is fully amortized over its term.
"BUSINESS DAY" means a day of the week (but not a Saturday, Sunday
or holiday) on which the offices of banks located in San Francisco and Los
Angeles, California are open to the public for carrying on substantially all of
such banks' business functions, PROVIDED that with respect to any Fixed Rate
Advance, "Business Day" shall further mean any day on which commercial banks are
open for dealings in Dollar deposits in the London interbank market.
"CAPITAL STOCK" means, with respect to any Person, all (i) shares,
interests, participations or other equivalents (howsoever designated) of capital
stock or partnership or other equity interests of such Person and (ii) rights
(other than debt securities convertible into capital stock or other equity
interests), warrants or options to acquire any such capital stock or partnership
or other equity interests of such Person. The term "Capital Stock" includes the
Partnership Units of the Borrower.
"CAPITALIZED LEASES" means all leases of the REIT and the
Consolidated Entities of real or personal property that are required to be
capitalized on the consolidated balance sheets of such Persons.
"CAPITALIZED LOAN FEES" means, with respect to the REIT, any
Consolidated Entity or any Unconsolidated Joint Venture, and with respect to any
period, any upfront, closing or similar fees paid by such Person in connection
with the incurrence or refinancing of Debt during such period that are
capitalized on the balance sheet of such Person.
"CLOSING DATE" means the earliest date upon which all of the
conditions to the effectiveness of this Agreement set forth in Section 4.1.
are satisfied.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
"COLLATERAL" is defined in Section 3.2.
5
"COMMENCEMENT OF CONSTRUCTION" with respect to a Real Property,
means the commencement of material on-site work (including grading) or the
commencement of a work of improvement of such Real Property.
"COMMITMENT" means, with respect to each Lender, the amount set
forth for such Lender as its "Commitment" on SCHEDULE 1.1.A, as reduced or
terminated from time to time pursuant to the terms hereof.
"COMMITMENT USAGE" means, at any time, (i) with respect to any
Lender, the sum of (A) the aggregate unpaid principal amount of all Committed
Advances made by such Lender, PLUS (B) the Lender's PRO RATA share of all Letter
of Credit Liability, PLUS (C) the Lender's PRO RATA share of the Interest
Reserve PLUS (D) the Lender's PRO RATA share of all Bid Advances outstanding
(regardless of whether such Bid Advances were made by such Lender) or (ii) with
respect to all Lenders, the sum of (A) the aggregate unpaid principal amount of
all Committed Advances made by all Lenders, PLUS (B) all Letter of Credit
Liability, PLUS (C) the Interest Reserve, PLUS (D) all Bid Advances outstanding,
in each case giving effect to the Borrowings then requested. For purposes of
clause (i)(D), a Lender's PRO RATA share of all Bid Advances shall be equal to
the aggregate amount of such Bid Advances, multiplied by a fraction, the
numerator of which is such Lender's Commitment and the denominator of which is
the aggregate Commitments of all Lenders.
"COMMITTED ADVANCE" is defined in Section 2.1.1.1.
"COMPETITIVE BID" means an offer by a Lender to make a Bid Advance
in response to a Competitive Bid Request, substantially in the form of EXHIBIT
B-4.
"COMPETITIVE BID REQUEST" means a notice, in substantially the form
of EXHIBIT B-3, requesting that Lenders submit Competitive Bids.
"COMPLIANCE CERTIFICATE" means a certificate of the chief financial
officer and the secretary of each Borrower Party, substantially in the form of
EXHIBIT C-4.
"CONSOLIDATED ENTITIES" means, collectively, (i) the Borrower, (ii)
any other Person the accounts of which are consolidated with those of the REIT
in the consolidated financial statements of the REIT in accordance with GAAP,
and (iii) except for purposes of Sections 7.1.2. and 7.3. all Unconsolidated
Joint Ventures of which any Consolidated Entity is a general partner.
"CONSTRUCTION-IN-PROCESS" means, with respect to any Retail Property
Under Construction, the aggregate amount of expenditures classified as
"construction-in-process" on the REIT's balance sheet with respect thereto.
"CONTINGENT OBLIGATION" means, as to any Person, any obligation,
direct or indirect, contingent or otherwise, of such Person (i) with respect to
any Debt or other obligation of another Person, including any direct or indirect
guarantee of such Debt (other than any
6
endorsement for collection in the ordinary course of business) or any other
direct or indirect obligation, by agreement or otherwise, to purchase or
repurchase any such Debt or obligation or any security therefor, or to provide
funds for the payment or discharge of any such Debt or obligation (whether in
the form of loans, advances, stock purchases, capital contributions or
otherwise), (ii) to provide funds to maintain the financial condition of the
other Person, or (iii) otherwise to assure or hold harmless the holders of Debt
or other obligation of another Person against loss in respect thereof. The
amount of any Contingent Obligation shall be an amount equal to the amount of
the Debt or obligation guaranteed or otherwise supported thereby.
Notwithstanding the foregoing, "CONTINGENT OBLIGATIONS" shall not include (x)
any obligation of the Borrower or any of the Consolidated Entities under any
contract for the acquisition of Real Property entered into in the ordinary
course to pay the purchase price of such Real Property prior to the transfer of
title to such Real Property, (y) any unliquidated contingent liabilities under
environmental indemnities given by the Borrower or any of the Consolidated
Entities or (z) any amount representing the excess of the obligations of an
Unconsolidated Joint Venture over the Borrower's PRO RATA share of such
obligations.
"CONTRACTUAL OBLIGATION" means, as applied to any Person, any
provision of any security issued by that Person or of any agreement or other
instrument to which that Person is a party or by which it or any of the
properties owned by it is bound or otherwise subject.
"CONTROL" means the possession, directly or indirectly, of the
power, whether or not exercised, to direct or cause the direction of the
management or policies of a Person, whether through the ownership of Capital
Stock, by contract or otherwise, and the terms "CONTROLLED" and "COMMON CONTROL"
have correlative meanings.
"CONTROLLED CONSOLIDATED ENTITY" means any Consolidated Entity,
except an Unconsolidated Joint Venture that is not controlled by the REIT or the
Borrower, PROVIDED that any Unconsolidated Joint Venture the general partners of
which include both a Consolidated Entity (or a Person controlled by a
Consolidated Entity) and a Person (the "THIRD PERSON") other than a Consolidated
Entity (or an Affiliate of a Consolidated Entity) shall not be a Controlled
Consolidated Entity as to any transaction or matter that such Third Person has
the power, under Applicable Law, to engage in or undertake on behalf of the
Unconsolidated Joint Venture without the consent of the Consolidated Entity that
is also a general partner (whether or not such consent would be required under
the partnership agreement or any other Contractual Obligation of the Third
Person or the Unconsolidated Joint Venture).
"CONTROLLED GROUP" means all domestic and foreign members of a
controlled group of corporations under Section 1563(a) of the Code (determined
without regard to Section 1563(b)(2)(C) of the Code) and all trades or
businesses (irrespective of whether incorporated) that are under common control
with the REIT. With regard to all Plans and Multiemployer Plans, "CONTROLLED
GROUP" includes all ERISA Affiliates.
"CREDIT SWEEP PROGRAM" is defined in Section 2.1.1.3.3.
"CUT-OFF DATE" is defined in Section 4.3.2.1.
7
"DEBT" means, with respect to any Person, the aggregate amount of,
without duplication: (i) all obligations for borrowed money including, in the
case of the REIT, the Permitted Subordinated Debentures; (ii) all obligations
evidenced by bonds, debentures, notes or other similar instruments; (iii) all
obligations to pay the deferred purchase price of property or services,
including trade accounts payable arising in the ordinary course of business;
(iv) all Capitalized Leases; (v) all obligations or liabilities of others
secured by a Lien on any asset owned by such Person or Persons whether or not
such obligation or liability is assumed; (vi) all obligations of such Person or
Persons, contingent or otherwise, in respect of any letters of credit or
bankers' acceptances; (vii) the maximum fixed redemption or repurchase price of
Disqualified Capital Stock of such Person at the date of determination, (viii)
all Contingent Obligations and (ix) the Interest Reserve, which shall be
considered unsecured Debt for purposes of this Agreement.
"DEFAULT" means any condition or event that, with the giving of
notice or lapse of time or both, would, unless cured or waived, become an Event
of Default.
"DEFAULTING LENDER" is defined in Section 9.10.2.
"DEFINED BENEFIT PLAN" means any pension plan subject to Title IV of
ERISA including a Multiemployer Plan and any money purchase pension plan subject
to the funding requirements of Section 412 of the Code.
"DEPRECIATION AND AMORTIZATION EXPENSE" means (without duplication),
for any period, the sum for such period of (i) total depreciation and
amortization expense, whether paid or accrued, of the REIT and the Consolidated
Entities, PLUS (ii) the REIT's and any Consolidated Entity's PRO RATA share of
depreciation and amortization expenses of Unconsolidated Joint Ventures. For
purposes of this definition, the REIT's PRO RATA share of depreciation and
amortization expense of any Unconsolidated Joint Venture shall be deemed equal
to the product of (i) the depreciation and amortization expense of such
Unconsolidated Joint Venture, MULTIPLIED BY (ii) the percentage of the total
outstanding Capital Stock of such Person held by the REIT or any Consolidated
Entity, expressed as a decimal.
"DISQUALIFIED CAPITAL STOCK" of any Person means any Capital Stock
of such Person that by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable), or otherwise (including upon
the occurrence of any event), is required to be redeemed or is redeemable for
cash at the option of the holder thereof, in whole or in part (including by
operation of a sinking fund), or is exchangeable for Debt (other than at the
option of such Person), in whole or in part, at any time prior to the 91st day
after the Maturity Date.
"DOLLARS" and "$" means lawful money of the United States of
America.
"DOMESTIC LENDING OFFICE" means the office, branch or Affiliate of
the Lender identified on SCHEDULE 1.1B designated as its Domestic Lending Office
or such other office, branch or Affiliate as such Lender may hereafter designate
as its Domestic Lending Office for one or more types of Advances by notice to
the Borrower and the Agent.
8
"EBITDA" means, for any period, (i) Net Income, PLUS (without
duplication) (A) Interest Expense, (B) Tax Expense, and (C) Depreciation and
Amortization Expense, in each case for such period.
"EFFECTIVE RATE" is defined in Section 2.4.1.
"ELIGIBLE ASSIGNEE" is defined in Section 10.5.2.
"ENVIRONMENTAL DAMAGES" means all claims, judgments, damages,
losses, penalties, liabilities (including strict liability), costs and expenses,
including costs of investigation, remediation, defense, settlement and
attorneys' fees and consultants' fees, that are incurred at any time as a result
of the existence of Hazardous Materials upon, about or beneath any Real Property
or migrating or threatening to migrate to or from any Real Property, or arising
in any manner whatsoever out of any violation of Environmental Requirements.
"ENVIRONMENTAL LIEN" means a Lien in favor of any Governmental
Authority for Environmental Damages.
"ENVIRONMENTAL REQUIREMENTS" means all Applicable Laws relating to
Hazardous Materials or the protection of human health or the environment,
including all requirements pertaining to reporting, permitting, investigation
and remediation of releases or threatened releases of Hazardous Materials into
the environment, or relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA AFFILIATE" means any Person that is or was a member of the
controlled group of corporations or trades or businesses (as defined in
Subsection (b), (c), (m) or (o) of Section 414 of the Code) of which any
Borrower Party is or was a member at any time within the last six years.
"EXISTING COMMITTED ADVANCES" is defined in the Recitals.
"EXISTING CREDIT AGREEMENT" is defined in the Recitals.
"EXISTING LETTER OF CREDIT" is defined in the Recitals.
"EXISTING WFB CREDIT AGREEMENT" means that certain Second Amended
and Restated Credit and Guaranty Agreement, dated as of December 13, 1996 (as
amended by Amendment No. 1 to Second Amended and Restated Credit and Guaranty
Agreement dated as of July 10, 1997, and Amendment No. 2 to Second Amended and
Restated Credit and Guaranty Agreement dated as of December 31, 1997).
"EXTENSION FEE" is defined in Section 2.6.4.
9
"EVENT OF DEFAULT" means any of the events specified in
Section 8.1.
"FACILITY FEE" is defined in Section 2.6.3.
"FAIR SALABLE VALUE" is defined in Section 3.9.
"FAIR VALUATION" is defined in Section 3.9.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards, 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 for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, PROVIDED that if such rate is not so published for
any day that is a Business Day, the Federal Funds Rate for such day shall be the
average rate charged to the Agent Bank on such day on such transactions as
determined by the Agent Bank.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System, or any successor thereto.
"FEE LETTER" means that certain letter dated June __, 1998 between
the Borrower and the Agent, as amended from time to time.
"FEES" means, collectively, the fees described or referenced in
the Fee Letter and in Section 2.6.
"FISCAL YEAR" means the fiscal year of the REIT, which shall be the
12-month period ending on December 31 in each year or such other period as the
REIT may designate and the Agent may approve in writing. "FISCAL QUARTER" or
"FISCAL QUARTER" means any quarter of a Fiscal Year.
"FIXED CHARGES" means, for any period, the sum of the amounts for
such period of (i) scheduled payments of principal of Debt of the REIT and the
Consolidated Entities (other than any Bullet Payment), (ii) the REIT's PRO RATA
share of scheduled payments of principal of Debt of Unconsolidated Joint
Ventures (other than any Bullet Payment) that does not otherwise constitute Debt
of and is not otherwise recourse to the REIT and the Consolidated Entities or
their assets, (iii) Interest Expense, (iv) payments of dividends in respect of
Disqualified Capital Stock and (v) an amount equal to $0.05 per quarter,
MULTIPLIED BY the total square footage of all Real Properties owned by the
Consolidated Entities and the PRO RATA share of square footage of all Real
Properties owned by the Unconsolidated Joint Ventures, in each case, at the end
of such period. For purposes of clauses (ii) and (v), the REIT's PRO RATA share
of payments by or square footage of any Unconsolidated Joint Venture shall be
deemed equal to the product of (a) the payments made by or square footage of
such Unconsolidated Joint Venture, MULTIPLIED BY (b) the percentage of the total
outstanding Capital Stock of such Person held by the REIT or any Consolidated
Entity, expressed as a decimal.
10
"FIXED CHARGE COVERAGE RATIO" means, at any time, the ratio of (i)
EBITDA for the fiscal quarter then most recently ended, to (ii) Fixed Charges
for such period.
"FIXED RATE" means (i) in the case of Committed Advances, the
Applicable LIBO Rate as accepted by the Borrower as an Effective Rate for a
particular Fixed Rate Period and Fixed Rate Portion or (ii) in the case of Fixed
Rate Bid Advances, the Applicable LIBO Rate for the Fixed Rate Period applicable
to such Fixed Rate Bid Advances.
"FIXED RATE ADVANCE" means any Advance that constitutes or, when
made, will constitute, the Fixed Rate Portion of any Committed Advance or a
Fixed Rate Bid Advance.
"FIXED RATE AUCTION" means a solicitation of Competitive Bids
setting forth LIBO Bid Margins pursuant to Section 2.1.2.3.1.
"FIXED RATE BID ADVANCE" means a Bid Advance that bears interest for
the relevant Fixed Rate Period, at a Fixed Rate.
"FIXED RATE COMMENCEMENT DATE" , with respect to any Fixed Rate
Advance that is a Committed Advance, is defined in Section 2.4.2.4. and, with
respect to any Fixed Rate Bid Advance or Absolute Rate Bid Advance, is defined
in Section 2.1.2.3.6.
"FIXED RATE NOTICE" means, with respect to any Fixed Rate Advance, a
written notice, substantially in the form of EXHIBIT B-2, which confirms the
Fixed Rate for a particular Fixed Rate Period and, if the Fixed Rate Advance is
a Committed Advance, the Fixed Rate Portion or, if the Fixed Rate Advance is a
Bid Advance, the amount of the Bid Advance.
"FIXED RATE PERIOD" means the period or periods of (a) in respect of
any Fixed Rate Advance that is a Committed Advance, (i) one, two, three or six
months; or (ii) any other period of at least one month that ends at the Maturity
Date, which periods are selected by the Borrower pursuant to Section 2.4.2. and
may be confirmed in a Fixed Rate Notice; (b) in respect of any Absolute Rate Bid
Advance, the period, commencing on the Funding Date in respect of such Bid
Advance and ending on a date that is thirty, sixty or ninety days later, as
selected by the Borrower in the related Competitive Bid Request; and (c) in
respect of any Fixed Rate Advance that is a Fixed Rate Bid Advance, the period,
commencing on the Funding Date in respect of such Bid Advance and ending on a
date that is one, two or three months later; PROVIDED that no Fixed Rate Period
shall extend beyond the Maturity Date. Notwithstanding the foregoing: (a) if a
Fixed Rate Advance that is a Committed Advance is continued, the Fixed Rate
Period applicable to the continued or converted Advance shall commence on the
day on which the Fixed Rate Period applicable to such Fixed Rate Advance ends;
(b) any Fixed Rate Period applicable to a Fixed Rate Advance (1) that would
otherwise end on a day that is not a Business Day shall be extended to the next
succeeding Business Day, unless such succeeding Business Day falls in another
calendar month, in which case such Fixed Rate Period shall end on the next
preceding Business Day or (2) that begins on the last 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 Fixed Rate Period) shall end on the last
Business Day of the calendar month at the end of such Fixed
11
Rate Period.
"FIXED RATE PORTION" means the portion or portions of the
unpaid principal balance of all Committed Advances that the Borrower
selects to have subject to a Fixed Rate. The Fixed Rate Portion shall
comply with Sections 2.4.2.7.
"FIXED RATE PRICE ADJUSTMENT" is defined in Section 2.13.
"FLOATING RATE DEBT" is defined in Section 7.3.6.
"FUNDING DATE" means any date on which an Advance is (or is
requested to be) made or a Letter of Credit is (or is requested to be) issued.
"FUNDS FROM OPERATIONS" or "FFO" means, for any period, the "Funds
From Operations" calculated for such period in accordance with NAREIT
Guidelines, PROVIDED that, notwithstanding Section 10.8., the components of
Funds From Operations or FFO shall be calculated on the basis of, and in
accordance with, GAAP as it exists on the date of this Agreement, and no effect
shall be given to any changes to such accounting principles that may be made
from time to time after the Closing Date. It is understood by the parties that,
notwithstanding the internal accounting practices or operations of the Borrower,
the defined terms included in this definition shall have the meanings set forth
in this Agreement.
"FUNDS TRANSFER AGREEMENT" means a Funds Transfer Agreement for
Disbursement of Loan Proceeds between the Agent Bank and the Borrower, on the
Agent Bank's standard form, executed and delivered after the date hereof as
contemplated by the definition of "Borrower Account," as such agreement may be
amended from time to time.
"GAAP" means generally accepted accounting principles as in effect
in the United States of America (as such principles are in effect on the date
hereof).
"GOVERNMENTAL APPROVAL" means an authorization, consent, approval,
permit or license issued by, or a registration or filing with, any Governmental
Authority.
"GOVERNMENTAL AUTHORITY" means any nation and any state or political
subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government and any
tribunal or arbitrator of competent jurisdiction.
"GROSS ASSET VALUE" means, at any time, the sum of (without
duplication):
(i) for Retail Properties that are Wholly-Owned , the sum of, for
each such property, (a) such property's Property NOI for the Measuring Period,
MULTIPLIED BY 4, DIVIDED BY (b) (1) 8.5% (expressed as a decimal), in the case
of regional Retail Properties (other than Huntington Beach Mall) or (2) 9.5%
(expressed as a decimal) in the case of Huntington Beach Mall or other Retail
Properties that are not regional Retail Properties, PLUS
12
(ii) for Retail Properties that are not Wholly-Owned, the sum of,
for each such property, (a) the Gross Asset Value of each such Retail Property
at such time, as calculated pursuant to the foregoing clause (i), MULTIPLIED BY
(b) a percentage (expressed as a decimal) equal to the percentage of the total
outstanding Capital Stock held by the Borrower of the Consolidated Entity or
Unconsolidated Joint Venture holding title to such Retail Properties, PLUS
(iii) all cash and Permitted Investments (other than, in either
case, Restricted Cash) held by the Consolidated Entities at such time,
MULTIPLIED BY in the case of cash and Permitted Investments not Wholly-Owned, a
percentage (expressed as a decimal) equal to the percentage of the total
outstanding Capital Stock held by the Borrower of the Consolidated Entity
holding title to such cash and Permitted Investments, PLUS
(iv) for Mortgage Loans that are Wholly-Owned, the lowest of (A) the
book value of each such Mortgage Loan at the time it is initially acquired, (B)
the book value of each such Mortgage Loan at the time Gross Asset Value is being
determined, or (C) the excess, if any, of (1) 80% of the Gross Asset Value of
the Retail Property securing such Mortgage Loan, determined pursuant to the
applicable clause of this definition as if such Retail Property were
Wholly-Owned, over (2) the amount of any Debt and other liabilities or
obligations, absolute or contingent, also secured by a Lien on such Retail
Property, which Lien is senior to or PARI PASSU with the Lien securing such
Mortgage Loan; PLUS
(v)(a) 100% of Construction-in-Process with respect to Retail
Properties that are Wholly-Owned and (b) the product of (1) 100% of
Construction-in-Process with respect to Retail Properties Under Construction
that are not Wholly-Owned MULTIPLIED BY (2) a percentage (expressed as a
decimal) equal to the percentage of the total outstanding Capital Stock held by
the Borrower of the Consolidated Entity or Unconsolidated Joint Venture holding
title to such Retail Properties Under Construction;
PROVIDED, HOWEVER, that the determination of Gross Asset Value for
any period shall not include any Retail Property that has been sold or otherwise
disposed of at any time prior to or during such period.
"GUARANTOR" means (i) any Initial Guarantor and (ii) any other
Person who from time to time becomes a Guarantor hereunder by executing and
delivering a Joinder Agreement substantially in the form of EXHIBIT E, in each
case unless and until such Person is released from any further liability
hereunder as specified in the definition of "Unencumbered Asset."
"GUARANTY" is defined in Section 3.1.
"HAZARDOUS MATERIALS" means any chemical substance (i) the presence
of which requires investigation or remediation under any Applicable Law; or (ii)
that is or becomes defined as a "hazardous waste" or "hazardous substance" under
any Applicable Law, including the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601 ET SEQ.) or the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901 ET SEQ.); or (iii) that is
toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
13
mutagenic, or otherwise hazardous and is or becomes regulated by any
Governmental Authority; or (iv) the presence of which on any Real Property
causes or threatens to cause a nuisance upon the Real Property or to adjacent
properties or poses or threatens to pose a hazard to any Real Property or to the
health or safety of Persons on or about any Real Property; or (v) which contains
gasoline, diesel fuel or other petroleum hydrocarbons; or (vi) which contains
polychlorinated biphenyls (PCBs) or asbestos.
"HUNTINGTON BEACH MALL" means the property identified as such
on Schedule 1.1C.
"INDEMNIFIED LIABILITIES" is defined in Section 10.1.3.
"INDEMNITEES" is defined in Section 10.1.3.
"INITIAL GUARANTORS" means MACERICH BRISTOL ASSOCIATES, a California
general partnership, and its successors, and MACERICH BUENAVENTURA LIMITED
PARTNERSHIP, a California limited partnership, and its successors, MACERICH
HUNTINGTON LIMITED PARTNERSHIP, a California limited partnership, and its
successors, and MACERICH STONEWOOD LIMITED PARTNERSHIP, a California limited
partnership, and its successors.
"INSOLVENT" is defined in Section 3.9.
"INTANGIBLE ASSETS" means (i) all unamortized debt discount and
expense, unamortized deferred charges, goodwill and other intangible assets and
(ii) all write-ups (other than write-ups resulting from foreign currency
translations and write-ups of assets of a going concern business made within
twelve months after the acquisition of such business) subsequent to December 31,
1994, in the book value of any asset owned by the REIT or any Consolidated
Entity.
"INTEREST COVERAGE RATIO" means, at any time, the ratio of (i)
EBITDA for the fiscal quarter then most recently ended, to (ii) Interest Expense
for such period.
"INTEREST EXPENSE" means, for any period, the sum (without
duplication) for such period of (i) total interest expense, whether paid or
accrued, of the REIT and the Consolidated Entities, including Fees payable
pursuant to Section 2.6., charges in respect of Letters of Credit and the
portion of any Capitalized Lease Obligations allocable to interest expense,
including the REIT's share of interest expenses in Unconsolidated Joint Ventures
but excluding amortization or write-off of debt discount and expense (except as
provided in clause (ii) below), (ii) amortization of costs related to interest
rate protection contracts and rate buydowns (other than the costs associated
with the interest rate buydowns completed in connection with the initial public
offering of the REIT), (iii) capitalized interest, PROVIDED that capitalized
interest may be excluded from this clause (iii) to the extent such interest (A)
does not exceed the Interest Reserve designated for such period or (B) is paid
or reserved out of any interest reserve established under a loan facility, (iv)
for purposes of determining Interest
14
Expense as used in the Fixed Charge Coverage Ratio (both numerator and
denominator) only, amortization of Capitalized Loan Fees, (v) to the extent not
included in clauses (i), (ii), (iii) and (iv), the REIT's PRO RATA share of
interest expense and other amounts of the type referred to in such clauses of
the Unconsolidated Joint Ventures, and (vi) interest incurred on any liability
or obligation that constitutes a Contingent Obligation of the REIT or any
Consolidated Entity. For purposes of clause (v), the REIT's PRO RATA share of
interest expense or other amount of any Unconsolidated Joint Venture shall be
deemed equal to the product of (a) the interest expense or other relevant amount
of such Unconsolidated Joint Venture, MULTIPLIED BY (b) the percentage of the
total outstanding Capital Stock of such Person held by the REIT or any
Consolidated Entity, expressed as a decimal.
"INTEREST RESERVE" means, with respect to any Fiscal Quarter, the
dollar amount designated by the Borrower as "Interest Reserve" for such Fiscal
Quarter in the Compliance Certificate submitted during such Fiscal Quarter;
PROVIDED, HOWEVER, that such dollar amount may not exceed the lesser of (i) the
amount that the Borrower would be permitted to draw as an Advance under this
Agreement or (ii) $10,000,000; PROVIDED FURTHER, however, that on the date of
this Agreement, the Interest Reserve shall be equal to $1,000,000.
"INVESTMENT" means, with respect to any Person, (i) any direct or
indirect purchase or other acquisition by that Person of stock or securities, or
any beneficial interest in stock or other securities, of any other Person, any
partnership interest (whether general or limited) in any other Person, or all or
any substantial part of the business or assets of any other Person, or (ii) any
direct or indirect loan, advance or capital contribution by that Person to any
other Person, including all indebtedness and accounts receivable from that other
Person that are not current assets or did not arise from sales to that other
Person in the ordinary course of business. The amount of any Investment shall be
the original cost of such Investment, PLUS the cost of all additions thereto,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment.
"JOINT VENTURE" means a joint venture, partnership, limited
liability company, business trust or similar arrangement, whether in corporate,
partnership or other legal form; PROVIDED that, as to any such arrangement in
corporate form, such corporation shall not, as to any Person of which such
corporation is a Subsidiary, be considered to be a Joint Venture to which such
Person is a party.
"LENDER" is defined in the Preamble, subject to Section 9.10.2. For
purposes of the Sections referred to in (and subject to) Section 10.5.3.,
"LENDER" includes a holder of a Participation.
"LENDER PARTY" is defined in the Preamble. For purposes of the
Sections referred to in (and subject to) Section 10.5.3., "LENDER PARTY"
includes a holder of a Participation.
"LETTER OF CREDIT" means a standby letter of credit issued pursuant
to this Agreement (including the Existing Letter of Credit) and a Letter of
Credit Agreement, either as originally issued or as amended, supplemented,
modified, renewed or extended.
15
"LETTER OF CREDIT AGREEMENT" means an Application and Agreement for
Standby Letter of Credit in the form attached hereto as EXHIBIT G.
"LETTER OF CREDIT COLLATERAL" is defined in Section 8.4.2.
"LETTER OF CREDIT COLLATERAL ACCOUNT" is defined in Section
8.4.1.
"LETTER OF CREDIT FEE" is defined in Section 2.6.2.
"LETTER OF CREDIT LIABILITY" means, at any time, all contingent
liabilities of the Borrower to the Agent Bank in respect of Letters of Credit
outstanding at such time and shall equal the aggregate Stated Amount of all
Letters of Credit then outstanding.
"LIBO BID MARGIN" means, in connection with any Fixed Rate Auction,
a margin (expressed in multiples of 1/1000th of one percent) above or below the
LIBO Rate offered for any Bid Advance to made pursuant hereto.
"LIBO LENDING OFFICE" means the office, branch or Affiliate of any
Lender identified on SCHEDULE 1.1.B as its LIBO Lending Office or such other
office, branch or Affiliate as such Lender may hereafter designate as its LIBO
Lending Office by notice to the Borrower and the Agent.
"LIBO RATE" is the rate of interest, rounded upward (if necessary)
to the nearest whole multiple of one-sixteenth of one percent (.0625%), quoted
by the Agent Bank as the London Inter-Bank Offered Rate for deposits in U.S.
Dollars at approximately 11:00 a.m. (London time),
(i) in the case of a Fixed Rate Advance that is a Committed Advance,
on the second Business Day prior to (or, if the Agent Bank is then the sole
Lender hereunder, on) a Fixed Rate Commencement Date or on a Price Adjustment
Date, as appropriate, for purposes of calculating effective rates of interest
for loans or obligations making reference thereto for an amount approximately
equal to the Fixed Rate Portion and for a period of time approximately equal to
a Fixed Rate Period or the time remaining in a Fixed Rate Period after a Price
Adjustment Date, as appropriate; and
(ii) in the case of a Fixed Rate Bid Advance, on the second Business
Day prior to the related Funding Date, for purposes of calculating effective
rates of interest for loans or obligations making reference thereto for an
amount approximately equal to such Fixed Rate Bid Advance and for a period of
time approximately equal to the Fixed Rate Period applicable thereto.
