SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of July 1, 1997
Among
THE PRICE REIT, INC.,
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK,
as Agent
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
TABLE OF CONTENTS
ARTICLE I
DEFINITION 2
1.1 Defined Terms 2
1.2 Other Interpretive Provisions 29
1.3 Accounting Principles 31
ARTICLE II
THE CREDIT 31
2.1 The Revolving Credit 31
2.2 Notes 33
2.3 Procedure for Borrowing 33
2.4 Conversion and Continuation Elections 34
2.5 Voluntary Termination or Reduction of Commitments 36
2.6 Optional Prepayments 37
2.7 Mandatory Prepayments of Loans 37
2.8 Repayment; Extension Option 38
2.9 Interest 39
2.10 Fees 40
2.11 Computation of Fees and Interest 41
2.12 Payments by the Company 42
2.13 Payments by the Banks to the Agent 43
2.14 Sharing of Payments, Etc. 44
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY 44
3.1 Taxes 44
3.2 Illegality 48
3.3 Increased Costs and Reduction of Return 49
3.4 Funding Losses 50
3.5 Inability to Determine Rates 52
3.6 Reserves on LIBOR Rate Loans 52
3.7 Certificates of Banks 53
3.8 Survival 53
ARTICLE IV
CONDITIONS PRECEDENT 53
4.1 Conditions of Initial Loans 53
4.2 Conditions to All Borrowings 55
ARTICLE V
REPRESENTATIONS AND WARRANTIES 56
5.1 Corporate Existence and Power 56
5.2 Corporate Authorization; No Contravention 57
5.3 Governmental Authorization 57
5.4 Binding Effect 58
5.5 Litigation 58
5.6 No Default 58
5.7 ERISA Compliance 58
5.8 Use of Proceeds; Margin Regulations 61
5.9 Title to Properties 61
5.10 Taxes 61
5.11 Financial Condition 61
5.12 Environmental Matters 62
5.13 Regulated Entities 63
5.14 No Burdensome Restrictions 63
5.15 Solvency 63
5.16 Labor Relations 63
5.17 Copyrights, Patents, Trademarks and Licenses, etc. 64
5.18 Subsidiaries 64
5.19 Broker's Transaction Fees 64
5.20 Insurance 64
5.21 SEC Filings 64
5.22 Full Disclosure 65
5.23 REIT Status 65
ARTICLE VI
AFFIRMATIVE COVENANTS 65
6.1 Financial Statements 65
6.2 Certificates; Other Information 66
6.3 Notices 68
6.4 Preservation of Corporate Existence, Etc. 70
6.5 Maintenance of Property 70
6.6 Insurance 71
6.7 Payment of Obligations 71
6.8 Compliance with Laws 72
6.9 Inspection of Property and Books and Records 72
6.10 Environmental Laws 72
6.11 Use of Proceeds 73
6.12 Solvency 73
6.13 Further Assurances 73
6.14 Qualification as a Real Estate Investment Trust 74
ARTICLE VII
NEGATIVE COVENANTS 74
7.1 Limitation on Liens 74
7.2 Disposition of Assets 75
7.3 Consolidations and Mergers 76
7.4 Loans and Investments 76
7.5 Limitation on Indebtedness 78
7.6 Transactions with Affiliates 79
7.7 Use of Proceeds 79
7.8 Contingent Obligations 80
7.9 Joint Ventures 80
7.10 Compliance with ERISA 80
7.11 Lease Obligations 81
7.12 Restricted Payments 81
7.13 Capital Expenditures 82
7.14 Net Operating Income 82
7.15 Tangible Net Worth 83
7.16 Change in Business 83
7.17 Change in Structure 83
7.18 Accounting Changes 83
7.19 Other Contracts 84
7.20 Other Prohibited Business Activities 84
7.21 Financial Covenants. 84
ARTICLE VIII
EVENTS OF DEFAULT 86
8.1 Event of Default 86
8.2 Remedies 90
8.3 Rights Not Exclusive. 90
ARTICLE IX
THE AGENT 91
9.1 Appointment and Authorization 91
9.2 Delegation of Duties 91
9.3 Liability of Agent 91
9.4 Reliance by Agent 92
9.5 Notice of Default 92
9.6 Credit Decision 93
9.7 Indemnification 94
9.8 Agent in Individual Capacity 95
9.9 Successor Agent 95
ARTICLE X
MISCELLANEOUS 96
10.1 Amendments and Waivers 96
10.2 Notices. 97
10.3 No Waiver; Cumulative Remedies 98
10.4 Costs and Expenses 98
10.5 Indemnity 99
10.6 Marshalling; Payments Set Aside 100
10.7 Successors and Assigns 101
10.8 Assignments, Participations, etc. 101
10.9 Set-off 105
10.10 Automatic Debits of Fees 106
10.11 Notification of Addresses, Lending Offices, Etc. 106
10.12 Counterparts 106
10.13 Severability 106
10.14 No Third Parties Benefited 107
10.15 Time 107
10.16 Governing Law and Jurisdiction 107
10.17 Waiver of Jury Trial 107
10.18 Entire Agreement 108
10.19 Collateral. 108
10.20 Survival. 108
10.21 Domicile of Loans 108
10.22 Limitation of Liability 108
10.23 Recourse Obligation 109
10.24 Legal Rate 109
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of July 1,
1997, among The Price REIT, Inc., a Maryland corporation (the "Company"), the
several financial institutions from time to time party to this Agreement (col
lectively, the "Banks"; individually, a "Bank"), and ▇▇▇▇▇▇ Guaranty Trust Compa
ny of New York ("MGT"), as agent for the Banks.
WHEREAS, the Banks previously agreed to make available to the Company a
revolving credit facility upon the terms and conditions set forth in the Credit
Agreement, dated as of September 22, 1993, as amended by amendments dated as of
May 9, 1994 and March 16, 1995 (as amended, the "Original Agreement");
WHEREAS, the Original Agreement was amended and restated in its entirety
pursuant to that certain Amended and Restated Credit Agreement dated as of
November 1, 1995 and was further amended by amendments dated December 20, 1995,
March 22, 1996, October 21, 1996, and January 10, 1997 (as so amended, restated
and further amended, the "Existing Credit Agreement");
WHEREAS, the Company and the Banks wish to amend and restate the provisions of
the Existing Credit Agreement in their entirety, as hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties hereby amend and restate the Existing
Credit Agreement and agree as follows:
I. The Existing Credit Agreement is hereby modified so that all of the terms
and conditions of the aforesaid Existing Credit Agreement shall be restated in
their entirety as set forth herein, and the Company agrees to comply with and be
subject to all of the terms, covenants and conditions of this Agreement.
II. This Agreement shall be binding upon and inure to the benefit of the
parties hereto, and their respective successors and assigns, and shall be deemed
to be effective as of the date hereof.
Any reference in the Notes, any other Loan Document or any other document
executed in connection with this Agreement to the Existing Credit Agreement
shall be deemed to refer to this Agreement.
ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS. In addition to the terms defined elsewhere in this Agree
ment, the following terms have the following meanings:
"Additional Commitment" has the meaning specified in subsection 2.1(b).
"Affiliate" means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract or otherwise. Without
limitation, any director, executive officer or beneficial owner of 10% or more
of the equity of a Person shall for the purposes of this Agreement, be deemed to
control the other Person. Notwithstanding the foregoing, no Bank shall be
deemed an "Affiliate" of the Company or of any Subsidiary of the Company.
"Agent" means MGT in its capacity as agent for the Banks hereunder, and any
successor agent.
"Agent-Related Persons" means MGT and any successor agent arising under Section
9.9, together with their respective Affiliates, and the officers, directors, em
ployees, agents and attorneys-in-fact of such Persons and Affiliates.
"Agent's Payment Office" means the address for payments set forth on the
signature page hereto in relation to the Agent or such other address as the
Agent may from time to time specify in accordance with Section 10.2.
"Aggregate Revolving Commitment" means the combined Revolving Commitments of the
Banks, in the initial amount of Seventy-Five Million Dollars ($75,000,000), as
such amount may be increased or reduced from time to time pursuant to this Agree
ment.
"Agreement" means this Second Amended and Restated Credit Agreement, as amended
from time to time in accordance with the terms hereof.
"Applicable Margin" means (i) with respect to Base Rate Loans, 0.500%; and (ii)
with respect to LIBOR Rate Loans, 1.300%; provided, however, at such time as
the Company shall receive, and for so long as the Company shall maintain, a long
term senior unsecured debt rating of not less than "BBB-" from Standard & Poor's
Rating Service and "Baa3" from ▇▇▇▇▇'▇ Investor Service, Inc.,
"Applicable Margin" with respect to LIBOR Rate Loans, shall mean 1.250%.
"Assignee" has the meaning specified in subsection 10.8(a).
"Assignment and Acceptance" has the meaning specified in subsection 10.8(a).
"Attorney Costs" means and includes all fees and disbursements of any law firm
or other external counsel, the allocated cost of internal legal services and all
disbursements of internal
counsel.
"Bank" has the meaning specified in the introductory clause hereto.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11 U.S.C.
101, et seq.).
"Base Rate" means, for any day, the rate per annum equal to the higher of: (a)
the Prime Rate, and (b) 0.50% per annum above the latest Federal Funds Rate.
"Base Rate Loan" means a Loan that bears interest based on the Base Rate.
"Borrowing" means a borrowing hereunder consisting of Loans made to the Company
on the same day by the Banks pursuant to Article II.
"Business Day" means any day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close
and, if the applicable Business Day relates to any LIBOR Rate Loan, means such a
day on which dealings are carried on in the applicable offshore dollar interbank
market.
"Capital Adequacy Regulation" means any guideline, request or directive of any
central bank or other Governmental Authority, or any other law, rule or regula
tion, whether or not having the force of law, in each case, regarding capital
adequacy of any Bank or of any corporation controlling a Bank.
"Capital Expenditures" means, for any period and with respect to any Person, the
aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing of fixed or capital assets or additions to equipment
(including replacements, capitalized repairs and improvements during such
period) which should be capitalized under GAAP on a consolidated balance sheet
of such Person and its Subsidiaries, exclusive of Construction Asset Costs. For
the purpose of this definition, the purchase price of equipment which is
purchased simultaneously with the trade-in of existing equipment owned by such
Person or any of its Subsidiaries or with insurance proceeds shall be included
in Capital Expenditures only to the extent of the gross amount of such purchase
price less the credit granted by the seller of such equipment for such equipment
being traded in at such time, or the amount of such proceeds, as the case may
be.
"Capital Lease" means any leasing or similar arrangement which, in accordance
with GAAP, is classified as a capital lease.
"Capital Lease Obligations" means all monetary obligations of the Company or any
of its Subsidiaries under any Capital Leases together with the portion of such
obligations of the Company's Joint Ventures and unconsolidated subsidiaries
which are allocable to the Company based on the Company's percentage ownership
interest of such Joint Venture or unconsolidated subsidiary.
"Capitalized Interest" means interest which is not expensed under GAAP.
"Cash Equivalents" means:
(a) securities issued or fully guaranteed or insured by the United States
Government or any agency thereof
(b) certificates of deposit, time deposits, LIBOR time deposits, repurchase
agreements, reverse repurchase agreements, or bankers' acceptances;
(c) commercial paper; and
(d) investments in short-term adjustable rate money market funds.
"CERCLA" has the meaning specified in the definition of "Environmental Laws."
"Charges" has the meaning specified in subsection 10.24.
"Closing Date" means the date on which all conditions precedent set forth in
Section 4.1 are satisfied or waived by all Banks.
"Code" means the Internal Revenue Code of 1986, and regulations promulgated
thereunder.
"Commitment Increase" has the meaning specified in subsection 2.1(b).
"Commitment Increase Effective Date" has the meaning specified in subsection
2.1(b).
"Commitment Increase Request" has the meaning specified in subsection 2.1(b).
"Construction Asset Cost" means, with respect to Real Property Assets as to
which construction of improvements has begun (as evidenced by foundation exca
vation) but have not yet been completed (as such completion shall be evidenced
by (i) ninety percent (90%) completion, (ii) a certificate of occupancy or its
equivalent, and (iii) commencement of payment of rent) the aggregate, good faith
estimated cost of construction of such improvements, as such completion shall be
evidenced by a certificate of occupancy or its equivalent.
"Contingent Obligation" means, as to any Person, (a) any Guaranty Obligation of
that Person; and (b) any direct or indirect obligation or liability, contingent
or otherwise, of that Person, (i) in respect of any Surety Instrument issued for
the account of that Person or as to which that Person is otherwise liable for
reimbursement of drawings or payments, (ii) to purchase any materials, supplies
or other Property from, or to obtain the services of, another Person if the
relevant contract or other related document or obligation requires that payment
for such materials, supplies or other Property, or for such services, shall be
made regardless of whether delivery of such materials, supplies or other Proper
ty is ever made or tendered, or such services are ever performed or tendered, or
(iii) in respect of any Rate Contract that is not entered into in connection
with a bona fide hedging operation that provides offsetting benefits to such
Person. The amount of any Contingent Obligation shall (subject, in the case of
Guaranty Obligations, to the last sentence of the definition of "Guaranty
Obligation") be deemed equal to the maximum reasonably anticipated liability in
respect thereof, and shall, with respect to item (b)(iii) of this definition, be
marked to market on a current basis.
"Contractual Obligations" means, as to any Person, any provision of any security
issued by such Person or of any agreement, undertaking, contract, indenture,
mortgage, deed of trust or other instrument, document or agreement to which such
Person is a party or by which it or any of its property is bound.
"Controlled Group" means the Company and all Persons (whether or not incor
porated) under common control or treated as a single employer with the Company
pursuant to Section 414(b), (c), (m) or (o) of the Code.
"Conversion Date" means any date on which the Company converts a Base Rate Loan
to a LIBOR Rate Loan or a LIBOR Rate Loan to a Base Rate Loan.
"Default" means any event or circumstance which, with the giving of notice, the
lapse of time, or both, would (if not cured or otherwise remedied during such
time) constitute an Event of Default.
"Disposition" means (i) the sale, lease, conveyance or other disposition of
Property, other than sales or other dispositions expressly permitted under
subsection 7.2(a) or 7.2(b), and (ii) the sale or transfer by the Company or any
Subsidiary of the Company of any equity securities issued by any Subsidiary of
the Company and held by such transferor Person.
"Dollars", "dollars" and "$" each mean lawful money of the United States.
"Domestic Lending Office" means, with respect to each Bank, the office of that
Bank designated as such in the signature pages hereto or such other office of
the Bank as it may from time to time specify to the Company and the Agent.
"Effective Date" means the date hereof.
"Eligible Assignee" means (i) a commercial bank organized under the laws of
the United States, or any state thereof, and having a combined capital and
surplus of at least $100,000,000; (ii) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having a combined capital and surplus of at least $100,000,000,
provided that such bank is acting through a branch or agency located in the
U.S.; and (iii) a Person that is primarily engaged in the business of commercial
banking and that is (A) a Subsidiary of a Bank, (B) a Subsidiary of a Person of
which a Bank is a Subsidiary, or (C) a Person of which a Bank is a Subsidiary.
"Environmental Claims" means all claims, however asserted, by any Governmental
Authority or other Person alleging potential liability or responsibility for
violation of any Environmental Law, or for release or injury to the environment
or threat to public health, personal injury (including sickness, disease or
death), property damage, natural resources damage, or otherwise alleging liabili
ty or responsibility for damages (punitive or otherwise), cleanup, removal,
remedial or response costs, restitution, civil or criminal penalties, injunctive
relief, or other type of relief, resulting from or based upon the presence,
placement, discharge, emission or release (including intentional and uninten
tional, negligent and non-negligent, sudden or non-sudden, accidental or non-
accidental, placement, spills, leaks, discharges, emissions or releases) of any
Hazardous Material at, in, or from Property, whether or not owned by the
Company.
"Environmental Laws" means all federal, state or local laws, statutes, common
law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authorities, in each case
relating to environmental, health, safety and land use matters; including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), the Clean Air Act, the Federal Water Pollution Control Act of 1972,
the Solid Waste Disposal Act, the Federal Resource Conservation and Recovery
Act, the Toxic Substances Control Act, the Emergency Planning and Community
Right-to-Know Act, the New York Hazardous Waste Control Law, the New York Solid
Waste Management, Resource, Recovery and Recycling Act, the New York Water Code
and the New York Health and Safety Code.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
under common control with the Company within the meaning of Section 414(b),
414(c) or 414(m) of the Code.
"ERISA Event" means (a) a Reportable Event with respect to a Qualified Plan or a
Multiemployer Plan; (b) a withdrawal by the Company or any ERISA Affiliate from
a Qualified Plan subject to Section 4063 of ERISA during a plan year in which it
was a substantial employer (as defined in Section 4001(a)(2) of ERISA); (c) a
complete or partial withdrawal by the Company or any ERISA Affiliate from a
Multiemployer Plan; (d) the filing of a notice of intent to terminate, the
treatment of a plan amendment as a termination under Section 4041 or 4041A of
ERISA or the commencement of proceedings by the PBGC to terminate a Qualified
Plan or Multiemployer Plan subject to Title IV of ERISA; (e) a failure by the
Company or any member of the Controlled Group to make required contributions to
a Qualified Plan or Multiemployer Plan; (f) an event or condition which might
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Qualified
Plan or Multiemployer Plan; (g) the imposition of any liability under Title IV
of ERISA, other than PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon the Company or any ERISA Affiliate; (h) an application for a funding
waiver or an extension of any amortization period pursuant to Section 412 of the
Code with respect to any Plan; (i) a non-exempt prohibited transaction occurs
with respect to any Plan for which the Company or any Subsidiary of the Company
may be directly or indirectly liable; or (j) a violation of the applicable
requirements of Section 404 or 405 of ERISA or the exclusive benefit rule under
Section 401(a) of the Code by any fiduciary or disqualified person with respect
to any Plan for which the Company or any member of the Controlled Group may be
directly or indirectly liable.
"Estimated Remediation Cost" means all costs associated with performing work to
remediate contamination of real property or groundwater, including engineering
and other professional fees and expenses, costs to remove, transport and dispose
of contaminated soil, costs to "cap" or otherwise contain contaminated soil, and
costs to pump and treat water and monitor water quality.
"Event of Default" means any of the events or circumstances specified in Section
8.1.
"Event of Loss" means, with respect to any Property, any of the following: (a)
any loss, destruction or damage of such Property if the reduction in value of
such Property held or retained by the Company would be $100,000 or more in each
instance; (b) any pending or threatened institution of any proceedings for the
condemnation or seizure of such Property or for the exercise of any right of
eminent domain; or (c) any actual condemnation, seizure or taking, by exercise
of the power of eminent domain or otherwise, of such Property, or confiscation
of such Property or the requisition of the use of such Property.
"Exchange Act" means the Securities and Exchange Act of 1934, and regulations
promulgated thereunder.
"Extension Date" has the meaning specified in subsection 2.8.
"Extension Notice" has the meaning specified in subsection 2.8.
"Extension Option" has the meaning specified in subsection 2.8.
"FDIC" means the Federal Deposit Insurance Corporation, or any entity succeeding
to any of its principal functions.
"Federal Funds Rate" means, for any period, the rate set forth in the weekly
statistical release designated as H-15(519), or any successor publication,
published by the Federal Reserve Board (including any such successor,
"H.15(519)") for such day opposite the caption "Federal Funds (Effective)". If
on any relevant day such rate is not yet published in H.15(519), the rate for
such day will be the rate set forth in the daily statistical release designated
as the Composite 3:30 p.m. Quotations for U.S. Government Securities, or any
successor publication, published by the Federal Reserve Bank of New York
(including any such successor, the "Composite 3:30 p.m. Quotation") for such day
under the caption "Federal Funds Effective Rate". If on any relevant day the
appropriate rate for such previous day is not yet published in either H.15(519)
or the Composite 3:30 p.m. Quotations, the rate for such day will be the
arithmetic mean as determined by the Agent of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York time) on that
day by each of three leading brokers of Federal funds transactions in New York
City selected by the Agent.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System, or any entity succeeding to any of its principal functions.
"FFO" means "funds from operations" defined to mean Net Income (loss) (computed
in accordance with GAAP), excluding gains (or losses) from debt restructurings
and sales of properties, plus depreciation and amortization, after adjustments
for unconsolidated partnerships and Joint Ventures. Adjustments for uncon
solidated partnerships and Joint Ventures will be calculated to reflect FFO on
the same basis.
"Fixed Charges" means with respect to any fiscal period, the sum of (a) interest
expense according to GAAP (including Capitalized Interest) plus (b) the aggre
gate of all scheduled principal payments on Indebtedness according to GAAP made
during that fiscal period for the Company and its Subsidiaries and for
Indebtedness guaranteed under a Contingent Obligation (but excluding balloon pay
ments of principal due upon the stated maturity of an Indebtedness), plus (c)
the aggregate of all dividends payable on the Company's or any of its
Subsidiary's preferred stock, plus (d) the Company's portion of the items set
forth in clauses (a)-(c) above of the Company's Joint Ventures and unconsoli
dated subsidiaries which are allocable to the Company based on the Company's
percentage ownership interest of such Joint Venture or unconsolidated
subsidiary. For the purposes of this definition, (i) interest on Fixed Rate
Indebtedness shall be the actual interest payable on such Indebtedness and (ii)
interest on Floating Rate Indebtedness shall be assumed to be the greater of (A)
the actual interest payable on such Indebtedness or (B) an assumed interest rate
of 9% per annum for Indebtedness, except that, if any of the foregoing in (A) or
(B) above is subject to an interest rate cap agreement purchased by the Company
or a Wholly-Owned Subsidiary, the interest rate shall be assumed to be the lower
of the actual interest payable on such Indebtedness or the capped rate of such
interest rate cap agreement. In no event shall any dividends payable on the
Company's or any Wholly-Owned Subsidiary's common stock be included in Fixed
Charges.
"Fixed Rate Indebtedness" means all Indebtedness which accrues interest at a
fixed rate.
"Floating Rate Indebtedness" means all Indebtedness which is not Fixed Rate
Indebtedness and which is not a Contingent Obligation or an Unused Commitment.
"FMV Cap Rate" means 10%.
"Form 1001" has the meaning specified in subsection 3.1(f).
"Form 4224" has the meaning specified in subsection 3.1(f).
"GAAP" means generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), or in such other statements by such other entity as may be in
general use by significant segments of the U.S. accounting profession, which are
applicable to the circumstances as of the date of determination.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Gross Asset Value" means, at any time, an amount equal to (x) the sum of (i)
Net Operating Income for the previous calendar quarter, and (ii) Projected New
Property Net Operating Income determined on the last day of the previous calen
dar quarter, and (iii) general overhead and operating expenses of the Company
for the applicable period to the extent previously deducted from Net Income, and
(iv) cash and Cash Equivalents of the Company and its Subsidiaries determined on
the last day of the previous calendar quarter, less (a) income attributable to
management fees for the applicable period, and (b) an amount equal to three
percent (3%) of the rental income for the applicable period, divided by (y) the
FMV Cap Rate.
"Guaranty Obligation" means, as applied to any Person, any direct or indirect
liability of that Person with respect to any Indebtedness, lease, dividend,
letter of credit or other obligation (the "primary obligations") of another
Person (the "primary obligor"), including any obligation of that Person, whether
or not contingent, (a) to purchase, repurchase or otherwise acquire such primary
obligations or any property constituting direct or indirect security therefor,
or (b) to advance or provide funds (i) for the payment or discharge of any such
primary obligation, or (ii) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet item, level of income or financial condition of the primary
obligor, or (c) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation, or (d) otherwise
to assure or hold harmless the holder of any such primary obligation against
loss in respect thereof; in each case (a), (b), (c) or (d), including
arrangements wherein the rights and remedies of the holder of the primary
obligation are limited to repossession or sale of certain property of such
Person. The amount of any Guaranty Obligation shall be deemed equal to the
stated or determinable amount of the primary obligation in respect of which such
Guaranty Obligation is made or, if not stated or if indeterminable, the maximum
reasonably anticipated liability in respect thereof.
"Hazardous Materials" means all those substances which are regulated by, or
which may form the basis of liability under, any Environmental Law, including
all substances identified under any Environmental Law as a pollutant,
contaminant, hazardous waste, hazardous constituent, special waste, hazardous
substance, hazardous material, or toxic substance, or petroleum or petroleum
derived substance or waste.
"Indebtedness" of any Person means, without duplication, (a) all indebtedness
for borrowed money; (b) all obligations issued, undertaken or assumed as the
deferred purchase price of property or services (other than trade payables
entered into in the ordinary course of business pursuant to ordinary terms); (c)
all non-contingent reimbursement or payment obligations with respect to Surety
Instruments; (d) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses; (e) all indebtedness
created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to Property ac
quired by the Person (even though the rights and remedies of the seller or bank
under such agreement in the event of default are limited to repossession or sale
of such property); (f) all Capital Lease Obligations; (g) all net obligations
with respect to Rate Contracts; (h) all indebtedness referred to in clauses (a)
through (g) above secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien upon or
in Property (including accounts and contracts rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Indebtedness; and (i) all Guaranty Obligations in respect of indebtedness or
obligations of others of the kinds referred to in clauses (a) through (g) above.
Indebtedness shall not include any undrawn but uncancelled amounts under this
facility. In the case of nonrecourse debt of any Person other than of the
Company or of its Subsidiary, only that portion of such Indebtedness equal to
the Company's percentage beneficial ownership in such Person shall be included
in calculating the Indebtedness of the Company. Indebtedness shall be deemed to
include all current liabilities of any Person.
"Indemnified Person" has the meaning specified in subsection 10.5(a).
"Indemnified Liabilities" has the meaning specified in subsection 10.5(a).
"Insolvency Proceeding" means (a) any case, action or proceeding before any
court or other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors,
composition, marshalling of assets for creditors, or other, similar arrangement
in respect of its creditors generally or any substantial portion of its
creditors; in each case (a) and (b) undertaken under U.S. Federal, State or
foreign law, including the Bankruptcy Code.
"Interest Payment Date" means, with respect to any LIBOR Rate Loan, the last day
of each Interest Period applicable to such Loan and, with respect to Base Rate
Loans, the last Business Day of each Interest Period applicable to such Loan and
each date a Base Rate Loan is converted into a LIBOR Rate Loan, provided, howev
er, that if any Interest Period for a LIBOR Rate Loan exceeds three months, the
date which falls three months after the beginning of such Interest Period and
after each Interest Payment Date thereafter shall also be an Interest Payment
Date.
"Interest Period" means:
(1) with respect to any LIBOR Rate Loan, the period commencing on the Business
Day the Loan is disbursed or continued or on the Conversion Date on which the
Loan is converted to the LIBOR Rate Loan and ending on the date one, two, three
or six months thereafter, but in no event later than the Revolving Termination
Date, as selected by the Company in its Notice of Borrowing or Notice of Conver
sion/Continuation;
(i) if any Interest Period pertaining to a LIBOR Rate Loan would otherwise end
on a day which is not a Business Day, that Interest Period shall be extended to
the next succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event such
Interest Period shall end on the immediately preceding Business Day; and
(ii) any Interest Period pertaining to a LIBOR Rate Loan 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 Interest Period)
shall end on the last Business Day of the calendar month at the end of such
Interest Period; and
(2) with respect to any Base Rate Loan, the period commencing on the Business
Day such Loan is disbursed, continued or converted to a Base Rate Loan and
ending 30 days thereafter; provided that any Interest Period which would
otherwise end on a day which is not a Business Day shall be extended to the next
succeeding Business Day.
"Joint Venture" means a joint venture or other similar legal arrangement
(whether created pursuant to contract or conducted through a separate legal
entity, and whether consolidated or unconsolidated), now or hereafter formed by
the Company or any of its Subsidiaries with another Person in order to conduct a
common venture or enterprise with such Person.
"Legal Rate" has the meaning specified in subsection 10.24.
"Lending Office" means, with respect to any Bank, the office or offices of the
Bank specified as its "Lending Office" or "Domestic Lending Office" or "LIBOR
Lending Office", as the case may be, opposite its name on the applicable
signature page hereto, or such other office or offices of the Bank as it may
from time to time notify the Company and the Agent.
"LIBOR" has the meaning specified in the definition of "LIBOR Rate".