"LIEN" means any lien, mortgage, pledge, security interest, charge,
or encumbrance of any kind (including any conditional sale or other title
retention agreement or any lease in the nature thereof) and any agreement to
give or refrain from giving any lien, mortgage, pledge, security interest,
charge, or other encumbrance of any kind.
16
"LOAN DOCUMENTS" means, collectively, this Agreement, the Notes, the
Fee Letter, each Letter of Credit Agreement, each Letter of Credit, any Funds
Transfer Agreement and any other agreement, instrument or other writing executed
or delivered by the Borrower, the REIT or any Subsidiary in connection herewith
from time to time, and all amendments, exhibits and schedules to any of the
foregoing.
"M&F GROSS LEASEABLE AREA" means, with respect to any Real Property,
the gross leaseable area of the mall and freestanding areas of such Real
Property (excluding the gross leaseable area of such Real Property that is, at
the time of determination, undergoing substantial capital improvements other
than any such capital improvements made to a tenant space pursuant to or in
anticipation of a new or renewed lease for such space).
"MANAGEMENT COMPANIES" means Macerich Property Management Company, a
California corporation, and Macerich Management Company, a California
corporation, and includes their respective successors.
"MANAGEMENT CONTRACT" means any contract between any Management
Company, on the one hand, and the Borrower and/or any other Consolidated Entity
or Unconsolidated Joint Venture, on the other hand, relating to the management
of the Borrower, any other Consolidated Entity or any Unconsolidated Joint
Venture or any of the properties of such Person, as the same may be amended from
time to time.
"MACERICH GROUP MEMBER" means any of the Borrower Parties, the
Principal Investors, the Management Companies, any Consolidated Entity (other
than any of the foregoing), or any other Person involved in the day-to-day
management of any Consolidated Entity or any Real Property held
by it.
"MARGIN REGULATIONS" means Regulations G, T, U and X of the Federal
Reserve Board, as amended from time to time.
"MARGIN STOCK" means "margin stock" as defined in Regulation U.
"MATERIAL," "MATERIAL ADVERSE EFFECT" or "MATERIAL ADVERSE CHANGE"
means (i) a condition or event material to, (ii) a material adverse effect on or
(iii) a material adverse change in, as the case may be, any one or more of the
following: (A) the business, assets, results of operations, financial condition
or prospects of the REIT and the Consolidated Entities taken as a whole or (B)
the ability of any Borrower Party to perform its obligations under any Loan
Document to which it is a party.
"MATURITY DATE" means February 26, 2000; PROVIDED, that if the
Maturity Date shall have been extended pursuant to Section 2.7.2., "MATURITY
DATE" means February 26, 2001.
"MEASURING PERIOD" means the period of three consecutive months,
constituting one full Fiscal Quarter, ended most recently for which operating
statements with respect to a Real Property have been delivered to the Lenders.
17
"MINORITY INTERESTS" means all of the Partnership Units of the
Borrower held by any Person other than the REIT.
"▇▇▇▇▇'▇" means ▇▇▇▇▇'▇ Investors Service, Inc. or any
successor.
"MORTGAGE LOANS" means all loans owned or held by the Borrower
secured by mortgages or deeds of trust on Retail Properties.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in
Section 3(37) and Section 4001(a)(3) of ERISA to which the Borrower or any of
its ERISA Affiliates is making or accruing an obligation to make contributions
or to which any such Person has made or accrued an obligation to make
contributions.
"NAREIT GUIDELINES" means the guidelines published from time to time
by the National Association of Real Estate Investment Trusts as in effect on the
date of this Agreement.
"NET INCOME" means, for any period, total net income (or loss) of
the REIT and the Consolidated Entities for such period taken as a single
accounting period, including the REIT's PRO RATA share of the income (or loss)
of any Unconsolidated Joint Venture for such period, PROVIDED that there shall
be excluded therefrom (i) any charges for minority interests in the Borrower
held by Persons holding Partnership Units of the Borrower (other than the REIT),
(ii) any income or loss attributable to extraordinary items, (iii) gains and
losses from sales of assets (other than undeveloped land that constitutes a
portion of any Retail Property), (iv) except to the extent otherwise included
hereunder, the income (or loss) of any Person accrued prior to the date it
becomes a Consolidated Entity or is merged with the REIT or any Consolidated
Entity or such Person's assets are acquired by the REIT or any Consolidated
Entity, and (v) any impairment loss required to be taken in such period in
accordance with Statement of Financial Accounting Standards No. 121 (Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of) with respect to any long-lived assets to be disposed of and whose value is
being reported during such period at the lower of its carrying amount or fair
value. For purposes of this definition, the REIT's PRO RATA share of income (or
loss) of any Unconsolidated Joint Venture shall be deemed equal to the product
of (i) the income (or loss) of such Unconsolidated Joint Venture, MULTIPLIED BY
(ii) the percentage of the total outstanding Capital Stock of such Person held
by the REIT or any Consolidated Entity, expressed as a decimal.
"NET WORTH" means, at any date, the consolidated stockholders'
equity of the REIT and the Consolidated Entities, excluding any amounts
attributable to Disqualified Capital Stock.
"NEW LENDERS" is defined in the Recitals.
"NON-RECOURSE DEBT" means Debt that (i) is non-recourse to the
Consolidated Entities (other than such Unconsolidated Joint Venture) and their
assets and (ii) does not constitute Debt of the Consolidated Entities (other
than such Unconsolidated Joint Venture).
18
"NON-RECOURSE SECURED DEBT" means Debt that (i) is non-recourse to
the Consolidated Entities (other than such Unconsolidated Joint Venture) and
their assets, (ii) does not constitute Debt of the Consolidated Entities (other
than such Unconsolidated Joint Venture) and (iii) is recourse only to Retail
Properties that secures such Debt.
"NOTE" means a Revolving Note or a Bid Advance Note.
"NOTICE OF BORROWING" is defined in Section 2.1.1.3.1.
"OBLIGATED PARTY" is defined in Section 9.10.2.
"OBLIGATIONS" means all present and future obligations and
liabilities of the Borrower of every type and description arising under or in
connection with this Agreement, the Notes and the other Loan Documents due or to
become due to the Lender Parties or any Person entitled to indemnification, or
any of their respective successors, transferees or assigns, whether for
principal, interest, letter of credit or other reimbursement obligations, cash
collateral cover, Fees, expenses, indemnities or other amounts (including
attorneys' fees and expenses) and whether due or not due, direct or indirect,
joint and/or several, absolute or contingent, voluntary or involuntary,
liquidated or unliquidated, determined or undetermined, and whether now or
hereafter existing, renewed or restructured, whether or not from time to time
decreased or extinguished and later increased, created or incurred, whether or
not arising after the commencement of a proceeding under the Bankruptcy Code
(including post-petition interest) and whether or not allowed or allowable as a
claim in any such proceeding, and whether or not recovery of any such obligation
or liability may be barred by a statute of limitations or such obligation or
liability may otherwise be unenforceable.
"OBLIGOR" is defined in Section 3.2.
"OFFERING CIRCULAR" means, as the case may be, (i) with respect to
the debentures described in clause (i) of the definition of "Permitted
Subordinated Debentures," the Offering Circular, dated June 20, 1997, pursuant
to which the Permitted Subordinated Debentures were offered by the REIT or (ii)
with respect to any other Permitted Subordinated Debentures, the final offering
document pursuant to which such Permitted Subordinated Debentures are offered by
the REIT.
"OPERATIVES" is defined in Section 10.12.2.
"OTHER GUARANTOR" is defined in Section 3.2.
"OTHER GUARANTY" is defined in Section 3.2.
"PARTICIPATION" is defined in Section 10.5.3.
"PARTNERSHIP UNITS," "PREFERRED PARTNERSHIP UNITS" and "SERIES A
PARTNERSHIP UNITS" are each defined in the Partnership Agreement of the
Borrower. Unless the
19
context indicates otherwise, the term "PARTNERSHIP UNITS" is used herein to
refer, collectively, to the Partnership Units, the Preferred Partnership Units
and the Series A Partnership Units.
"PBGC" means the Pension Benefit Guaranty Corporation, as defined in
Title IV of ERISA, or any successor.
"PERMITTED INVESTMENTS" means (i) marketable direct obligations
issued or unconditionally guaranteed by the United States Government or issued
by any agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one year from the date of acquisition
thereof, (ii) marketable direct obligations issued by any state of the United
States or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and having, at the time of acquisition, the highest rating obtainable
from either Standard & Poor's Ratings Group, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, or Moody's, (iii) commercial paper having, at the time of
acquisition, the highest rating obtainable from either S&P or Moody's, (iv)
certificates of deposit, other time deposits, and bankers' acceptances maturing
within one year from the date of acquisition thereof issued by any bank
operating under the laws of the United States or any state thereof or the
District of Columbia that has combined capital and surplus of not less than
$500,000,000, (v) institutional money market funds organized under the laws of
the United States of America or any state thereof that invest solely in any of
the Investments permitted under the foregoing clauses (i), (ii), (iii) and (iv)
or (vi) Capital Stock that is (x) traded on a national securities exchange, (y)
purchased in the secondary market and (z) not subject to any legal or
contractual restrictions on transferability.
"PERMITTED SUBORDINATED DEBENTURES" means (i) the 7 1/4% Convertible
Subordinated Debentures due 2002 of the REIT in the aggregate principal amount
of $161,400,000, offered pursuant to the Offering Circular, which debentures
have such terms and are subject to such conditions as are set forth in the
Offering Circular and (ii) any other unsecured subordinated debentures issued by
the REIT PROVIDED that, in the reasonable discretion of the Agent, the terms and
conditions related to subordination of such unsecured subordinated debentures
are substantially similar to the terms and conditions related to subordination
of the debentures described in clause (i) of this definition.
"PERSON" means an individual, a corporation, a partnership, a
limited liability company, a trust, an unincorporated organization or any other
entity or organization, including a government or any agency or political
subdivision thereof and, for the purpose of the definition of "ERISA Affiliate,"
a trade or business.
"PLAN" means any pension, retirement, disability, defined benefit,
defined contribution, profit sharing, deferred compensation, employee stock
ownership, employee stock purchase, health, life insurance, or other employee
benefit plan or arrangement, irrespective of whether any of the foregoing is
funded, in which any personnel of any Borrower Party or its ERISA Affiliates
participates or from which any such personnel may derive a benefit.
"POST-DEFAULT RATE" means, at any time, a rate per annum equal to
the Base Rate
20
in effect at such time PLUS 2%.
"PRICE ADJUSTMENT DATE", with respect to any Fixed Rate
Advance, or Absolute Rate Bid Advance, is defined in Section 2.13.
"PRIME RATE" means a base rate of interest which the Agent Bank
establishes from time to time and which serves as the basis upon which effective
rates of interest are calculated for those loans making reference thereto. Any
change in an Effective Rate due to a change in the Prime Rate shall become
effective on the day each such change is announced within the Agent Bank.
"PRINCIPAL INVESTORS" means, collectively, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
"PRO FORMA UNENCUMBERED ASSET VALUE" is defined in
Section 4.3.1..
"PROHIBITED TRANSACTION" means a transaction that is prohibited
under Section 4975 of the Code or Section 406 or 407 of ERISA and not exempt
under Section 4975 of the Code or Section 408 of ERISA.
"PROPERTY EXPENSES" means, for any Retail Property, all operating
expenses relating to such Retail Property, including the following items
(PROVIDED, HOWEVER, that Property Expenses shall not include Debt service,
tenant improvement costs, leasing commissions, capital improvements,
Depreciation and Amortization Expenses and any extraordinary items not
considered operating expenses under GAAP):
(i) all expenses for the operation of such Retail Property,
including any management fees payable under the Management Contracts and all
insurance expenses, but not including any expenses incurred in connection with a
sale or other capital or interim capital transaction;
(ii) water charges, property taxes, sewer rents and other
impositions, other than fines, penalties, interest or such impositions (or
portions thereof) that are payable by reason of the failure to pay an imposition
timely; and
(iii) the cost of routine maintenance, repairs and minor
alterations, to the extent they can be expensed under GAAP.
"PROPERTY INCOME" means, for any Retail Property, all gross revenue
from the ownership and/or operation of such Retail Property (but excluding
income from a sale or other capital item transaction), service fees and charges
and all tenant expense reimbursement income payable with respect to such Retail
Property (but not such reimbursement for expenditures not deducted as a Property
Expense).
"PROPERTY NOI" means, for any Retail Property for any period, (i)
all Property
21
Income for such period, MINUS (ii) all Property Expenses for such period.
"RAW LAND" means (i) raw land or (ii) undeveloped land that
constitutes a portion of any Retail Property, other than such portions of the
Retail Properties as are reasonably considered to be an integral part of or a
pad site for such properties.
"REAL PROPERTY" means each of those parcels (or portions thereof) of
real property, improvements and fixtures thereon and appurtenances thereto now
or hereafter owned or leased by the Borrower or any other Consolidated Entity.
"REGULATION D" means Regulation D of the Federal Reserve Board, as
amended from time to time.
"REGULATION U" means Regulation U of the Federal Reserve Board, as
amended from time to time.
"REGULATORY COSTS" are, collectively, future, supplemental,
emergency or other changes in Reserve Percentages, assessment rates imposed by
the FDIC, or similar requirements or costs imposed by any domestic or foreign
governmental authority and related in any manner to a Fixed Rate.
"REGULATORY CHANGE" means, with respect to any Lender, (i) the
adoption or becoming effective after the date hereof of any treaty, law, rule or
regulation, (ii) any change in any such treaty, law, rule or regulation, or any
change in the administration or enforcement thereof, by any Governmental
Authority, central bank or other monetary authority charged with the
interpretation or administration thereof, in each case after the date hereof, or
(iii) compliance after the date hereof by the Lender (or its Applicable Lending
Office or any holding company of the Lender) with, any interpretation,
directive, request, order or decree (whether or not having the force of law) of
any such Governmental Authority, central bank or other monetary authority.
"REIT" is defined in the Preamble.
"REQUIRED LENDERS" means, (i) if the Commitments have not
terminated, Lenders holding at least 66-2/3% of the aggregate amount of the
Commitments and, if the Agent Bank is not the sole Lender hereunder at such
time, at least two Lenders, or (ii) if the Commitments have terminated, (a)
Lenders holding at least 66-2/3% of the sum of (x) the aggregate unpaid
principal amount of the Advances PLUS (y) the aggregate amount of all Letter of
Credit Liability and (b) if the Agent Bank is not the sole Lender hereunder at
such time, at least two Lenders, in each case giving effect to the provisions of
Section 9.10.2.
"RESPONSIBLE OFFICER" is defined in Section 2.1.3.1.
"RESERVE PERCENTAGE" is, at any time the percentage announced within
the Agent Bank as the reserve percentage under Regulation D for loans and
obligations making reference to a LIBO Rate for a Fixed Rate Period or time
remaining in a Fixed Rate Period on a Price
22
Adjustment Date, as appropriate. The Reserve Percentage shall be based on
Regulation D or other regulations from time to time in effect concerning
reserves for eurocurrency liabilities, as defined in Regulation D, from related
institutions as though the Agent Bank were in a net borrowing position, as
promulgated by the Federal Reserve Board.
"RESTRICTED CASH" means any cash or cash equivalents held by the
Borrower or any of the other Consolidated Entities with respect to which the
Borrower or the Consolidated Entity does not have unrestricted access and
unrestricted right to expend such cash or expend or liquidate such Permitted
Investments including, without limitation, cash or Permitted Investments
constituting tenant deposits held pursuant to any lease for any Real Property.
"RESTRICTED PAYMENT" means (i) any dividend or other distribution,
direct or indirect, on account of any Capital Stock of the Borrower, the REIT or
any Subsidiary now or hereafter outstanding, except (a) a dividend or other
distribution payable solely in shares of Capital Stock of the Borrower, the REIT
or such Subsidiary, as the case may be, and (b) the issuance of equity interests
upon the exercise of outstanding warrants, options or other rights, or (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any Capital Stock of the Borrower,
the REIT or any Subsidiary now or hereafter outstanding. It is understood that
the conversion of any Capital Stock of the Borrower into Capital Stock of the
REIT shall not constitute a Restricted Payment by the Borrower.
"RETAIL PROPERTY" means any Real Property that is a neighborhood,
community or regional shopping center or mall.
"RETAIL PROPERTY UNDER CONSTRUCTION" means Retail Property for which
Commencement of Construction has occurred but construction of such Retail
Property is not substantially complete.
"REVOLVING NOTE" means a promissory note made by Borrower payable to
the order of any Lender, in the amount of such Lender's Commitment, which note
is substantially in the form of EXHIBIT A-1, as amended from time to time.
"SEC" means the United States Securities and Exchange
Commission, and any successor.
"SENIOR OBLIGATIONS" is defined in Section 9.10.2.
"SENIOR OFFICER" means, with respect to any Borrower Party, the
Chairman of the Board of Directors, the Vice Chairman of the Board of Directors,
the President, the Chief Executive Officer, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, the General Counsel or any Vice
President in charge of a principal business unit or division of such Borrower
Party.
"SENIOR UNSECURED INTEREST EXPENSE COVERAGE RATIO" means, at any
time, the
23
ratio of (i) Property NOI of all Unencumbered Assets for the fiscal quarter then
most recently ended, to (ii) Interest Expense on all unsecured Debt for such
period (other than Interest Expense attributable to the Permitted Subordinated
Debentures).
"SINGLE EMPLOYER PLAN" means a Plan other than a Multiemployer
Plan.
"STATED AMOUNT" means, with respect to a Letter of Credit, the
maximum amount available to be drawn thereunder, without regard to whether any
conditions to drawing could be met.
"SUBORDINATED DEBT" is defined in Section 6.9.
"SUBORDINATED CREDITOR" is defined in Section 6.9.
"SUBSIDIARY" means, with respect to any Person, any other Person of
which more than 50% of the total voting power of the Capital Stock entitled to
vote in the election of the board of directors (or other Persons performing
similar functions) are at the time directly or indirectly owned by such first
Person. Unless otherwise specified, the term "SUBSIDIARY" refers to any
Subsidiary of a Borrower Party.
"S&P" means Standard & Poor's Ratings Services, a division of the
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or any successor.
"TANGIBLE NET WORTH" means, at any time, (i) Net Worth MINUS (ii)
Intangible Assets, PLUS (iii) solely for purposes of Section 7.3.1., any
minority interest reflected in the balance sheet of the REIT, but only to the
extent attributable to Minority Interests, in each case at such time.
"TAX EXPENSE" means (without duplication), for any period, total tax
expense (if any) attributable to income and franchise taxes based on or measured
by income, whether paid or accrued, of the REIT and the Consolidated Entities,
including the REIT's and Consolidated Entity's PRO RATA share of tax expenses in
the Unconsolidated Joint Venture. For purposes of this definition, the REIT's
PRO RATA share of any such tax expense of any Unconsolidated Joint Venture shall
be deemed equal to the product of (i) such tax expense of such Unconsolidated
Joint Venture, MULTIPLIED BY (ii) the percentage of the total outstanding
Capital Stock of such Person held by the REIT or any Consolidated Entity,
expressed as a decimal.
"TAXES" means, collectively, all withholdings, interest equalization
taxes, stamp taxes or other taxes (except income and franchise taxes) imposed by
any domestic or foreign Governmental Authority and related in any manner to a
Fixed Rate.
"THIRD PERSON" is defined in the definition of "Controlled
Consolidated Entity" in this Section 1.1.
"TOTAL LIABILITIES" means, at any time, without duplication, the
aggregate
24
amount of (i) all Debt and other liabilities of the Borrower and the
Consolidated Entities reflected in the financial statements of the REIT or
disclosed in the financial notes thereto, PLUS (ii) all liabilities of all
Unconsolidated Joint Ventures that is otherwise recourse to the Borrower or any
Consolidated Entity or any of its assets or that otherwise constitutes Debt of
the Borrower or any Consolidated Entity, PLUS (iii) the Borrower's PRO RATA
share of all Debt and other liabilities of any Unconsolidated Joint Venture not
otherwise constituting Debt of or recourse to the Borrower or any Consolidated
Entity or any of its assets. For purposes of clause (iii), the Borrower's PRO
RATA share of all Debt and other liabilities of any Unconsolidated Joint Venture
shall be deemed equal to the product of (a) such Debt or other liabilities,
MULTIPLIED BY (b) the percentage of the total outstanding Capital Stock of such
Person held by the Borrower or any Consolidated Entity, expressed as a decimal.
"TRANSFERRED PARTICIPATIONS" is defined in the Recitals.
"UNCONSOLIDATED JOINT VENTURE" means (i) any Joint Venture of the
REIT or any Consolidated Entity in which the REIT or such Consolidated Entity
holds any Capital Stock but which would not be combined with the REIT in the
consolidated financial statements of the REIT in accordance with GAAP, and (ii)
any Investment of the REIT or any Consolidated Entity in any Person that is not
a Joint Venture.
"UNENCUMBERED ASSET" means, subject to Section 4.3., any Real
Property that satisfies all of the following conditions:
(i) is a neighborhood, community and regional shopping center
or mall;
(ii) is Wholly-Owned, free and clear of any Lien (other than (a)
easements, covenants, and other restrictions, charges or encumbrances not
securing Debt that do not interfere materially with the ordinary operations of
the property and do not materially detract from the value of the property; (b)
building restrictions, zoning laws and other Applicable Laws, and (c) leases and
subleases of the property in the ordinary course of business, PROVIDED that any
such Liens under (c) that are ground leases entered into after the Closing Date
or that are ground leases with respect to Real Properties that become part of
the Unencumbered Pool after the Closing Date shall have been approved by the
Required Lenders in their discretion);
(iii) in the case of any Real Property title to which is not held
directly by the Borrower, (a) the Consolidated Entity holding title to such Real
Property is a Guarantor or becomes a Guarantor prior to the the Real Property
being treated as an Unencumbered Asset for purposes of determining the
Unencumbered Pool, (b) the Capital Stock of such Consolidated Entity is not
subject to any Lien, and (c) the Consolidated Entity delivers to the Agent (1)
an opinion of counsel, substantially in the form delivered to the Agent pursuant
to Section 4.1 and by counsel reasonably acceptable to the Agent, with respect
to the matters covered by the closing opinion delivered pursuant to Section 4.1
with respect to the Initial Guarantors, and (2) a copy of the charter documents
of the Guarantor, as in effect at that time;
(iv) unless waived by the Agent, a title report from a title
company of national
25
repute for such Real Property is delivered to the Agent showing that no material
defects exist in or with respect to title to the Real Property (other than Liens
permitted to exist pursuant to clause (ii));
(v) unless waived by the Required Lenders, a Phase I
environmental study for such Real Property is delivered to the Agent showing
that no material adverse environmental conditions exist on or with respect to
the Real Property;
(vi) not less than 80% of the M&F Gross Leaseable Area of the Real
Property shall be subject to a lease or a sublease pursuant to which rent is
being paid by the tenant thereunder;
(vii) the Real Property has been otherwise expressly approved by
the Required Lenders in writing as eligible for inclusion in the Unencumbered
Pool in their discretion; and
(viii) the Real Property has been designated by the Borrower as an
Unencumbered Asset.
Unless the Borrower shall have notified the Agent and the Lenders to
the contrary, the Real Properties listed as "Unencumbered Assets" in the
Compliance Certificate most recently delivered to the Agent pursuant to Section
6.1.3, shall be considered designated by the Borrower as Unencumbered Assets
pursuant to clause (viii) above. As of the date hereof, all of the Real
Properties that have been approved by the Required Lenders as eligible for
inclusion in the Unencumbered Pool and designated by the Borrower as
Unencumbered Assets pursuant to clauses (vii) and (viii) above, respectively,
are set forth on SCHEDULE 1.1C. If any Unencumbered Asset (including any of the
properties listed on SCHEDULE 1.1C) no longer satisfies the conditions of the
foregoing clauses (ii), (iii) or (vi), at the direction of the Required Lenders,
the Agent shall notify the Borrower that, effective upon the giving of such
notice, such asset shall no longer be considered an Unencumbered Asset
(irrespective of whether a Default or Event of Default exists at that time or
results therefrom). If the Borrower intends to designate a property as an
Unencumbered Asset to be added to the Unencumbered Pool from time to time (other
than those listed on SCHEDULE 1.1C), it will notify the Agent and the Lenders of
such intention, which notice will include (a) a physical description of the
property to be added to the Unencumbered Pool, including its age and location
and, if requested by the Agent, a recent title report, (b) if title to the
property is held by a Consolidated Entity other than the Borrower, the names and
respective percentage interests of all Persons holding Capital Stock of such
Consolidated Entity, (c) information regarding the occupancy of the property (a
rent roll), (d) operating statements for the most recent Fiscal Quarter and the
most recent Fiscal Year (and the previous Fiscal Year, if available) and (e) an
operating budget for the current Fiscal Year. The property shall become part of
the Unencumbered Pool upon the written approval of the Required Lenders. If the
Borrower at any time intends to withdraw any Real Property from the Unencumbered
Pool, it shall (i) notify the Agent and the Lenders of its intention, and (ii)
deliver to the Agent and the Lenders a certificate of its chief financial
officer setting forth the calculations establishing that the Borrower will be in
compliance with Section 7.4. with giving effect to such withdrawal (and any
26
concurrent addition of properties to the Unencumbered Pool), which calculations
shall be substantially in the form of the calculations in EXHIBIT C-4 relating
to Section 7.4. Effective automatically upon delivery of such notice and
certificate by the Borrower, (i) such property shall no longer constitute an
Unencumbered Asset and (ii) if title to the property that is being released from
the Unencumbered Pool is not held directly by the Borrower and the Consolidated
Entity holding title to such property holds title to no other Unencumbered
Asset, such Consolidated Entity shall be released from the Guaranty, and shall
cease to be a Guarantor hereunder, in each case without any further action by
the Agent or any Lender.
"UNENCUMBERED ASSET VALUE" means, at any time:
(i) with respect to any specified Unencumbered Asset other than
the Unencumbered Assets described in clauses (ii), (iii) or (v) below, for each
such property, (a) the product of such property's Property NOI for the Measuring
Period, MULTIPLIED BY 4, DIVIDED BY (b) 9.5% (expressed as a decimal); PLUS
(ii) with respect to any specified Unencumbered Asset that is a
regional Retail Property other than a regional Retail Property described in
clause (iii) or (v) below, for each such property, (a) the product of such
property's Property NOI for the Measuring Period, MULTIPLIED BY 4, DIVIDED BY
(b) 8.5% (expressed as a decimal); PLUS
(iii) so long as Huntington Beach Mall is an Unencumbered Asset and
provided the Huntington Beach Mall is not described in clause (v) below, (a) the
product of such property's Property NOI for the Measuring Period, MULTIPLIED BY
4, DIVIDED BY (b) 9.5% (expressed as a decimal); PLUS
(iv) all cash and Permitted Investments (other than, in either
case, Restricted Cash) held by the Consolidated Entities at such time,
MULTIPLIED BY in the case of cash and Permitted Investments not Wholly-Owned, a
percentage (expressed as a decimal) equal to the percentage of the total
outstanding Capital Stock held by the Borrower of the Consolidated Entity
holding title to such cash and Permitted Investments; PLUS
(v)(a) 100% of Construction-in-Process with respect to Retail
Properties in the Unencumbered Pool that are Wholly-Owned and are Unencumbered
Assets and (b) the product of (1) 100% of Construction-in-Process with respect
to Retail Properties in the Unencumbered Pool that are not Wholly-Owned
MULTIPLIED BY (2) a percentage (expressed as a decimal) equal to the percentage
of the total outstanding Capital Stock held by the Borrower of the Consolidated
Entity holding title to such Retail Properties in the Unencumbered Pool;
PROVIDED, HOWEVER, that the Unencumbered Asset Value included in this clause (v)
shall not constitute more than 25% percent of the total Unencumbered Asset
Value.
"UNENCUMBERED POOL" means the pool of Unencumbered Assets.
"UNSECURED FUNDED DEBT" means any Debt referred to in clause (i),
(ii), (iii), (iv) or (ix) of the definition of "Debt" that is not secured by any
Lien.
27
"WHOLLY-OWNED" means, with respect to any Real Property or other
asset owned or leased, that (i) title to such asset is held directly by, or such
asset is leased by, the Borrower, or (ii) in the case of Real Property, title to
such property is held by, or such property is leased by, a Consolidated Entity
at least 99% of the Capital Stock of which is held of record and beneficially by
the Borrower and the balance of the Capital Stock of which (if any) is held of
record and beneficially by the REIT (or any wholly-owned Subsidiary of the
REIT).
"WHOLLY-OWNED ENTITY" is defined in Section 7.2.2.
"YEAR 2000 COMPLIANT" is defined in Section 6.11.
SECTION 1.2. RELATED MATTERS.
1.2.1. CONSTRUCTION. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, the singular
includes the plural, the part includes the whole, "including" is not limiting,
and "or" has the inclusive meaning represented by the phrase "and/or." The words
"hereof," "herein," "hereby," "hereunder" and similar terms in this Agreement
refer to this Agreement as a whole (including the Preamble, the Recitals, the
Schedules and the Exhibits) and not to any particular provision of this
Agreement. Article, section, subsection, exhibit, schedule, recital and preamble
references in this Agreement are to this Agreement unless otherwise specified.
References in this Agreement to any agreement, other document or law "as
amended" or "as amended from time to time," or to amendments of any document or
law, shall include any amendments, supplements, replacements, renewals, waivers
or other modifications. References in this Agreement to any law (or any part
thereof) include any rules and regulations promulgated thereunder (or with
respect to such part) by the relevant Governmental Authority, as amended from
time to time.