"LIBOR Lending Office" means with respect to each Bank, the office of such Bank
designated as such in the signature pages hereto or such other office of such
Bank as such Bank may from time to time specify to the Company and the Agent.
"LIBOR Rate" means, for each Interest Period in respect of LIBOR Rate Loans
comprising part of the same Borrowing, an interest rate per annum (rounded
upward to the nearest 1/16th of 1%) determined pursuant to the following
formula:
LIBOR Rate = LIBOR
-------------------------------
1.00 - LIBOR Reserve Percentage
Where,
"LIBOR Reserve Percentage" means the maximum reserve percentage (expressed as a
decimal, rounded upward to the nearest 1/100th of 1%) in effect an the date
LIBOR for such Interest Period is determined (whether or not applicable to any
Bank) under regulations issued from time to time by the Federal Reserve Board
for determining the maximum reserve requirement (including any emergency, sup
plemental or other marginal reserve requirement) with respect to Eurocurrency
funding (currently referred to as "Eurocurrency liabilities") having a term com
parable to such Interest Period; and
"LIBOR" means the rate of interest per annum determined by the Agent to be the
arithmetic mean (rounded upward to the nearest 1/16th of 1%) of the rates of
interest per annum notified to the Agent by the Reference Bank as the rate of
interest at which dollar deposits in the approximate amount of the amount of the
Loan to be made or continued as, or converted into, a LIBOR Rate Loan by the Ref
erence Bank and having a maturity comparable to such Interest Period would be
offered to major banks in the London interbank market at their request at or
about 11:00 a.m. (London time) on the second Business Day prior to the
commencement of such Interest Period.
The LIBOR Rate shall be adjusted automatically as of the effective date of any
change in the LIBOR Reserve Percentage.
"LIBOR Rate Loan" means a Loan that bears interest based on the LIBOR Rate.
"LIBOR Reserve Percentage" has the meaning specified in the definition of
"LIBOR Rate".
"Lien" means any mortgage, deed of trust, pledge, hypothecation, assignment,
charge or deposit arrangement, encumbrance, lien (statutory or other) or prefer
ence, priority or other security interest or preferential arrangement of any
kind or nature whatsoever (including those created by, arising under or evi
denced by any conditional sale or other title retention agreement, the interest
of a lessor under a Capital Lease Obligation, any financing lease having
substantially the same economic effect as any of the foregoing, or the filing of
any financing statement naming the owner of the asset to which such lien relates
as debtor, under the UCC or any comparable law) and any contingent or other
agreement to provide any of the foregoing, but not including the interest of a
lessor under an Operating Lease.
"Loan" means an extension of credit by a Bank to the Company pursuant to the
terms hereof, and may be a Base Rate Loan or a LIBOR Rate Loan.
"Loan Documents" means this Agreement and all documents delivered to the Agent
in connection therewith.
"Majority Banks" means (i) at any time when there are two (2) or less financial
institutions constituting Banks, all Banks and (ii) at any time when there are
more than two financial institutions constituting Banks, Banks then holding at
least 66-2/3% of the then aggregate unpaid principal amount of the Loans, or, if
no such principal amount is then outstanding, Banks then having at least 66-2/3%
of the Revolving Commitments.
"Margin Stock" means "margin stock" as such term is defined in Regulation G, T,
U or X of the Federal Reserve Board.
"Material Adverse Effect" means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, condition (financial
or otherwise) or prospects of the Company or the Company and its Subsidiaries
taken as a whole; (b) a material impairment of the ability of the Company to
perform under any Loan Document and avoid any Event of Default; or (c) a materi
al adverse effect upon the legality, validity, binding effect or enforceability
of any Loan Document.
"MGT" means ▇▇▇▇▇▇ Guaranty Trust Company of New York.
"Mortgage" means any deed of trust, mortgage or other document creating a Lien
an real property or any interest in real property.
"Multiemployer Plan" means a "multiemployer plan" (within the meaning of Section
4001(a)(3) of ERISA) and to which any member of the Controlled Group makes, is
making, or is obligated to make contributions or, during the preceding three
calendar years, has made, or been obligated to make, contributions.
"Net Income" means net income of the Company and its Subsidiaries, plus that
portion of net income of any unconsolidated subsidiary or Joint Venture equal to
the Company's percentage beneficial ownership in such unconsolidated Subsidiary
or Joint Venture, determined in accordance with GAAP.
"Net Issuance Proceeds" means, in respect of any issuance of debt or equity,
cash proceeds and non-cash proceeds received or receivable in connection
therewith, net of reasonable out-of-pocket costs and expenses paid or incurred
in connection therewith in favor of any Person not an Affiliate of the Company,
such costs and expenses not to exceed 10% of the gross proceeds of such
issuance.
"Net Operating Income" means Net Income (or net loss) plus depreciation and
amortization and interest (to the extent previously deducted from Net Income),
but less (x) Capital Expenditures (non-reimbursable and recurring) of the
Company and its Subsidiaries (and the Company's allocable share, based on the
Company's percentage ownership interest of such Joint Venture or unconsolidated
subsidiary, of such Capital Expenditures of its unconsolidated subsidiaries and
Joint Ventures), and (y) increases in deferred rent receivables. Net Income
shall be computed for these purposes by giving effect to extraordinary losses
and extraordinary gains.
"Net Proceeds" means proceeds in cash, checks or other cash equivalent financial
instruments (including Cash Equivalents) as and when received by the Person
making a Disposition, net of: (a) the direct costs relating to such Disposition
excluding amounts payable to the Company or any Affiliate of the Company, (b)
sale, use or other transaction taxes paid or payable as a result thereof, (c)
amounts required to be applied to repay principal, interest and prepayment premi
ums and penalties on Indebtedness secured by a Lien on the asset which is the
subject of such Disposition, and (d) amounts representing capital gains due to
the Company's shareholders. "Net Proceeds" shall also include proceeds paid on
account of any Event of Loss; and net of (i) all money actually applied to
repair or reconstruct the damaged property or property affected by the
condemnation or taking, (ii) all of the costs and expenses reasonably incurred
in connection with the collection of such proceeds, award or other payments, and
(iii) any amounts retained by or paid to parties having superior rights to such
proceeds, awards or other payments.
"Notice of Borrowing" means a notice given by the Company to the Agent pursuant
to Section 2.3, in substantially the form of Exhibit A.
"Notice of Conversion/Continuation" means a notice given by the Company to the
Agent pursuant to Section 2.4, in substantially the form of Exhibit B.
"Notice of Lien" means any "notice of lien" or similar document intended to be
filed or recorded with any court, registry, recorder's office, central filing
office or other Governmental Authority for the purpose of evidencing, creating,
perfecting or preserving the priority of a Lien securing obligations owing to a
Governmental Authority.
"Obligations" means all Loans, and other Indebtedness, advances, debts, liabili
ties, obligations, covenants and duties owing by the Company to any Bank, the
Agent, or any other Person required to be indemnified, that arises under any
Loan Document, whether or not for the payment of money, whether arising by
reason of an extension of credit, loan, guaranty, indemnification or in any
other manner, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising and however acquired.
"Operating Lease" means, as applied to any Person, any lease of Property which
is not a Capital Lease.
"Ordinary Course of Business" means, in respect of any transaction involving the
Company or any Subsidiary of the Company, the ordinary course of such Person's
business, as conducted by any such Person in accordance with past practice and
undertaken by such Person in good faith and not for purposes of evading any
covenant or restriction in any Loan Document.
"Organization Documents" means, for any corporation, the certificate or articles
of incorporation, the bylaws, any certificate of determination or instrument
relating to the rights of preferred shareholders of such corporation, any
shareholder rights agreement, and all applicable resolutions of the board of
directors (or any committee thereof) of such corporation.
"Other Acquisition" means any transaction or series of related transactions for
any acquisition other than a Permitted Real Property Acquisition.
"Other Taxes" has the meaning specified in subsection 3.1(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding
to any of its principal functions under ERISA.
"Participant" has the meaning specified in subsection 10.8(d).
"Permitted Liens" has the meaning specified in Section 7.1.
"Permitted Real Property Acquisition" means any transaction or series of related
transactions for the purpose of or resulting in the acquisition by the Company
or any Subsidiary of the Company of a fee or long-term leasehold interest in a
parcel of substantially improved real property located in the United States,
whether by means of (a) the direct purchase of an interest in such property or,
in the case of a long-term leasehold interest, the creation of such interest by
execution and delivery of a lease, (b) the acquisition of all or substantially
all of the assets of a Person, or of any business or division of a Person, (c)
the acquisition of in excess of 50% of the capital stock, partnership interests
or equity of any Person or otherwise causing any Person to become a Subsidiary,
or (d) a merger or consolidation or any other combination with another Person in
accordance with Section 7.3 hereof.
"Person" means an individual, partnership, corporation, business trust, joint
stock company, limited liability company, limited liability partnership, trust,
unincorporated association, joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section 3(3) of ERISA)
which the Company or any member of the Controlled Group sponsors or maintains or
to which the Company or any member of the Controlled Group makes, is making or
is obligated to make contributions, (and includes any Multiemployer Plan or
Qualified Plan.
"Prime Rate" means the rate of interest publicly announced by MGT from time to
time as its "prime" or "base" rate.
"Principal Payment Date" has the meaning specified in subsection 2.8.
"Proforma Net Operating Income" means Net Operating Income plus Projected New
Property Net Operating Income.
"Proforma Interest Expense" means an annual amount equal to the greater of (x)
the product of the total outstanding Indebtedness of the Company and its
Subsidiaries and the Company's allocable share, based on the Company's percent
age ownership interest of such Joint Venture or unconsolidated subsidiary, of
the outstanding Indebtedness of unconsolidated subsidiaries and Joint Ventures
of the Company, and the ten year Treasury Note Rate at the time in question plus
2.5% and (y) the actual interest and regularly scheduled payments of principal
payable on such Indebtedness during the applicable period.
"Projected New Property Net Operating Income" means with respect to (i) Real
Property Assets owned for less than the previous four quarter period, or (ii)
Real Property Assets which were Unimproved Assets during the previous four
quarter period, or (iii) Real Property Assets which have been the subject of
Capital Expenditures during the previous four quarter period which have resulted
in an increase in rent, Net Operating Income of such Real Property Assets calcu
lated on an estimated, pro forma (i.e., the results for the period during which
such Real Property Assets have been owned or shall have ceased to be Unimproved
Assets or during which such Capital Expenditures shall have been completed,
shall be annualized, with appropriate adjustments for items of income and ex
pense which are not earned or incurred in equal monthly amounts and adjusted up
wards for leases executed in connection with new Capital Expenditures) basis.
"Property" means any interest in any kind of property or asset, whether real,
personal or mixed, and whether tangible or intangible.
"Qualified Plan" means a pension plan (as defined in Section 3(2) of ERISA)
intended to be tax-qualified under Section 401(a) of the Code and which any mem
ber of the Controlled Group sponsors, maintains, or to which it makes, is making
or is obligated to make contributions, or in the case of a multiple employer
plan (as described in Section 4064(a) of ERISA) has made contributions at any
time during the immediately preceding period covering at least five (5) plan
years, but excluding any Multiemployer Plan.
"Real Property Assets" means all real property assets (including interests in
participating mortgages in which the Company's interest therein is characterized
as equity according to GAAP) currently owned directly or indirectly by the
Company and its Subsidiaries or hereafter acquired, directly or indirectly, by
the Company or any of its Subsidiaries.
"Reference Bank" means ▇▇▇▇▇▇ Guaranty Trust Company of New York, or such other
Bank as the Agent in its discretion may designate.
"Reportable Event" means, as to any Plan, (a) any of the events set forth in
Section 4043(b) of ERISA or the regulations thereunder, other than any such
event for which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC, (b) a withdrawal from a Plan described in
Section 4063 of ERISA, or (c) a cessation of operations described in Section
4062(e) of ERISA.
"Requirement of Law" means, as to any Person, any law (statutory or common),
treaty, rule or regulation or determination of an arbitrator or of a Gov
ernmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.
"Responsible Officer" means the chief executive officer or the president of the
Company, or any other officer having substantially the same authority and respon
sibility; or, with respect to compliance with financial covenants, the chief
financial officer or the treasurer of the Company, or any other officer having
substantially the same authority and responsibility.
"Revolving Commitment", with respect to each Bank, has the meaning specified in
subsection 2.1.
"Revolving Commitment Percentage" means, as to any Bank, the percentage
equivalent of such Bank's Revolving Commitment divided by the Aggregate Revolv
ing Commitment.
"Revolving Note" means a promissory note of the Company payable to the order of
a Bank in substantially the form of Exhibit C, evidencing the aggregate
indebtedness of the Company to such Bank resulting from Loans made by such Bank.
"Revolving Termination Date" means the earlier to occur of:
(a) June 30, 2000, except as the same may be extended pursuant to the terms of
subsection 2.8 hereof; and
(b) the date on which the Aggregate Revolving Commitment shall terminate in
accordance with the provisions of this Agreement.
"SEC" means the Securities and Exchange Commission, or any entity succeeding to
any of its principal functions.
"Secured Indebtedness" means any Indebtedness of the Company and its
Subsidiaries that is secured by a Lien, together with the Company's allocable
share of Indebtedness of its unconsolidated subsidiaries and Joint Ventures that
is secured by a Lien.
"Solvent" means, as to any Person at any time, that (a) the fair value of the
Property of such Person is greater than the amount of such Person's liabilities
(including disputed, contingent and unliquidated liabilities) as such value is
established and liabilities evaluated for purposes of Section 101(31) of the
Bankruptcy Code and, in the alternative, for purposes of the New York Uniform
Fraudulent Transfer Act; (b) the present fair saleable value of the Property of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured; (c) such Person is able to realize upon its Property and pay its debts
and other liabilities (including disputed, contingent and unliquidated lia
bilities) as they mature in the normal course of business; (d) such Person does
not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person's ability to pay as such debts and liabilities mature; and
(e) such Person is not engaged in business or a transaction, and is not about to
engage in business or a transaction, for which such Person's property would
constitute unreasonably small capital.
"Subsidiary" of a Person means any corporation, association, partnership, joint
venture or other business entity (i) of which 50% or more of the voting stock or
other equity interests (in the case of Persons other than corporations), is
owned or controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof and (ii) which is
consolidated with such Person in accordance with GAAP.
"Surety Instruments" means all letters of credit (including standby and com
mercial), bankers acceptances, bank guaranties, shipside bonds, surety bonds and
similar instruments.
"Tangible Net Worth" means at any date the consolidated stockholders' equity of
the Company and its Subsidiaries (determined on a book basis), less their
consolidated Intangible Assets, plus accumulated depreciation, all determined as
of such date, plus the Company's allocable share of such tangible net worth of
its unconsolidated subsidiaries and Joint Ventures, based on the Company's
percentage ownership interest of such Joint Ventures or unconsolidated
subsidiaries. For purposes of this definition "Intangible Assets" means with re
spect to any such intangible assets, the amount (to the extent reflected in de
termining such consolidated stockholders' equity) of 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 March 31, 1997 in the book value of any asset
(other than Real Property Assets) owned by the Company or a Subsidiary and (ii)
goodwill, patents, trademarks, service marks, trade names, anticipated future
benefit of tax loss carry forwards, copyrights, organization or developmental
expenses and other intangible assets.
"Taxes" has the meaning specified in subsection 3.1(a).
"Transferee" has the meaning specified in subsection 10.8(e).
"UCC" means the Uniform Commercial Code as in effect in the State of New York.
"Unfunded Pension Liabilities" means the excess of a Plan's benefit liabilities
under Section 4001(a)(16) of ERISA, over the current value of that Plan's
assets, determined in accordance with the assumptions used by the Plan's
actuaries for funding the Plan pursuant to section 412 for the applicable plan
year.
"Unimproved Assets" means Real Property Assets upon which no material
improvements have been completed which completion is evidenced by a certificate
of occupancy or its equivalent.
"Unimproved Asset Value" means the Company's allocable share of the book value
of Unimproved Assets, determined in accordance with GAAP.
"United States" and "U.S." each means the United States.
"Unleveraged Assets" means Real Property Assets which are not subject, in any
part, to a Lien securing Indebtedness and which are not Unimproved Assets.
"Unleveraged Asset Value" means the Gross Asset Value of Unleveraged Assets of
the Company and its Subsidiaries plus the Company's allocable share, based on
the Company's percentage ownership interest of such Joint Venture or
unconsolidated subsidiary, of the Gross Asset Value of Unleveraged Assets of the
Company's Joint Ventures and unconsolidated subsidiaries.
"Unsecured Indebtedness" means Indebtedness of the Company and all Subsidiaries
which is not secured by a Lien, plus the Company's allocable share, based on the
Company's percentage ownership interest of such Joint Venture or unconsolidated
subsidiary, of such unsecured Indebtedness of the Company's Joint Ventures and
unconsolidated subsidiaries.
"Unused Commitments" shall mean an amount equal to all unadvanced funds (other
than unadvanced funds in connection with any construction loan) which any third
party is obligated to advance to the Company or another Person or otherwise
pursuant to any loan document, written instrument or otherwise (in the case of a
loan to another Person, the Company's share of the Indebtedness shall be
calculated in the same manner as that set forth in the last sentence of the defi
nition of "Indebtedness").
"Wholly-Owned Subsidiary" means any corporation in which (other than directors'
qualifying shares required by law) 100% of the capital stock of each class
having ordinary voting power, and 100% of the capital stock of every other
class, in each case, at the time as of which any determination is being made, is
owned, beneficially and of record, by the Company, or by one or more of the
other Wholly-Owned Subsidiaries, or both.
"Withdrawal Liabilities" means, as of any determination date, the aggregate
amount of the liabilities, if any, pursuant to Section 4201 of ERISA if the Con
trolled Group made a complete withdrawal from all Multiemployer Plans and any
increase in contributions pursuant to Section 4243 of ERISA.
1.2 Other Interpretive Provisions.
(a) Defined Terms. Unless otherwise specified herein or therein, all terms
defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto. The meaning of
defined terms shall be equally applicable to the singular and plural forms of
the defined terms. Terms (including uncapitalized terms) not otherwise defined
herein and that are defined in the UCC shall have the meanings therein
described.
(b) The Agreement. The words "hereof", "herein", "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; and subsection, sec
tion, schedule and exhibit references are to this Agreement unless otherwise
specified.
(c) Certain Common Terms.
(i) The term "documents" includes any and all instruments, documents,
agreements, certificates, indentures, notices and other writings, however evi
denced.
(ii) The term "including" is not limiting and means "including without
limitation."
(d) Performance; Time. Whenever any performance obligation hereunder (other
than a payment obligation) shall be stated to be due or required to be satisfied
on a day other than a Business Day, such performance shall be made or satisfied
on the next succeeding Business Day. In the computation of periods of time from
a specified date to a later specified date, the word "from means "from and
including; the words "to" and "until" each mean "to but excluding", and the word
"through" means "to and including." If any provision of this Agreement refers
to any action taken or to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be interpreted to encompass any and
all means, direct or indirect, of taking, or not taking, such action.
(e) Contracts. Unless otherwise expressly provided herein, references to
agreements and other contractual instruments shall be deemed to include all
subsequent amendments and other modifications thereto, but only to the extent
such amendments and other modifications are not prohibited by the terms of any
Loan Document.
(f) Laws. References to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or regulation.
(g) Captions. The captions and headings of this Agreement are for convenience
of reference only and shall not affect the interpretation of this Agreement.
(h) Independence of Provisions. The parties acknowledge that this Agreement and
other Loan Documents may use several different limitations, tests or measure
ments to regulate the same or similar matters, and that such limitations, tests
and measurements are cumulative and must each be performed, except as expressly
stated to the contrary in this Agreement.
(i) Interpretation. This Agreement is the result of negotiations among and has
been reviewed by counsel to the Agent, the Company and other parties, and is the
product of all parties hereto. Accordingly, this Agreement and the other Loan
Documents shall not be construed against the Banks or the Agent merely because
of the Agent's or Banks' involvement in the preparation of such documents and
agreements.
1.3 Accounting Principles.
(a) Unless the context otherwise clearly requires, all accounting terms not
expressly defined herein shall be construed, and all financial computations re
quired under this Agreement shall be made, in accordance with GAAP, consistently
applied.
References herein to "fiscal year" and "fiscal quarter" refer to such fiscal
periods of the Company.
ARTICLE II
THE CREDIT
2.1 The Revolving Credit.
(a) Each Bank severally agrees, on the terms and conditions hereinafter set
forth, to make Loans to the Company from time to time on any Business Day during
the period from the Effective Date to the Revolving Termination Date, in an
aggregate amount not to exceed at any time outstanding the amount set forth
opposite the Bank's name in Schedule 2.1 under the heading "Revolving
Commitment" (such amount as the same may be reduced pursuant to Section 2.5 or
as a result of one or more assignments pursuant to Section 10.8, or as such
amount may be increased pursuant to Section 2.1(b) below, the Bank's "Revolving
Commitment"); provided, however, that, after giving effect to any Borrowing of
Loans, the aggregate principal amount of all outstanding Loans shall not exceed
the Aggregate Revolving Commitment. Within the limits of each Bank's Revolving
Commitment, and subject to the other terms and conditions hereof, the Company
may borrow under this Section 2.1(a), prepay pursuant to Section 2.6 and
reborrow pursuant to this Section 2.1(a).
(b) (i) Provided that there has been no Material Adverse Effect and that no
Event of Default shall have occurred and be continuing, the Company shall have
the one time right to deliver written notice to the Agent (the "Commitment In
crease Request") at any time on or before ninety (90) days prior to the Revolv
ing Termination Date to request that the Banks agree to increase the Aggregate
Revolving Commitment by $25,000,000 (the "Commitment Increase"), which Commit
ment Increase Request, the Agent shall promptly deliver to the Banks. The Banks
shall have the option (but not the obligation), in the sole and absolute discre
tion of each Bank, to elect to increase the amount of each Bank's Revolving Com
mitment by an amount equal to such Bank's pro rata share of the Commitment In
crease (as to each Bank, such additional amount being referred to herein as the
"Additional Commitment"). Each Bank shall endeavor to notify the Agent within
fifteen (15) business days after receipt by such Bank of the Commitment Increase
Request whether such Bank approves or disapproves the Commitment Increase. The
failure of any Bank to so notify the Agent shall in no event be deemed an
approval by such Bank of the Commitment Increase. The Agent shall endeavor to
notify the Company promptly upon its receipt of responses from all of the Banks
and, if all Banks have approved the Commitment Increase, as to the date (the
"Commitment Increase Effective Date") that the Commitment Increase will be made
effective.
(ii) It shall be a condition to the effectiveness of the Commitment In
crease that (A) no Event of Default shall have occurred and be continuing on the
Commitment Increase Effective Date, (B) all Banks shall have approved the Commit
ment Increase, (C) the Company shall have delivered to the Agent promissory
notes, in substantially the form of Exhibit G attached hereto, made payable to
the order of each Bank and in the original principal amount of such Bank's
Additional Commitment, and (D) the Company shall have paid to the Agent, for the
ratable account of the Banks, an additional commitment fee equal to one quarter
percent (.25%) of the Commitment Increase.
(iii) In no event shall the Aggregate Revolving Commitment, as it may be in
creased pursuant to this Section 2.1(b), exceed $100,000,000.
2.2 Notes.
(a) The Loans made by each Bank shall be evidenced by a Revolving Note payable
to the order of that Bank in an amount equal to its Revolving Commitment.
(b) Each Bank shall endorse on the schedules annexed to its Revolving Notes, the
date, amount and maturity of each Loan made by it and the amount of each payment
of principal made by the Company with respect thereto. Each Bank is irrevocably
authorized by the Company to endorse its Revolving Notes and each Bank's record
shall be rebuttable presumptive evidence; provided, however, that the failure of
a Bank to make, or an error in making, a notation thereon with respect to any
Loan shall not limit or otherwise affect the obligations of the Company here
under or under any such Revolving Note to such Bank.
2.3 Procedure for Borrowing.
(a) Each Borrowing of Loans shall be made upon the Company's irrevocable written
notice delivered to the Agent in accordance with Section 10.2 in the form of a
Notice of Borrowing (which notice must be received by the Agent prior to 2:00
p.m. (New York time) (i) three Business Days prior to the requested Borrowing
date, in the case of LIBOR Rate Loans and (ii) one Business Day prior to the
requested Borrowing date, in the case of Base Rate Loans, specifying:
(A) the amount of the Borrowing, which shall be in an aggregate minimum
principal amount of Three Million Dollars ($3,000,000) or any multiple of One
Million Dollars ($1,000,000) in excess thereof;
(B) the requested Borrowing date, which shall be a Business Day;
(C) whether the Borrowing is to be comprised of LIBOR Rate Loans or Base
Rate Loans;
(D) the duration of the Interest Period applicable to such Loans included
in such notice. If the Notice of Borrowing shall fail to specify the duration
of the Interest Period for any Borrowing comprised of LIBOR Rate Loans, such
Interest Period shall be three months.
provided, however, that with respect to the Borrowing to be made on the
Effective Date, the Notice of Borrowing shall be delivered to the Agent not
later than 2:00 p.m. (New York time) one Business Day before the Effective Date
and such Borrowing will consist of Base Rate Loans only.
(b) Upon receipt of the Notice of Borrowing, the Agent will promptly notify each
Bank thereof and of the amount of such Bank's Commitment Percentage of the Bor
rowing.
(c) Each Bank will make the amount of its Commitment Percentage of the Borrowing
available to the Agent for the account of the Company at the Agent's Payment
Office by 12:00 noon (New York time) on the Borrowing date requested by the
Company in funds immediately available to the Agent. The proceeds of all such
Loans will then be made available to the Company by the Agent at such office by
crediting the account of the Company on the books of MGT.
(d) Unless the Banks shall otherwise agree, during the existence of a Default or
an Event of Default, the Company may not elect to have a Loan be made as, or
converted into or continued as, a LIBOR Rate Loan.
(e) After giving effect to any Borrowing, there shall not be more than six (6)
different LIBOR Rate Loans in effect.
2.4 Conversion and Continuation Elections.
(a) The Company may upon irrevocable written notice to the Agent in accordance
with subsection 2.4(b):
(i) elect to convert on any Business Day, any Base Rate Loans (or any part
thereof in an amount not less than $3,000,000, or that is in an integral
multiple of $1,000,000 in excess thereof except that if a LIBOR Rate Loan shall
simultaneously be converted or renewed pursuant to clauses (ii) or (iii), such
amount shall be not less than $1,000,000 or integral multiples thereof) into
LIBOR Rate Loans; or
(ii) elect to convert on any Interest Payment Date any LIBOR Rate Loans
maturing on such Interest Payment Date (or any part thereof in an amount not
less than $3,000,000, or that is in an integral multiple of $1,000,000 in excess
thereof) into Base Rate Loans; or
(iii) elect to renew on any Interest Payment Date any LIBOR Rate Loans
maturing on such Interest Payment Date (or any part thereof in an amount not
less than $3,000,000, or that is in an integral multiple of $1,000,000 in excess
thereof);
provided, that if the aggregate amount of LIBOR Rate Loans in respect of any
Borrowing shall have been reduced, by payment, prepayment, or conversion of part
thereof to be less than $1,000,000, such LIBOR Rate Loans shall automatically
convert into Base Rate Loans, and on and after such date the right of the
Company to continue such Loans as, and convert such Loans into, LIBOR Rate Loans
shall terminate.
(b) The Company shall deliver a Notice of Conversion/Continuation in accordance
with Section 10.2 to be received by the Agent not later than 2:00 p.m. (New York
time) at least (i) three Business Days in advance of the Conversion Date or
continuation date, if the Loans are to be converted into or continued as LIBOR
Rate Loans and (ii) one Business Day in advance of the Conversion Date, if the
Loans are to be converted into Base Rate Loans; specifying:
(A) the proposed Conversion Date or continuation date;
(B) the aggregate amount of Loans to be converted or renewed;
(C) the nature of the proposed conversion or continuation; and
(D) the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to LIBOR Rate
Loans, the Company has failed to select timely a new Interest Period to be
applicable to such LIBOR Rate Loans, or if any Default or Event of Default shall
then exist, the Company shall be deemed to have elected to convert such LIBOR
Rate Loans into Base Rate Loans effective as of the expiration date of such
current Interest Period.