1.2.2. DETERMINATIONS. Any determination or calculation contemplated
by this Agreement that is made by any Lender Party shall be final and conclusive
and binding upon each Borrower Party, and, in the case of determinations by the
Agent, also the other Lender Parties, in the absence of manifest error.
References in this Agreement to any "determination" by any Lender Party include
good faith estimates by such Lender Party (in the case of quantitative
determinations), and good faith beliefs by such Lender Party (in the case of
qualitative determinations). All references herein to "discretion" of any Lender
Party (or terms of similar import) shall mean "absolute and sole discretion."
All consents and other actions of any Lender Party contemplated by this
Agreement may be given, taken, withheld or not taken in such Lender Party's
discretion (whether or not so expressed), except as otherwise expressly provided
herein.
1.2.3. 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 on a consolidated basis in
accordance with GAAP applied on a basis consistent (except for changes that the
independent public accountants of the REIT deem necessary in order to allow them
to render an unqualified opinion to the REIT and for changes that are not deemed
so necessary but are concurred in by such independent public accountants and the
Agent) with the
28
audited consolidated financial statements of the REIT and the Consolidated
Entities referred to in Section 5.6.1. Notwithstanding anything herein to the
contrary, for purposes of determining the REIT's PRO RATA share of any income,
expense, asset, liability or other item of or with respect to any Unconsolidated
Joint Venture, as used in the defined terms used in or by reference in Section
7.3., the percentage of the Capital Stock held by the REIT or any Consolidated
Entity shall be the percentage required to be used under GAAP.
1.2.4. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS (OTHER THAN THE RULES REGARDING CONFLICTS
OF LAWS, EXCEPT THOSE CONTAINED IN CALIFORNIA CIVIL CODE SECTION 1646.5) OF THE
STATE OF CALIFORNIA.
1.2.5. HEADINGS. The Article and Section headings used in this
Agreement are for convenience of reference only and shall not affect the
construction hereof.
1.2.6. SEVERABILITY. If any provision of this Agreement shall be
held to be invalid, illegal or unenforceable under Applicable Law in any
jurisdiction, such provision shall be ineffective only to the extent of such
invalidity, illegality or unenforceability, which shall not affect any other
provisions hereof or the validity, legality or enforceability of such provision
in any other jurisdiction.
1.2.7. INDEPENDENCE OF COVENANTS. All covenants under this Agreement
shall each be given independent effect so that if a particular action or
condition is not permitted by any such covenant, the fact that it would be
permitted by another covenant, by an exception thereto, or be otherwise within
the limitations thereof, shall not avoid the occurrence of a Default or an Event
of Default if such action is taken or condition exists.
1.2.8. OTHER DEFINITIONS. Terms otherwise defined in Preamble, the
Recitals and in any other provision of this Agreement or any of the other Loan
Documents not defined or referenced in Section 1.1. have their respective
defined meanings when used herein or therein.
ARTICLE 2.
AMOUNT AND TERMS OF THE CREDIT FACILITIES
SECTION 2.1. CREDIT FACILITIES.
2.1.1. COMMITTED FACILITY.
2.1.1.1. COMMITTED ADVANCES.
Upon the terms and subject to the conditions set forth in
this Agreement, (a) on the Closing Date, the Existing Credit Agreement is hereby
superseded, amended and restated in its entirety, and (b) each Lender hereby
severally agrees, at any time from and after the Closing Date until the Business
Day next preceding the Maturity Date, to make advances
29
(each a "COMMITTED ADVANCE," which term shall also include amounts drawn under
Letters of Credit pursuant to Section 2.2.5.1.) to the Borrower in an aggregate
outstanding principal amount not to exceed at any time outstanding, when added
to other Commitment Usage of such Lender at such time, the Commitment of such
Lender, PROVIDED that the Commitment Usage of all Lenders at any time, in the
aggregate, shall not exceed the aggregate Commitments of all Lenders. Committed
Advances may be voluntarily prepaid and, subject to the provisions of this
Agreement (including Section 2.13.), any amounts so prepaid may be re-borrowed,
up to the amount available under this Section 2.1.1. at the time of such
re-borrowing.
2.1.1.2. TYPE OF COMMITTED ADVANCES AND MINIMUM AMOUNTS.
Committed Advances made under this Section 2.1. may be Base Rate Advances or
Fixed Rate Advances, subject, however, to Section 2.4. Each Borrowing of Fixed
Rate Advances to which the same Fixed Rate Period is applicable shall be in a
minimum amount of $2,000,000 and integral multiples of $1,000,000.
2.1.1.3. NOTICE OF BORROWING.
2.1.1.3.1. When the Borrower desires to borrow pursuant to
Section 2.1., it shall deliver to the Agent a Notice of Borrowing substantially
in the form of EXHIBIT B-1, duly completed and executed by a Responsible Officer
(a "NOTICE OF BORROWING"), no later than 10:00 a.m. (California time) (i) at
least one Business Day before (or, if the Agent Bank is the sole Lender
hereunder at such time, on) the proposed Funding Date, in the case of a Base
Rate Advance, or (ii) at least three Business Days (or, if the Agent Bank is the
sole Lender hereunder at such time, one Business Day) before the proposed
Funding Date, in the case of a Fixed Rate Advance.
2.1.1.3.2. In lieu of delivering a Notice of Borrowing for a
Base Rate Advance, the Borrower, through a Responsible Officer, may give the
Agent telephonic notice by the required time of the proposed borrowing for
Advances of that type and all information required by a Notice of Borrowing;
PROVIDED, HOWEVER, that such notice shall be confirmed in writing by delivery of
a Notice of Borrowing by fax to the Agent as soon as practicable one day prior
to the proposed Funding Date. The Lender Parties shall incur no liability to the
Borrower in acting upon any telephonic notice that the Agent believes to have
been given by a Person authorized to act on behalf of the Borrower or for
otherwise acting in good faith under this Section 2.1. and in making any Advance
in accordance with this Agreement pursuant to any telephonic notice.
2.1.1.3.3. Notwithstanding anything herein to the contrary,
no Notice of Borrowing shall be required at any time while the Agent Bank is the
only Lender hereunder with respect to any Base Rate Advance while there shall be
in effect, pursuant to subsequent mutual agreement between the Borrower and the
Agent Bank, a program (such as a credit sweep) whereby Base Rate Advances are
made automatically to maintain a target balance in an account the Borrower
maintains with the Agent Bank (a "CREDIT SWEEP PROGRAM"). The Agent Bank shall
incur no liability to the Borrower making Advances pursuant to any Credit Sweep
Program.
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2.1.1.3.4. The Agent shall promptly notify each Lender of
the contents of any Notice of Borrowing (or telephonic notice in lieu thereof)
received by it and such Lender's PRO RATA portion of the Borrowing of Committed
Advances requested. Not later than 9:00 a.m. (California time) on the date
specified in such notice as the Funding Date, each Lender, subject to the terms
and conditions hereof, shall make its PRO RATA portion of the Borrowing of
Committed Advances available, in immediately available funds, to the Agent at
the Agent's Account.
2.1.1.4. FUNDING OF COMMITTED ADVANCES. Subject to and
upon satisfaction of the applicable conditions set forth in Article 4. as
determined by the Agent, the Agent shall make the proceeds of the requested
Committed Advances available to the Borrower in Dollars in immediately available
funds in the Borrower Account. In addition, if the Borrower Account is
maintained with a financial institution other than the Agent, all borrowings
hereunder shall be subject to the terms and conditions of the Funds Transfer
Agreement.
2.1.2. BID FACILITY.
2.1.2.1. BID ADVANCES.
2.1.2.1.1. Each Lender severally agrees that, subject to the
conditions that at the time of the Borrower's submission of the relevant
Competitive Bid Request no Default or Event of Default has occurred and is
continuing, the Borrower may, in accordance with this SECTION 2.1.2. and the
other relevant provisions of the Loan Documents, from time to time request that
the Lenders, at any time before the 32nd day prior to the Maturity Date, submit
Competitive Bids to make Bid Advances to the Borrower; PROVIDED, HOWEVER, that
(X) at no time shall the Commitment Usage of all Lenders at any time, in the
aggregate, exceed the aggregate Commitments of all Lenders; (y) at no time shall
the aggregate principal amount of all Bid Advances exceed the Bid Advance Limit;
and (Z) at no time may the number of Fixed Rate Periods of then outstanding
Fixed Rate Advances and Absolute Rate Bid Advances exceed eight, in each case
giving effect to any Bid Advances then requested.
2.1.2.1.2. The Lenders may, but shall not be obligated to,
submit Competitive Bids in response to any Competitive Bid Request, and the
Borrower may, but shall not be obligated to, accept any such offers. Subject to
Section 2.1.1.1., the obligation of a Lender to fund its PRO rata share of
Committed Advances shall be unaffected by its making of any Bid Advances,
notwithstanding that the sum of such Lender's Commitment Usage LESS the Lender's
PRO RATA share of all Bid Advances outstanding (regardless of whether such Bid
Advances were made by such Lender) PLUS the aggregate amount of such Lender's
outstanding Bid Advances, may exceed such Lender's Commitment.
2.1.2.1.3. On the last day of each Fixed Rate Period
applicable to any Bid Advances, the Borrower shall pay to the Agent, for the
respective accounts of the Lenders making such Bid Advances, the full amount of
the principal of such Bid Advances.
2.1.2.2. TYPE OF BID ADVANCES AND MINIMUM AMOUNTS. Bid
Advances
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made under this Section 2.1.2 may be Absolute Rate Bid Advances or Fixed Rate
Bid Advances, subject, however, to Section 2.11. Each Borrowing of Fixed Rate
Bid Advances to which the same Fixed Rate Period is applicable shall be in a
minimum amount of $15,000,000 and integral multiples of $1,000,000.
2.1.2.3. BID ADVANCE BORROWINGS.
2.1.2.3.1. When the Borrower desires to effect one or more
Borrowings consisting of one or more Bid Advances, BUT NOT more often than once
in any period of 30 consecutive days, the Borrower shall notify the Agent by
telephone (followed promptly by a facsimile of the related Competitive Bid
Request) no later than 8:00 a.m. (California time), (x) in the case of a Fixed
Rate Auction, five Business Days prior to the proposed Funding Date of the
requested Borrowing, or (y) in the case of an Absolute Rate Auction, two
Business Days prior to the proposed Funding Date of the requested Borrowing(s),
TOGETHER WITH payment of any Fees payable to the Agent as provided in the Fee
Letter, specifying (together with the other information required to be provided
pursuant to the Competitive Bid Request):
(a) the Funding Date of such Borrowing(s), which shall be a
Business Day;
(b) the aggregate amount of such Borrowing(s), which shall be
in an amount (subject to the limitations set forth in other provisions of
the Loan Documents) equal to $15,000,000 or an integral multiple of
$1,000,000 in excess thereof;
(c) whether the requested Borrowing(s) is/are to be made as
either (1) one or more Fixed Rate Bid Advances or (2) one or more Absolute
Rate Bid Advances; and
(d) the duration of the requested Fixed Rate Period (subject to
the limitation that Borrower may request no more than three Fixed Rate
Periods in any single Competitive Bid Request).
Borrower's right to request Competitive Bids for Bid Advances, and each Lender's
obligation to fund any Bid Advance pursuant to any Competitive Bid accepted by
Borrower, and all Bid Advances made from time to time, shall be subject in all
respects to the provisions of Sections 2.11, 2.12 and 2.13.
2.1.2.3.2. Upon receipt of a Competitive Bid Request, the
Agent shall promptly send a copy thereof to each of the Lenders by facsimile,
attaching thereto notice of the date and time (as specified in Section
2.1.2.3.3.) by which responses must be received in order to be considered by the
Borrower. The Competitive Bid Request shall not constitute an offer by the
Borrower, but merely an invitation to the Lenders to submit Competitive Bids
with respect to the requested Borrowing(s).
2.1.2.3.3.
(a) Each Lender may, in its discretion, submit a Competitive Bid
containing
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an offer or offers to make Bid Advances in response to any
Competitive Bid Request. Each Competitive Bid must comply with the
provisions of this Section 2.1.2.3 and must be submitted to the Agent (or,
in the case of a Competitive Bid being submitted by the Agent in its
capacity as a Lender, to the Borrower), by facsimile, no later than 7:00
a.m. (or, in the case of a Competitive Bid by the Agent, in its capacity
as Lender, 6:30 a.m.), California time, (1) in the case of a Fixed Rate
Auction, three Business Days prior to the Funding Date of the proposed
Borrowing(s), or (2) in the case of an Absolute Rate Auction, on the
Funding Date. Each Competitive Bid so submitted (subject only to the
provisions of Sections 2.1.2.1.1, 2.11, 2.12, 2.13 and 4.2 and to the
satisfaction of all other conditions precedent to the requested Bid
Advance(s)) shall be irrevocable, unless the Borrower otherwise agrees in
writing.
(b) Each Competitive Bid shall identify and be signed on behalf of
the submitting Lender, shall specify the date of the proposed Borrowing(s)
specified in the Competitive Bid Request in the form attached hereto as
EXHIBIT B-3 to which the submitting Lender is responding and shall
specify:
(i) the principal amount of each Bid Advance for which a
Competitive Bid is being made (which shall not be limited by the
submitting Lender's Commitment, but which shall be in an amount, no
greater than the amount of the requested Borrowing, equal to
$5,000,000 or an integral multiple of $1,000,000 in excess
thereof); and
(ii)(1) in the case of a Fixed Rate Auction, the LIBO
Bid Margin offered by the submitting Lender, or (2) in the case of
an Absolute Rate Auction, the Absolute Rate offered by the
submitting Lender.
A Competitive Bid may include up to three separate offers by the
submitting Lender with respect to each Fixed Rate Period specified in the
Competitive Bid Request to which it responds. Any Competitive Bid that (X)
does not include all the information required by this Section 2.1.2.3.3,
(Y) contains language that qualifies or conditions the submitting Lender's
offer to make the Bid Advance(s) described therein or to otherwise make
such an offer revocable or proposes terms other than (or in addition to)
the terms proposed in the relevant Competitive Bid Request OTHER THAN by
setting an aggregate limit on the principal amount of Bid Advances for
which offers being made by the submitting Lender maybe accepted, or (Z) is
received by the Agent (or the Borrower, as applicable) after the time set
forth in this Section 2.1.2.3.3 (unless amended to bring it into
compliance with respect to any noncompliance described in clause (X) or
(Y), in either case prior to the time set forth in this Section 2.1.2.3.3)
shall be disregarded.
2.1.2.3.4. Promptly upon receipt, but not later than 8:00
a.m. (California time) on the date by which Competitive Bids are required to
have been submitted with respect to a Competitive Bid Request, the Agent shall
notify the Borrower of (i)(A) the terms of each Competitive Bid (other than one
that is to be disregarded as described above) received in
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response to the Competitive Bid Request, and (B) the identity of the Lender
submitting such Competitive Bid, and (ii)(A) the aggregate principal amount of
Bid Advances for which Competitive Bids have been received for each Fixed Rate
Period requested in the Competitive Bid Request, and (B) the respective
principal amounts and LIBO Bid Margins or Absolute Rates, as the case may be, so
offered.
2.1.2.3.5. No later than 8:30 a.m. (California time) on the
date by which Competitive Bids are required to have been submitted with respect
to a Competitive Bid Request, the Borrower shall notify the Agent, by means of a
notice reasonably acceptable to the Agent in form, of its acceptance or
rejection of the offers notified to it as provided in Section 2.1.2.3.4. The
Borrower shall have no obligation to accept any such offer, and may choose to
reject all of them. If the Borrower has failed to timely notify the Agent of its
acceptance or rejection of any one or more offers by the time specified in this
Section 2.1.2.3.5., the Borrower shall be deemed to have rejected such offer(s).
The Borrower may accept any Competitive Bid (other than one that is to be
disregarded as provided above) in whole or in part, PROVIDED THAT:
(a) the aggregate principal amount of the Competitive Bids so
accepted may not exceed the aggregate amount of the Borrowing(s) requested
in the relevant Competitive Bid Request;
(b)(i) subject to the provisions set forth below with respect to
multiple offers at the same LIBO Bid Margin or Absolute Rate, the
principal amount of each accepted Competitive Bid must be in an amount
equal to $5,000,000 or an integral multiple of $1,000,000 in excess
thereof and (ii) Competitive Bids must be accepted with respect to an
aggregate principal amount of at least $15,000,000; and
(c) with respect to each Fixed Rate Period for which Competitive
Bids were requested, the Borrower may accept offers solely on the basis of
ascending LIBO Bid Margins or Absolute Rates, as the case may be (provided
that the Borrower may, to the extent necessary to comply with the
preceding subparagraph (b) accept only part of an offer at a particular
LIBO Bid Margin or Absolute Rate and accept all or part of one or more
offers at a higher Fixed Rate Bid Margin or Absolute Rate).
If the Borrower chooses to accept one or more offers, Borrower shall
deliver a notice to the Agent by not later than 8:30 a.m. (California
time), in such form as Agent may from time to time reasonably request),
specifying the aggregate principal amount of offers with respect to each
requested Fixed Rate Period that it chooses to accept. If two or more
Lenders offer the same LIBO Bid Margin or Absolute Rate for an aggregate
principal amount greater than the amount for which such offers were
requested (or greater than the remaining portion of such offers that has
not been allocated to offers at lower Fixed Rate Bid Margins or Absolute
Rates) with respect to any requested Fixed Rate Period, the Borrower shall
allocate the principal amount of the affected Bid Advances among such
Lenders as nearly as possible (in such multiples, not less than
$1,000,000, as the Borrower may deem appropriate) in proportion to the
aggregate principal amounts to
34
which their respective offers related. The Borrower's allocation, in the
absence of manifest error, shall be conclusive.
2.1.2.3.6. Promptly upon receipt of the notice from the
Borrower pursuant to Section 2.1.2.3.5, the Agent shall promptly notify each
Lender having submitted a Competitive Bid whether its offer has been accepted
and, if its offer has been accepted, of the amount of the Bid Advance(s) to be
made by it on the date of the relevant Borrowing(s). The date that is the second
Business Day prior to the Funding Date of the Borrowing set forth in the
applicable Competitive Bid Request shall be the "FIXED RATE COMMENCEMENT DATE"
for the Fixed Rate Period.
2.1.2.3.7. Promptly (but no later than one Business Day)
following each Borrowing of one or more Bid Advances, the Agent shall notify
each Lender (whether or not such Lender submitted a Competitive Bid with respect
to such Borrowing) of the ranges of Competitive Bids submitted and the highest
and lowest Competitive Bids accepted for each Fixed Rate Period requested by the
Borrower and of the aggregate amount of the Bid Advances made pursuant to such
Borrowing.
2.1.2.3.8. Upon receipt of a Competitive Bid Request in
proper form requesting Competitive Bids to make a Bid Advance that is a Fixed
Rate Advance under Section 2.1.2.3.1 above, the Agent shall determine the Fixed
Rate applicable to each of the Fixed Rate Periods specified in the Competitive
Bid Request, and shall, two Business Days prior to the beginning of such Fixed
Rate Period, send a Fixed Rate Notice specifying such rate (or rates, as the
case may be) to the Borrower and the Lenders; PROVIDED, HOWEVER, that failure to
give such notice to any Person shall not affect the validity of such rate.
2.1.2.3.9. Not later than 9:00 a.m. (California time) on the
date specified in such notice as the Funding Date, each Lender that submitted a
Competitive Bid that was accepted by the Borrower, subject to the terms and
conditions hereof, shall make its Bid Advance available, in immediately
available funds, to the Agent at the Agent's Account.
2.1.2.4. FUNDING OF BID ADVANCES. Subject to and upon satisfaction
of the applicable conditions set forth in Article 4. as determined by the Agent,
the Agent shall make the proceeds of the requested Bid Advances available to the
Borrower in Dollars in immediately available funds in the Borrower Account. In
addition, if the Borrower Account is maintained with a financial institution
other than the Agent, all borrowings hereunder shall be subject to the terms and
conditions of the Funds Transfer Agreement.
2.1.3. RESPONSIBLE OFFICERS WITH RESPECT TO ADVANCES.
2.1.3.1. The Borrower shall notify the Agent of the names of its
officers and employees authorized to request and take other actions with respect
to Advances on behalf of the Borrower (each a "RESPONSIBLE OFFICER") and shall
provide the Agent with a specimen signature of each such officer or employee.
The Agent shall be entitled to rely conclusively on a Responsible Officer's
authority to request and take other actions (including any Notices of
35
Borrowing or telephonic notice in lieu thereof, notices pursuant to Section
2.4.2., acceptance of telephonic quotes of Fixed Rates given by the Lender
pursuant to Section 2.4.2., issuance of Competitive Bid Requests or telephonic
notice in lieu thereof and acceptance of Competitive Bids) with respect to
Advances on behalf of the Borrower until the Agent receives written notice to
the contrary. The Agent shall have no duty to verify the authenticity of the
signature appearing on any Notice of Borrowing, Competitive Bid Request or any
other certificate or notice delivered pursuant to this Agreement.
2.1.3.2. Any Notice of Borrowing (or telephone notice in lieu
thereof) delivered pursuant to Section 2.1.1.3. and any notice delivered
pursuant to Section 2.1.2.3.5. shall be irrevocable and the Borrower shall be
bound to make a Borrowing in accordance therewith. Further, each Notice of
Borrowing and each Competitive Bid Request shall set forth that the Agent's Loan
Number is 3959ZL and the Agent's Accounting Unit Number is 2924.
SECTION 2.2. LETTERS OF CREDIT.
2.2.1. IN GENERAL. Upon the terms and subject to the conditions
set forth in this Agreement, at any time from and after the Closing Date until
the day that is thirty (30) days prior to the Maturity Date, the Agent Bank
shall issue for the account of the Borrower one or more Letters of Credit,
PROVIDED that (a) the aggregate Stated Amount of all outstanding Letters of
Credit shall not exceed $15,000,000, (b) the Stated Amount of the proposed
Letter of Credit, when added to other Commitment Usage of all Lenders at such
time, in the aggregate, shall not exceed the aggregate Commitments of all
Lenders, and (c) in no event shall Letters of Credit be issued for the benefit
of any of the Lenders. Letters of Credit shall have expiry dates not later than
24 months from the date of issuance and in any event not later than 10 Business
Days prior to the Maturity Date. No Letter of Credit shall contain an automatic
renewal or extension clause. The provisions of this Section 2.2. and Section
4.2. shall apply to any supplement, amendment, extension, renewal or increase of
a Letter of Credit as if it were a new Letter of Credit.
2.2.2. EXISTING LETTER OF CREDIT.
The Existing Letter of Credit shall be treated as having been
issued pursuant to this Section 2.2.
2.2.3. ISSUANCES OF LETTERS OF CREDIT. When the Borrower desires
the issuance of a Letter of Credit, the Borrower shall deliver to the Agent Bank
at least five (5) Business Days before the Funding Date, a Letter of Credit
Agreement and such other documents and materials as may be required by the Agent
Bank, each in form and substance satisfactory to the Agent Bank. The Agent Bank
shall, if it approves of the contents of the Letter of Credit Agreement and such
other documents and materials, and subject to the terms and conditions of this
Agreement, issue the Letter of Credit on or before 5:00 p.m. (California time)
on or before the day that is five (5) Business Days following the receipt of all
documents required under this Section 2.2.3. In the event of a conflict between
the terms of any Letter of Credit Agreement and this Agreement, the terms of
this Agreement shall govern. Upon issuance of a Letter of Credit, the Agent
shall promptly notify each Lender thereof and of such Lender's PRO RATA share of
such
36
Letter of Credit.
2.2.4. PARTICIPATIONS IN LETTERS OF CREDIT. Immediately upon any
Person (other than the Agent Bank) becoming a Lender under this Agreement, such
Lender shall be deemed to have irrevocably purchased from the Agent Bank a
participation in the Existing Letter of Credit, any drawing thereunder in an
amount equal to such Lender's PRO RATA share of the aggregate Stated Amount of
the Existing Letter of Credit and such Lender's PRO RATA share of any unearned
Letter of Credit Fees paid by the Borrower to the Agent Bank in respect of the
Existing Letter of Credit. Immediately upon the issuance of a Letter of Credit
(other than the Existing Letter of Credit), each Lender (other than the Agent
Bank) shall be deemed to have irrevocably purchased from the Agent Bank a
participation in such Letter of Credit and any drawing thereunder in an amount
equal to such Lender's PRO RATA share of the Stated Amount of such Letter of
Credit. An amount equal to the Letter of Credit Liability for each Letter of
Credit shall be reserved under the Commitments and shall not be available for
borrowing for any purpose other than reimbursement of amounts drawn under the
Letters of Credit pursuant to the terms of this Section 2.2.
2.2.5. DRAWINGS, ETC. Notwithstanding any provisions to the
contrary in any Letter of Credit Agreement:
2.2.5.1. In case of a drawing under any Letter of Credit,
the amounts so drawn shall, from the date of payment thereof by the Agent Bank,
be deemed to be an Advance by the Agent Bank, as a Lender, and, to the extent
reimbursed pursuant to Section 2.2.5.2., Advances by the other Lenders, for all
purposes hereunder.
2.2.5.2. Promptly after payment by the Agent Bank of any
amount drawn under any Letter of Credit, the Agent shall notify each Lender of
the amount of such drawing and of such Lender's respective participation
therein. Each Lender shall make available to the Agent Bank an amount equal to
its respective participation in immediately available funds, at the office of
such Agent Bank specified in such notice, not later than the Business Day after
the date on which the Agent gives such notice. Each Lender's obligations under
this Section 2.2.5.2. (a) shall not be subject to any set-off, counterclaim or
defense to payment that the Lender may have against any Borrower Party or
against the Agent Bank and (b) shall be absolute, unconditional and irrevocable,
and as a primary obligor, not as a surety, notwithstanding any circumstance or
event whatsoever, including (i) the occurrence of an Event of Default or
Default, (ii) the failure of any other Lender to fund its participation as
required hereby, (iii) the financial condition of any Borrower Party or Lender
Party or any set-off, counterclaim or defense to payment that the Borrower may
have or (iv) the termination or cancellation of the Commitment of such Lender.
If any Lender fails to make available to the Agent Bank the amount of such
Lender's participation in the Letter of Credit as provided in this Section
2.2.5.2., (A) such amount shall bear interest at the Federal Funds Rate (or,
commencing with the third day, the Base Rate) from the day on which the Agent's
notice referred to above is given until paid and (B) upon demand by the Agent
Bank, the Borrower shall make payment to the Agent Bank of such amount, together
with interest accrued thereon.
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SECTION 2.3. USE OF PROCEEDS. The proceeds of the Advances shall be used
by the Borrower only for pre-development and development costs, acquisition
costs, capital improvements, working capital, Investments, repayment of Debt,
scheduled amortization payments of Debt and general corporate purposes, in each
case to the extent otherwise permissible hereunder. No part of the proceeds of
the Advances or Letters of Credit shall be used directly or indirectly (a) to
purchase Capital Stock of any Lender Party or any of their respective
Affiliates, or (b) for the purpose, whether immediate, incidental or ultimate,
of purchasing or carrying any Margin Stock or maintaining or extending credit to
others for such purpose or for any other purpose that otherwise violates the
Margin Regulations.
SECTION 2.4. INTEREST; CONVERSION/CONTINUATION.
2.4.1. EFFECTIVE RATE.
2.4.1.1. The unpaid principal amount of all Advances (or
portions thereof) shall bear interest at the Effective Rate. The "EFFECTIVE
RATE" upon which interest shall be calculated for the Advances shall be one or
more of the following:
2.4.1.1.1. Provided no Default or Event of Default
then exists:
(i) for those portions of the principal balance of
Committed Advances that are not part of any Fixed Rate Portions, the
Effective Rate shall be the Base Rate;
(ii) for those portions of the principal balance of
Committed Advances that are part of Fixed Rate Portions, the Effective
Rate for the Fixed Rate Period thereof shall be the Fixed Rate selected by
the Borrower and set in accordance with the provisions hereof;
(iii) for those Bid Advances that are Absolute Rate
Bid Advances, the Effective Rate for the Fixed Rate Period thereof shall
be the Absolute Rate quoted by the Lender making such Bid Advance pursuant
to Section 2.1.2.3.3 and accepted by the Borrower pursuant to Section
2.1.2.3.5; and
(iv) for those Bid Advances that are Fixed Rate Bid
Advances, the Effective Rate for the Fixed Rate Period thereof shall be
the Fixed Rate quoted by the Lender making such Bid Advance pursuant to
Section 2.1.2.3.3 and accepted by the Borrower pursuant to Section
2.1.2.3.5.
2.4.1.2. During such time as a Default or Event of Default
exists (whether or not the Obligations have then become due and payable by
acceleration) and from and after the Maturity Date, the interest rate applicable
to the then outstanding principal balance of all Advances shall be the rate set
forth in Section 2.4.1.1.1. or, at the option of the Lenders holding 66-2/3% of
the outstanding Advances, the Post-Default Rate.
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2.4.2. SELECTION OF FIXED RATE FOR COMMITTED Advances. Provided no
Default or Event of Default then exists, the Borrower, at its option and upon
satisfaction of the conditions set forth herein, may request a Fixed Rate as the
Effective Rate for calculating interest on any Committed Advance being requested
pursuant to Section 2.1. or the portion of the unpaid principal balance of
outstanding Committed Advances, in each case for the period selected in
accordance with and subject to the following procedures and conditions:
2.4.2.1. In the case of a request of a Fixed Rate with
respect to outstanding Committed Advances, three Business Days (or, if the Agent
Bank is the sole Lender hereunder at such time, one Business Day) before
requesting a Fixed Rate, the Borrower shall give the Agent advance telephonic
notice that it will request a rate quotation for a portion of the principal
balance of the Advances and for a period of time that conforms to a Fixed Rate
Portion and Fixed Rate Period and the other provisions hereof. The Agent will
promptly notify the Lenders of such request. In the case of a new Advance, the
Notice of Borrowing shall set forth the requested period of time, which shall
conform to a Fixed Rate Portion and Fixed Rate Period and the other provisions
hereof.