(d) Upon receipt of a Notice of Conversion/ Continuation, the Agent will
promptly notify each Bank thereof, or, if no timely notice is provided by the
Company, the Agent will promptly notify each Bank of the details of any
automatic conversion. All conversions and continuations shall be made pro rata
according to the respective outstanding principal amounts of the Loans with
respect to which the notice was given held by each Bank.
(e) Unless the Banks shall otherwise agree, during the existence of a Default or
an Event of Default, the Company may not elect to have a Loan converted into or
continued as a LIBOR Rate Loan.
(f) Notwithstanding any other provision contained in this Agreement, after
giving effect to any conversion or continuation of any Loans, there shall not be
more than six (6) different LIBOR Rate Loans in effect.
2.5 Voluntary Termination or Reduction of Commitments.
(a) The Company may, upon not less than five Business Days' prior notice to the
Agent, terminate the Aggregate Revolving Commitments or permanently reduce the
Aggregate Revolving Commitment by an aggregate minimum amount of $3,000,000 or
any multiple of $1,000,000 in excess thereof; provided that no such reduction or
termination shall be permitted if, after giving effect thereto and to any
prepayments of the Loans made on the effective date thereof, the then
outstanding principal amount of the Loans would exceed the Aggregate Revolving
Commitment then in effect.
(b) Once reduced in accordance with this Section 2.5, the Aggregate Revolving
Commitment may not be increased. Any reduction of the Aggregate Revolving
Commitment shall be applied to each Bank's Commitment in accordance with such
Bank's Revolving Commitment Percentage. All accrued commitment fees to, but not
including the effective date of any reduction or termination of Revolving
Commitments, shall be paid on the effective date of such reduction or
termination.
2.6 Optional Prepayments. Subject to Section 3.4, the Company may, at any time
or from time to time, upon at least five Business Days' notice to the Agent for
LIBOR Rate Loans, and at least one Business Day's notice to the Agent for Base
Rate Loans, ratably prepay Loans in whole or in part, in amounts of $1,000,000
or any multiple of $1,000,000 in excess thereof unless the then outstanding
principal amount of Loans is less than $1,000,000, in which case any prepayment
shall be equal to such outstanding principal amount. Such notice of prepayment
shall specify the date and amount of such prepayment and whether such prepayment
is of Base Rate Loans or LIBOR Rate Loans, or any combination thereof. Such
notice shall not thereafter be revocable by the Company and the Agent will
promptly notify each Bank thereof and of such Bank's Revolving Commitment
Percentage of such prepayment. If such notice is given by the Company, the
Company shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein, together with
accrued interest to each such date on the amount prepaid and any amounts
required pursuant to Section 3.4.
2.7 Mandatory Prepayments of Loans.
(a) Asset Dispositions. If the Company or any of its Subsidiaries shall at any
time or from time to time make or agree to make a Disposition or shall suffer an
Event of Loss, then (i) the Company shall promptly notify the Agent of such
proposed Disposition or Event of Loss (including the amount of the estimated Net
Proceeds to be received by the Company in respect thereof) and (ii) promptly
upon receipt by the Company or its Subsidiary of the Net Proceeds of such
Disposition or Event of Loss, the Company shall prepay Loans in an aggregate
amount equal to the cash portion of such Net Proceeds.
(b) Equity Issuance. If the Company shall issue new common or preferred equity,
the Company shall promptly notify the Agent of the estimated cash portion of Net
Issuance Proceeds of such issuance to be received by the Company in respect
thereof. Promptly upon receipt by the Company of the cash portion of Net
issuance Proceeds of such issuance, the Company shall prepay the Loans in an
aggregate amount equal to the amount of such cash portion of Net Issuance
Proceeds.
(c) General. Any prepayments pursuant to this Section 2.7 shall be applied first
to any Base Rate Loans then outstanding and then to LIBOR Rate Loans with the
shortest Interest Periods remaining; provided, however, that if the amount of
Base Rate Loans then outstanding is not sufficient to satisfy the entire
prepayment requirement, the Company may, at its option, place any amounts which
it would otherwise be required to use to prepay LIBOR Rate Loans on a day other
than the last day of the Interest Period therefor in an interest-bearing account
pledged to the Agent for the benefit of the Banks until the end of such Interest
Period at which time such pledged amounts will be applied to prepay such LIBOR
Rate Loans. The Company shall pay, together with each prepayment under this
Section 2.7, accrued interest on the amount prepaid and any amounts required
pursuant to Section 3.4.
2.8 Repayment; Extension Option. The Company shall repay to the Banks in full
on the Revolving Termination Date the aggregate principal amount of the Loans
outstanding on the Revolving Termination Date; provided, however, subject to the
following conditions, the Company shall have the option (the "Extension Option")
exercisable upon delivery by the Company of written notice thereof to the Agent
(the "Extension Notice") on or before 90 days prior to the Revolving Termination
Date to extend the term of the Aggregate Revolving Commitment and the Revolving
Termination Date for an additional one year period, such that the Revolving
Termination Date shall be extended to June 30, 2001 (which Extension Notice,
Agent shall promptly deliver to the Banks). The Company's right to exercise the
Extension Option shall be subject to the following terms and conditions: (i) all
the Banks must consent in writing to such extension within thirty (30) days
after the Agent's receipt of the Extension Notice, which consent shall be in the
sole discretion of the Banks, (ii) no Default or Event of Default shall have
occurred and be continuing both on the date the Company delivers the Extension
Notice to the Agent and on July 1, 2000 (the "Extension Date"), and (iii) the
Company shall pay to the Agent, for the account of the Banks, within five (5)
Business Days after the Banks consent to the extension pursuant to clause (i)
above, a fee equal to .15% of the then uncancelled Aggregate Revolving Commit
ment. The Company's delivery of the Extension Notice shall be irrevocable
except that the Company may revoke the Extension Notice only if upon the expira
tion of the thirty (30) day period set forth in clause (i) above less than 100%
of the Banks shall have consented in writing to such extension or earlier if at
least one Bank has refused to consent in writing to such extension, provided
that, in any case, such revocation shall be delivered to the Agent in writing no
less than fifteen (15) days prior to the Revolving Termination Date. Upon the
Revolving Termination Date, any Loans then outstanding (together with accrued
interest thereon) shall be due and payable on such date.
2.9 Interest.
(a) Subject to subsection 2.9(d), each Loan shall bear interest on the
outstanding principal amount thereof from the date when made at a rate per annum
equal to the LIBOR Rate or the Base Rate, as the case may be, plus the
Applicable Margin.
(b) Interest on each Loan shall be paid in arrears on each Interest Payment
Date. Interest shall also be paid on the date of any prepayment of Loans pursu
ant to Section 2.6 and 2.7 for the portion of the Loans so prepaid and upon
payment (including prepayment) in full thereof and, during the existence of any
Event of Default, interest shall be paid on demand.
(c) While any Event of Default exists or after acceleration, the Company shall
pay interest (after as well as before entry of judgment thereon to the extent
permitted by law) on the principal amount of all Loans due and unpaid, at a rate
per annum equal to the Base Rate plus 4%.
If any amount of principal of or interest on any Loan, or any other amount
payable hereunder or under any of the other Loan Documents is not paid in full
when due (whether at stated maturity, by acceleration, demand or otherwise), the
Company agrees to pay interest on such unpaid principal or other amount, from
the date such amount becomes due until the date such amount is paid in full, and
after as well as before any entry of judgment thereon to the extent permitted by
law, payable on demand, at a rate per annum equal to the Base Rate plus 4%.
(d) Anything herein to the contrary notwithstanding, the obligations of the
Company hereunder shall be subject to the limitation that payments of interest
shall not be required, for any period for which interest is computed hereunder,
to the extent (but only to the extent) that contracting for or receiving such
payment by the respective Bank would be contrary to the provisions of any law
applicable to such Bank limiting the highest rate of interest which may be
lawfully contracted for, charged or received by such Bank, and in such event the
Company shall pay such Bank interest at the highest rate permitted by applicable
law.
2.10 Fees.
(a) Commitment Fees. The Company shall pay to the Agent for the account of each
Bank a commitment fee on the average daily unused portion of such Bank's Re
volving Commitment, computed on a quarterly basis in arrears on the last
Business Day of each calendar quarter based upon the daily utilization for that
quarter as calculated by the Agent, equal to one quarter percent (.25%) per
annum. Such commitment fee shall accrue from the Effective Date to the Revolving
Termination Date and shall be due and payable quarterly in arrears on the last
Business Day of each quarter commencing on September 30, 1997 through the Revolv
ing Termination Date, with the final payment to be made on the Revolving Termina
tion Date; provided that, in connection with any reduction or termination of
Revolving Commitments pursuant to Section 2.5 or Section 2.7, the accrued com
mitment fee calculated for the period ending on such date shall also be paid on
the date of such reduction or termination, with the next succeeding quarterly
payment being calculated on the basis of the period from the reduction or
termination date to such quarterly payment date. The commitment fees provided
in this subsection shall accrue at all times after the above-mentioned com
mencement date, including at any time during which one or more conditions in
Article IV are not met.
(b)Fees Non-Refundable. All fees set forth in this Section 2.10 shall be deemed
to have been earned on the date payment is due in accordance with the provisions
hereof and shall be non-refundable. The obligation of the Company to pay such
fees in accordance with the provisions hereof shall be binding upon the Company
and shall inure to the benefit of the Agent, and the Banks regardless of whether
any Loans are actually made.
2.11 Computation of Fees and Interest.
(a) All computations of interest payable in respect of Base Rate Loans at all
times as the Base Rate is determined by MGT's Prime Rate shall be made on the
basis of a year of 365 or 366 days, as the case may be, and actual days elapsed.
All other computations of fees and interest under this Agreement shall be made
on the basis of a 360-day year and actual days elapsed, which results in more
interest being paid than if computed on the basis of a 365-day year. Interest
and fees shall accrue during each period during which interest or such fees are
computed from the first day thereof to the last day thereof.
(b) The Agent will, with reasonable promptness, notify the Company and the Banks
of each determination of a LIBOR Rate; provided that any failure to do so shall
not relieve the Company of any liability hereunder or provide the basis for any
claim against the Agent. Any change in the interest rate on a Loan resulting
from a change in the Applicable Margin or the LIBOR Reserve Percentage shall
become effective as of the opening of business on the day on which such change
in the Applicable Margin or the LIBOR Reserve Percentage becomes effective. The
Agent will with reasonable promptness notify the Company and the Banks of the
effective date and the amount of each such change, provided that any failure to
do so shall not relieve the Company of any liability hereunder or provide the
basis for any claim against the Agent.
(c) Each determination of an interest rate by the Agent shall be conclusive and
binding on the Company and the Banks in the absence of manifest error.
2.12 Payments by the Company.
(a) All payments (including prepayments) to be made by the Company on account of
principal, interest, fees and other amounts required hereunder shall be made
without set-off, recoupment or counterclaim; shall, except as otherwise
expressly provided herein, be made to the Agent for the ratable account of the
Banks at the Agent's Payment Office, and shall be made in dollars and in imme
diately available funds, no later than 2:00 p.m. (New York time) on the date
specified herein. The Agent will promptly distribute to each Bank its Revolving
Commitment Percentage (or other applicable share as expressly provided herein,
including any necessary adjustments based on the provisions of Section 3.2(c))
of such principal, interest, fees or other amounts, in like funds as received.
Any payment which is received by the Agent later than 2:00 p.m. (New York time)
shall be deemed to have been received on the immediately succeeding Business Day
and any applicable interest or fee shall continue to accrue.
(b) Whenever any payment hereunder shall be stated to be due on a day other than
a Business Day, such payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the computation of
interest or fees, as the case may be; subject to the provisions set forth in the
definition of "Interest Period" herein.
(c) Unless the Agent shall have received notice from the Company prior to the
date on which any payment is due to the Banks hereunder that the Company will
not make such payment in full as and when required hereunder, the Agent may
assume that the Company has made such payment in full to the Agent on such date
in immediately available funds and the Agent may (but shall not be so required),
in reliance upon such assumption, cause to be distributed to each Bank on such
due date an amount equal to the amount then due such Bank. If and to the extent
the Company shall not have made such payment in full to the Agent, each Bank
shall repay to the Agent on demand such amount distributed to such Bank,
together with interest thereon for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate as in effect for each such day.
2.13 Payments by the Banks to the Agent.
(a) Unless the Agent shall have received notice from a Bank on the Closing Date
or, with respect to each Borrowing after the Closing Date, at least one Business
Day prior to the date of any proposed Borrowing, that such Bank will not make
available to the Agent as and when required hereunder for the account of the
Company the amount of that Bank's Commitment Percentage of the Borrowing, the
Agent may assume that each Bank has made such amount available to the Agent in
immediately available funds on the Borrowing date and the Agent may (but shall
not be so required), in reliance upon such assumption, make available to the
Company on such date a corresponding amount. If and to the extent any Bank
shall not have made its full amount available to the Agent in immediately avail
able funds and the Agent in such circumstances has made available to the Company
such amount, that Bank shall on the next Business Day following the date of such
Borrowing make such amount available to the Agent, together with interest at the
Federal Funds Rate for and determined as of each day during such period. A
notice of the Agent submitted to any Bank with respect to amounts owing under
this subsection 2.13(a) shall be conclusive, absent manifest error. If such
amount is so made available, such payment to the Agent shall constitute such
Bank's Loan on the date of Borrowing for all purposes of this Agreement. If
such amount is not made available to the Agent on the next Business Day
following the date of such Borrowing, the Agent shall notify the Company of such
failure to fund and, upon demand by the Agent, the Company shall pay such amount
to the Agent for the Agent's account, together with interest thereon for each
day elapsed since the date of such Borrowing, at a rate per annum equal to the
interest rate applicable at the time to the Loans comprising such Borrowing.
(b) The failure of any Bank to make any Loan on any date of borrowing shall not
relieve any other Bank of any obligation hereunder to make a Loan on the date of
such borrowing, but no Bank shall be responsible for the failure of any other
Bank to make the Loan to be made by such other Bank on the date of any
borrowing.