2.4.2.2. In the case of a request of a Fixed Rate with
respect to outstanding Committed Advances, at approximately 9:00 a.m.
(California time) on the Business Day next following such advance notice, the
Borrower shall telephonically request the Agent to quote telephonically an
Applicable LIBO Rate as a Fixed Rate for the Fixed Rate Portion and Fixed Rate
Period selected by the Borrower. If upon the expiration of any Fixed Rate Period
with respect to any Fixed Rate Portion, the Borrower fails to select, or the
Agent is unable to provide, a Fixed Rate with respect to such Fixed Rate Portion
or any part thereof, such Fixed Rate Portion or part shall automatically convert
into a Base Rate Portion, and the Agent shall promptly notify the Lenders of
such fact. The Borrower shall not be released from its obligation to pay
interest at the Effective Rate and the Lender Parties shall incur no liability
to the Borrower if the Borrower is unable to obtain, or the Agent is unable to
provide, a telephonic quote on any Business Day.
2.4.2.3. In the case of a new Committed Advance that is a
Fixed Rate Advance, at approximately 9:00 a.m. (California time) on the Business
Day before the Funding Date (or, if the Agent Bank is the sole Lender hereunder
at such time, on the Funding Date) requested in the Notice of Borrowing, the
Borrower shall telephonically request the Agent to quote telephonically an
Applicable LIBO Rate as a Fixed Rate for the Fixed Rate Portion and Fixed Rate
Period selected by the Borrower in the related Notice of Borrowing. The Lender
Parties shall incur no liability to the Borrower if the Borrower is unable to
obtain, or the Agent is unable to provide, a telephonic quote on any Business
Day. In any such case, the Borrower shall be deemed to have withdrawn its Notice
of Borrowing without any further action being required by the Agent or the
Borrower.
2.4.2.4. If the Borrower accepts the Agent's telephonic
quote of the Fixed Rate requested with respect to any Committed Advance by
approximately 9:05 a.m. (California time) on the day of the Agent's quote, such
Fixed Rate shall be the Effective Rate for the Fixed
39
Rate Portion and Fixed Rate Period selected. The date that is two Business Days
after the day on which (or, if the Agent Bank is then the sole Lender hereunder,
the day on which) the quoted Fixed Rate is telephonically accepted by the
Borrower shall be the "FIXED RATE COMMENCEMENT DATE" for that Fixed Rate Period.
2.4.2.5. The Agent is authorized to rely upon the telephonic
request by any Responsible Officer and acceptance of the Agent's telephonic
quote by any Person who purports to be a Responsible Officer. The Agent shall
incur no liability to the Borrower in acting upon any telephonic notice or
acceptance of any telephonic quote that the Agent believes to have been given or
made by a Person authorized to act on behalf of the Borrower or for otherwise
acting in good faith under this Section 2.4.2.
2.4.2.6. The Borrower's acceptance of a Fixed Rate shall be
confirmed by a written Fixed Rate Notice, which the Agent shall promptly deliver
to the Borrower and the Lenders not less than two days prior to the Fixed Rate
Commencement Date. The Agent's failure to deliver the Fixed Rate Notice shall
not release the Lenders from funding any Committed Advance requested pursuant to
a Notice of Borrowing, or the Borrower from its obligation to pay interest at
the Effective Rate pursuant to the terms hereof.
2.4.2.7. The Borrower shall not have the right to request a
Committed Advance in the form of a Fixed Rate Advance or request or accept a
quote of a Fixed Rate applicable to Fixed Rate Advances if more than five Fixed
Rate Portions are then subject to a Fixed Rate or if more than eight different
Fixed Rate Periods are then applicable to Fixed Rate Advances (including any
Fixed Rate Bid Advances and Absolute Rate Bid Advances).
2.4.2.8. All Committed Advances made or deemed made pursuant
to Section 2.2.5.1. shall initially be Base Rate Advances.
2.4.3. PAYMENT OF INTEREST. Interest accrued on the Base Rate
Portion and each Fixed Rate Advance shall be due and payable in arrears (a) on
the first Business Day of each month, commencing with the first month following
the Closing Date and (b) on the Maturity Date.
2.4.4. COMPUTATIONS. Interest on the Advances and other amounts
payable hereunder or the other Loan Documents shall be computed on the basis of
a 360-day year and the actual number of days elapsed. Any change in the interest
rate on any Advance or other amount resulting from a change in the rate
applicable thereto (or any component thereof) pursuant to the terms hereof shall
become effective as of the opening of business on the Business Day on which such
change in the applicable rate (or component) shall become effective. Each
determination of an interest rate by the Agent pursuant to any provision of this
Agreement shall be conclusive and binding on the Borrower for all purposes, in
the absence of manifest error.
2.4.5. MAXIMUM LAWFUL RATE OF INTEREST. The rate of interest
payable on any Advances or other amount shall in no event exceed the maximum
rate permissible under Applicable Law. If the rate of interest payable on any
Advances or other amount is ever reduced
40
as a result of this Section and at any time thereafter the maximum rate
permitted by Applicable Law shall exceed the rate of interest provided for in
this Agreement, then the rate provided for in this Agreement shall be increased
to the maximum rate provided by Applicable Law for such period as is required so
that the total amount of interest received by the Lenders is that which would
have been received by the Lenders but for the operation of the first sentence of
this Section.
SECTION 2.5. NOTE, ETC.
2.5.1. ADVANCES EVIDENCED BY NOTE. The Committed Advances made by
each Lender shall be evidenced by its own single Revolving Note. The Bid
Advances made by each Lender shall be evidenced by its own single Bid Advance
Note. Each Note shall be dated the Closing Date and stated to mature in
accordance with the provisions of this Agreement applicable to the relevant
Advances.
2.5.2. NOTATION OF AMOUNTS AND MATURITIES, ETC. Each Lender is
hereby irrevocably authorized to record on the schedule attached to its Note (or
a continuation thereof) the information contemplated by such schedule. The
failure to record, or any error in recording, any such information shall not,
however, affect the obligations of the Borrower hereunder or under any Note to
repay the principal amount of the Advances evidenced thereby, together with all
interest accrued thereon. All such notations shall constitute conclusive
evidence of the accuracy of the information so recorded, in the absence of
manifest error.
SECTION 2.6. FEES.
2.6.1. On the Closing Date and from time to time thereafter as
specified in the Fee Letter, the Borrower shall pay to the Agent the Fees
specified in the Fee Letter. All Fees shall be fully earned when payable
hereunder and under the Fee Letter and shall be non-refundable.
2.6.2. The Borrower shall pay to the Agent, for the account of the
Lenders, a standby letter of credit fee (the "LETTER OF CREDIT FEE") for each
Letter of Credit issued (which Letter of Credit Fee shall be remitted to the
Lenders net of the Agent's usual and customary operational charges related to
the issuance, amendment or negotiation of any Letters of Credit) equal to one
and one-half percent (1.50%) per annum ($500 minimum per annum) of the Stated
Amount of each Letter of Credit from the date of issuance of such Letter of
Credit until its expiry. The Letter of Credit Fee shall be payable in advance
upon the issuance of any Letter of Credit.
2.6.3. On each of April 1, July 1, October 1 and January 1 prior
to the Maturity Date and on the Maturity Date, the Borrower shall pay in
arrears to the Agent for the PRO RATA benefit of the Lenders a fee (the
"FACILITY FEE") equal to (i) 0.25% per annum of the Commitments of all
Lenders if the ratio of Total Liabilities to Gross Asset Value (expressed as
a percentage) at the end of the Fiscal Quarter with respect to which the
Facility Fee is being determined is less than 60% and (ii) 0.30% per annum of
the Commitments of all Lenders if
41
clause (i) does not apply (including if the Compliance Certificate
showing that clause (i) is satisfied is not delivered when required hereby).
2.6.4. If the extension option is exercised by the Borrower in
accordance with Section 2.7.2., then the Borrower shall pay to the Agent for the
PRO RATA benefit of the Lenders, a fee (the "EXTENSION FEE") equal to 0.25% of
the aggregate amount of the Commitments.
SECTION 2.7. TERMINATION, REDUCTION AND EXTENSION OF COMMITMENT.
2.7.1. Each Lender's Commitment shall terminate without further
action on the part of such Lender on the Maturity Date unless the Maturity Date
is extended pursuant to Section 2.7.2. In addition, the Commitment shall
terminate in accordance with Section 8.2.
2.7.2. The Borrower may, by written notice to the Agent and the
Lenders not less than 60 days and not more than 120 days before the Maturity
Date initially in effect, request that the Maturity Date be extended to the date
that is one year following the initial Maturity Date. If the Borrower shall so
request such an extension, the Maturity Date shall be automatically extended to
the date that is one year following the initial Maturity Date; PROVIDED that no
such extension shall be effective unless (a) no Default or Event of Default
shall exist either on the date of the notice requesting such extension or on the
Maturity Date initially in effect , (b) each of the representations and
warranties of the Borrower Parties set forth in the Loan Documents shall be true
and complete on and as of each such date with the same force and effect as if
made on and as of each such date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such specific
date) and (c) the Borrower shall have paid the Extension Fee.
2.7.3. The Borrower shall have the right, at any time or from time
to time after the Closing Date, to terminate in whole or permanently reduce in
part, without premium or penalty, the unused Commitments to an amount not less
than the Commitment Usage of all Lenders outstanding at such time, by giving the
Agent not less than three Business Days' prior written notice of such
termination or reduction and the amount of any partial reduction. Any such
termination or partial reduction shall be effective on the date specified in the
Borrower's notice, shall be in a minimum amount of $1,000,000 and an integral
multiple thereof and shall be applied to the reduction, on a proportionate
basis, of each of the Commitments, the maximum Stated Amount of all Letters of
Credit as set forth in Section 2.2.1 and the Bid Advance Limit.
SECTION 2.8. REPAYMENTS AND PREPAYMENTS.
2.8.1. REPAYMENT. The unpaid principal amount of all Advances shall
be paid in full on the Maturity Date.
2.8.2. MANDATORY PREPAYMENT FOR EXCESS ADVANCES. If at any time the
outstanding principal amount of all Advances PLUS the Letter of Credit Liability
exceeds the aggregate amount of the Commitments, the Borrower shall, on the
Business Day on which the Borrower learns or is notified of the excess, make
mandatory prepayments of first, the
42
Committed Advances and, second, any Bid Advances as may be necessary so that,
after such repayment, such excess is eliminated.
2.8.3. REINSTATEMENT. To the extent any Lender Party receives
payment of any amount under the Loan Documents, whether by way of payment by the
Borrower, set-off or otherwise, which payment is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, receiver or any other party under any bankruptcy law, other law or
equitable cause, in whole or in part, then, to the extent of such payment
received, the Obligations or part thereof intended to be satisfied thereby shall
be revived and continue in full force and effect as if such payment had not been
received by such Lender Party.
2.8.4. NO PREPAYMENT OF BID ADVANCES. The Borrower shall have no
right to pay all or any portion of any Bid Advance prior to the last day of the
Fixed Rate Period applicable thereto.
SECTION 2.9. MANNER OF PAYMENT.
Except as otherwise expressly provided, the Borrower shall make
each payment hereunder or under the other Loan Documents to the Agent in Dollars
and in immediately available funds, without any deduction whatsoever, including
any deduction for any set-off, recoupment, counterclaim or Taxes, at the Agent's
Office, for the account of the Applicable Lending Offices of the Lenders
entitled to such payment, not later than 11:00 a.m. (California time) on the due
date thereof. Any payments received after 11:00 a.m. (California time) on any
Business Day shall be deemed received on the next succeeding Business Day.
Whenever any payment to be made hereunder shall be due on a day that is not a
Business Day, such payment shall instead be made on the next succeeding Business
DAY. Not later than 5:00 p.m. (California time) on the day such payment is
credited to the Advances outstanding hereunder, the Agent shall deliver to each
Lender, for the account of the Lender's Applicable Lending Office, in Dollars
and in immediately available funds, such Lender's share of the payment so made,
determined pursuant to Section 2.10. Delivery shall be made in accordance with
the written instructions satisfactory to the Agent from time to time given to
the Agent by each Lender.
SECTION 2.10. PRO RATA TREATMENT. Except to the extent otherwise
expressly provided herein,
2.10.1. Committed Advances shall be requested from, and all Letter
of Credit Liability, the Interest Reserve and all Fees payable pursuant to
Sections 2.6.2, 2.6.3 and 2.6.4 shall be allocated to, the Lenders, PRO RATA
according to their respective Commitments.
2.10.2. Each reduction of the Commitments of the Lenders shall be
applied to the respective Commitments of the Lenders PRO RATA according to their
respective Commitments before such reduction.
2.10.3. Subject to Section 2.10.5, each payment or prepayment by
the Borrower of principal of the Committed Advances shall be made for the
account of the Lenders PRO RATA
43
according to the respective unpaid principal amount of the Committed Advances
owed to the Lenders, and each payment by the Borrower of interest on the
Committed Advances shall be made for the account of the Lenders PRO RATA
according to the respective accrued but unpaid interest on the Committed
Advances owed to such Lenders.
2.10.4. Subject to Section 2.10.5, each payment by the Borrower of
principal of Bid Advances made as part of the same Borrowing shall be made for
the account of the Lenders holding such Bid Advances PRO RATA according to the
respective unpaid principal amount of such Bid Advances owed to such Lenders,
and each payment by the Borrower of interest on Bid Advances shall be made for
the account of the Lenders holding such Bid Advances PRO RATA according to the
respective accrued but unpaid interest on the Bid Advances owed to such Lenders.
2.10.5. If, pursuant to Section 8.2.2, the Agent shall have
declared the unpaid principal amount of all Advances together with any and all
accrued interest thereon to be due and payable, all amounts received by the
Agent or any of the Lenders (whether received by voluntary payment, by
counterclaim or cross action or by the enforcement of any or all of the
Obligations) which are applicable to the payment of the Obligations, equitable
adjustment will be made so that, in effect, all such amounts will be shared
among the Lenders ratably in accordance with their proportionate share of the
amount to be so applied based on, in each case, the ratio of the aggregate
principal amount of all outstanding Advances (whether Committed Advances or Bid
Advances) owed to each Lender to the aggregate principal amount of all
outstanding Advances.
SECTION 2.11. MANDATORY SUSPENSION AND CONVERSION OF FIXED RATE ADVANCES.
If any of the transactions necessary for the calculation of interest at any
Fixed Rate requested or selected by the Borrower should be or become prohibited
or unavailable to any Lender, or, if in the Agent's good faith judgment, it is
not possible or practical for the Agent to set a Fixed Rate for a Fixed Rate
Portion, Fixed Rate Bid Advance or any Fixed Rate Period as requested or
selected by the Borrower or to continue to have outstanding any Fixed Rate
Portion or Fixed Rate Bid Advance, the Effective Rate for such Fixed Rate
Portion or Fixed Rate Bid Advance shall remain at or automatically revert to the
Base Rate, and (i) in the case of any Committed Advance, such Fixed Rate Advance
then being requested by the Borrower shall be made as a Base Rate Advance, or
(ii) in the case of any Fixed Rate Bid Advance, such Advance shall not be made,
in each case without any action on the part of the Borrower or the Lender
Parties.
SECTION 2.12. INCREASED REGULATORY COSTS.
2.12.1. TAXES, REGULATORY COSTS AND PERCENTAGES. Upon any Lender's
demand, the Borrower shall pay to the Agent, in addition to all other amounts
that may be, or become, due and payable under this Agreement or the other Loan
Documents, any and all Taxes and Regulatory Costs, to the extent they are not
internalized by calculation of a Fixed Rate. Further, at each Lender's option,
the Fixed Rate shall be automatically adjusted by adjusting the Reserve
Percentage, as determined by such Lender in its prudent banking judgment, from
the date of imposition (or any subsequent date selected by such Lender) of any
such Regulatory Costs. The
44
relevant Lender shall give the Borrower notice of any Taxes and Regulatory Costs
as soon as practicable after their occurrence, but the Borrower shall be liable
for any Taxes and Regulatory Costs regardless of whether or when notice is so
given. In addition, if, on or after the date hereof, any Regulatory Change (a)
shall subject any Lender Party (or its Applicable Lending Office) to any Taxes
with respect to Letters of Credit or its obligations under or with respect
thereto, or changes the basis of taxation of payments to any Lender Party of
reimbursement obligations or related Fees or (b) shall impose, modify or deem
applicable any reserve, special deposit, compulsory loan, insurance or similar
requirement against, or any fees or charges in respect of, assets held by,
deposits with or other liabilities for the account of, Letters of Credit or
shall impose on any Lender Party (or its Applicable Lending Office) any other
condition affecting any Letter of Credit or any obligation in respect of Letter
of Credit participations, and the effect of the foregoing is (i) to increase the
cost to such Lender Party (or its Applicable Lending Office) of making, issuing,
renewing or maintaining any Letter of Credit or in respect of Letter of Credit
participations or (ii) to reduce the amount of any sum received or receivable by
such Lender Party (or its Applicable Lending Office) hereunder or under any
other Loan Document with respect thereto, then the Borrower shall from time to
time pay to such Lender Party, within 10 days after request by such Lender
Party, such additional amounts as may be specified by such Lender Party as
sufficient to compensate such Lender Party for such increased cost or reduction.
2.12.2. CAPITAL COSTS. If a Regulatory Change after the date hereof
regarding capital adequacy (including the adoption or becoming effective of any
treaty, law, rule, regulation or guideline adopted pursuant to or arising out of
the July 1988 report of the Basle Committee on Banking Regulations and
Supervisory Practices entitled "International Convergence of Capital Measurement
and Capital Standards") has or would have the effect of reducing the rate of
return on the capital of or maintained by any Lender Party or any company
controlling such Lender Party as a consequence of such Lender Party's Advances,
Letters of Credit, participations therein or obligations hereunder and other
commitments of this type to a level below that which such Lender Party or such
company could have achieved but for such Regulatory Change (taking into account
such Lender Party's or company's policies with respect to capital adequacy),
then, subject to Section 2.14., the Borrower shall from time to time pay to such
Lender Party, within 10 days after request by such Lender Party, such additional
amounts as may be specified by such Lender Party as sufficient to compensate
such Lender Party or company for such reduction in return, to the extent such
Lender Party or such company determines such reduction to be attributable to the
existence, issuance or maintenance of such Advances, Letters of Credit,
participations therein or obligations for the account of the Borrower.
SECTION 2.13. FIXED RATE PRICE ADJUSTMENT. The Borrower acknowledges that
prepayment or acceleration of a Fixed Rate Advance or an Absolute Rate Bid
Advance (including pursuant to Sections 2.8.2., 2.11., 2.12., 2.13. and 8.2.)
during a Fixed Rate Period will result in the Lender Party holding such Fixed
Rate Advance or Absolute Rate Bid Advance incurring additional costs, expenses
and/or liabilities and that it is extremely difficult and impractical to
ascertain the extent of such costs, expenses and/or liabilities. Therefore, on
the date a Fixed Rate Portion is prepaid or the date all Obligations become due
and payable, by
45
acceleration or otherwise (a "PRICE ADJUSTMENT DATE"), the Borrower will pay
each Lender Party (in addition to all other sums then owing to such Lender
Party) an amount (the "FIXED RATE PRICE ADJUSTMENT") equal to (a) (i) in the
case of a Fixed Rate Advance, the then present value, calculated by using as a
discount rate the LIBO Rate quoted on the Price Adjustment Date, of the amount
of interest that would have accrued on the Fixed Rate Portion or Fixed Rate Bid
Advances then outstanding to such Lender Party for the remainder of the Fixed
Rate Period at the Fixed Rate, set on the related Fixed Rate Commencement Date
or applicable to such Fixed Rate Bid Advance LESS (ii) the amount of interest
that would accrue on the same Fixed Rate Portion or Fixed Rate Bid Advance for
the same period if the Fixed Rate were set on the Price Adjustment Date as the
Applicable LIBO Rate in effect on the Price Adjustment Date or (b) in the case
of an Absolute Rate Bid Advance, the sum of such losses and expenses as the
Lender that made such Absolute Rate Bid Advance may reasonably incur by reason
of such prepayment, including, without limitation, any losses or expenses
incurred in obtaining, liquidating or employing deposits from third parties, but
excluding loss of margin for the period after such prepayment.
By initialing this provision where indicated below, the Borrower
confirms that each Lender Party's agreement to make the Advances
evidenced by this Agreement at the interest rates and on the other
terms set forth herein and in the other Loan Documents constitutes
adequate and valuable consideration, given individual weight by the
Borrower, for this Agreement.
BORROWER'S INITIALS:
----------------
SECTION 2.14. PURCHASE, SALE AND MATCHING OF FUNDS. The Borrower
understands, agrees and acknowledges the following: (a) no Lender Party has any
obligation to purchase, sell and/or match funds in connection with the use of a
LIBO Rate as a basis for calculating a Fixed Rate or Fixed Rate Price
Adjustment; (b) a LIBO Rate is used merely as a reference in determining a Fixed
Rate and Fixed Rate Price Adjustment; and (c) the Borrower has accepted a LIBO
Rate as a reasonable and fair basis for calculating a Fixed Rate and a Fixed
Rate Price Adjustment. The Borrower further agrees to pay the Fixed Rate Price
Adjustment, Taxes and Regulatory Costs, if any, whether or not any Lender Party
elects to purchase, sell and/or match funds.
ARTICLE 3.
GUARANTY
SECTION 3.1. GUARANTY.
3.1.1. The Guarantors unconditionally jointly and severally
guaranty and promise to pay to the order of the Agent, for the benefit of the
Lender Parties, on demand, in lawful money of the United States of America, any
and all Obligations from time to time owing to the Lender Parties (together with
the related provisions of this Article 3, this "GUARANTY"). All Obligations
shall be conclusively presumed to have been created in reliance on this
Guaranty.
46
3.1.2. In addition, the Guarantors jointly and severally promise to
pay to the Lender Parties, any and all costs and expenses, including attorneys'
fees and expenses, that the Lender Parties may incur in connection with (a) the
collection of all sums guarantied hereunder or (b) the exercise or enforcement
of any of the rights, powers or remedies of the Lender Parties under this
Guaranty or Applicable Law. All such amounts and all other amounts payable
hereunder shall be payable on demand, together with interest at a rate equal to
the lesser of (i) the Post Default Rate, or (ii) the maximum rate allowed by
Applicable Law, from and including the due date to and excluding the date of
payment.
3.1.3. All payments under this Guaranty shall be made free and clear
of any and all deductions, withholdings and setoffs, including withholdings on
account of Taxes.
SECTION 3.2. CONTINUING AND IRREVOCABLE GUARANTY. This Guaranty is a
continuing guaranty of the Obligations and may not be revoked and shall not
otherwise terminate unless and until the Obligations have been indefeasibly paid
and performed in full. If, notwithstanding the foregoing, any Guarantor shall
have any right under Applicable Law to terminate this Guaranty prior to
indefeasible payment in full of the Obligations, no such termination shall be
effective until noon the next Business Day after the Lender Parties shall
receive written notice thereof, signed by such Guarantor. Any such termination
shall not affect this Guaranty in relation to (a) any Obligation that was
incurred or arose prior to the effective time of such notice, (b) any Obligation
incurred or arising after such effective time where such Obligation is incurred
or arises either pursuant to commitments existing at such effective time or
incurred for the purpose of protecting or enforcing rights against the Borrower,
any Guarantor or other guarantor of or other Person directly or indirectly
liable on the Obligations or any portion thereof (an "OTHER GUARANTOR"; each of
the Borrower, the Guarantors and the Other Guarantors is referred to herein as
an "OBLIGOR") or any security ("COLLATERAL") given for the Obligations or any
other guaranties of the Obligations or any portion thereof (an "OTHER GUARANTY")
(c) any renewals, extensions, readvances, modifications or rearrangements of any
of the foregoing or (d) the liability of any other Guarantor hereunder.
SECTION 3.3. NATURE OF GUARANTY. The liability of each Guarantor under
this Guaranty is independent of and not in consideration of or contingent upon
the liability of the Borrower or any other Obligor, and a separate action or
actions may be brought and prosecuted against any Guarantor, whether or not any
action is brought or prosecuted against the Borrower or any other Obligor or
whether the Borrower or any other Obligor is joined in any such action or
actions. This Guaranty shall be construed as a continuing, absolute and
unconditional guaranty of payment (and not merely of collection) without regard
to:
3.3.1. the legality, validity or enforceability of this Agreement
(including this Guaranty), the Note or any other Loan Document, any of the
Obligations, any Lien or Collateral or any Other Guaranty;
3.3.2. any defense (other than payment), set-off or counterclaim
that may at any time be available to the Borrower or any other Obligor against,
and any right of setoff at any time
47
held by, any Lender Party; or
3.3.3. any other circumstance whatsoever (with or without notice to
or knowledge of each Guarantor or any other Obligor), whether or not similar to
any of the foregoing, that constitutes, or might be construed to constitute, an
equitable or legal discharge of the Borrower or any other Obligor, in bankruptcy
or in any other instance.
Any payment by any Obligor or other circumstance that operates to toll any
statute of limitations applicable to such Obligor shall also operate to toll the
statute of limitations applicable to each Guarantor. When making any demand
hereunder (including by commencement or continuance of any legal proceeding),
any Lender Party may, but shall be under no obligation to, make a similar demand
on all or any of the other Obligors, and any failure by any Lender Party to make
any such demand shall not relieve any Guarantor of its obligations hereunder.
SECTION 3.4. AUTHORIZATION. Each Guarantor authorizes each Lender Party,
without notice to or further assent by each Guarantor, and without affecting
each Guarantor's liability hereunder (regardless of whether any subrogation or
similar right that each Guarantor may have or any other right or remedy of each
Guarantor is extinguished or impaired), from time to time to:
3.4.1. permit the Borrower to increase or create Obligations, or
terminate, release, compromise, subordinate, extend, accelerate or otherwise
change the amount or time, manner or place of payment of, or rescind any demand
for payment or acceleration of, the Obligations or any part thereof, or
otherwise amend the terms and conditions of this Agreement, any other Loan
Document or any provision thereof;
3.4.2. take and hold any Collateral from the Borrower or any other
Person for the Obligations, perfect or refrain from perfecting a Lien on such
Collateral, and exchange, enforce, subordinate, release (whether intentionally
or unintentionally), or take or fail to take any other action in respect of, any
such Collateral or Lien or any part thereof;
3.4.3. exercise in such manner and order as it elects in its sole
discretion, fail to exercise, waive, suspend, terminate or suffer expiration of,
any of the remedies or rights of any Lender Party against the Borrower or any
other Obligor in respect of any Obligations or any Collateral;
3.4.4. release, add or settle with any Obligor in respect of
this Guaranty, any Other Guaranty of the Obligations;
3.4.5. accept partial payments on the Obligations and apply any and
all payments or recoveries from any Obligor or Collateral to such of the
Obligations as any Lender Party may elect in its sole discretion, whether or not
such Obligations are secured or guaranteed;
3.4.6. refund at any time, at any Lender Party's sole discretion,
any payments or
48
recoveries received by such Lender Party in respect of any Obligations or
Collateral; and
3.4.7. otherwise deal with the Borrower, any other Obligor and any
Collateral as any Lender Party may elect in its sole discretion.
SECTION 3.5. CERTAIN WAIVERS. Each Guarantor hereby waives:
3.5.1. the right to require any Lender Party to proceed against the
Borrower or any other Obligor, to proceed against or exhaust any Collateral or
to pursue any other remedy in such Lender Party's power whatsoever and the right
to have the property of the Borrower or any other Obligor first applied to the
discharge of the Obligations;
3.5.2. all rights and benefits under Section 2809 of the California
Civil Code and any other Applicable Law purporting to reduce a guarantor's
obligations in proportion to the obligation of the principal or providing that
the obligation of a surety or guarantor must neither be larger nor in other
respects more burdensome than that of the principal;
3.5.3. the benefit of any statute of limitations affecting the
Obligations or Guarantor's liability hereunder and of Section 359.5 of the
California Code of Civil Procedure;
3.5.4. any requirement of marshaling or any other principle of
election of remedies and all rights and defenses arising out of an election of
remedies by any Lender Party, even though that election of remedies, such as
nonjudicial foreclosure with respect to the security for a guaranteed
obligation, has destroyed such Guarantor's rights of subrogation, and
reimbursement against the Borrower by the operation of Section 580d of the
California Code of Civil Procedure or otherwise;
3.5.5. any right to assert against any Lender Party any defense
(legal or equitable), set-off, counterclaim and other right that such Guarantor
may now or any time hereafter have against the Borrower or any other Obligor;
3.5.6. presentment, demand for payment or performance (including
diligence in making demands hereunder), notice of dishonor or nonperformance,
protest, acceptance and notice of acceptance of this Guaranty, and all other
notices of any kind;
3.5.7. all defenses that at any time may be available to such
Guarantor by virtue of any valuation, stay, moratorium or other law now or
hereafter in effect;
3.5.8. any rights, defenses and other benefits such Guarantor may
have by reason of any failure of any Lender Party to comply with Applicable Law
in connection with the disposition of Collateral;
3.5.9. any rights or defenses the Guarantor may have because the
Obligations are secured by real property or an estate for years, including any
rights or defenses that are based upon, directly or indirectly, the application
of Section 580a, 580b, 580d, or 726 of the California
49
Code of Civil Procedure to the Obligations; and
3.5.10. without limiting the generality of the foregoing or any
other provision hereof, EACH GUARANTOR HEREBY WAIVES ALL RIGHTS AND DEFENSES
THAT ARE OR MAY BECOME AVAILABLE TO THE GUARANTOR BY REASON OF SECTIONS 2787 TO
2855, INCLUSIVE, AND SECTION 3433 OF THE CALIFORNIA CIVIL CODE.
SECTION 3.6. SUBROGATION; CERTAIN AGREEMENTS.
3.6.1. EACH GUARANTOR WAIVES ANY AND ALL RIGHTS OF SUBROGATION,
INDEMNITY, CONTRIBUTION OR REIMBURSEMENT, AND ANY AND ALL BENEFITS OF AND RIGHTS
TO ENFORCE ANY POWER, RIGHT OR REMEDY THAT ANY LENDER PARTY MAY NOW OR HEREAFTER
HAVE IN RESPECT OF THE OBLIGATIONS AGAINST THE BORROWER OR ANY OTHER OBLIGOR,
ANY AND ALL BENEFITS OF AND RIGHTS TO PARTICIPATE IN ANY COLLATERAL, WHETHER
REAL OR PERSONAL PROPERTY, NOW OR HEREAFTER HELD BY ANY LENDER PARTY, AND ANY
AND ALL OTHER RIGHTS AND CLAIMS (AS DEFINED IN THE BANKRUPTCY CODE) THE
GUARANTOR MAY HAVE AGAINST THE BORROWER OR ANY OTHER OBLIGOR, UNDER APPLICABLE
LAW OR OTHERWISE, AT LAW OR IN EQUITY, BY REASON OF ANY PAYMENT HEREUNDER,
UNLESS AND UNTIL THE OBLIGATIONS SHALL HAVE BEEN PAID IN FULL. Without
limitation, each Guarantor shall exercise no voting rights, shall file no claim,
and shall not participate or appear in any bankruptcy or insolvency case
involving the Borrower with respect to the Obligations unless and until all the
Obligations shall have been paid in full. If, notwithstanding the foregoing, any
amount shall be paid to any Guarantor on account of any such rights at any time,
such amount shall be held in trust for the benefit of the Lender Parties and
shall forthwith be paid to the Lender Parties to be credited and applied in
accordance with the terms of this Agreement and the other Loan Documents upon
the Obligations, whether matured, unmatured, absolute or contingent, in the
discretion of the Agent.
3.6.2. Each Guarantor assumes the responsibility for being and
keeping itself informed of the financial condition of the Borrower and each
other Obligor and of all other circumstances bearing upon the risk of nonpayment
of the Obligations that diligent inquiry would reveal, and agrees that the
Lender Parties shall have no duty to advise any Guarantor of information
regarding such condition or any such circumstances.
SECTION 3.7. BANKRUPTCY NO DISCHARGE.
3.7.1. Without limiting Section 3.3 this Guaranty shall not be
discharged or otherwise affected by any bankruptcy, reorganization or similar
proceeding commenced by or against the Borrower, any Guarantor or any other
Obligor, including (i) any discharge of, or bar or stay against collecting, all
or any part of the Obligations in or as a result of any such proceeding, whether
or not assented to by any Lender Party, (ii) any disallowance of all or any
50
portion of any Lender Party's claim for repayment of the Obligations, (iii) any
use of cash or other collateral in any such proceeding, (iv) any agreement or
stipulation as to adequate protection in any such proceeding, (v) any failure by
any Lender Party to file or enforce a claim against the Borrower, any Guarantor
or any other Obligor or its estate in any bankruptcy or reorganization case,
(vi) any amendment, modification, stay or cure of any Lender Party's rights that
may occur in any such proceeding, (vii) any election by any Lender Party under
Section 1111(b)(2) of the Bankruptcy Code, or (viii) any borrowing or grant of a
Lien under Section 364 of the Bankruptcy Code. Each Guarantor understands and
acknowledges that by virtue of this Guaranty, it has specifically assumed any
and all risks of any such proceeding with respect to the Borrower and each other
Obligor.
3.7.2. Notwithstanding anything herein to the contrary, any Event
of Default under Section 8.1.7 and 8.1.8 of this Agreement shall render all
Obligations under this Guaranty, automatically due and payable for purposes of
this Guaranty, without demand on the part of any Lender Party.
3.7.3. Notwithstanding anything to the contrary herein contained,
this Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment, or any part thereof, of any or all of the
Obligations is rescinded, invalidated, declared to be fraudulent or preferential
or otherwise required to be restored or returned by any Lender Party in
connection with any bankruptcy, reorganization or similar proceeding involving
the Borrower, any other Obligor or otherwise or if such Lender Party elects to
return any such payment or proceeds or any part thereof in its sole discretion,
all as though such payment had not been made or such proceeds not been received.
SECTION 3.8. MAXIMUM LIABILITY OF GUARANTOR. If the obligations of each
of the Guarantors hereunder otherwise would be subject to avoidance under
Section 548 of the Bankruptcy Code or any applicable state law relating to
fraudulent conveyances or fraudulent transfers, taking into consideration such
Guarantor's (i) rights of reimbursement and indemnity from the Borrower with
respect to amounts paid by such Guarantor, (ii) rights of subrogation to the
rights of the Lender Parties and (iii) rights of contribution from each other
Obligor, then such obligations hereby are reduced to the largest amount that
would make them not subject to such avoidance. Any Person asserting that such
Guarantor's obligations are so avoidable shall have the burden (including the
burden of production and of persuasion) of proving (a) that, without giving
effect to this Section 3.8, such Guarantor's obligations hereunder would be
avoidable and (b) the extent to which such obligations are reduced by operation
of this Section 3.8.
SECTION 3.9. FINANCIAL BENEFIT. Each Guarantor hereby acknowledges and
warrants it has derived or expects to derive a financial advantage from each
Advance and each other relinquishment of legal rights, made or granted or to be
made or granted by any Lender Party in connection with the Obligations. After
giving effect to this Guaranty, and the transactions contemplated hereby, such
Guarantor is not Insolvent or left with assets or capital that is unreasonably
small in relation to its business or the Obligations. "INSOLVENT" means, with
respect to each Guarantor, that (a) determined on the basis of a "fair
valuation" or their "fair salable
51
value" (whichever is the applicable test under Section 548 and other relevant
provisions of the Bankruptcy Code and the relevant state fraudulent conveyance
or transfer laws) the sum of such Guarantor's assets is less than its debts, or
(b) such Guarantor is generally not paying its debts as they become due. The
meaning of the terms "FAIR VALUATION" and "FAIR SALABLE VALUE" and the
calculation of assets and liabilities shall be determined and made in accordance
with the relevant provisions of the Bankruptcy Code and applicable state
fraudulent conveyance or transfer laws.
ARTICLE 4.
CONDITIONS PRECEDENT TO ADVANCES
AND LETTERS OF CREDIT
SECTION 4.1. CONDITIONS PRECEDENT TO CLOSING DATE. The obligations of the
Lenders to make any Advances or of the Agent Bank to issue any Letters of Credit
on any Funding Date shall be subject to the occurrence of the following
conditions precedent:
4.1.1. CLOSING DATE. The Closing Date shall occur on or before
___________, 1998.
4.1.2. CERTAIN DOCUMENTS. The Agent shall have received the
documents listed on SCHEDULE 4.1.2., all of which shall be in form and substance
satisfactory to the Agent.
4.1.3. FEES AND EXPENSES PAID. The Borrower shall have paid all of
the Fees and expenses due and payable on or before the Closing Date, including
the Fees specified in the Fee Letter and all legal fees and disbursements of the
Agent's counsel (including, without limitation, allocated costs of in-house
counsel) for which the Borrower shall have been billed on or prior to such date.
4.1.4. GENERAL. All other documents and legal matters in connection
with the transactions contemplated by this Agreement shall have been delivered
or executed or recorded in form and substance satisfactory to the Agent and the
Agent shall have received all such counterpart originals or certified copies
thereof as the Agent may request.
SECTION 4.2. CONDITIONS PRECEDENT TO ADVANCES AND LETTERS OF CREDIT. The
obligation of the Lenders to make any Advances (except pursuant to Section
2.2.5.) or of the Agent Bank to issue any Letters of Credit on any Funding Date
shall be subject to the following conditions precedent:
4.2.1. CLOSING DATE. The conditions precedent set forth in Section
4.1. shall have been satisfied or waived in writing by the Agent before the
Notice of Borrowing (or telephonic notice in lieu thereof) is given or the
Letter of Credit Agreement is delivered.
4.2.2. NOTICE OF BORROWING, LETTER OF CREDIT AGREEMENT, ETC. The
Borrower shall have delivered, in accordance with the applicable provisions of
this Agreement, (a) to the Agent, a Notice of Borrowing (or telephonic notice in
lieu thereof), in the case of a Committed
52
Advance (except in the case of any borrowing of a Base Rate Advance pursuant to
a Credit Sweep Program, if the Agent Bank is the sole Lender hereunder), (b) to
the Agent, a Competitive Bid Request and notification of acceptance of a
Competitive Bid submitted in response thereto, in the case of a Bid Advance or
(c) to the Agent Bank, a Letter of Credit Agreement (and such other documents
and instruments as the Agent Bank may require under Section 2.2.3.), in the case
of a Letter of Credit.
4.2.3. REPRESENTATIONS AND WARRANTIES. All of the representations
and warranties of the Borrower contained in the Loan Documents shall be true and
correct in all material respects on and as of the Funding Date as though made on
and as of that date (except to the extent that such representations and
warranties expressly were made only as of a specific date).
4.2.4. LETTER OF CREDIT FEES. In the case of any issuance of a
Letter of Credit, the Borrower shall have paid to the Agent Bank, for the
account of the Lenders, the Letter of Credit Fees then due and payable in
respect of such Letter of Credit.
4.2.5. NO DEFAULT. No Default or Event of Default shall exist or
result from the making of the Advance or the issuance of the Letter of Credit.
4.2.6. NO MATERIAL ADVERSE CHANGE. No Material Adverse Change shall
have occurred since the date of the financial statements referred to in Section
5.6.
4.2.7. ORDERS OF GOVERNMENTAL AUTHORITY, ETC. No order, judgment or
decree of, or any request or directive (whether or not having the force of law)
from, any Governmental Authority, or any other Applicable Law, shall purport by
its terms to enjoin, restrain, prohibit or otherwise prevent the Agent Bank from
issuing letters of credit generally or the Letter of Credit or shall impose upon
the Agent Bank or any Lender with respect to that Letter of Credit (or any
participation therein) any restriction, unreimbursed reserve requirement or
unreimbursed cost or expense that was not applicable, in effect or known to the
Agent Bank or such Lender on the Closing Date and that the Agent Bank or such
Lender in good ▇▇▇▇▇ ▇▇▇▇▇ materially adverse to it.
Each borrowing of an Advance (including any Advance made pursuant to
any Credit Sweep Program or upon any draw under a Letter of Credit) and Letter
of Credit issuance shall constitute a representation and warranty by the
Borrower as of the Funding Date that the conditions contained in Sections 4.2.5.
through 4.2.7. have been satisfied.
SECTION 4.3. ADDITIONAL CONDITIONS PRECEDENT AND PROVISIONS APPLICABLE
TO CERTAIN ACQUISITION ADVANCES.
4.3.1. CERTAIN CONDITIONS. The Borrower may request, and the
Lenders shall be required to make Committed Advances pursuant to Section
2.1.1, for the purpose of acquiring (the "ACQUISITION") a Real Property (a)
that, once acquired, qualifies as an Unencumbered Asset (including the
previous approval by the Required Lenders pursuant to subsection (vii) of the
53
definition of "Unencumbered Asset"), and (b) without inclusion of which in the
Unencumbered Pool, the Borrower would not be in compliance with Section 7.4
giving effect to such Advances, if, in addition to the other conditions set
forth in this Agreement (including Section 4.2), all of the following conditions
shall be satisfied as of the Funding Date:
4.3.1.1. The Borrower shall be in compliance with
Section 7.4 giving effect to the Acquisition and the funding of the
Committed Advances;
4.3.1.2. The Borrower shall have previously delivered to the
Agent and the Lenders the information required to be delivered to them under the
definition of "Unencumbered Asset" as to such Real Property, and such Real
Property shall have been approved as eligible for inclusion in the Unencumbered
Pool as contemplated by clause (ii) of such definition;
4.3.1.3. The Borrower shall have delivered to the Agent a
separate Notice of Borrowing with respect to that portion of such Committed
Advances that could not be made in compliance with Section 7.4 without giving
effect to the inclusion of such Real Property in the Unencumbered Pool (such
portion being the "ACQUISITION ADVANCES");
4.3.1.4. The Borrower shall have delivered to the Agent
concurrently with its Notice of Borrowing referred to in Section 4.3.1.3 above,
a certificate in the form attached hereto as Exhibit B-5, duly executed by a
Senior Officer of the Borrower, describing the Real Property to be acquired,
designating such Real Property as an Unencumbered Asset effective upon
consummation of the Acquisition, and setting forth the Unencumbered Asset Value
of such Real Property as if it were an Unencumbered Asset as of the date of such
Notice of Borrowing (the "PRO FORMA UNENCUMBERED ASSET VALUE");
4.3.1.5. All statements set forth in the certificate
referred to in 4.3.1.4 above shall be true and correct as of the date thereof
and the Funding Date;
4.3.1.6. The Borrower shall have provided to the Agent and
the Lenders such information as may be reasonably requested by the Agent and the
Lenders in order to verify the terms, timing and method of payment specified in
the contract between a Borrower Party, as purchaser of the Real Property to be
acquired, and the seller of such property (the "ACQUISITION AGREEMENT"), or to
determine compliance with this Section 4.3.; and
4.3.1.7. No Required Lender shall have notified the Borrower
(and, if the notice is given by any Lender, also the other Lenders and the
Agent) that it is not satisfied in its discretion that the requested Acquisition
Advances are consistent with the terms of the Acquisition Agreement, that such
Acquisition Agreement is BONA FIDE, and that the Real Property will qualify as
an Unencumbered Asset upon the completion of the Acquisition of such property
pursuant to the terms of the Acquisition Agreement.
Each borrowing of an Acquisition Advance shall constitute a
representation and warranty by the Borrower as of the Funding Date that the
conditions contained in this
54
Section 4.3.1 have been satisfied.
4.3.2. CERTAIN PROVISIONS APPLICABLE TO ACQUISITION ADVANCES.
4.3.2.1. The amount of the Pro Forma Unencumbered Asset
Value reflected in the certificate referred to in Section 4.3.1.4 with respect
to a Real Property, the Acquisition of which is financed through Acquisition
Advances, shall, notwithstanding that such Real Property is not yet an
Unencumbered Asset, be added to, and treated as part of, the Unencumbered Asset
Value for a period commencing on the related Funding Date and ending no later
than the earlier to occur of (i) seven calendar days thereafter, or (ii) the
date on which the Acquisition is consummated (the "CUT-OFF DATE").
4.3.2.2. The Borrower agrees and covenants that the proceeds
of all Acquisition Advances shall be used only to acquire the relevant Real
Property and that, if the Acquisition of such Real Property is not consummated
by, or such Real Property does not qualify as an Unencumbered Asset on the
Cut-off Date, then the Borrower shall immediately prepay outstanding Advances
under the Credit Agreement in an amount equal to the amount of such Acquisition
Advances.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES
Each Borrower Party represents and warrants to the Lender Parties as
follows:
SECTION 5.1. ORGANIZATION, AUTHORITY AND TAX STATUS OF THE BORROWER;
ENFORCEABILITY, ETC.
5.1.1. ORGANIZATION AND AUTHORITY; TAX STATUS. The Borrower has
been duly formed, is validly existing as a limited partnership in good standing
under the laws of the State of Delaware, and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such qualification
except where the absence of such qualification would not have a Material Adverse
Effect. The Borrower has all requisite power and authority to own or hold under
lease the property it purports to own (including the properties listed on
SCHEDULE 1.1C that are designated as owned by the Borrower) or hold under lease,
to carry on its business as now conducted and as proposed to be conducted, to
execute and deliver the Loan Documents to which it is a party and to perform its
obligations hereunder and thereunder. The Borrower is a partnership for purposes
of federal income taxation and for purposes of the tax laws of any state or
locality in which the Borrower is subject to taxation based on its income.
5.1.2. AUTHORIZATION; BINDING EFFECT. The Borrower has by all
necessary action duly authorized (a) the execution and delivery of the Loan
Documents to which the Borrower is a party and (b) the performance of its
obligations thereunder. Each Loan Document to which the
55
Borrower is a party constitutes the legal, valid and binding obligation of
the Borrower, enforceable against it in accordance with its respective terms,
except as enforcement may be limited by equitable principles and by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to creditors' rights generally.
5.1.3. PARTNERSHIP UNITS; GENERAL PARTNER. All of the Partnership
Units of the Borrower are validly issued and non-assessable and owned of record
in the percentage amounts and by the Persons set forth on SCHEDULE 5.1., as
amended from time to time. The REIT owns (i) 26,004,747 Partnership Units of the
Borrower, (ii) 5,185,542 Preferred Partnership Units of the Borrower and (iii)
3,627,131 Series A Partnership Units of the Borrower, free and clear of any
Liens. Such Partnership Units were offered and sold in compliance with all
Applicable Laws (including, without limitation, federal and state securities
laws). There are no outstanding securities convertible into or exchangeable for
Partnership Units of the Borrower, or options, warrants or rights to purchase
any such Partnership Units, or, except as set forth on SCHEDULE 5.1, commitments
of any kind for the issuance of additional Partnership Units or any such
convertible or exchangeable securities or options, warrants or rights to
purchase such Partnership Units. The REIT is the sole general partner of the
Borrower.
SECTION 5.2. ORGANIZATION, AUTHORITY AND REIT STATUS OF THE REIT;
ENFORCEABILITY, ETC.
5.2.1. ORGANIZATION AND AUTHORITY. The REIT is a corporation duly
organized, validly existing and in good standing under the laws of Maryland, and
is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or leasing of
property requires such qualification except where the absence of such
qualification would not have a Material Adverse Effect. The REIT has all
requisite power and authority to own or hold under lease the property it
purports to own or hold under lease, to carry on its business as now conducted
and as proposed to be conducted, to execute and deliver this Agreement and to
perform its obligations hereunder.
5.2.2. AUTHORIZATION; BINDING EFFECT. The REIT has by all necessary
action duly authorized the execution and delivery of this Agreement and the
performance of its obligations hereunder. This Agreement constitutes the legal,
valid and binding obligation of the REIT, enforceable against it in accordance
with its respective terms, except as enforcement may be limited by equitable
principles and by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to creditors' rights generally.
5.2.3. REIT STATUS. The REIT is organized in conformity with the
requirements for qualification as a real estate investment trust under the Code
and its ownership and method of operation enables it to meet the requirements
for taxation as a real estate investment trust under the Code.
56
SECTION 5.3. ORGANIZATION, AUTHORITY AND TAX STATUS OF GUARANTORS;
ENFORCEABILITY, ETC.
5.3.1. ORGANIZATION AND AUTHORITY. Each of the Guarantors has been
duly formed, is validly existing as a general partnership or a limited
partnership, as the case may be, in good standing under the laws of the State of
California, and is duly qualified to transact business and is in good standing
in each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification except where the absence of such
qualification would not have a Material Adverse Effect. Each of the Guarantors
has all requisite power and authority to own or hold under lease the property it
purports to own (including the property listed on SCHEDULE 1.1C that is
designated as owned by such Guarantor) or hold under lease, to carry on its
business as now conducted and as proposed to be conducted, to execute and
deliver the Loan Documents to which it is a party and to perform its obligations
thereunder. Each of the Guarantors is a partnership for purposes of federal
income taxation and for purposes of the tax laws of any state or locality in
which such Guarantor is subject to taxation based on its income.
5.3.2. AUTHORIZATION; BINDING EFFECT. Each of the Guarantors has by
all necessary action duly authorized the execution and delivery of this
Agreement and the performance of its obligations hereunder. This Agreement
constitutes the legal, valid and binding obligation of each Guarantor,
enforceable against it in accordance with its respective terms, except as
enforcement may be limited by equitable principles and by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to creditors'
rights generally.
SECTION 5.4. CONSOLIDATED ENTITIES AND UNCONSOLIDATED JOINT
VENTURES; MANAGEMENT COMPANIES.
5.4.1. OWNERSHIP. SCHEDULE 5.4. (as amended from time to time)
contains complete and correct lists of the Consolidated Entities (other than the
Borrower) and the Unconsolidated Joint Ventures, showing, in each case, the
correct name thereof, the type of organization, the jurisdiction of its
organization, and the percentage of Capital Stock outstanding and owned by the
Borrower Parties and the Consolidated Entities, as the case may be. All of the
outstanding shares of Capital Stock of each Consolidated Entity or
Unconsolidated Joint Venture shown in SCHEDULE 5.4. as being owned by any
Borrower Party or any Consolidated Entity have been validly issued and are owned
by such Borrower Party or Consolidated Entity free and clear of any Lien (except
as otherwise disclosed on SCHEDULE 5.4.).
5.4.2. ORGANIZATION AND OWNERSHIP. Each Consolidated Entity and
Unconsolidated Joint Venture is a corporation, partnership or other legal entity
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization, and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification except where
the absence of such qualification would not have a Material Adverse Effect. Each
such Consolidated Entity and Unconsolidated Joint Venture has all requisite
power and authority to own or hold under lease the property it purports to own
or hold under lease, to carry on its
57
business as now conducted and as proposed to be conducted. Each such
Consolidated Entity or Unconsolidated Joint Venture organized as a partnership
is a partnership for purposes of federal income taxation and for purposes of the
tax laws of any state or locality in which the Borrower is subject to taxation
based on its income.
5.4.3. MANAGEMENT COMPANIES. Each of the Management Companies is a
corporation duly organized, validly existing and in good standing under the laws
of jurisdiction of incorporation, and is duly qualified to transact business and
is in good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification. Each of the
Management Companies has all requisite power and authority to own or hold under
lease the property it purports to own or hold under lease, to carry on its
business as now conducted and as proposed to be conducted. The Borrower is the
sole owner of record of all of the issued and outstanding shares of preferred
stock of each of the Management Companies. Each of the Management Contracts
constitutes the legal, valid and binding obligations of the signatories that are
party thereto, enforceable against each of them in accordance with its terms.
SECTION 5.5. NO CONFLICT, ETC.
5.5.1. NO CONFLICT. The execution, delivery and performance by each
Borrower Party of each Loan Document to which it is party, and the consummation
of the transactions contemplated thereby, do not and will not (a) violate any
provision of the charter, bylaws or partnership agreement of any Borrower Party,
as the case may be, (b) conflict with, result in a breach of, or constitute (or,
with the giving of notice or lapse of time or both, would constitute) a default
under, or require the approval or consent of any person pursuant to (except as
disclosed in SCHEDULE 5.5., which consents have been obtained and are in full
force and effect), any Contractual Obligation of any Borrower Party, or violate
any provision of Applicable Law binding on any Borrower Party, or (c) result in
the creation or imposition of any Lien upon any material asset of any Borrower
Party.
5.5.2. GOVERNMENTAL APPROVALS. Except for filings and recordings
which are described on SCHEDULE 5.5., which in each case have been made and are
in full force and effect, no Governmental Approval is or will be required in
connection with the execution, delivery and performance of any Borrower Party of
this Agreement or any Loan Document to which it is party or the transactions
contemplated hereby or thereby or to ensure the legality, validity or
enforceability hereof or thereof. Each of the REIT, the Borrower and the other
Consolidated Entities possesses all material Governmental Approvals, in full
force and effect, free from burdensome restrictions, that are necessary for the
ownership, maintenance and operation of its properties and conduct of its
business as now conducted and proposed to be conducted, and is not in violation
thereof.
SECTION 5.6. FINANCIAL INFORMATION.
5.6.1. The consolidated balance sheet of the REIT and the
Consolidated Entities for the Fiscal Years ended December 31, 1995, December 31,
1996, and December 31, 1997, and
58
the consolidated statements of income, retained earnings and cash flow of the
REIT and the Consolidated Entities for the Fiscal Year then ended, in each case
certified by the Borrower's independent certified public accountants, copies of
which have been delivered to the Agent, were prepared in accordance with GAAP
consistently applied and fairly present the consolidated financial position of
the REIT and the Consolidated Entities as at the respective dates thereof and
the results of operations and cash flow of the REIT and the Consolidated
Entities for the respective periods then ended. Neither the REIT nor any
Consolidated Entity had on such dates any material Contingent Obligations,
liabilities for Taxes or long-term leases, unusual forward or long-term
commitments or unrealized losses from any unfavorable commitments which are not
reflected in the foregoing statements or in the notes thereto and which are
material to the business, assets, prospects, results of operation or financial
condition of the REIT and the Consolidated Entities taken as a whole.
5.6.2. The unaudited consolidated balance sheet of the REIT as at
March 31, 1998 and related statements of income, retained earnings and cash flow
for the period then ended, approved by the Chief Financial Officer of the REIT,
a copy of which has been delivered to the Agent, were prepared in accordance
with GAAP consistently applied (except to the extent noted therein) and fairly
present the consolidated financial position of the REIT and the Consolidated
Entities as of such date and the results of operations and cash flow for the
period covered thereby, subject to normal year-end audit adjustments. Neither
the REIT nor any Consolidated Entity had on such date any material Contingent
Obligations, liabilities for Taxes or long-term leases, unusual forward or
long-term commitments or unrealized losses from any unfavorable commitments
which are not reflected in the foregoing statements or in the notes thereto and
which are Material.
SECTION 5.7. NO MATERIAL ADVERSE CHANGES. Since December 31, 1997, there
has been no Material Adverse Change that has not been disclosed in any report
filed by the REIT with the SEC prior to date hereof.
SECTION 5.8. LITIGATION. Except as disclosed in SCHEDULE 5.8. hereto,
there are no actions, suits or proceedings pending or, to the best knowledge of
the Borrower Parties, threatened against or affecting the REIT or any
Consolidated Entity or any of its or their respective properties before any
Governmental Authority (a) in which there is a reasonable possibility of an
adverse determination that could have a Material Adverse Effect, or (b) which
draws into question the validity or the enforceability of this Agreement, any
other Loan Document or any transaction contemplated hereby or thereby.
SECTION 5.9. AGREEMENTS; APPLICABLE LAW. Neither the REIT nor any
Consolidated Entity is in violation of any Applicable Law, or in default under
any Contractual Obligations to which it is a party or by which its properties
are bound, except where such violation or default could not, individually or in
the aggregate, have a Material Adverse Effect. Neither the REIT or any
Consolidated Entity is a party to or bound by any unduly burdensome Contractual
Obligation which could have a Material Adverse Effect that has not been
disclosed in any report filed by the REIT with the SEC prior to date hereof.
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SECTION 5.10. GOVERNMENTAL REGULATION. Neither the REIT nor any
Consolidated Entity is (a) an "investment company" registered or required to be
registered under the Investment Company Act of 1940, as amended, or a company
controlled by such a company, or (b) subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act or to any Federal or state, statute or regulation limiting its
ability to incur Debt for money borrowed.
SECTION 5.11. MARGIN REGULATIONS. Neither the REIT nor any Consolidated
Entity is engaged principally, or as one of its important activities, in the
business of extending credit for the purposes of purchasing or carrying Margin
Stock. The execution, delivery and performance of the Loan Documents by the
Borrower Parties will not violate the Margin Regulations. The value of all
Margin Stock held by the Borrower Parties and their Subsidiaries constitutes
less than 25% of the value, as determined in accordance with the Margin
Regulations, of all assets of the Borrower Parties and their Subsidiaries.
SECTION 5.12. EMPLOYEE BENEFIT PLANS.
5.12.1. Each Borrower Party and each of the ERISA Affiliates is in
compliance in all Material respects with all Applicable Laws including any
applicable provisions of ERISA and the Code and the regulations and published
interpretations thereunder with respect to all Plans and Multiemployer Plans.
There have been no Prohibited Transactions with respect to any Plan which could
result in any Material liability of any Borrower Party or any of the ERISA
Affiliates. Neither any Borrower Party nor any of the ERISA Affiliates has
participated in or contributed to any Defined Benefit Plan at any time. Neither
any Borrower Party nor any of the ERISA Affiliates has failed to make any
Material payments required to be made under any agreement relating to a
Multiemployer Plan or any law pertaining thereto. The Borrower Parties and the
ERISA Affiliates have not had asserted and do not expect to have asserted
against them any Material penalty, interest or excise tax under Sections 4971,
4972, 4975, 4976, 4977, 4979, 4980 or 4980B of the Code or Sections 502(c)(1) or
502(i) of ERISA. Each Plan covering employees of the Borrower Parties or any of
the ERISA Affiliates is able to pay benefits thereunder when due. There are no
Material claims pending or overtly threatened, involving any Plan, nor is there
any reasonable basis to anticipate any claims involving any such Plans.
5.12.2. The investment in the Borrower Parties by benefit plan
investors is not significant within the meaning of Department of Labor
Regulation Section 2510.3-101(f).
SECTION 5.13. TITLE TO PROPERTY; LIENS.
5.13.1. Each of the REIT, the Controlled Consolidated Entities and,
to the best knowledge of the Borrower Parties, the other Consolidated Entities
or Unconsolidated Joint Ventures has good and marketable title to, or valid and
subsisting leasehold interests in, all of its Real Property and other property
reflected in its books and records as being owned by it. On and after the
Closing Date, each Real Property from time to time designated by the Borrower as
an Unencumbered Asset meets the conditions set forth in the definition of
"Unencumbered Asset" (other than those set forth in clause (iv) thereof).
60
5.13.2. Neither the REIT, any Controlled Consolidated Entity nor, to
the best knowledge of the Borrower Parties, any other Consolidated Entity or
Unconsolidated Joint Venture is in default in the performance or observance of
any of the covenants or conditions contained in any of its Contractual
Obligations, except where such default or defaults, if any, would not have a
Material Adverse Effect.