2.14 Sharing of Payments, Etc. If, other than as expressly provided elsewhere
herein, any Bank shall obtain on account of the Loans made by it any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) in excess of its Revolving Commitment Percentage (subject to any
necessary adjustments based on the provisions of Section 3.2(c)) of payments on
account of the Loans obtained by all the Banks, such Bank shall forthwith (a)
notify the Agent of such fact, and (b) purchase from the other Banks such
participations in the Loans made by them as shall be necessary to cause such
purchasing Bank to share the excess payment ratably with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from the purchasing Bank, such purchase shall to that extent be
rescinded and each other Bank shall repay to the purchasing Bank the purchase
price paid therefor, together with an amount equal to such paying Bank's
Revolving Commitment Percentage (according to the proportion of (i) the amount
of such paying Bank's required repayment to (ii) the total amount so recovered
from the purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. The Company agrees
that any Bank so purchasing a participation from another Bank pursuant to this
Section 2.14 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off, but subject to Section 10.9)
with respect to such participation as fully as if such Bank were the direct
creditor of the Company in the amount of such participation. The Agent will
keep records (which shall be conclusive and binding in the absence of manifest
error) of participations purchased pursuant to this Section 2.14 and will in
each case notify the Banks following any such purchases or repayments.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.1 Taxes.
(a) Subject to subsection 3.1(g), any and all payments by the Company to each
Bank or the Agent under this Agreement shall be made free and clear of, and with
out deduction or withholding for, any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Bank and the Agent, such taxes
(including income taxes or franchise taxes) as are imposed on or measured by
each Bank's net income by the jurisdiction under the laws of which such Bank or
the Agent, as the case may be, is organized or maintains a Lending Office or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes").
(b) In addition, the Company shall pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Documents (hereinafter referred to as "Other Taxes").
(c) Subject to subsection 3.1(g), the Company shall indemnify and hold harmless
each Bank and the Agent for the full amount of Taxes or Other Taxes (including
any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under
this Section 3.1) paid by the Bank or the Agent and any liability (including
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. Payment under this indemnification shall be made within 30
days from the date the Bank or the Agent makes written demand therefor.
(d) If the Company shall be required by law to deduct or withhold any Taxes or
Other Taxes from or in respect of any sum payable hereunder to any Bank or the
Agent, then, subject to subsection 3.1(g):
(i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 3.1) such Bank or the Agent, as the case may be,
receives an amount equal to the sum it would have received had no such deduc
tions been made;
(ii) the Company shall make such deductions, and
(iii) the Company shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.
(e) Within 30 days after the date of any payment by the Company of Taxes or
Other Taxes, the Company shall furnish to the Agent the original or a certified
copy of a receipt evidencing payment thereof, or other evidence of payment
satisfactory to the Agent.
(f) Each Bank which is a foreign person (i.e., a person other than a United
States person for United States Federal income tax purposes) agrees that:
(i) it shall, no later than the Closing Date (or, in the case of a Bank
which becomes a party hereto pursuant to Section 10.8 after the Closing Date,
the date upon which the Bank becomes a party hereto) deliver to the Company
through the Agent two accurate and complete signed originals of Internal Revenue
Service Form 4224 or any successor thereto ("Form 4224"), or two accurate and
complete signed originals of Internal Revenue Service Form 1001 or any successor
thereto ("Form 1001"), as appropriate, in each case indicating that the Bank is
on the date of delivery thereof entitled to receive payments of principal,
interest and fees under this Agreement free from withholding of United States
Federal income tax;
(ii) if at any time the Bank makes any changes necessitating a new Form
4224 or Form 1001, it shall with reasonable promptness deliver to the Company
through the Agent in replacement for, or in addition to, the forms previously
delivered by it hereunder, two accurate and complete signed originals of Form
4224; or two accurate and complete signed originals of Form 1001, as
appropriate, in each case indicating that the Bank is on the date of delivery
thereof entitled to receive payments of principal, interest and fees under this
Agreement free from withholding of United States Federal income tax;
(iii) it shall, before or promptly after the occurrence of any event
(including the passing of time but excluding any event mentioned in (ii) above)
requiring a change in or renewal of the most recent Form 4224 or Form 1001 previ
ously delivered by such Bank and deliver to the Company through the Agent two
accurate and complete original signed copies of Form 4224 or Form 1001 in
replacement for the forms previously delivered by the Bank; and
(iv) it shall, promptly upon the Company's or the Agent's reasonable
request to that effect, deliver to the Company or the Agent (as the case may be)
such other forms or similar documentation as may be required from time to time
by any applicable law, treaty, rule or regulation in order to establish such
Bank's tax status for withholding purposes.
(g) The Company will not be required to pay any additional amounts in respect of
United States Federal income tax pursuant to subsection 3.1(d) to any Bank for
the account of any Lending Office of such Bank:
(i) if the obligation to pay such additional amounts would not have arisen
but for a failure by such Bank to comply with its obligations under subsection
3.1(f) in respect of such Lending Office;
(ii) if such Bank shall have delivered to the Company a Form 4224 in
respect of such Lending Office pursuant to subsection 3.1(f), and such Bank
shall not at any time be entitled to exemption from deduction or withholding of
United States Federal income tax in respect of payments by the Company hereunder
for the account of such Lending Office for any reason other than a change in
United States law or regulations or in the official interpretation of such law
or regulations by any governmental authority charged with the interpretation or
administration thereof (whether or not having the force of law) after the date
of delivery of such Form 4224; or
(iii) if the Bank shall have delivered to the Company a Form 1001 in respect
of such Leading Office pursuant to subsection 3.01(f), and such Bank shall not
at any time be entitled to exemption from deduction or withholding of United
States Federal income tax in respect of payments by the Company hereunder for
the account of such Lending Office for any reason other than a change in United
States law or regulations or any applicable tax treaty or regulations or in the
official interpretation of any such law, treaty or regulations by any gov
ernmental authority charged with the interpretation or administration thereof
(whether or not having the force of law) after the date of delivery of such Form
1001.
(h) If, at any time, the Company requests any Bank to deliver any forms or other
documentation pursuant to subsection 3.1(f)(iv), then the Company shall, on
demand of such Bank through the Agent, reimburse such Bank for any costs and
expenses (including Attorney Costs) reasonably incurred by such Bank in the
preparation or delivery of such forms or other documentation.
(i) If the Company is required to pay additional amounts to any Bank or the
Agent pursuant to subsection 3.1(d), then such Bank shall use its reasonable
best efforts (consistent with legal and regulatory restrictions) to change the
jurisdiction of its Lending Office so as to eliminate any such additional
payment by the Company which may thereafter accrue if such change in the judg
ment of such Bank is not otherwise disadvantageous to such Bank.
3.2 Illegality.
(a) If any Bank shall determine that the introduction of any Requirement of Law,
or any change in any Requirement of Law or in the interpretation or administra
tion thereof, has made it unlawful, or that any central bank or other
Governmental Authority has asserted that it is unlawful, for any Bank or its
Lending Office to make LIBOR Rate Loans, then, on notice thereof by the Bank to
the Company through the Agent, the obligation of that Bank to make LIBOR Rate
Loans shall be suspended until the Bank shall have notified the Agent and the
Company that the circumstances giving rise to such determination no longer
exists.
(b) If a Bank shall determine that it is unlawful to maintain any LIBOR Rate
Loan, the Company shall prepay in full all LIBOR Rate Loans of that Bank then
outstanding, together with interest accrued thereon, either on the last day of
the Interest Period thereof if the Bank may lawfully continue to maintain such
LIBOR Rate Loans to such day, or immediately, if the Bank may not lawfully
continue to maintain such LIBOR Rate Loans, together with any amounts required
to be paid in connection therewith pursuant to Section 3.4.
(c) If the Company is required to prepay any LIBOR Rate Loan immediately as
provided in subsection 3.2(b), then concurrently with such prepayment, the Compa
ny shall borrow from the affected Bank, in the amount of such repayment, a Base
Rate Loan.
(d) Before giving any notice to the Agent pursuant to this Section 3.2, the
affected Bank shall designate a different Lending Office with respect to its
LIBOR Rate Loans if such designation will avoid the need for giving such notice
or making such demand and will not, in the judgment of the Bank, be illegal or
otherwise disadvantageous to the Bank.
3.3 Increased Costs and Reduction of Return.
(a) If any Bank shall determine that, due to either (i) the introduction of or
any change (other than any change by way of imposition of or increase in reserve
requirements included in the calculation of the LIBOR Rate) in or in the
interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
cost to such Bank of agreeing to make or making, funding or maintaining any
LIBOR Rate Loans, then, subject to subsection (c) below, the Company shall be
liable for, and shall from time to time, upon demand therefor by such Bank (with
a copy of such demand to the Agent), pay to the Agent for the account of such
Bank, additional amounts as are sufficient to compensate such Bank for such
increased costs.
(b) If any Bank shall have determined that (i) the introduction of any Capital
Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation, (iii)
any change in the interpretation or administration of any Capital Adequacy
Regulation by any central bank or other Governmental Authority charged with the
interpretation or administration thereof, or (iv) compliance by the Bank (or its
Lending Office) or any corporation controlling the Bank, with any Capital
Adequacy Regulation; affects or would affect the amount of capital required or
expected to be maintained by the Bank or any corporation controlling the Bank
and (taking into consideration such Bank's or such corporation's policies with
respect to capital adequacy and such Bank's desired return on capital) deter
mines that the amount of such capital is increased as a consequence of its
Revolving Commitment, loans, credits or obligations under this Agreement, then,
subject to subsection (c) below, the Company shall be liable for and shall, upon
demand of such Bank (with a copy to the Agent), pay to the Bank, from time to
time as specified by the Bank, additional amounts sufficient to compensate the
Bank for such increase.
(c) Each Bank shall deliver to the Company and the Agent a written notice
promptly after it learns of an event which has caused or in its opinion is
likely to result in increased costs or reductions in the amounts received or
receivable hereunder to such Bank, and setting forth in reasonable detail the
basis for calculating the additional amount owed to such Bank, which statement
shall be conclusive and binding upon all parties hereto absent manifest error.
The Company shall not be obligated to pay any additional amounts which, under
the terms hereof, were accrued and upon demand would have been payable to such
Bank more than 30 days before such notice was given.
3.4 Funding Losses. The Company agrees to pay to each Bank, upon the request
of such Bank, and to hold each Bank harmless from the amount (as determined by
such Bank in its reasonable discretion) of any loss, cost, or expense which the
Bank may sustain or incur as a consequence of:
(a) the failure of the Company to make any payment or mandatory prepayment of
principal of any LIBOR Rate Loan (including payments made after any acceleration
thereof);
(b) the failure of the Company to borrow, continue or convert a Loan after the
Company has given (or is deemed to have given) a Notice of Borrowing or a Notice
of Conversion/Continuation;
(c) the failure of the Company to make any prepayment after the Company has
given a notice in accordance with Section 2.6;
(d) the prepayment (including pursuant to Section 2.7 or acceleration upon the
occurrence of an Event of Default) of a LIBOR Rate Loan on a day which is not
the last day of the Interest Period with respect thereto; or
(e) the conversion pursuant to Section 2.4 of any LIBOR Rate Loan to a Base Rate
Loan on a day that is not the last day of the respective Interest Period;
including any such loss, cost, or expense arising from the liquidation or
reemployment of funds obtained by it to maintain its LIBOR Rate Loans hereunder
or from fees payable to terminate the deposits from which such funds were ob
tained. Solely for purposes of calculating amounts payable by the Company to
the Banks under this Section 3.4 and under subsection 3.3(a), each LIBOR Rate
Loan made by a Bank (and each related reserve, special deposit or similar
requirement) shall be conclusively deemed to have been funded at the LIBOR used
in determining the LIBOR Rate for such LIBOR Rate Loan by a matching deposit or
other borrowing in the interbank eurodollar market for a comparable amount and
for a comparable period, whether or not such LIBOR Rate Loan is in fact so fund
ed. A Bank's determination of the amount so due under this Section, and the
yield maintenance calculation thereof, shall be set forth in the request for
such amount or amounts; such determination and calculation shall be conclusive
absent manifest error.
3.5 Inability to Determine Rates. If (a) the Agent shall have determined that
for any reason adequate and reasonable means do not exist for ascertaining the
LIBOR Rate for any requested Interest Period with respect to a proposed LIBOR
Rate Loan or (b) if the Majority Banks shall have determined and have notified
the Agent that the LIBOR Rate applicable pursuant to subsection 2.09(a) for any
requested Interest Period with respect to a proposed LIBOR Rate Loan does not
adequately and fairly reflect the cost to such Banks of funding such Loan, the
Agent will forthwith give notice of such determination to the Company and each
Bank. Thereafter, the obligation of the Banks to make or maintain LIBOR Rate
Loans hereunder shall be suspended until the Agent upon the instruction of the
Majority Banks revokes such notice in writing. Upon receipt of such notice, the
Company may revoke any Notice of Borrowing or Notice of Conversion/Continuation
then submitted by it. If the Company does not revoke such notice, the Banks
shall make, convert or continue the Loans, as proposed by the Company, in the
amount specified in the applicable notice submitted by the Company, but such
Loans shall be made, converted or continued as Base Rate Loans instead of LIBOR
Rate Loans.
3.6 Reserves on LIBOR Rate Loans. On condition that the Company shall have
received from a Bank written notice (with a copy to the Agent) that such Bank is
required under regulations of the Federal Reserve Board to maintain reserves
with respect to liabilities or assets consisting of or including Eurocurrency
funds or deposits (currently known as "Eurocurrency liabilities"), the Company
shall pay to each Bank, as long as such Bank shall be required to maintain such
reserves, additional costs on the unpaid principal amount of each LIBOR Rate
Loan equal to actual costs of such reserves allocated to such Loan by the Bank
(as determined by the Bank in good faith, which determination shall be
conclusive). Such additional costs shall be payable on each date on which
interest is payable on such Loan provided the Company shall have received at
least 15 days' prior written notice (with a copy to the Agent) of such addi
tional interest from the Bank. If a Bank fails to give notice fifteen days
prior to the relevant Interest Payment Date, such additional interest shall be
payable fifteen days from receipt of such notice. This covenant shall survive
payment of all other Obligations.
3.7 Certificates of Banks. Any Bank claiming reimbursement or compensation
pursuant to this Article III shall deliver to the Company (with a copy to the
Agent) a certificate setting forth in reasonable detail the amount payable to
the Bank hereunder and such certificate shall be conclusive and binding on the
Company in the absence of manifest error.