SECTION 5.14. LICENSES, TRADEMARKS, ETC. The REIT, the Controlled
Consolidated Entities and, to the best knowledge of the Borrower Parties, the
other Consolidated Entities or Unconsolidated Joint Ventures own or hold valid
licenses in all necessary trademarks, copyrights, patents, patent rights and
other similar rights which are Material to the conduct of their respective
businesses as heretofore operated and as proposed to be conducted. Neither the
REIT, any Controlled Consolidated Entity nor, to the best knowledge of the
Borrower Parties, any other Consolidated Entity or Unconsolidated Joint Venture
has been charged or, to the best knowledge of the Borrower Parties, threatened
to be charged with any infringement of, nor has any of them infringed on, any
unexpired trademark, patent, patent registration, copyright, copyright
registration or other proprietary right of any Person except where the effect
thereof individually or in the aggregate would not have a Material Adverse
Effect.
SECTION 5.15. ENVIRONMENTAL CONDITION. Except as set forth on
SCHEDULE 5.15. hereto:
5.15.1. To the best of each Borrower Party's knowledge, all Real
Property owned or used by the REIT or any Consolidated Entity is free from
contamination from any Hazardous Materials except contamination that would not
have a Material Adverse Effect that has not been disclosed in any report filed
by the REIT with the SEC prior to date hereof. To the best of each Borrower
Party's knowledge, no polychlorinated biphenyls (PCBs) (including any
transformers, capacitors, ballasts, or other equipment which contains dielectric
fluid containing PCBs) or asbestos is constructed within, stored, disposed of or
location on such Real Property except for matters that would not have a Material
Adverse Effect or that have not been disclosed in any report filed by the REIT
with the SEC prior to date hereof. Neither the REIT nor any Consolidated Entity
has caused or suffered, nor to the knowledge of any Borrower Party has any other
owner or user of such Real Property caused or suffered any Environmental Damages
that has had or which could have a Material Adverse Effect that has not been
disclosed in any report filed by the REIT with the SEC prior to date hereof.
5.15.2. Neither the REIT nor any Consolidated Entity nor, to the
best knowledge of each Borrower Party, any prior owner or occupant of the Real
Property owned or used by the REIT or any Consolidated Entity has received
notice of any alleged violation of Environmental Requirements, or notice of any
alleged liability for Environmental Damages in connection with the Real
Property, which could reasonably be expected to have a Material Adverse Effect
that has not been disclosed in any report filed by the REIT with the SEC prior
to date hereof. There exists no order, judgment or decree outstanding, nor any
action, suit, proceeding, citation or investigation, pending or threatened,
relating to any alleged liability arising out of the suspected presence of
Hazardous Material, any alleged violation of Environmental Requirements or any
alleged liability for Environmental Damages in connection with the Real Property
or the business
61
or operations of the REIT and the Consolidated Entities that has had or which
could have a Material Adverse Effect that has not been disclosed in any report
filed by the REIT with the SEC prior to date hereof nor, to the best of each
Borrower Party's knowledge, does there exist any basis for such action, suit,
proceeding, citation or investigation being instituted or filed.
SECTION 5.16. ABSENCE OF CERTAIN RESTRICTIONS. Neither any Controlled
Consolidated Entity nor, to the best knowledge of the Borrower Parties, any
other Consolidated Entity or Unconsolidated Joint Venture is subject to any
Contractual Obligation which restricts or limits its ability to (a) pay
dividends or make any distributions on its Capital Stock, (b) incur or pay Debt
owed the REIT or any other Consolidated Entity, (c) make any loans or advances
to the Borrower or (d) transfer any of its property to the Borrower; PROVIDED
that the foregoing restrictions in subclauses (b), (c) and (d) shall not apply
to any Bankruptcy Remote Entity to the extent such restrictions are required by
any rating agency as a condition to the rating of the Debt of such Bankruptcy
Remote Entity.
SECTION 5.17. DISCLOSURE. The information in any document, certificate or
written statement furnished to the Lender by or on behalf of the REIT, the
Borrower or any other Consolidated Entity with respect to the business, assets,
prospects, results of operation or financial condition of the REIT, the
Borrower, or any other Consolidated Entity or any Unconsolidated Joint Venture,
including operating statements and rent rolls, for use in connection with the
transactions contemplated by this Agreement has been true and correct or, in the
case of any information relating to any Consolidated Entity that is not a
Controlled Consolidated Entity or to any Unconsolidated Joint Venture, true and
correct to the best knowledge of the Borrower Parties. There is no fact known to
the Borrower Parties (other than matters of a general economic nature) that has
a Material Adverse Effect or could reasonably be expected to have a Material
Adverse Effect, which has not been disclosed herein or in such other documents,
certificates, and statements.
ARTICLE 6.
AFFIRMATIVE COVENANTS OF THE BORROWER PARTIES
So long as any portion of the Commitments shall be in effect and until all
Obligations are paid in full:
SECTION 6.1. FINANCIAL STATEMENTS AND OTHER REPORTS. The Borrower Parties
will deliver to the Agent, with sufficient copies for the Lender Parties:
6.1.1. within 90 days after the end of each Fiscal Year, the
consolidated balance sheet of the REIT and the Consolidated Entities as of the
end of such Fiscal Year and the related consolidated statements of income,
stockholders' equity and cash flow of the REIT and the Consolidated Entities for
such Fiscal Year, setting forth in each case in comparative form the
consolidated or combined figures, as the case may be, for the previous Fiscal
Year, all in reasonable detail and accompanied by a report thereon of Coopers &
▇▇▇▇▇▇▇ or other independent certified public accountants of recognized national
standing selected by the
62
Borrower and reasonably satisfactory to the Agent, which report shall be
unqualified (except for qualifications that the Required Lenders do not consider
Material in their discretion) and shall state that such consolidated financial
statements fairly present the financial position of the REIT and the
Consolidated Entities as at the date indicated and the results of their
operations and cash flow for the periods indicated in conformity with GAAP
(except as otherwise stated therein) and that the examination by such
accountants in connection with such consolidated financial statements has been
made in accordance with generally accepted auditing standards;
6.1.2. within 45 days after the end of each Fiscal Quarter, a
consolidated balance sheet of the Borrower and the Consolidated Entities as at
the end of such quarter and the related combined statements of income and cash
flow of the REIT and the Consolidated Entities for such quarter and the portion
of the Fiscal Year ended at the end of such quarter, setting forth in each case
in comparative form the consolidated or combined figures, as the case may be,
for the corresponding periods of the prior Fiscal Year, all in reasonable detail
and in conformity with GAAP (except as otherwise stated therein), together with
a representation by the REIT's chief financial officer, as of the date of such
financial statements, that such financial statements have been prepared in
accordance with GAAP (PROVIDED, HOWEVER, that such financial statements may not
include all of the information and footnotes required by GAAP for complete
financial information) and reflect all adjustments that are, in the opinion of
management, necessary for a fair presentation of the financial information
contained therein;
6.1.3. together with each delivery of financial statements pursuant
to clauses (a) and (b) above, a Compliance Certificate duly completed and
setting forth the calculations required to establish whether the Borrower
Parties were in compliance with Sections 7.2.2., 7.3., 7.4.
and 7.5 on the date of such financial statements;
6.1.4. promptly after any Borrower Party becomes aware of the
occurrence of any Default or Event of Default, a certificate of a Senior Officer
of the Borrower Party setting forth the details thereof and the action which the
Borrower Party is taking or proposes to take with respect thereto;
6.1.5. not later than five (5) days after their being filed with the
SEC, copies of all financial statements, reports, notices and proxy statements
sent or made available by the REIT to its security holders, all registration
statements (other than the exhibits thereto) and annual, quarterly or monthly
reports, if any, filed by the REIT with the SEC (other than reports under
Section 16 of the Securities Exchange Act of 1934, as amended) and all press
releases by the REIT or any Consolidated Entity concerning material developments
in the business of the REIT or any Consolidated Entity;
6.1.6. if requested by Agent, not later than ten (10) days after
such request, Tax returns, reports, declarations, statements, information
statements or any other document filed by the REIT with respect to the income
Taxes of the REIT or the qualification of the REIT as a real estate investment
trust under the Code;
6.1.7. promptly after any Borrower Party obtains knowledge thereof,
notice of all
63
litigation or proceedings commenced or threatened affecting the REIT or any
Consolidated Entity in which there is a reasonable possibility of an
adverse decision and (a) which involves alleged liability in excess of
$2,500,000 (in the aggregate) which is not covered by insurance, (b) in which
injunctive or similar relief is sought which if obtained could have a Material
Adverse Effect or (c) which questions the validity or enforceability of any Loan
Document;
6.1.8. within 120 days after the end of each Fiscal Year, a forecast
for the next succeeding two Fiscal Years of the consolidated results of
operations and cash flows of the REIT, together with (a) an outline of the major
assumptions upon which the forecast is based and (b) information regarding the
capital expenditures forecast for such period (including leasing commissions,
tenant improvements, renovations and other capital expenditures, all broken down
by appropriate categories), other than capital expenditures attributable to
acquisitions of Real Properties (or to the Real Properties so acquired) that may
occur (but have not yet occurred) during the period covered by the forecast;
6.1.9. for each Unencumbered Asset held in the Unencumbered
Pool:
6.1.9.1. within 90 days after the end of each Fiscal Year, a
property budget with respect to such Unencumbered Asset for the next Fiscal
Year; and
6.1.9.2. within 45 days after the end of each Fiscal Quarter,
operating statements, rent rolls and lease status reports with respect to such
Unencumbered Asset;
6.1.10. for each Retail Property that constitutes
Construction-in-Process the value of which is estimated to be $20,000,000 or
greater:
6.1.10.1. within 45 days after the Commencement of
Construction, a property budget with respect to such Retail Property; and
6.1.10.2. within 45 days after the Commencement of
Construction, a pro forma operating statement respect to such Retail
Property;
6.1.11. promptly after the receipt thereof, a copy of any notice,
summons, citation or written communication concerning any actual, alleged,
suspected or threatened Material violation of Environmental Requirements, or
Material liability of any Borrower Party or any Consolidated Entity for
Environmental Damages in connection with its Real Property or past or present
activities of any Person thereon; and
6.1.12. from time to time such additional information regarding the
financial position or business of the REIT and the Consolidated Entities or
regarding any of the Real Properties as the Agent may reasonably request on
behalf of any Lender.
SECTION 6.2. RECORDS AND INSPECTION. Each Borrower Party shall, and shall
cause each Consolidated Entity to, maintain adequate books, records and accounts
as may be required or necessary to permit the preparation of consolidated
financial statements in accordance with
64
sound business practices and GAAP. Each Borrower Party shall, and shall cause
each Consolidated Entity to, permit such persons as any Lender may designate, at
reasonable times and as often as may be reasonably requested, to (a) visit and
inspect any properties of the Borrower Parties and the Consolidated Entities,
(b) inspect and copy their books and records, and (c) discuss with their
officers and employees and their independent accountants, their respective
businesses, assets, liabilities, prospects, results of operation and financial
condition.
SECTION 6.3. CORPORATE EXISTENCE, ETC. Each Borrower Party shall, and
shall cause each Consolidated Entity to, at all times preserve and keep in full
force and effect its partnership, corporate or other legal existence, as the
case may be, and any licenses, permits, rights and franchises material to its
business, PROVIDED, HOWEVER, that the partnership, corporate or other legal
existence of any Consolidated Entity (other than the Borrower) may be terminated
if, in the good faith judgment of the REIT, such termination is in the best
interest of the Borrower and is not disadvantageous in any material respect to
any Lender Party.
SECTION 6.4. PAYMENT OF TAXES AND CHARGES. The Borrower Parties shall, and
shall cause each Consolidated Entity to, file all tax returns required to be
filed in any jurisdiction and, if applicable, pay and discharge all Taxes
imposed upon it or any of its properties or in respect of any of its franchises,
business, income or property before any material penalty shall be incurred with
respect to such Taxes, PROVIDED, HOWEVER, that, unless and until foreclosure,
distraint, levy, sale or similar proceedings shall have commenced, the Borrower
Parties and the Consolidated Entities need not pay or discharge any such Tax so
long as the validity or amount thereof is contested in good faith and by
appropriate proceedings and so long as any reserves or other appropriate
provisions as may be required by GAAP shall have been made therefor.
SECTION 6.5. MAINTENANCE OF PROPERTIES. Each Borrower Party shall, and
shall cause each Consolidated Entity to, maintain or cause to be maintained in
good repair, working order and condition (ordinary wear and tear excepted), all
Real Properties and all other Material properties useful or necessary to its
business, and from time to time the Borrower Parties will make or cause to be
made all appropriate repairs, renewals and replacements thereto.
SECTION 6.6. MAINTENANCE OF INSURANCE. Each Borrower Party shall, and
shall cause each Consolidated Entity to, maintain with financially sound and
reputable insurance companies, insurance in at least such amounts, of such
character and against at least such risks as are usually insured against in the
same general area by companies of established repute engaged in the same or a
similar business.
SECTION 6.7. CONDUCT OF BUSINESS. No Borrower Party or Consolidated Entity
shall engage in any business other than the business of owning and operating
Retail Properties or the assets and other properties set forth in Section 7.2.2.
or any businesses incident thereto. Each Borrower Party shall, and shall cause
each Consolidated Entity to, conduct its business in compliance in all material
respects with Applicable Law and all material Contractual Obligations.
SECTION 6.8. EXCHANGE LISTING; TAX STATUS OF BORROWER PARTIES. The REIT
will do or
65
cause to be done all things necessary to maintain the listing of its Capital
Stock on the New York Stock Exchange, the American Stock Exchange or the Nasdaq
National Market System and continue to qualify as a real estate investment trust
under the Code, and the Borrower will do or cause to be done all things
necessary to cause it to be treated as a partnership for purposes of federal
income taxation and the tax laws of any state or locality in which the Borrower
is subject to taxation based on its income.
SECTION 6.9. SUBORDINATION.
6.9.1. The REIT, the Borrower and each Guarantor (each a
"SUBORDINATED CREDITOR") hereby absolutely subordinates, both in right of
payment and in time of payment, (a) in the case of the REIT, any and all present
or future obligations and liabilities of the Borrower or any Guarantor to the
REIT, (b) in the case of any Guarantor, any and all present or future
obligations and liabilities of the Borrower or any other Guarantor to such
Guarantor. and (c) in the case of the Borrower, any and all present and future
obligations and liabilities of the REIT or any Guarantor to the Borrower (such
obligations and liabilities referred to in clause (a) or (b) being "SUBORDINATED
DEBT"), to the prior payment in full in cash of the Obligations or the
obligations of such Person under the Guaranty, as applicable. Each Subordinated
Creditor agrees to make no claim for, or receive payment with respect to, such
Subordinated Debt until all Obligations and such obligations have been fully
discharged in cash. Notwithstanding the foregoing, the Borrower shall be
entitled to declare and pay dividends with respect to its Capital Stock, as long
as no Event of Default then exists.
6.9.2. All amounts and other assets that may from time to time be
paid or distributed to or otherwise received by any Subordinated Creditor in
respect of Subordinated Debt in violation of this Section 6.9. shall be
segregated and held in trust by the Subordinated Creditor for the benefit of the
Lender Parties and promptly paid over to the Agent.
6.9.3. Each Subordinated Creditor further agrees not to assign all
or any part of the Subordinated Debt unless the Agent is given prior notice and
such assignment is expressly made subject to the terms of this Agreement. If the
Agent so requests, (a) all instruments evidencing the Subordinated Debt shall be
duly endorsed and delivered to the Agent, (b) all security for the Subordinated
Debt shall be duly assigned and delivered to Agent for the benefit of the
Lenders, (c) the Subordinated Debt shall be enforced, collected and held by the
relevant Subordinated Creditor as trustee for the Lender Parties and shall be
paid over to the Agent for the benefit of the Lenders on account of the
Advances, and (d) the Subordinated Creditors shall execute, file and record such
documents and instruments and take such other action as the Agent deems
necessary or appropriate to perfect, preserve and enforce the Lender Parties'
rights in and to the Subordinated Debt and any security therefor. If any
Subordinated Creditor fails to take any such action, the Lender, as
attorney-in-fact for such Subordinated Creditor, is hereby authorized to do so
in the name of the Subordinated Creditor. The foregoing power of attorney is
coupled with an interest and cannot be revoked.
6.9.4. In any bankruptcy or other proceeding in which the filing of
claims is
66
required by Applicable Law, each Subordinated Creditor shall file all claims
relating to the Subordinated Debt that the Subordinated Creditor may have
against the obligor thereunder and shall assign to the Agent, for the benefit of
the Lenders, all rights of the relating to the Subordinated Debt thereunder. If
any Subordinated Creditor does not file any such claim, the Agent, as
attorney-in-fact for the Subordinated Creditor, is hereby authorized to do so in
the name of the Subordinated Creditor or, in the Agent's discretion, to assign
the claim to a nominee and to cause proof of claim to be filed in the name of
the Agent or the Agent's nominee. The foregoing power of attorney is coupled
with an interest and cannot be revoked. The Agent or its nominee shall have the
right, in its reasonable discretion, to accept or reject any plan proposed in
such proceeding and to take any other action which a party filing a claim is
entitled to do. In all such cases, whether in administration, bankruptcy or
otherwise, the Person or Persons authorized to pay such claim shall pay to the
Agent for the benefit of the Lenders the amount payable on such claim and, to
the full extent necessary for that purpose, each Subordinated Creditor hereby
assigns to the Agent for the benefit of the Lenders all of the Subordinated
Creditor's rights to any such payments or distributions; PROVIDED, HOWEVER, the
Subordinated Creditor's obligations hereunder shall not be satisfied except to
the extent that the Agent receives cash by reason of any such payment or
distribution.
SECTION 6.10. REMEDIAL ACTION REGARDING HAZARDOUS MATERIALS. The Borrower
shall promptly take, and shall cause its Subsidiaries promptly to take, any and
all necessary remedial action in connection with the presence, storage, use,
disposal, transportation or release of any Hazardous Materials on, under or
about any Real Property in order to comply with all applicable Environmental
Requirements. In the event that the Borrower or any of its Subsidiaries
undertakes any remedial action with respect to any Hazardous Materials on, under
or about any Real Properties, the Borrower and such Subsidiary shall conduct and
complete such remedial action in compliance with all applicable Environmental
Requirements and in accordance with the policies, orders and directives of all
Governmental Authorities.
SECTION 6.11. YEAR 2000 COVENANT. The Borrower shall ensure that the
following are Year 2000 Compliant in a timely manner, but in no event later than
December 31, 1999: (a) the Borrower; and (b) any other major Real Properties and
entities in which the Borrower holds a controlling interest. As used in this
paragraph, "major" shall mean properties or entities the failure of which to be
Year 2000 Compliant would have a Material Adverse Effect on the Borrower. The
term "YEAR 2000 COMPLIANT" shall mean, in regard to any Real Property or entity,
that all software, hardware, equipment, goods or systems utilized by or material
to the physical operations, business operations, or financial reporting of such
Real Property or entity (collectively, the "systems") will properly perform date
sensitive functions, the failure of which would cause a Material Adverse Effect
on the Borrower before, during and after the year 2000. In furtherance of this
covenant, the Borrower shall, in addition to any other necessary actions,
perform a comprehensive review and assessment of all material systems of the
Borrower, and shall adopt a plan for the testing, remediation, and monitoring of
such systems. The Borrower shall, within thirty business days of the Agent's
written request, provide to the Agent such certifications or other evidence of
the Borrower's compliance with the terms of this paragraph as the Agent may from
time to time reasonably require.
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ARTICLE 7.
NEGATIVE COVENANTS OF THE BORROWER PARTIES
So long as any portion of the Commitments shall be in effect and
until all Obligations are paid in full:
SECTION 7.1. UNSECURED DEBT AND CLAIMS.
7.1.1. The Borrower Parties shall not, and shall not permit any
other Consolidated Entity to, directly or indirectly, create, incur, assume,
guarantee, or otherwise become or remain liable with respect to, any Unsecured
Funded Debt, except (a) the Obligations, (b) trade accounts payable and accruals
incurred in the ordinary course of business, guaranties and deferred purchase
obligations related to acquisitions and deferred acquisition costs and (c)
Permitted Subordinated Debentures.
7.1.2. The Borrower Parties shall not, and shall not permit any
other Consolidated Entity to, directly or indirectly, create, incur, assume,
guarantee, or otherwise become or remain liable with respect to, any unsecured
Debt, liabilities or claims (excluding (a) Unsecured Funded Debt and (b) Debt of
Unconsolidated Joint Ventures that constitutes Non-Recourse Debt) if, as a
result, the sum of (i) the amount of all such unsecured Debt, liabilities and
claims of the REIT and the Consolidated Entities, PLUS the REIT's PRO RATA share
of all unsecured Debt, liabilities and claims of the Unconsolidated Joint
Ventures (excluding Non-Recourse Debt), would exceed (ii) the sum of the amount
of all tenant and other receivables and cash and cash equivalents of the REIT
and the Consolidated Entities PLUS the REIT's PRO RATA share of tenant and other
receivables and cash and cash equivalents of the Unconsolidated Joint Ventures,
by more than 3.5% of Gross Asset Value. For purposes of this Section, the REIT's
PRO RATA share of unsecured Debt, liabilities, claims, receivables, cash or cash
equivalents of any Unconsolidated Joint Venture shall be deemed equal to the
product of (i) the unsecured Debt, liabilities, claims, receivables, cash or
cash equivalents, as applicable, of such Unconsolidated Joint Venture,
MULTIPLIED BY (ii) the percentage of the total outstanding Capital Stock of such
Person held by the REIT or any Consolidated Entity, expressed as a decimal.
SECTION 7.2. INVESTMENTS; ASSET MIX.
7.2.1. The REIT shall not at any time make or own any Investment in
any Person, or purchase, lease or own any other asset or property, except in (a)
the Borrower, (b) any Capital Stock of the Consolidated Entities (other than the
Borrower) listed in SCHEDULE 5.4. on the Closing Date, or any Capital Stock of
any Consolidated Entity (including a Bankruptcy Remote Entity) formed or
acquired after the Closing Date and added to SCHEDULE 5.4. in accordance with
Section 10.2.2., PROVIDED that such Investment in such formed or acquired
Consolidated Entity shall not exceed one percent (1%) of the Capital Stock of
such Consolidated Entity, and (c) any cash or other property that is being
distributed to the shareholders of the REIT substantially contemporaneous with
the REIT's receipt of such property from the Borrower.
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7.2.2. The Borrower shall not at any time make or own any Investment
in any Person, or purchase, lease or own any Real Property or other asset,
except that the Borrower may own or lease the following, subject to the
limitations set forth below:
ASSET TYPE LIMITATION ON VALUE FOR EACH ASSET TYPE
---------- ---------------------------------------
1. Wholly-Owned Retail Properties Unlimited
(other than Retail Property
Under Construction)
2. Wholly-Owned Raw Land that is 5% of Gross Asset Value
not under development and for
which no development is planned
to commence within 12 months
after the date on which it was
acquired
3. Wholly-Owned Real Property 5% of Gross Asset Value
(other than Retail Properties,
Retail Properties Under
Construction or Raw Land
referred to in clause 2.)
4. Wholly-Owned Capital Stock of 5% of Gross Asset Value, PROVIDED
any corporation (other than any that the Borrower may hold Capital
Person (a "WHOLLY-OWNED ENTITY") Stock of corporate Subsidiaries
at least 99% of the Capital formed to acquire one or more
Stock of which is held of record Retail Properties if, together
and beneficially by the Borrower with any other Capital Stock,
and the balance of the Capital holdings in such Capital Stock do
Stock of which (if any) is held not exceed 30% of Gross Asset Value
of record and beneficially by
the REIT (or any wholly-owned
Subsidiary of the REIT))
5. Wholly-Owned Mortgage Loans; 15% of Gross Asset Value
PROVIDED that the mortgage or
deed of trust securing any such
Mortgage Loan is a first
priority mortgage or deed of
trust
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6. Wholly-Owned Capital Stock of 40% of Gross Asset Value
Joint Ventures (other than
corporations or Wholly-Owned
Entities (as defined above)) of
which the Borrower is a general
partner and that hold primarily
Retail Properties
7. Retail Property Under 10% of Gross Asset Value
Construction (as measured by
Construction-in-Process)
8. Permitted Investments Unlimited
9. Capital Stock of Management 5% of Gross Asset Value
Companies
Notwithstanding the foregoing, Investments and other assets in the
foregoing categories 2 through 7 and 9 may not exceed, at any time, 50% of Gross
Asset Value. Without limitation of Section 1.2.3., all values of Investments and
other assets shall be the book values of such Investments and assets, determined
in accordance with GAAP, except as otherwise expressly provided.
SECTION 7.3. FINANCIAL COVENANTS.
7.3.1. MINIMUM TANGIBLE NET WORTH. As of the last day of any Fiscal
Quarter, Tangible Net Worth shall not be less than the sum of (a) $275,000,000,
MINUS (b) 100% of the cumulative Depreciation and Amortization Expense deducted
in determining Net Income for all fiscal quarters ending after December 31,
1997, PLUS (c) 90% of the cumulative net cash proceeds received from and the
value of assets acquired (net of Debt incurred or assumed in connection
therewith) through the issuance of Capital Stock of the REIT or the Borrower
after December 31, 1997. For purposes of clause (c), "net" means net of
underwriters' discounts, commissions and other reasonable out-of-pocket expenses
of issuance actually paid to any Person (other than a Macerich Group Member or
any Affiliate of any Borrower Party).
7.3.2. MAXIMUM TOTAL LIABILITIES TO GROSS ASSET VALUE. The ratio of
Total Liabilities to Gross Asset Value shall not be more than 60% at any time,
except that, during the period from the Closing Date to and including December
31, 1998, such ratio shall not be more than 65%.
7.3.3. MINIMUM INTEREST COVERAGE RATIO. As of the last day of any
fiscal quarter, the Interest Coverage Ratio shall not be less than 1.80.
7.3.4. MINIMUM FIXED CHARGE COVERAGE RATIO. As of the last day of
any fiscal quarter, the Fixed Charge Coverage Ratio shall not be less than 1.60.
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7.3.5. MINIMUM SENIOR UNSECURED INTEREST EXPENSE COVERAGE
RATIO. As of the last day of any fiscal quarter, the Senior Unsecured
Interest Expense Coverage Ratio shall not be less than 1.75.
7.3.6. MAXIMUM FLOATING RATE DEBT. The sum of the following shall
not exceed $500,000,000 at any time (without duplication): (a) Floating Rate
Debt of the REIT and the Consolidated Entities, PLUS (b) the REIT's PRO RATA
share of all Floating Rate Debt of the Unconsolidated Joint Ventures that does
not otherwise constitute Debt of the REIT or any Consolidated Entity. For
purposes of the foregoing, (i) "FLOATING RATE DEBT" means any Debt interest on
which accrues at a floating rate (including any Fixed Rate), except to the
extent there is then in full force and effect an interest rate swap or "cap"
agreement that does not expire or terminate prior to the Maturity Date with
respect to such Debt that entitles the obligor under such Debt to payments from
the counterparty equal to, and payable at the same time as, the floating rate
payable on such Debt (or that portion thereof exceeding the "cap"), in return
for payments by the obligor of fixed amounts to such counterparty, and (ii) the
REIT's PRO RATA share of Floating Rate Debt of any Unconsolidated Joint Venture
shall be deemed equal to the product of (A) the Floating Rate Debt of such
Unconsolidated Joint Venture (other than Debt that is a Contingent Obligation of
any Borrower Party), MULTIPLIED BY (B) the percentage of the total outstanding
Capital Stock of such Person held by the REIT or any Consolidated Entity,
expressed as a decimal.
SECTION 7.4. MINIMUM UNENCUMBERED POOL. The aggregate of the Unencumbered
Asset Values of all Unencumbered Assets in the Unencumbered Pool shall not, at
any time, be less than 165% of the sum of the unsecured Debt of the REIT and the
Consolidated Entities (other than the Permitted Subordinated Debentures)
outstanding at such time.
SECTION 7.5. AGGREGATE LEASED AREA OF REAL PROPERTIES IN UNENCUMBERED
POOL. As of the last day of any fiscal quarter, the ratio (expressed as a
percentage) of (i) the aggregate M&F Gross Leaseable Area of the Retail
Properties included in the Unencumbered Pool that is subject to a bona fide
lease pursuant to which the contractually agreed rent is being paid by the
tenant thereunder to (ii) the aggregate M&F Gross Leaseable Area of the Retail
Properties included in the Unencumbered Pool shall not be less than 85%;
PROVIDED that the M&F Gross Leaseable Area of any Retail Property included in
the Unencumbered Pool that constitutes a Retail Property Under Construction
shall be excluded from the calculation provided for in clause (i) and (ii).
SECTION 7.6. RESTRICTION ON FUNDAMENTAL CHANGES. The REIT and the
Consolidated Entities shall not enter into any merger, consolidation or
reorganization or any sale of all or a substantial portion of the assets of the
REIT and the Consolidated Entities, taken as a whole, or liquidate, wind up or
dissolve, except that:
7.6.1. as long as no Default or Event of Default shall exist after
giving effect to such merger or consolidation, any Consolidated Entity (other
than the Borrower) may be merged or consolidated with or into the Borrower;
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7.6.2. any Person may merge or consolidate with and into the
Borrower or any other Consolidated Entity and the Borrower or any other
Consolidated Entity may merge or consolidate with and into any Person, in each
case, with the prior written approval of the Required Lenders.