3.8 Survival. The agreements and obligations of the Company in this Article III
shall survive the payment of all other Obligations.
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Conditions of Initial Loans. The obligation of each Bank to make its
initial Loan hereunder is subject to the condition that the Agent shall have re
ceived on or before the Closing Date all of the following, in form and substance
satisfactory to the Agent and each Bank and in sufficient copies for each Bank:
(a) Credit Agreement and Notes. This Agreement and the Notes executed by the
Company, the Agent and each of the Banks;
(b) Resolutions; Incumbency.
(i) Copies of the resolutions of the board of directors of the Company
approving and authorizing the execution, delivery and performance by the Company
of this Agreement and the other Loan Documents to be delivered hereunder, and
authorizing the borrowing of the Loans, certified as of the Closing Date by the
Secretary or an Assistant Secretary of the Company;
(ii) A certificate of the Secretary or Assistant Secretary of the Company
certifying the names and true signatures of the officers of the Company autho
rized to execute, deliver and perform, as applicable, this Agreement, and all
other Loan Documents to be delivered hereunder;
(c) Articles of Incorporation; By-laws and Good Standing. Each of the
following documents:
(i) the articles or certificate of incorporation of the Company as in
effect on the Closing Date, certified by the Secretary of State (or similar,
applicable Governmental Authority) of the state of incorporation of the Company
as of a recent date and by the Secretary or Assistant Secretary of the Company
as of the Closing Date, and the bylaws of the Company as in effect on the
Closing Date, certified by the Secretary or Assistant Secretary of the Company
as of the Closing Date; and
(ii) a good standing and tax good standing certificate for the Company from
the Secretary of State (or similar, applicable Governmental Authority) of its
state of incorporation and each state where the Company is qualified to do
business as a foreign corporation, as of a date no earlier than June 1, 1997;
(d) Legal Opinion. An opinion of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel to the
Company and addressed to the Agent and the Banks, substantially in the form of
Exhibit D;
(e) Payment of Fees. The Company shall have paid all accrued and unpaid fees,
costs and expenses to the extent then due and payable on the Effective Date, to
gether with Attorney Costs of MGT to the extent invoiced prior to or on the
Effective Date, together with such additional amounts of Attorney Costs as shall
constitute MGT's reasonable estimate of Attorney Costs incurred or to be
incurred through the closing proceedings, provided that such estimate shall not
thereafter preclude final settling of accounts between the Company and MGT; in
cluding any such costs, fees and expenses arising under or referenced in
Sections 2.10, 3.1 and 10.4;
(f) Certificate. A certificate signed by a Responsible Officer, dated as of the
Closing Date, stating that:
(i) the representations and warranties contained in Article V are true and
correct on and as of such date, as though made on and as of such date;
(ii) no Default or Event of Default exists or would result from the initial
Borrowing; and
(iii) there has occurred since March 31, 1997, no event or circumstance that
has resulted or could reasonably be expected to result in a Material Adverse
Effect;
(g) Financial Statements. A certified copy of financial statements of the Compa
ny and its Subsidiaries referred to in Section 5.11;
(h) Insurance Policies. Standard lenders' payable endorsements with respect to
the casualty insurance policies or other instruments or documents evidencing
insurance coverage on the properties of the Company in accordance with Section
6.6;
(i) Due Diligence. Evidence of completion to the satisfaction of the Agent of
such investigations, reviews and audits with respect to the Company as the Agent
or any Bank may deem appropriate; and
(j) Other Documents. Such other approvals, opinions, documents or materials as
the Agent or any Bank may request.
4.2 Conditions to All Borrowings. The obligation of each Bank to make any Loan
to be made by it hereunder (including its initial Loan) or to continue or
convert any Loan pursuant to Section 2.4 is subject to the satisfaction of the
following conditions precedent on the relevant borrowing, continuation or
conversion date:
(a) Notice of Borrowing or Continuation/ Conversion. The Agent shall have
received (with, in the case of the initial Loan only, a copy for each Bank) a
Notice of Borrowing or a Notice of Continuation/Conversion, as applicable;
(b) Continuation of Representations and Warranties. The representations and
warranties made by the Company contained in Article V shall be true and correct
on and as of such borrowing, continuation or conversion date with the same
effect as if made on and as of such borrowing, continuation or conversion date
(except to the extent such representations and warranties expressly refer to an
earlier date, in which case they shall be true and correct as of such earlier
date);
(c) No Existing Default. No Default or Event of Default shall exist or shall
result from such Borrowing or continuation or conversion;
(d) Aggregate Revolving Commitment. Immediately after such Borrowing, the
aggregate outstanding principal amount of the Loans will not exceed the aggre
gate amount of the commitments and with respect to each Bank, such Bank's pro
rata portion of the Loans will not exceed such Bank's Revolving Commitment;
(e) Legality. No law or regulation shall have been adopted, no order, judgment
or decree of any Governmental Authority shall have been issued, and no
litigation shall be pending, which does or seeks to enjoin, prohibit or
restrain, the making or repayment of the Loans or any participations therein or
the consummation of the transactions contemplated by this Agreement; and
(f) Material Adverse Effect. No event, act or condition shall have occurred
after the Closing Date which, in the reasonable judgment of the Agent or the
Banks, as the case may be, has had or is likely to have a Material Adverse Ef
fect;
Each Notice of Borrowing and Notice of Continuation-Conversion submitted by
the Company hereunder shall constitute a representation and warranty by the
Company hereunder, as of the date of each such notice or application and as of
the date of each Borrowing, continuation or conversion, as applicable, that the
conditions in Section 4.2 are satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each Bank that:
5.1 Corporate Existence and Power. The Company and each of its Subsidiaries:
(a) is a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation;
(b) has the power and authority and all governmental licenses, authorizations,
consents and approvals to own its assets, carry on its business and execute,
deliver, and perform its obligations under, the Loan Documents;
(c) is duly qualified as a foreign corporation, and licensed and in good
standing, under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
or license; and
(d) is in compliance with all Requirements of Law; except, in each case referred
to in clause (c) or clause (d), to the extent that the failure to do so could
not reasonably be expected to have a Material Adverse Effect.
5.2 Corporate Authorization; No Contravention. The execution, delivery and
performance by the Company and its Subsidiaries of this Agreement, and any other
Loan Document to which such Person is party, have been duly authorized by all
necessary corporate action, and do not and will not:
(a) contravene the terms of any of that Person's Organization Documents;
(b) conflict with or result in any breach or contravention of, or the creation
of any Lien under, any document evidencing any Contractual Obligation to which
such Person is a party or any order, injunction, writ or decree of any
Governmental Authority to which such Person or its Property is subject; or
(c) violate any Requirement of Law.
5.3 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Company or
any of its Subsidiaries of the Agreement or any other Loan Document.
5.4 Binding Effect. This Agreement and each other Loan Document to which the
Company or any of its Subsidiaries is a party constitute the legal, valid and
binding obligations of the Company, enforceable against such Person in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, or similar laws affecting the enforcement
of creditors' rights generally or by equitable principles relating to
enforceability.
5.5 Litigation. Except as specifically disclosed in Schedule 5.5, there are no
actions, suits, proceedings, claims or disputes pending, or to the best knowl
edge of the Company, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against the Company, or its
Subsidiaries or any of their respective Properties which:
(a) purport to affect or pertain to this Agreement or any other Loan Document,
or any of the transactions contemplated hereby or thereby; or
(b) if determined adversely to the Company or its Subsidiaries, would reasonably
be expected to have a Material Adverse Effect. No injunction, writ, temporary
restraining order or any order of any nature has been issued by any court or
other Governmental Authority purporting to enjoin or restrain the execution,
delivery or performance of this Agreement or any other Loan Document, or
directing that the transactions provided for herein or therein not be
consummated as herein or therein provided.
5.6 No Default. No Default or Event of Default exists or would result from the
incurring of any Obligations by the Company. Neither the Company nor any of its
Subsidiaries is in default under or with respect to any Contractual Obligation
in any respect which, individually or together with all such defaults, could
reasonably be expected to have a Material Adverse Effect or that would, if such
default had occurred after the Closing Date, create an Event of Default under
subsection 8.1(e).
5.7 ERISA Compliance.
(a) Schedule 5.7 lists all Plans and separately identifies Plans intended to be
Qualified Plans and Multiemployer Plans. All written descriptions thereof
provided to the Agent are true and complete in all material respects.
(b) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Federal or state law, including all re
quirements under the Code or ERISA for filing reports (which are true and
correct in all material respects as of the date filed), and benefits have been
paid in accordance with the provisions of the Plan.
(c) Each Qualified Plan and Multiemployer Plan has been determined by the IRS to
qualify under Section 401 of the Code, and the trusts created thereunder have
been determined to be exempt from tax under the provisions of Section 501 of the
Code, and to the best knowledge of the Company nothing has occurred which would
cause the loss of such qualification or tax-exempt status.
(d) Except as specifically disclosed in Schedule 5.7, there is no outstanding
liability under Title IV of ERISA with respect to any Plan maintained or spon
sored by the Company or any ERISA Affiliate, nor with respect to any Plan to
which the Company or any ERISA Affiliate contributes or is obligated to
contribute.
(e) Except as specifically disclosed in Schedule 5.7, no Plan subject to Title
IV of ERISA has any Unfunded Pension Liability.
(f) Except as specifically disclosed in Schedule 5.7, no member of the
Controlled Group has ever represented, promised or contracted (whether in oral
or written form) to any current or former employee (either individually or to
employees as a group) that such current or former employee(s) would be provided,
at any cost to any member of the Controlled Group, with life insurance or
employee welfare plan benefits (within the meaning of section 3(l) of ERISA)
following retirement or termination of employment. To the extent that any
member of the Controlled Group has made any such representation, promise or con
tract, such member has expressly reserved the right to amend or terminate such
life insurance or employee welfare plan benefits with respect to claims not yet
incurred.
(g) Members of the Controlled Group have complied in all material respects with
the notice and continuation coverage requirements of Section 4980B of the Code.
(h) Except as specifically disclosed in Schedule 5.7, no ERISA Event has
occurred or is reasonably expected to occur with respect to any Plan.
(i) There are no pending or, to the best knowledge of the Company, threatened
claims, actions or lawsuits, other than routine claims for benefits in the usual
and ordinary course, asserted or instituted against (i) any Plan maintained or
sponsored by the Company or its assets, (ii) any member of the Controlled Group
with respect to any Qualified Plan, or (iii) any fiduciary with respect to any
Plan for which the Company may be directly or indirectly liable, through
indemnification obligations or otherwise.
(j) Except as specifically disclosed in Schedule 5.7, neither the Company nor
any ERISA Affiliate has incurred nor reasonably expects to incur (i) any liabili
ty (and no event has occurred which, with the giving of notice under Section
4219 of ERISA, would result in such liability) under Section 4201 or 4243 of
ERISA with respect to a Multiemployer Plan or (ii) any liability under Title IV
of ERISA (other than premiums due and not delinquent under Section 4007 of
ERISA) with respect to a Plan.
(k) Except as specifically disclosed in Schedule 5.7, neither the Company nor
any ERISA Affiliate has transferred any Unfunded Pension Liability to a Person
other than the Company or an ERISA Affiliate or otherwise engaged in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA.
(l) No member of the Controlled Group has engaged, directly or indirectly, in a
non-exempt prohibited transaction (as defined in Section 4975 of the Code or
Section 406 of ERISA) in connection with any Plan which could reasonably be
expected to have a Material Adverse Effect.
5.8 Use of Proceeds; Margin Regulations. The proceeds of the Loans are
intended to be and shall be used solely for the purposes set forth in and
permitted by Section 6.11, and are intended to be and shall be used in compli
ance with Section 7.7. Neither the Company nor any of its Subsidiaries is
generally engaged in the business of purchasing or selling Margin Stock or
extending credit for the purpose of purchasing or carrying Margin Stock.
5.9 Title to Properties. The Company and each of its Subsidiaries have good
record and marketable title in fee simple to, or valid leasehold interests in,
as applicable, all real property necessary or used in the ordinary conduct of
their respective businesses, except for such defects in title as could not, indi
vidually or in the aggregate, have a Material Adverse Effect. As of the Closing
Date, the Property of the Company and its Subsidiaries is subject to no Liens,
other than Permitted Liens.
5.10 Taxes. The Company and its Subsidiaries have filed all Federal and other
material tax returns and reports required to be filed, and have paid all Federal
and other material taxes, assessments, fees and other governmental charges
levied or imposed upon them or their Properties, income or assets otherwise due
and payable, except those which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been provided in accordance
with GAAP and no Notice of Lien has been filed or recorded. There is no
proposed tax assessment against the Company or any of its Subsidiaries which
would, if the assessment were made, have a Material Adverse Effect.
5.11 Financial Condition.
(a) The audited consolidated financial statements of financial condition of the
Company and its Subsidiaries dated December 31, 1996, and the related consol
idated statements of income or operations, shareholders' equity and cash flows
for the fiscal year ended on that date:
(i) were prepared in accordance with GAAP consistently applied throughout
the period covered thereby, except as otherwise expressly noted therein;
(ii) fairly present the financial condition of the Company and its
Subsidiaries as of the date thereof and results of operations for the period
covered thereby; and
(iii) except as specifically disclosed in Schedule 5.11, show all material
indebtedness and other liabilities, direct or contingent of the Company and its
Subsidiaries as of the date thereof, including liabilities for taxes, material
commitments and Contingent Obligations.
(b)Since December 31, 1996, there has been no Material Adverse Effect.
5.12 Environmental Matters.
(a) Except as specifically disclosed in Schedule 5.12, the ongoing operations of
the Company and each of its Subsidiaries comply in all respects with all Environ
mental Laws, except such non-compliance which would not (if enforced in
accordance with applicable law) result in liability in excess of $100,000 in the
aggregate.
(b) Except as specifically disclosed in Schedule 5.12, the Company and each of
its Subsidiaries have obtained all licenses, permits, authorizations and regis
trations required under any Environmental Law ("Environmental Permits") and
necessary for their respective ordinary course operations, all such Environ
mental Permits are in good standing, and the Company and each of its Subsid
iaries are in compliance with all material terms and conditions of such Environ
mental Permits.