SECTION 7.7. TRANSACTIONS WITH AFFILIATES. None of the REIT, the Borrower
and the other Consolidated Entities shall, directly or indirectly, enter into
any transaction (including the purchase, sale, lease, or exchange of any
property or the rendering of any service) (i) in the case of a transaction to
which the REIT is a party, with the Borrower or any Consolidated Entity or
Unconsolidated Joint Venture, and (ii) in the case of any other transaction,
with any Affiliate of the Borrower or of any Consolidated Entity (other than a
transaction with a Consolidated Entity that is not a Bankruptcy Remote Entity),
in each case unless (a) such transaction is not otherwise prohibited by this
Agreement, (b) such transaction is in the ordinary course of business and (c)
such transaction is on fair and reasonable terms no less favorable to the
Borrower, Consolidated Entity or Unconsolidated Joint Venture party thereto, as
the case may be, than those terms which might be obtained at the time in a
comparable arm's length transaction with a Person who is not the REIT or such an
Affiliate or, if such transaction is not one which by its nature could be
obtained from such other Person, is on fair and reasonable terms and was
negotiated in good faith, PROVIDED that this Section 7.7. shall not restrict (a)
dividends, distributions and other payments and transfers on account of any
shares of Capital Stock of any Consolidated Entity, (b) payments pursuant to the
terms of any Contractual Obligations in effect on the date of the Existing WFB
Credit Agreement, PROVIDED that such dividends, distributions or other payments
are not otherwise prohibited by the terms of this Agreement or would result in a
Default or an Event of Default, and (c) transactions between any Unconsolidated
Joint Venture that is not controlled by the REIT or by any Consolidated Entity
and any Affiliate of such Unconsolidated Joint Venture that is not also an
Affiliate of the REIT or of any Consolidated Entity.
SECTION 7.8. RESTRICTED PAYMENTS. The Borrower shall not, and shall not
permit the REIT or any Subsidiary to, directly or indirectly, declare, pay or
make, or agree to declare, pay or make, any Restricted Payment, except:
7.8.1. dividends, distributions or payments (a) by the Borrower to
the REIT (to the extent used by the REIT for the payment of dividends
permissible under Section 7.8.2. or 7.8.3.), or (b) by any Subsidiary to the
Borrower or to a Wholly-Owned Subsidiary that is not a Bankruptcy Remote Entity;
7.8.2. if no Default or Event of Default shall then exist or result
from such Restricted Payment, the REIT, the Borrower and any Subsidiary may pay
or make Restricted Payments so long as the aggregate amount of all Restricted
Payments pursuant to this Section 7.8.2. paid during the four Fiscal Quarters
immediately preceding the Fiscal Quarter in which such Restricted Payment is
proposed to be made (treated as a single accounting period), together with the
Restricted Payment proposed to be made, does not exceed 95% of the aggregate
amount of Funds From Operations for such period of four Fiscal Quarters; and
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7.8.3. if no Default or Event of Default under Section 8.1.1. shall
then exist or result from such Restricted Payment, the REIT may pay or make
Restricted Payments only in the amount necessary to enable the REIT to meet the
requirements for taxation as a real estate investment trust under the Code, but
in any event not in excess of 95% of the aggregate amount of Funds From
Operations for the four Fiscal Quarters immediately preceding the Fiscal Quarter
in which such Restricted Payment is proposed to be made (treated as a single
accounting period).
SECTION 7.9. ERISA. No Borrower Party shall, and no Borrower Party shall
permit any current ERISA Affiliate to:
7.9.1. engage in any Prohibited Transaction or engage in any conduct
or commit any act or suffer to exist any condition that could give rise to any
Material excise tax, penalty, interest or liability under Sections 4971, 4972,
4975, 4976, 4977, 4979, 4980 or 4980B of the Code or Sections 502(c) or 502(i)
of ERISA;
7.9.2. permit the benefit liabilities (whether or not vested) under
all Plans (excluding all Plans with assets greater than or equal to liabilities
(whether or not vested)) to exceed the current value of the assets of such Plans
allocable to such benefits by more than $500,000;
7.9.3. adopt or contribute to any Plan that is a Defined
Benefit Plan;
7.9.4. create or suffer to exist any liability with respect to Plans
that are welfare plans within the meaning of Section 3(1) of ERISA if, after
immediately giving effect to such liability, the aggregate annualized cost with
respect to such Plans for post retirement benefits for any fiscal year would
exceed $500,000; or
7.9.5. Allow any investment in any Borrower Party by benefit plan
investors to become significant within the meaning of Department of Labor
Regulation Section 2510.3-101(f).
SECTION 7.10. AMENDMENTS OF CHARTER AND BYLAWS. No Borrower Party will
make any amendment of its charter, bylaws, partnership agreement or other
organizational document, as the case may be, if such amendment could have a
Material Adverse Effect or could otherwise be materially disadvantageous to the
Lender Parties.
SECTION 7.11. PAYMENTS WITH RESPECT TO PERMITTED SUBORDINATED DEBENTURES.
The REIT will not make any payment of principal (including redemption price) of
or premium, if any, or interest on, or additional amounts or purchase price
payable with respect to the Permitted Subordinated Debentures (including any
amounts payable upon repurchase at the election of the holders of such Permitted
Subordinated Debentures upon the occurrence of a Designated Event, as such term
is defined in the Offering Circular for such Permitted Subordinated Debentures),
unless (i) no Default or Event of Default under Section 8.1.1. or 8.1.7. and
(ii) no other Event of Default, then exists or would exist giving effect to such
payment on a PRO FORMA basis. At least five Business Days prior to making any
such payment (other than a payment of interest) with
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respect to the Permitted Subordinated Debentures (including any such payment
upon the occurrence of a Designated Event, as so defined), the REIT shall notify
the Agent and the Lenders of such payment, which notice shall be accompanied by
a certificate substantially in the form of Exhibit C-4 demonstrating that such
payment will be permissible under this Section 7.11..
SECTION 7.12. ACQUISITIONS OF REAL PROPERTIES. Neither the Borrower nor
any Consolidated Entity shall purchase any Real Property in a single transaction
or series of related transactions the gross purchase price of which exceeds 25%
of the Gross Asset Value without the prior written approval of the Required
Lenders.
ARTICLE 8.
EVENTS OF DEFAULT
SECTION 8.1. EVENTS OF DEFAULT. The occurrence of any one or more of the
following events, acts or occurrences shall constitute an event of default (an
"EVENT OF DEFAULT"):
8.1.1. FAILURE TO MAKE PAYMENTS. The Borrower (i) shall fail to pay
when due any principal (whether at stated maturity, upon acceleration, upon
required prepayment or otherwise) of any Advance or (ii) shall fail to pay
interest on any Advance or any other amount payable under the Loan Documents
within three Business Days of the date when due; or
8.1.2. DEFAULT IN OTHER DEBT. The REIT or any Consolidated Entity
shall (a) default in the payment (whether at stated maturity, upon acceleration,
upon required prepayment or otherwise), beyond any period of grace provided
therefor, of any principal of or interest on any Non-Recourse Secured Debt with
a principal amount in excess of $20,000,000 or any other Debt with a principal
amount in excess of $1,000,000 or (b) be in default, breach or violation, beyond
any period of grace or notice provided therefor, of any other agreement,
covenant, representation, warranty or obligation under any Non-Recourse Secured
Debt with a principal amount in excess of $20,000,000 or any other Debt with a
principal amount in excess of $1,000,000 and as a result of such default, breach
or violation the holder or holders of such Debt (or a Person on behalf of such
holder or holders) shall cause such Debt to become or be declared due and
payable prior to its stated maturity, PROVIDED that the foregoing shall not
apply to Non-Recourse Debt of Unconsolidated Joint Ventures; or
8.1.3. BREACH OF CERTAIN NONFINANCIAL COVENANTS. The Borrower shall
fail to perform, comply with or observe any agreement, covenant or obligation
under Section 2.3., 6.1.4., 6.3. (insofar as such Section requires the
preservation of the corporate existence of any Borrower Party), 6.8., 6.9.,
7.6., 7.7., 7.8., 7.10., 7.11. or 7.12.; or
8.1.4. BREACH OF CERTAIN FINANCIAL COVENANTS. The Borrower shall
fail to comply with or observe any agreement, covenant or obligation under
Section 7.1., 7.2., 7.3., 7.4. or 7.5. and such failure shall not have been
remedied within 30 days after written notice thereof
74
from the Agent or any Lender; or
8.1.5. BREACH OF WARRANTY. Any representation or warranty or
certification made or furnished by any Borrower Party under this Agreement or
the other Loan Documents or any agreement, instrument or document contemplated
hereby and thereby shall prove to have been false or incorrect in any material
respect when made (or deemed made); or
8.1.6. OTHER DEFAULTS UNDER AGREEMENT AND OTHER LOAN DOCUMENTS. Any
Borrower Party shall fail to perform, comply with or observe any agreement,
covenant or obligation to be performed, observed or complied with by it under
this Agreement (other than those provisions referred to in Section 8.1.3. or
8.1.4. above) or under the other Loan Documents (other than a Letter of Credit
Agreement) and such failure shall not have been remedied within 60 days after
written notice thereof from the Agent or any Lender, or there shall occur any
"Event of Default" (as defined in the Letter of Credit Agreement); or
8.1.7. INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. There
shall be commenced against any Borrower Party or any Consolidated Entity an
involuntary case seeking the liquidation or reorganization of any such Borrower
Party or Consolidated Entity under Chapter 7 or Chapter 11, respectively, of the
Bankruptcy Code or any similar proceeding under any other Applicable Law or an
involuntary case or proceeding seeking the appointment of a receiver,
liquidator, sequestrator, custodian, trustee or other officer having similar
powers of any such Borrower Party or Consolidated Entity or to take possession
of all or a substantial portion of its property or to operate all or a
substantial portion of its business, and any of the following events occur: (i)
any such Borrower Party or Consolidated Entity consents to the institution of
the involuntary case or proceeding; (ii) the petition commencing the involuntary
case or proceeding is not timely controverted; (iii) the petition commencing the
involuntary case or proceeding remains undismissed and unstayed for a period of
60 days (PROVIDED, HOWEVER, that, during the pendency of such period, the
Lenders shall be relieved of the Commitments); or (iv) an order for relief shall
have been issued or entered therein; or
8.1.8. VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. Any
Borrower Party or any Consolidated Entity shall institute a voluntary case
seeking liquidation or reorganization under Chapter 7 or Chapter 11,
respectively, of the Bankruptcy Code or any similar proceeding under any other
Applicable Law, or shall consent thereto; or shall consent to the conversion of
an involuntary case to a voluntary case; or shall file a petition, answer a
complaint or otherwise institute any proceeding seeking, or shall consent or
acquiesce to the appointment of, a receiver, liquidator, sequestrator,
custodian, trustee or other officer with similar powers of it or to take
possession of all or a substantial portion of its property or to operate all or
a substantial portion of its business; or shall make a general assignment for
the benefit of creditors; or shall generally not pay its debts as they become
due; or the Board of Directors (or respective governing body) of any Borrower
Party or Consolidated Entity (or any committee thereof) adopts any resolution or
otherwise authorizes action to approve any of the foregoing; or
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8.1.9. JUDGMENTS AND ATTACHMENTS. Any Borrower Party or any
Consolidated Entity shall suffer any money judgments, writs or warrants of
attachment or similar processes which individually or in the aggregate involve
an amount or value in excess of $1,000,000 and such judgments, writs, warrants
or other orders shall continue unsatisfied and unstayed for a period of 10 days
unless the amount of such judgments, writs, warrants or attachments are fully
covered by insurance (other than deductibles substantially the same as those in
effect on the Closing Date and provided that any deductible in excess of
$100,000 is supported by a bond or letter of credit in at least the amount by
which such deductible exceeds $100,000) and the insurer has in writing accepted
liability therefor; or a judgment creditor shall obtain possession of any
material portion of the assets of the REIT or any Consolidated Entity by any
means, including, without limitation, levy, distraint, replevin or self-help; or
8.1.10. ERISA LIABILITIES. Any violation of Section 7.9.3.
or 7.9.5. shall occur; or
8.1.11. CHANGE OF CONTROL OR MANAGEMENT. The Principal Investors no
longer control, directly or indirectly, at least 10% of the Capital Stock of the
Borrower (which percentage shall be subject to adjustment to give effect to any
dilution of such holdings by virtue of the issuance of any Capital Stock of the
Borrower or the REIT after the Closing Date or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and either of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇ are no longer Senior Officers of the REIT and
the Borrower; or
8.1.12. GENERAL PARTNER. The REIT shall cease to be the
general partner of the Borrower; or
8.1.13. INVALIDITY OF GUARANTY OR SUBORDINATION. The Guaranty or the
subordination provisions of Section 6.9. shall for any reason be revoked or
invalidated, or otherwise cease to be in full force and effect, or any Guarantor
or Subordinated Creditor shall contest in any manner the validity or
enforceability thereof or deny that it has any further liability or obligation
thereunder; or
8.1.14. CHANGE OF TAX STATUS.
8.1.14.1. The REIT shall either determine in good faith or
receive written notice from the relevant taxing authority that the REIT does not
conform or no longer conforms to the requirements for qualification as a real
estate investment trust under the Code (except as a result of the enactment of
any Applicable Law with which the REIT cannot or has determined in good faith
not to comply); or
8.1.14.2. The Borrower or any Guarantor shall either determine
in good faith or receive written notice from the relevant taxing authority that
the Borrower or any Guarantor does not conform or no longer conforms to the
requirements for qualification as a partnership under the Code.
SECTION 8.2. REMEDIES. Upon the occurrence of an Event of Default:
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8.2.1. If an Event of Default occurs under Section 8.1.7. or 8.1.8.,
then the Commitments and all pending Competitive Bids (whether or not accepted)
shall automatically and immediately terminate, and the obligation of the Lenders
to make any Advances and of the Agent Bank to issue any Letter of Credit
hereunder shall cease, and the unpaid principal amount of and any accrued
interest on all Advances shall automatically become immediately due and payable,
without presentment, demand, protest, notice or other requirements of any kind,
all of which are hereby expressly waived by the Borrower.
8.2.2. If an Event of Default occurs under Section 8.1. hereof,
other than under Section 8.1.7. or 8.1.8., (a) the Agent shall, at the request
of the Required Lenders, by written notice to the Borrower, declare that the
Commitments and all pending Competitive Bids (whether or not accepted) shall be
terminated on the date that is 60 days after the date of such notice or on such
earlier date as may be determined by the Required Lenders, whereupon the
obligation of the Lenders to make any Advance and of the Agent Bank to issue any
Letter of Credit hereunder shall cease on such day, and/or (b) the Agent shall,
at the request of the Required Lenders, by written notice to the Borrower,
declare the unpaid principal amount of all Advances together with any and all
accrued interest thereon to be, and the same shall become, due and payable on
the date that is 60 days after the date of such notice or on such earlier date
as may be determined by the Required Lenders, without presentment, demand,
protest, any additional notice whatsoever or other requirements of any kind, all
of which are hereby expressly waived by the Borrower.
SECTION 8.3. RESCISSION. At any time after the Advances shall have been
declared due and payable pursuant to Section 8.2.2. or a demand shall have been
made pursuant to Section 8.4, the Required Lenders, by written notice by the
Agent to the Borrower, may rescind and annul any such declaration or demand and
its consequences, PROVIDED the Required Lenders hold 66-2/3% of the outstanding
Advances. No rescission and annulment under this Section 8.3. will extend to or
affect any subsequent Event of Default or Default or impair any right consequent
thereon.
SECTION 8.4. ACTIONS IN RESPECT OF LETTERS OF CREDIT.
8.4.1. LETTER OF CREDIT COLLATERAL ACCOUNT. If, at any time and from
time to time, any Letter of Credit shall have been issued hereunder and an Event
of Default shall have occurred and be continuing, then, upon the occurrence and
during the continuation thereof, the Agent shall at the request of the Required
Lenders, whether in addition to the taking by the Agent of any of the actions
described in this Article 8 or otherwise, make a demand upon the Borrower to,
and forthwith upon such demand (but in any event within ten days after such
demand) the Borrower shall, (i) pay to the Agent, on behalf of the Lender
Parties, in same day funds at the Agent's office designated in such demand, for
deposit in a special interest-bearing cash collateral account (the "LETTER OF
CREDIT COLLATERAL ACCOUNT") to be maintained in the name of "The Macerich
Partnership, L.P., who executed a Security Agreement Rights to Payment in favor
of ▇▇▇▇▇ Fargo Bank, National Association, as Agent for the Lender Parties" and
under the Agent's sole dominion and control at such place as shall be designated
by the Agent, an amount equal to
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the amount of the Letter of Credit Liability under the Letters of Credit, and
(ii) execute and deliver to the Agent all such documents, instruments and/or
certificates as the Agent shall reasonably request in order to perfect, and
maintain a perfected security interest in, the Letter of Credit Collateral
(including, without limitation, a Security Agreement Rights to Payment, Uniform
Commercial Code financing statements and any notice required to perfect the
Agent's security interest in the Letter of Credit). The Borrower authorizes and
empowers the Agent, as its attorney-in-fact, and as its agent, irrevocably, with
full power of substitution for it and in its name, following the occurrence of
an Event of Default, to give any authorization, to furnish any information, to
make any demands, to execute and/or deliver any documents, instruments and/or
certificates (including, without limitation, a Security Agreement Rights to
Payment, Uniform Commercial Code financing statements and notices required to
perfect the Agent's security interest in the Letter of Credit Collateral) and to
take any and all other action on behalf of and in the name of the Borrower which
in the opinion of the Agent may be necessary or appropriate to be given,
furnished, made, exercised or taken to perfect or maintain the perfection of the
Agent's security interest in the Letter of Credit Collateral. This
power-of-attorney is irrevocable and coupled with an interest, and any similar
or dissimilar powers heretofore given by the Borrower in respect of the Letter
of Credit Collateral to any other Person are hereby revoked.
8.4.2. PLEDGE OF LETTER OF CREDIT COLLATERAL. The Borrower hereby
pledges, assigns and grants to the Agent, as collateral agent for its benefit
and the ratable benefit of the other Lender Parties a lien on and a security
interest in, the following collateral (the "LETTER OF CREDIT COLLATERAL"):
8.4.2.1. the Letter of Credit Collateral Account, all cash
deposited therein and all certificates and instruments, if any, from time to
time representing or evidencing the Letter of Credit Collateral Account;
8.4.2.1. all notes, certificates of deposit and other
instruments from time to time hereafter delivered to or otherwise possessed by
the Agent for or on behalf of the Borrower in substitution for or in respect of
any or all of the then existing Letter of Credit Collateral;
8.4.2.1. all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the then existing Letter of Credit
Collateral; and
8.4.2.1. to the extent not covered by the above
clauses, all proceeds of any or all of the foregoing Letter of Credit
Collateral.
The lien and security interest granted hereby secures the payment of
all Obligations of the Borrower now or hereafter existing hereunder and under
any Loan Documents.
8.4.3. APPLICATION OF FUNDS IN LETTER OF CREDIT COLLATERAL ACCOUNT.
The Borrower hereby authorizes the Agent for the ratable benefit of the Lenders
to apply, from time to time
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after funds are deposited in the Letter of Credit Collateral Account, funds then
held in the Letter of Credit Collateral Account to the payment of any amounts,
in such order as the Agent may elect, as shall have become due and payable by
the Borrower to the Lender Parties in respect of the Letters of Credit.
8.4.4. LIMITATION ON THE BORROWER'S RIGHTS. Neither the Borrower nor
any Person claiming or acting on behalf of or through the Borrower shall have
any right to withdraw any of the funds held in the Letter of Credit Collateral
Account, except as provided in Section 8.4.8 hereof.
8.4.5. NEGATIVE COVENANTS. The Borrower agrees that it will not (i)
sell or otherwise dispose of any interest in the Letter of Credit Collateral or
(ii) create or permit to exist any lien, security interest or other charge or
encumbrance upon or with respect to any of the Letter of Credit Collateral,
except for the security interest created by this Section 8.4.
8.4.6. RIGHTS OF AGENT ON EVENT OF DEFAULT. If any Event of Default
shall have occurred and be continuing:
8.4.6.1. The Agent may, in its sole discretion, without notice
to the Borrower except as required by law and at any time from time to time,
charge, set off or otherwise apply all or any part of FIRST, (x) amounts
previously drawn on any Letter of Credit that have not been reimbursed by the
Borrower and (y) any Letter of Credit Liability that is then due and payable,
and SECOND, any other unpaid Obligations then due and payable against the Letter
of Credit Collateral Account or any part thereof, in accordance with Section
2.10.5. The rights of the Agent under this Section 8.4 are in addition to any
rights and remedies which any Lender may have.
8.4.6.2. The Agent may also exercise, in its sole discretion,
in respect of the Letter of Credit Collateral Account, in addition to the other
rights and remedies provided herein or otherwise available to it, all the rights
and remedies of a secured party upon default under the Uniform Commercial Code
in effect in the State of California at that time.
8.4.7. STANDARD OF CARE. The Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Letter of Credit
Collateral if the Letter of Credit Collateral is accorded treatment
substantially equal to that which the Agent accords its own property, it being
understood that, assuming such treatment, the Agent shall not have any
responsibility or liability with respect thereto.
8.4.8. CURE. At such time as all Events of Default have been cured
or waived in writing, all amounts remaining in the Letter of Credit Collateral
Account shall be promptly returned to the Borrower. Absent such cure or written
waiver, any surplus of the funds held in the Letter of Credit Collateral Account
and remaining after payment in full of all of the Obligations of the Borrower
hereunder and under any other Loan Document after the Maturity Date shall be
paid to the Borrower or to whomsoever may be lawfully entitled to receive such
surplus.
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ARTICLE 9.
THE AGENT AND THE LENDERS
SECTION 9.1. AUTHORIZATION AND ACTION.
9.1.1. Each Lender hereby irrevocably appoints and authorizes the
Agent Bank to act as its agent hereunder and under the other Loan Documents, to
execute and deliver or accept, on its behalf, the other Loan Documents and any
other documents, instruments and agreements related thereto or hereto to take
such action on its behalf under the provisions hereof and thereof and to
exercise such rights, remedies, powers and privileges hereunder and thereunder
as are delegated to the Agent by the terms hereof and thereof, together with
such rights, remedies, powers and privileges as are reasonably incidental
thereto.
9.1.2. Except for any matters expressly subject to the consent or
approval of the Agent under the Loan Documents, the Agent shall not, without the
prior approval of the Required Lenders (or, as provided in Section 10.2., all of
the Lenders), waive any default or otherwise amend this Agreement or any other
Loan Documents. The Agent will, to the extent practicable under the
circumstances, consult with the other Lender Parties prior to taking action on
their behalf under the Loan Documents and in acting as their Agent thereunder.
The Agent will not take any action contrary to the written direction of Required
Lenders, will take any lawful action not contrary to the provisions of the Loan
Documents prescribed in written instructions of the Required Lenders (or, as
provided in Section 10.2., all the Lenders) and, as to any matters not expressly
provided for by the Loan Documents (including enforcement or collection), may
decline to take any action, except upon the written instructions of the Required
Lenders (or, as provided in Section 10.2., all the Lenders). If such
instructions are requested reasonably promptly, the Agent shall be absolutely
entitled to refrain from taking any action and shall not have any liability to
any Borrower Party or any Lender for refraining from taking any action until it
shall have received such instructions; PROVIDED, HOWEVER, that the Agent shall
in no event be required to take or refrain from taking any action that would, in
the Agent's opinion, be inconsistent with the Agent's practice in similar
situations when acting solely for its own account or be contrary to the
provisions of any Loan Document or Applicable Law.
9.1.3. The Agent shall not have any duties or responsibilities
except those expressly set forth in the Loan Documents. The Agent shall not be
required to exercise any right, power, remedy or privilege granted to it in any
Loan Document, to ascertain or inquire whether any Default or Event of Default
has occurred and is continuing, or to inspect the property (including the books
and records) of any Borrower Party or to take any other affirmative action,
except as provided in Sections 8.2. and 8.4, or unless requested or directed to
do so in accordance with the provisions of Section 9.1.2.
9.1.4. The duties of the Agent shall be mechanical and
administrative in nature. The Agent shall not have by reason of this Agreement a
fiduciary relationship in respect of any other Lender Party. Except for notices,
reports and other documents and information expressly
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required to be furnished by the Agent for the Lender Parties hereunder, the
Agent shall not have any duty or responsibility to provide any Lender Party with
any credit or other information concerning the affairs, financial condition or
business of any Borrower Party that may come into the possession of the Agent or
any of its Affiliates.
SECTION 9.2. EXCULPATION; AGENT'S RELIANCE; ETC. Neither the Agent nor any
of its directors, officers, agents, attorneys or employees shall be liable to
any Borrower Party or any other Lender Party for any action taken or omitted to
be taken by it or them under or in connection with any Loan Document (a) with
the consent or at the request of the Required Lenders (or, as provided in
Section 10.2., all the Lenders), or (b) in any other circumstances, except for
its or their own gross negligence or willful misconduct as determined by a final
judgment of a court of competent jurisdiction. The Agent makes no warranty or
representation to any other Lender Party and shall not be responsible to any
other Lender Party for any recitals, statements, warranties or representations
made in, or in connection with, any Loan Document or for the execution,
effectiveness, genuineness, validity, enforceability, collectibility, or
sufficiency of any Loan Document or any financial information, opinions of
counsel or other documents executed and delivered pursuant thereto, or for the
financial condition of any Borrower Party. The Agent shall not be responsible to
any Lender for the satisfaction of any condition specified in Article 4., except
receipt of items required to be delivered to the Agent. The Agent may treat the
payee of any Note as the holder thereof until the Agent receives the related
Assignment and Acceptance signed by such holder and the assignee and in form
satisfactory to the Agent. The Agent shall be entitled to rely upon any notice,
certificate or other writing believed by the Agent to be genuine and correct and
to have been signed or sent by the proper Person or Persons. The Agent shall be
entitled to consult with legal counsel, independent public accountants and other
experts selected by the Agent and to act in reliance upon the advice of such
counsel and other experts concerning its actions and duties hereunder.
SECTION 9.3. AGENT AND AFFILIATES. In its capacity as a Lender and issuer
of Letters of Credit, the Agent Bank shall have the same rights, powers and
obligations under this Agreement and the other Loan Documents as any other
Lender and may exercise or refrain from exercising the same as though it were
not the Agent or such issuer, including the right to give or deny consent to any
action requiring consent or direction of the Required Lenders or all the
Lenders. The Agent Bank and its Affiliates may accept deposits from, lend money
to, act as trustee under indentures of, and generally engage in any kind of
business with, any Borrower Party, any Subsidiary of a Borrower Party and any
Affiliate of any Borrower Party, all as if the Agent were not the Agent and
without any duty to account therefor to the Lenders. The Agent Bank shall be
entitled to receive from the Borrower its fees or portions thereof in connection
with this transaction without any liability to account therefor to any other
Lender, except as the Agent Bank may have expressly agreed.
SECTION 9.4. LENDER CREDIT DECISION. Each Lender Party acknowledges that
it has, independently and without reliance upon the Agent or any other Lender
Party 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
Lender Party also acknowledges that it will,
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independently and without reliance upon the Agent or any other Lender Party 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 action
under the Loan Documents.
SECTION 9.5. INDEMNIFICATION. The Agent shall in no event be required to
take any action under the Loan Documents or in relation thereto unless it shall
first be indemnified to its satisfaction by the other Lender Parties against any
and all liability and expense that it may incur by reason of taking any such
action. Each Lender agrees to indemnify and hold the Agent harmless (to the
extent not promptly paid or reimbursed by the Borrower), ratably according to
their respective Commitments, from and against any and all (a) costs, expenses
and other amounts incurred by the Agent otherwise payable by the Borrower
pursuant to Section 10.1. and (b) Indemnified Liabilities that may be imposed
on, incurred by, or asserted against the Agent, except to the extent they are
finally adjudged by a court of competent jurisdiction to have directly resulted
from the gross negligence or willful misconduct of the Agent. Without limitation
of the foregoing, each Lender agrees to reimburse the Agent promptly upon demand
for its ratable share of any out-of-pocket expenses (including outside counsel
fees) incurred by the Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, the Loan Documents, to the extent
that the Agent is not promptly reimbursed for such expenses by the Borrower.
SECTION 9.6. SUCCESSOR AGENT. The Agent may resign at any time as Agent
under the Loan Documents by giving not less than 30-days' written notice thereof
to the Lenders and the Borrower and the Agent may be removed at any time with
cause by written action of all Lenders (other than the Agent) delivered to the
Agent. Upon any such resignation or removal, the Required Lenders shall have the
right to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Required Lenders, and shall have accepted such appointment,
within 30 days after the retiring Agent's notice of resignation or the removal
of the Agent, then the retiring or removed Agent may, on behalf of the other
Lender Parties, appoint a successor Agent, which shall be a financial
institution having a combined capital and surplus of at least $100,000,000, or a
branch or agency of such a financial institution, organized or licensed to do
business under the laws of the United States of America or any State thereof,
and which shall have a minimum rating of "Baa-2" by ▇▇▇▇▇'▇ and a minimum
long-term debt rating of "BBB" by S&P. Upon the acceptance of any appointment as
the Agent by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged of its duties and
obligations under the Loan Documents. Upon any retiring Agent's resignation or
removal, the provisions of this Article 9. (as well as other expense
reimbursement, indemnification and exculpatory provisions in the other Loan
Documents) shall continue in effect for its benefit as to any actions taken or
omitted by it while it was Agent.
SECTION 9.7. EXCESS PAYMENTS. If any Lender shall obtain any payment or
other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Obligations in excess of its PRO RATA share of
payments and other recoveries on account of
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such Obligations obtained by all Lenders, such Lender shall purchase from the
other Lenders such participations in such Obligations held by them as shall be
necessary to cause such purchasing Lender to share the excess payment or other
recovery ratably with each of the other Lenders; PROVIDED, HOWEVER, that if all
or any portion of the excess payment or other recovery is thereafter recovered
from such purchasing Lender, the purchase shall be rescinded and the purchase
price restored to such Lender to the extent of such recovery, but without
interest. The Borrower agrees that any Lender so purchasing a participation from
another Lender pursuant to this Section 9.7. may, to the fullest extent
permitted by Applicable Law, exercise all of its rights of payment (including
setoff) with respect to such participation as fully as if such Lender were the
direct creditor of the Borrower in the amount of such participation.
SECTION 9.8. LENDER PARTIES. The provisions of this Article 9. are solely
for the benefit of the Agent and the other Lender Parties, and the Borrower
shall not have any rights to rely on or enforce any of the provisions hereof
(except that the provisions of Sections 9.6. are also for the benefit of the
Borrower). In performing its functions and duties under the Loan Documents, the
Agent shall act solely as agent of the Lenders and does not assume and shall not
be deemed to have assumed any obligation toward or relationship of agency or
trust with or for the Borrower.
SECTION 9.9. DEFAULT BY THE BORROWER; ACCELERATION. The Agent will send to
each Lender copies of any notices of a Default or an Event of Default sent by
the Agent to the Borrower under the terms of the Loan Documents concurrently
with sending the same to the Borrower. In the event of any Default or Event of
Default of which the Agent has actual knowledge, the Agent shall (as soon as is
practicable under the circumstances) consult with the Lenders in an effort to
determine a mutually acceptable course of action with respect to the Default or
Event of Default. The Agent may deliver to the Lenders a written recommendation
of a course of action (the "recommended course of action"), in which case each
Lender shall either approve such action in writing or object in writing to such
action within thirty (30) days (or such lesser period as specified in the notice
from the Agent) following such notice. Failure to deliver a written objection
within thirty (30) days (or such lesser period which will not be less than five
(5) business days) will be deemed to constitute an approval. The Agent may take
the recommended course of action if consented or approved as provided above by
the Required Lenders (or, as provided in Section 10.2., all Lenders), PROVIDED
that no rights shall be released without the consent of all Lenders. In
furtherance of the foregoing, and notwithstanding anything herein to the
contrary, each Lender hereby appoints and constitutes the Agent its agent with
full power and authority to exercise in the name of, and on behalf of each
Lender, any and all rights and remedies which each Lender may have with respect
to, and to the extent necessary under Applicable Law for, the enforcement of the
Loan Documents, or which the Agent may have as a matter of law. It is understood
and agreed that in the event the Agent determines it is necessary to engage
counsel for the Lenders from and after the occurrence of an Event of Default,
said counsel shall be selected by the Agent and written notice of the same shall
be delivered to the Lenders.
SECTION 9.10. PAYMENTS; AVAILABILITY OF FUNDS; CERTAIN NOTICES.
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9.10.1. If the Agent shall fail to deliver to any other Lender Party
its share of any payment received from the Borrower as and when required by
Section 2.9., the Agent shall pay to such Lender its share of such payment
together with interest on such amount at the Federal Funds Rate, for each day
from the date such amount was required to be paid to such Lender until the date
the Agent pays such amount to such Lender, calculated as set forth in Section
2.4.4.
9.10.2. Unless (a) the Agent shall have been notified by a Lender
prior to the date upon which an Advance is to be made pursuant to Section 2.1.
or (b) the Agent shall have been notified by the Borrower prior to the date on
which the Borrower is required to make any payment hereunder, that such Lender
or the Borrower, as the case may be (the "OBLIGATED PARTY"), does not intend to
make available to the Agent the Obligated Party's portion of such Advance or
such payment, the Agent may assume that the Obligated Party will make such
amount available to the Agent on such date and the Agent may, in reliance upon
such assumption (but shall not be required to), make available to the Borrower
(in the case of an Advance) or the Lenders (in the case of a payment by the
Borrower) a corresponding amount. If such corresponding amount is not in fact
made available to the Agent by the Obligated Party, the Agent shall be entitled
to recover such amount on demand from the Obligated Party (or, in the case of an
Advance, if the Lender that is the Obligated Party fails to pay such amount
forthwith upon such demand, from the Borrower). Such amount shall be payable
together with interest thereon from the day on which such corresponding amount
was made available by the Agent to the Lender or the Borrower, as applicable, to
the date of payment by the Obligated Party (or the Borrower, as applicable), at
a rate of interest equal to (i) in the case of any payment by any other Lender
Party, the Federal Funds Rate, and (ii) in the case of any payment by the
Borrower, the interest rate applicable to the Advance. In addition, no Lender
that fails to make any such payment or otherwise fails to perform any of its
obligations hereunder within the time frame specified for payment or performance
or, if no time frame is specified, if such failure continues for five Business
Days after notice from the Agent (each a "DEFAULTING LENDER") shall have the
right to vote on, or be considered to be a "Lender" with respect to, any matter
for which a vote of the Required Lenders or all or any Lenders is required or
may be taken under this Agreement during any period commencing on the date upon
which such Lender Party is required to make such payment or render such
performance through the date upon which such payment, together with the interest
thereon at the Federal Funds Rate, is made or such performance is rendered.
Furthermore, (a) until such time as a Defaulting Lender has funded its PRO RATA
share of a Borrowing or a participation in a Letter of Credit or has funded the
Bid Advance with respect to any Competitive Bid that has been accepted by the
Borrower, or until all other Lender Parties have received payment in full
(whether by repayment or prepayment) of all their Advances included in such
Borrowing or used to fund such participation, and all interest and Fees due in
respect thereof (collectively, the "SENIOR OBLIGATIONS"), (i) all of the
Obligations (including principal, interest and Fees) owing to such Defaulting
Lender hereunder shall be subordinated in right of payment to the prior payment
in full of all Senior Obligations, and (ii) all amounts paid by any Borrower
Party or otherwise due to be applied to the Obligations owing to the Defaulting
Lender pursuant to the terms hereof (x) if due with respect to Committed
Advances, shall be distributed by the Agent to the other Lender Parties in
accordance with their respective PRO RATA shares (recalculated for purposes
hereof to exclude the Defaulting Lender's Commitment) and
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(y) if due with respect to any Bid Advance, shall be distributed by the Agent to
the other Lender Parties who have Bid Advances then due and payable in
accordance with their respective PRO RATA shares (based on the ratio of the
aggregate amount due to each such other Lender Party to the aggregate amount
then due and payable to all Lender Parties, but calculated for purposes hereof
to exclude amounts due to the Defaulting Lender with respect to Bid Advances),
until all Senior Obligations have been paid in full. This provision governs only
the relationship among the Agent, each Defaulting Lender, and the other Lender
Parties; nothing hereunder shall limit the obligation of any Borrower Party to
repay all Advances and other Obligations in accordance with the terms of this
Agreement and the other Loan Documents. The Agent shall be entitled to (1)
withhold or set off and to apply to the payment of the defaulted amount and any
related interest any amounts to paid to such Defaulting Lender under this
Agreement and (2) bring an action or suit against such Defaulting Lender in a
court of competent jurisdiction to recover the defaulted amount and any related
interest. The provisions of this section shall apply and be effective regardless
of whether an Event of Default occurs and is then continuing, and
notwithstanding (i) any other provision of this Agreement to the contrary, (ii)
any instruction of any Borrower Party as to its desired application of payments
or (iii) the suspension of such Defaulting Lender's right to vote on matters
which are subject to the consent or approval of Required Lenders or all or any
Lenders. In addition, the Defaulting Lender shall indemnify, defend and hold the
Agent and each of the other Lender Parties harmless from and against any and all
liabilities, cost and expenses, plus interest thereon at the Post-Default Rate,
which they may sustain or incur by reason of or as a direct consequence of the
Defaulting Lender's failure or refusal to abide by its obligations under this
Agreement.
9.10.3. The Agent shall promptly notify the Lenders by telex or
telecopy (or telephone, in the case of notice contemplated by Section 2.4.) of
each interest period chosen by the Borrower, the LIBO Rate for each interest
period (and the relevant interest rate), the date of any expected payment and
all other material notices transmitted by the Borrower.
SECTION 9.11. OBLIGATIONS OF LENDER PARTIES SEVERAL; ENFORCEMENT BY
THE AGENT.
9.11.1. Each Lender Party's obligations hereunder are several, and
not joint or joint and several. The failure of any Lender Party to make any
Advance or otherwise to perform its obligations hereunder will not increase the
obligations of any other Lender Party. Notwithstanding the foregoing, any Lender
may assume, but shall have no obligation to any Person to assume, any
non-performing Lender's obligation to make an Advance. Nothing contained in this
Agreement and no action taken by the Agent or any other Lender Party pursuant to
this Agreement shall be deemed to constitute the Agent and any other Lender
Party to be a partnership, an association, a joint venture or any other kind of
entity.
9.11.2. Each Lender agrees that, except with the prior written
consent of the Agent, no Lender Party shall have any right individually to
enforce any Loan Document or any provision thereof, or make demand thereunder,
it being agreed that such rights and remedies may only be exercised by the Agent
for the ratable benefit of the Lenders upon the terms of this Agreement.
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SECTION 9.12. REPLY OF LENDERS. Each Lender shall promptly reply to any
communication from the Agent to the Lenders requesting the Lenders'
determination, consent, approval or disapproval under this Agreement, but in any
event no later than ten Business Days (or such other period as may be required
under this Agreement to respond) after receipt of the request therefor by the
Agent for those matters requiring the consent of the Lenders. Except as
otherwise provided in this Agreement, including Section 9.9., if any Lender
fails to reply within the applicable time periods, such Lender shall be deemed
to have given its consent or approval to the action or actions recommended by
the Agent with respect to the matter for which the Agent requested such Lender's
determination, consent, approval or disapproval.
ARTICLE 10.
MISCELLANEOUS
SECTION 10.1. EXPENSES; INDEMNITY. The Borrower shall pay on demand:
10.1.1. any and all reasonable attorneys' fees and disbursements
(including allocated costs of in-house counsel) and out-of-pocket cost and
expenses incurred by the Agent in connection with the development, drafting and
negotiation of this Agreement and the other Loan Documents, the administration
hereof and thereof (including any amendments), the closing of the transactions
contemplated thereby and the syndication of the credit facilities hereunder; and
10.1.2. all costs and expenses (including fees and disbursements of
in-house and other attorneys, appraisers and consultants) of the Lender Parties
in any workout, restructuring or similar arrangements or, after a Default, in
connection with the protection, preservation, exercise or enforcement of any of
the terms of the Loan Documents or in connection with any foreclosure,
collection or bankruptcy proceedings.
10.1.3. The Borrower shall indemnify, defend and hold harmless each
Lender Party and the officers, directors, employees, agents, attorneys,
affiliates, successors and assigns of each Lender Party (collectively, the
"INDEMNITEES") from and against (a) any and all transfer taxes, documentary
taxes, assessments or charges made by any Governmental Authority by reason of
the execution and delivery of the Loan Documents or the making of the Advances
or the issuance of any Letter of Credit, and (b) any and all liabilities,
losses, damages, penalties, judgments, claims, costs and expenses of any kind or
nature whatsoever (including reasonable attorneys' fees and disbursements in
connection with any actual or threatened investigative, administrative or
judicial proceeding, whether or not such Indemnitee shall be designated a party
thereto) that may be imposed on, incurred by or asserted against such
Indemnitee, in any manner relating to or arising out of the Loan Documents, the
Advances, Letters of Credit, the use or intended use of the proceeds of the
Advances or Letters of Credit (including the failure of the Agent Bank to honor
a drawing as a result of any act or omission, whether rightful or wrongful, of
any Governmental Authority) (the "INDEMNIFIED LIABILITIES"); PROVIDED that (i)
no Indemnitee shall have the right to be indemnified or held harmless hereunder
for its own gross negligence or
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willful misconduct, as determined by a final judgment of a court of competent
jurisdiction, and (ii) Indemnified Liabilities shall include amounts
attributable to the passive or active negligence of any Lender Party.
10.1.4. To the extent that the undertaking to indemnify and hold
harmless set forth in Section 10.1.3. may be unenforceable because it is
violative of any Applicable Law or public policy, the Borrower shall make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities that is permissible under Applicable Law. All Indemnified
Liabilities shall be payable on demand.
SECTION 10.2. WAIVERS; MODIFICATIONS IN WRITING.
10.2.1. No amendment of any provision of this Agreement or any other
Loan Document (including a waiver thereof or consent relating thereto) shall be
effective unless the same shall be in writing and signed by the Agent and the
Required Lenders. Notwithstanding the foregoing,
10.2.1.1. no amendment that has the effect of (a) reducing the
rate or amount, or extending the stated maturity or due date, of any amount
payable by the Borrower to any Lender Party under the Loan Documents, (b)
increasing the amount, or extending the stated termination or reduction date, of
any Lender's Commitment hereunder or subjecting any Lender Party to any
additional obligation to extend credit, (c) altering the rights and obligations
of the Borrower to prepay the Advances, (d) releasing any Borrower Party under
the Guaranty, (e) changing this Section 10.2. or the definition of the term
"Required Lenders," (f) amending the definitions of "Gross Asset Value,"
"Unencumbered Asset Value" or "Unencumbered Asset," or (g) approving the
forgiveness of interest, principal or Fees shall be effective unless the same
shall be signed by or on behalf of all of the Lenders;
10.2.1.2. no amendment that has the effect of (a) increasing
the duties or obligations of the Agent, (b) increasing the standard of care or
performance required on the part of the Agent, or (c) reducing or eliminating
the indemnities or immunities to which the Agent is entitled (including any
amendment of this Section 10.2.1.2.), shall be effective unless the same shall
be signed by or on behalf of the Agent; and.
10.2.1.3. no amendment that has the effect of (a) increasing
the duties or obligations of the Agent Bank with respect to Letters of Credit,
(b) increasing the standard of care or performance required on the part of the
Agent Bank with respect to Letters of Credit, or (c) reducing or eliminating the
indemnities or immunities to which the Agent Bank with respect to Letters of
Credit is entitled (including any amendment of this Section 10.2.1.3.), shall be
effective unless the same shall be signed by or on behalf of the Agent Bank.
10.2.2. Notwithstanding anything to the contrary, (a) the Borrower
may, by written notice furnished to the Agent, amend SCHEDULES 1.1C, 5.1., 5.4.
and 10.4. to the extent the changes to such Schedules are expressly permissible
under this Agreement, and (b) a Guarantor may be released hereunder as specified
in the definition of "Unencumbered Asset."
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10.2.3. Any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. No notice to or
demand on any Borrower Party in any case shall entitle such Borrower Party to
any other or further notice or demand in similar or other circumstances. Any
amendment effected in accordance with this Section 10.2. shall be binding upon
each present and future Lender Party and the Borrower.
SECTION 10.3. CUMULATIVE REMEDIES; FAILURE OR DELAY. The rights and
remedies provided for under this Agreement are cumulative and are not exclusive
of any rights and remedies that may be available to the Lender Parties under
Applicable Law or otherwise. No failure or delay on the part of any Lender Party
in the exercise of any power, right or remedy under the Loan Documents shall
impair such power, right or remedy or operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or remedy preclude other or
further exercise thereof or of any other power, right or remedy.
SECTION 10.4. NOTICES, ETC. All notices and other communications under
this Agreement shall be in writing and (except for financial statements, other
related informational documents and routine communications, which may be sent by
first-class mail, postage prepaid) shall be personally delivered or sent by
prepaid courier, by overnight mail, by overnight, registered or certified mail
(postage prepaid), or by prepaid telex, telecopy or telegram, and shall be
deemed given when received by the intended recipient thereof. Unless otherwise
specified in a notice sent or delivered in accordance with this Section 10.4.,
all notices and other communications shall be given to the parties hereto at
their respective addresses (or to their respective telex or telecopier numbers)
indicated on SCHEDULE 1.1B (in the case of the Lender Parties) or
10.4. (in the case of the Borrower Parties).
SECTION 10.5. SUCCESSORS AND ASSIGNS.
10.5.1. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. The Borrower Parties may not assign or transfer any interest hereunder
without the prior written consent of each Lender Party.
10.5.2. Each Lender shall have the right at any time to assign (an
"ASSIGNMENT") all or any portion of such Lender's Commitment, Committed Advances
or participations in Letters of Credit to one or more banks or other financial
institutions each having a combined capital and surplus of at least
$100,000,000, a minimum long-term debt rating of "Baa-2" by ▇▇▇▇▇'▇ and a
minimum long-term debt rating of "BBB" by S&P, at the time of such assignment
(or participation, as the case may be), and which have not been involved in
material litigation with the Agent regarding an assigned, participated, or
syndicated credit (an "ELIGIBLE ASSIGNEE"); PROVIDED, HOWEVER, that (a) each
Assignment of any Commitment shall be of a portion of the Commitments at least
equal to $10,000,000 and, unless otherwise agreed by the Agent, each assignment
shall be of a constant, and not a varying, percentage of all of such Lender's
rights and obligations under this Agreement and the other Loan Documents; (b) no
Assignment (other than an Assignment to a Person that is then a Lender) shall be
effective without the consent of the
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Agent and the Borrower, which consents shall not be unreasonably withheld or
delayed, and which consents will not be required if a Default or Event of
Default exists; (c) the parties to the Assignment shall execute and deliver to
the Agent an Assignment and Acceptance substantially in the form of EXHIBIT F
(an "ASSIGNMENT AND ACCEPTANCE"); and (d) the assignee shall pay to the Agent a
processing and recordation fee of $3,000. From and after the date on which the
conditions in the foregoing clauses and the Assignment and Acceptance have been
satisfied, the assignee shall be a "Lender" hereunder and, to the extent that
rights and obligations hereunder have been assigned to it, shall have the rights
and obligations (including the obligation to participate in Letters of Credit)
of the assigning Lender hereunder, and the assigning Lender shall, to the extent
that rights and obligations hereunder have been assigned by it, relinquish its
rights and be released from its obligations under this Agreement (and, in the
case of an Assignment covering all or the remaining portion of the assigning
Lender's rights and obligations under this Agreement, cease to be a party
hereto). Notwithstanding anything herein to the contrary, for so long as ▇▇▇▇▇
Fargo Bank, National Association is the Agent under this Agreement the
Commitment of ▇▇▇▇▇ Fargo Bank, National Association shall not be less than the
Commitment of the Lender having the second largest Commitment.
10.5.3. Each Lender shall have the right at any time to grant or
sell participations (each a "PARTICIPATION") in all or any portion of such
Lender's Commitment, Advances (including Committed Advances and Bid Advances) or
participations in Letters of Credit to one or more Eligible Assignees, subject
to the terms and conditions set forth in this Section 10.5.3. If the Lender
sells or grants a Participation, (a) such Lender shall make and receive all
payments for the account of its participant, (b) such Lender's obligations under
this Agreement shall remain unchanged, (c) such Lender shall continue to be the
sole holder of the Note or Notes and other Loan Documents subject to the
Participation and shall have the sole right to enforce its rights and remedies
under the Loan Documents, (d) the Borrower shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under the Loan Documents, and (e) the Participation agreement shall
not restrict such Lender's ability to agree to any amendment of the terms of the
Loan Documents, or to exercise or refrain from exercising any powers or rights
that such Lender may have under or in respect of the Loan Documents, shall be
limited to the right to consent to any (A) reduction of the rate or amount, or
any extension of the stated maturity or due date, of any principal, interest or
Fees payable by the Borrower and subject to the Participation or (B) increase in
the amount or extension of the stated termination or reduction date of the
affected Commitment. A Participant shall have the rights of the Lenders under
Sections 2.11. and 2.12., subject to the obligations imposed by such Sections;
PROVIDED that amounts payable to any Participant shall not exceed the amounts
that would have been payable under such Sections to the Lender granting the
Participation, had such Participation not been granted, unless the Participation
is made with the prior written consent of the Borrower.
10.5.4. Each Lender may at any time assign or pledge any portion of
its rights under the Loan Documents to a Federal Reserve Bank. No such
assignment or pledge shall be subject to the provisions of Sections 10.5.2. or
10.5.3.
10.5.5. Subject to the provisions of Section 10.6., each Lender
shall have the
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right at any time to furnish one or more potential assignees or participants
with any information concerning the Borrower and the Consolidated Entities that
has been supplied by the Borrower to any Lender Party. The Borrower shall to
supply all reasonably requested information and execute and deliver all such
instruments and take all such further action (including, in the case of an
Assignment, the execution and delivery of replacement Notes) as the Agent may
reasonably request in connection with any Assignment or Participation
arrangement.
SECTION 10.6. CONFIDENTIALITY. Each Lender Party will maintain any
confidential information that it may receive from any Borrower Party pursuant to
this Agreement confidential and shall not disclose such information to third
parties without the prior consent of the Borrower, except for disclosure: (a) to
any other Lender Party or an affiliate of any Lender Party or any officer,
director, employee, agent, advisor, legal counsel, accountant or other
professional advisor to such Lender Party or affiliate; (b) to regulatory
officials having jurisdiction over such Lender Party; (c) as required by
Applicable Law or in connection with any legal proceeding; (d) to another Person
in connection with a potential Assignment or Participation, PROVIDED such Person
shall have agreed in writing to be subject to this Section 10.6.; and (e) of
information that has been previously disclosed publicly without breach of this
provision.
SECTION 10.7. CHOICE OF FORUM.
10.7.1. All actions or proceedings arising in connection with this
Agreement and the other Loan Documents shall be tried and litigated in state or
Federal courts located in Los Angeles, County of Los Angeles, State of
California, unless such actions or proceedings are required to be brought in
another court to obtain subject matter jurisdiction over the matter in
controversy. EACH OF THE BORROWER PARTIES AND THE LENDER PARTIES WAIVES ANY
RIGHT IT MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS, TO ASSERT THAT
IT IS NOT SUBJECT TO THE JURISDICTION OF SUCH COURTS OR TO OBJECT TO VENUE TO
THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION.
10.7.2. IN ANY ACTION AGAINST ANY BORROWER PARTY, SERVICE OF PROCESS
MAY BE MADE UPON SUCH BORROWER PARTY BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO ITS ADDRESS INDICATED IN SCHEDULE 10.4., WHICH SERVICE
SHALL BE DEEMED SUFFICIENT FOR PERSONAL JURISDICTION AND SHALL BE DEEMED
EFFECTIVE 10 DAYS AFTER MAILING.
10.7.3. Nothing contained in this Section 10.7. shall preclude the
Lender Parties from bringing any action or proceeding arising out of or relating
to this Agreement and the other Loan Documents in the courts of any place where
any Borrower Party or any of its assets may be found or located.
SECTION 10.8. CHANGES IN ACCOUNTING PRINCIPLES. Except as otherwise
provided herein (including, without limitation, the definition of "Funds from
Operations"), if any changes in generally accepted accounting principles from
those used in the preparation of the financial
90
statements referred to in this Agreement hereafter result from by the
promulgation of rules, regulations, pronouncements, or opinions of or required
by the Financial Accounting Standards Board or the American Institute of
Certified Public Accountants (or successors thereto or agencies with similar
functions), or there shall occur any change in the Borrower's fiscal or tax
years and, as a result of any such changes, there shall result a change in the
method of calculating any of the financial covenants, negative covenants,
standards or other terms or conditions found in this Agreement, then the parties
agree to enter into negotiations in order to amend such provisions so as to
equitably reflect such changes with the desired result that the criteria for
evaluating the Borrower's financial condition shall be the same after such
changes as if such changes had not been made.
SECTION 10.9. SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND WARRANTIES. All
agreements, representations and warranties made herein shall survive the
execution and delivery of this Agreement, the closing and the extensions of
credit hereunder and shall continue until payment and performance of any and all
Obligations. Any investigation at any time made by or on behalf of the Lender
Parties shall not diminish the right of the Lender Parties to rely thereon.
SECTION 10.10. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.
SECTION 10.11. COMPLETE AGREEMENT. This Agreement, together with the
Exhibits and Schedules hereto, and the other Loan Documents is intended by the
parties as the final expression of their agreement regarding the subject matter
hereof and as a complete and exclusive statement of the terms and conditions of
such agreement.
SECTION 10.12. LIMITATION OF LIABILITY.
10.12.1. No claim shall be made by any Borrower Party against any
Lender Party or the Affiliates, directors, officers, employees, attorneys or
agents of any Lender Party for any special, indirect, consequential or punitive
damages in respect of any claim for breach of contract or under any other theory
of liability arising out of or related to the transactions contemplated by this
Agreement or the other Loan Documents, or any act, omission or event occurring
in connection therewith; and each Borrower Party hereby waives, releases and
agrees not to ▇▇▇ upon any claim for any such damages, whether or not accrued
and whether or not known or suspected to exist in its favor.
10.12.2. Except as otherwise provided in Section 10.12.3., neither
the REIT nor any officer, employee, servant, controlling person, executive,
director, agent or authorized representative thereof (herein referred to as
"OPERATIVES") shall be liable personally for the Obligations. The sole recourse
of any Lender Party for satisfaction of the Obligations shall be to the
Borrower, and each Guarantor of which the REIT is not a general partner, as an
entity, and to the Borrower's and each Guarantor's assets, and not to any assets
of the REIT or its Operatives. In the event that an Event of Default occurs in
connection with the Obligations, no action shall be
91
brought against the REIT or its Operatives.
10.12.3. Notwithstanding anything in Section 10.12.2. to the
contrary, (a) nothing herein shall limit or otherwise prejudice in any way the
right of any Lender Party to proceed against (i) the Borrower, or any Guarantor
of which the REIT is not a general partner, with respect to the enforcement of
any Obligations or the liability of the Borrower or such Guarantor for such
Obligations, or (ii) the assets of any Guarantor with respect to the enforcement
of any Obligations, (b) nothing herein shall limit or otherwise prejudice in any
way the right of any Lender Party to proceed against the REIT with respect to
any breach of its representations, warranties, covenants and obligations in this
Agreement or its liability for any violation of such provisions, and (c) Section
10.12.2. shall not apply to, or constitute a waiver of any claim by any Lender
Party for fraud, deceit, intentional or willful misrepresentation or bad faith
waste. It is expressly agreed that any Lender Party shall have full recourse
against the REIT and its Operatives for any matters referred to in clause (c) of
this section.
SECTION 10.13. UNSECURED ADVANCES; NO LIEN. The Advances and Letters of
Credit contemplated in this Agreement are unsecured loans and extensions of
credit and no Lien is intended to be created upon the Unencumbered Assets or any
other property of the REIT or any Consolidated Entity by any provision in this
Agreement or the other Loan Documents.
SECTION 10.14. AMENDMENT AND RESTATEMENT. On the Closing Date, (a) this
Agreement shall supersede the Existing Credit Agreement insofar as the two are
inconsistent, (b) all Existing Committed Advances will be considered "Committed
Advances" outstanding under this Agreement and (c) all outstanding Existing
Letter of Credit will be considered "Committed Advances" and a "Letter of
Credit" outstanding under this Agreement. However, the execution and delivery of
this Agreement shall not excuse, or constitute a waiver of, any defaults under
the Existing Credit Agreement, it being understood that this Agreement is not a
termination of the Existing Credit Agreement, but is a modification (and, as
modified, a continuation) of the Existing Credit Agreement.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
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SECTION 10.15. WAIVER OF TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION (a) ARISING UNDER THE LOAN DOCUMENTS, INCLUDING ANY PRESENT
OR FUTURE AMENDMENT THEREOF OR (b) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES OR ANY OF THEM WITH RESPECT TO THE
LOAN DOCUMENTS (AS NOW OR HEREAFTER AMENDED) OR ANY OTHER INSTRUMENT, DOCUMENT
OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS
RELATED HERETO OR THERETO, IN EACH CASE WHETHER SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION IS NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE AND REGARDLESS OF WHICH PARTY ASSERTS SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION; AND EACH PARTY HEREBY AGREES AND CONSENTS
THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE PARTIES TO THE WAIVER OF ANY RIGHT THEY MIGHT OTHERWISE HAVE TO
TRIAL BY JURY.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first set forth above.
BORROWER:
THE MACERICH PARTNERSHIP, L.P., a
Delaware limited partnership
By: THE MACERICH COMPANY, a
Maryland corporation, the Sole
General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇
-----------------------------------
Senior Vice President, Chief
Financial Officer and
Treasurer
93
INITIAL GUARANTORS:
MACERICH BRISTOL ASSOCIATES, a
California general partnership
By: THE MACERICH COMPANY, a
Maryland corporation, a General
Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇
Title: Senior Vice President, Chief
Financial Officer and
Treasurer
By: THE MACERICH PARTNERSHIP, L.P., a
Delaware limited partnership, a
General Partner
By: THE MACERICH COMPANY, a
Maryland corporation, the Sole
General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇
Title: Senior Vice President, Chief
Financial Officer and
Treasurer
MACERICH BUENAVENTURA LIMITED
PARTNERSHIP, a California limited
partnership
BY: MACERICH BUENAVENTURA GP CORP., a
Delaware corporation, the Sole General
Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇
Title: Senior Vice President, Chief
Financial Officer and
Treasurer
94
MACERICH HUNTINGTON LIMITED
PARTNERSHIP, a California limited
partnership
BY: MACERICH HUNTINGTON GP CORP., a
Delaware corporation, the Sole General
Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇
Title: Senior Vice President, Chief
Financial Officer and
Treasurer
MACERICH STONEWOOD LIMITED PARTNERSHIP,
a California limited partnership
BY: MACERICH STONEWOOD GP CORP., a
Delaware corporation, the Sole General
Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇
Title: Senior Vice President, Chief
Financial Officer and
Treasurer
REIT:
THE MACERICH COMPANY, a Maryland
corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇
Title: Senior Vice President, Chief
Financial Officer and
Treasurer
95
AGENT:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Assistant Vice President
LENDERS:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Assistant Vice President
NATIONSBANK, N.A.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
CREDIT LYONNAIS, NEW YORK BRANCH
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
FLEET NATIONAL BANK
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
96