(c) Except as specifically disclosed in Schedule 5.12, none of the Company, any
of its Subsidiaries or any of their respective present Properties or operations,
is subject to any outstanding written order from or agreement with any
Governmental Authority, nor subject to any judicial or docketed administrative
proceeding, respecting any Environmental Law, Environmental Claim or Hazardous
Material.
(d) Except as specifically disclosed in Schedule 5.12, there are no Hazardous
Materials or other conditions or circumstances existing with respect to any Prop
erty, or arising from operations prior to the Closing Date, of the Company or
any of its Subsidiaries that would reasonably be expected to give rise to
Environmental Claims with a potential liability of the Company and its
Subsidiaries in excess of $100,000 in the aggregate for any such condition,
circumstance or Property. In addition, (i) neither the Company nor any of its
Subsidiaries has any underground storage tanks (x) that are not properly
registered or permitted under applicable Environmental Laws, or (y) that are
leaking or disposing of Hazardous Materials off-site, and (ii) the Company and
its Subsidiaries have notified all of their employees of the existence, if any,
of any health hazard arising from the conditions of their employment and have
met all notification requirements under Title III of CERCLA and all other
Environmental Laws.
5.13 Regulated Entities. None of the Company, any Person controlling the
Company, or any Subsidiary of the Company, is (a) an "Investment Company" within
the meaning of the Investment Company Act of 1940; or (b) subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code, or any other Federal
or state statute or regulation limiting its ability to incur Indebtedness.
5.14 No Burdensome Restrictions. Neither the Company nor any of its
Subsidiaries is a party to or bound by any Contractual Obligation, or subject to
any charter or corporate restriction, or any Requirement of Law, which could
reasonably be expected to have a Material Adverse Effect.
5.15 Solvency. The Company and each of its Subsidiaries are Solvent.
5.16 Labor Relations. There are no strikes, lockouts or other labor disputes
against the Company or any of its Subsidiaries, or, to the best of the Company's
knowledge, threatened against or affecting the Company or any of its
Subsidiaries, and no significant unfair labor practice complaint is pending
against the Company or any of its Subsidiaries or, to the best knowledge of the
Company, threatened against any of them before any Governmental Authority.
5.17 Copyrights, Patents, Trademarks and Licenses, etc. The Company or its
Subsidiaries own or are licensed or otherwise have the right to use all of the
patents, trademarks, service marks, trade names, copyrights, contractual
franchises, authorizations and other rights that are reasonably necessary for
the operation of their respective businesses, without conflict with the rights
of any other Person. To the best knowledge of the Company, no slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by the Company or any of its
Subsidiaries infringes upon any rights held by any other Person; except as spe
cifically disclosed in Schedule 5.5, no claim or litigation regarding any of the
foregoing is pending or threatened, and no patent, invention, device,
application, principle or any statute, law, rule, regulation, standard or code
is pending or, to the knowledge of the Company, proposed, which, in either case,
could reasonably be expected to have a Material Adverse Effect.
5.18 Subsidiaries. As of the Closing Date, the Company has no Subsidiaries
other than those specifically disclosed in part (a) of Schedule 5.18 hereto and
has no equity investments in any other corporation or entity other than those
specifically disclosed in part (b) of Schedule 5.18.
5.19 Broker's Transaction Fees. Neither the Company nor any of its
Subsidiaries has any obligation to any Person in respect of any finder's,
broker's or investment banker's fee in connection with the transactions contem
plated hereby.
5.20 Insurance. The Properties of the Company and its Subsidiaries are insured
with financially sound and reputable insurance companies not Affiliates of the
Company, in such amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and owning
similar Properties in localities where the Company or such Subsidiary operates.
5.21 SEC Filings. The information contained in any documents filed by the
Company with the SEC, including without limitation that certain Form S-11
Registration Statement, which was declared effective on August 5, 1993, was true
and correct in all material respects as of the date of their respective filings.
5.22 Full Disclosure. None of the representations or warranties made by the
Company or any of its Subsidiaries in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in each exhibit, report, statement or certificate furnished
by or on behalf of the Company or any of its Subsidiaries in connection with the
Loan Documents (including the offering and disclosure materials delivered by or
on behalf of the Company to the Banks prior to the Closing Date), contains any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading as of the time when made
or delivered.
5.23 REIT Status. The Company qualifies as a Real Estate Investment Trust
under the Code.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Company covenants and agrees that, so long as any Bank shall have any
Commitment hereunder, or any Loan or other Obligation shall remain unpaid or
unsatisfied, unless the Majority Banks waive compliance in writing:
6.1 Financial Statements. The Company shall deliver to the Agent in form and
detail satisfactory to the Agent and the Majority Banks, with sufficient copies
for each Bank:
(a) as soon as available, but not later than ten (10) Business Days after the
same is filed with the SEC, but in no event later than 120 days after the end of
each fiscal year, a copy of the audited consolidated balance sheet of the
Company as at the end of such year and the related consolidated statements of
income or operations, shareholders' equity and cash flows for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, and accompanied by the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & Company or
another nationally-recognized independent public accounting firm which report
shall state that such consolidated financial statements present fairly the
financial position for the periods indicated in conformity with GAAP applied on
a basis consistent with prior years. Such opinion shall not be qualified or
limited because of a restricted or limited examination by such accountant of any
material portion of the Company's or any Subsidiary's records and shall be
delivered to the Agent pursuant to a reliance agreement between the Agent and
Banks and such accounting firm in form and substance satisfactory to the Agent;
(b) as soon as available, but not later than ten (10) Business Days after the
same is filed with the SEC, but in no event later than 60 days after the end of
each of the first three fiscal quarters of each year, a copy of the unaudited
consolidated balance sheet of the Company and its Subsidiaries as of the end of
such quarter and the related consolidated statements of income, shareholders'
equity and cash flows for the period commencing on the first day and ending on
the last day of such quarter, and certified by an appropriate Responsible
Officer as being complete and correct and fairly presenting, in accordance with
GAAP, the financial position and the results of operations of the Company and
the Subsidiaries; and
(c) with respect to any Real Property Asset to be acquired, as soon as
available, but not less than thirty (30) days prior to acquisition, a rent roll,
and five (5) years of projected cash flow.
6.2 Certificates; Other Information. The Company shall furnish to the Agent,
with sufficient copies for each Bank:
(a) concurrently with the delivery of the financial statements referred to in
subsection 6.1(a) above, a certificate of the independent certified public
accountants reporting on such financial statements stating that in making the
examination necessary therefor no knowledge was obtained of any Default or Event
of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements referred to in
subsections 6.1(a) and (b) above and with the closing of each Acquisition, a
certificate of a Responsible Officer (i) stating that, to the best of such
officer's knowledge, the Company, during such period, has observed and performed
all of its covenants and other agreements, and satisfied every condition
contained in this Agreement to be observed, performed or satisfied by it, and
that such officer has obtained no knowledge of any Default or Event of Default
except as specified (by applicable subsection reference) in such certificate,
and (ii) showing in detail the calculations supporting such statement in respect
of Sections 7.14 and 7.15;
(c) as soon as available, but not later than five days after the same are sent,
copies of all financial statements and reports which the Company sends to its
shareholders; and promptly after the same are filed, copies of all financial
statements and regular, periodic or special reports which the Company may make
to, or file with, the Securities and Exchange Commission or any successor or
similar Governmental Authority;
(d) concurrently with the delivery of the financial statements referred to in
subsection 6.1(b) above, an occupancy report for each parcel of real property
owned by the Company, substantially in the form attached hereto as Exhibit F;
(e) concurrently with the delivery of the financial statements referred to in
subsection 6.1(a) above, financial projections for the Company through the
Revolving Termination Date, together with a financial projection for each parcel
of real property owned by the Company, all in form and detail satisfactory to
the Banks;
(f) promptly upon the request of any Bank made through the Agent, copies of any
document, including appraisals, related to any Permitted Real Property Acqui
sition;
(g) if the occupancy rate of any parcel of real property owned by the Company
should fall below 90%, a written plan to increase such occupancy in form and
detail satisfactory to the Banks; and
(h) promptly, such additional business, financial, corporate affairs and other
information as the Agent, at the request of any Bank, may from time to time
reasonably request.
6.3 Notices. The Company shall promptly notify the Agent and each Bank:
(a) (i) of the occurrence of any Default or Event of Default, (ii) of the
occurrence or existence of any event or circumstance that foreseeably will
become a Default or Event of Default, and (iii) of the occurrence or existence
of any event or circumstance that would cause the condition to Borrowing set
forth in subsection 4.2(b) not to be satisfied if a Borrowing were requested on
or after the date of such event or circumstance;
(b) of (i) any breach or non-performance of, or any default under, any Contrac
tual Obligation of the Company or any of its Subsidiaries which could result in
a Material Adverse Effect; and (ii) any dispute, litigation, investigation,
proceeding or suspension which may exist at any time between the Company or any
of its Subsidiaries and any Governmental Authority;
(c) of the commencement of, or any material development in, any litigation or
proceeding affecting the Company or any Subsidiary (i) in which the amount of
damages claimed is $250,000 (or its equivalent in another currency or cur
rencies) or more, (ii) in which injunctive or similar relief is sought and
which, if adversely determined, would reasonably be expected to have a Material
Adverse Effect, or (iii) in which the relief sought is an injunction or other
stay of the performance of this Agreement or any other Loan Document;
(d) upon, but in no event later than 10 days after, becoming aware of (i) any
and all enforcement, cleanup, removal or other governmental or regulatory
actions instituted, completed or threatened against the Company or any of its
Subsidiaries or any of their respective Properties pursuant to any applicable
Environmental Laws, (ii) all other Environmental Claims, and (iii) any envi
ronmental or similar condition on any real property adjoining or in the vicinity
of the property of the Company or any Subsidiary that could reasonably be antic
ipated to cause such property or any part thereof to be subject to any
restrictions on the ownership, occupancy, transferability or use of such
property under any Environmental Laws;
(e) of any other litigation or proceeding affecting the Company or any of its
Subsidiaries which the Company would be required to report to the SEC pursuant
to the Exchange Act, within four days after reporting the same to the SEC;
(f) of any of the following ERISA events affecting the Company or any member of
its Controlled Group (but in no event more than 10 days after such event),
together with a copy of any notice with respect to such event that may be
required to be filed with a Governmental Authority and any notice delivered by a
Governmental Authority to the Company or any member of its Controlled Group with
respect to such event:
(i) an ERISA Event;
(ii) the adoption of any new Plan that is subject to Title IV of ERISA or
section 412 of the Code by any member of the Controlled Group;
(iii) the adoption of any amendment to a Plan that is subject to Title IV of
ERISA or section 412 of the Code, if such amendment results in a material
increase in benefits or unfunded liabilities; or
(iv) the commencement of contributions by any member of the Controlled
Group to any Plan that is subject to Title IV of ERISA or section 412 of the
Code;
(g) any Material Adverse Effect subsequent to the date of the most recent
audited financial statements of the Company delivered to the Banks pursuant to
subsection 6.1(a) or 4.1(h);
(h) of any change in accounting policies or financial reporting practices by the
Company or any of its Subsidiaries; and
(i) of any labor controversy resulting in or threatening to result in any
strike, work stoppage, boycott, shutdown or other labor disruption against or in
volving the Company or any of its Subsidiaries.
Each notice pursuant to this Section shall be accompanied by a written statement
by a Responsible Officer of the Company setting forth details of the occurrence
referred to therein, and stating what action the Company proposes to take with
respect thereto and at what time. Each notice under subsection 6.3(a) shall
describe with particularity any and all clauses or provisions of this Agreement
or other Loan Document that have been breached or violated.
6.4 Preservation of Corporate Existence, Etc. The Company shall, and shall
cause each of its Subsidiaries to:
(a) preserve and maintain in full force and effect its corporate existence and
good standing under the laws of its state or jurisdiction of incorporation;
(b) preserve and maintain in full force and effect all rights, privileges,
qualifications, permits, licenses and franchises necessary or desirable in the
normal conduct of its business except in connection with transactions permitted
by Section 7.3 and sales of assets permitted by Section 7.2;
(c) use its reasonable efforts, in the Ordinary Course of Business, to preserve
its business organization and preserve the goodwill and business of the
customers, suppliers and others having material business relations with it;
(d) preserve or renew all of its registered trademarks, trade names and service
marks, the non-preservation of which could reasonably be expected to have a
Material Adverse Effect; and
(e) continue to engage in business of the same general type as conducted by the
Company.
6.5 Maintenance of Property. The Company shall maintain, and shall cause each
of its Subsidiaries to maintain, and preserve all its Property which is used or
useful in its business in good working order and condition, ordinary wear and
tear excepted and make all necessary repairs thereto and renewals and
replacements thereof except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect, except as permitted by Section 7.2.
The Company shall use the standard of care typical in the industry in the opera
tion and maintenance of its facilities.
6.6 Insurance. The Company shall maintain, and shall cause each of its
Subsidiaries to maintain, with financially sound and reputable independent insur
ers, insurance with respect to its Properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons; including workers'
compensation insurance, public liability and property and casualty insurance.
All casualty insurance and key man insurance (if any) maintained by the Company
shall name the Agent as loss payee and all liability insurance shall name the
Agent as additional insured for the benefit of the Banks, as their interests may
appear. Upon request of the Agent or any Bank, the Company shall furnish the
Agent, with sufficient copies for each Bank, at reasonable intervals (but not
more than once per calendar year) a certificate of a Responsible Officer of the
Company (and, if requested by the Agent, any insurance broker of the Company)
setting forth the nature and extent of all insurance maintained by the Company
and its Subsidiaries in accordance with this Section 6.6 (and which, in the case
of a certificate of a broker, was placed through such broker).
6.7 Payment of Obligations. The Company shall, and shall cause its
Subsidiaries to, pay and discharge as the same shall become due and payable, all
their respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges or levies upon it
or its properties or assets, unless the same are being contested in good faith
by appropriate proceedings and adequate reserves in accordance with GAAP are
being maintained by the Company or such Subsidiary;
(b) all lawful claims which, if unpaid, would by law become a Lien upon its
property; and
(c) all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.
8.8 Compliance with Laws. The Company shall comply, and shall cause each of
its Subsidiaries to comply, in all material respects with all Requirements of
Law of any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except such as may be
contested in good faith or as to which a bona fide dispute may exist.
6.9 Inspection of Property and Books and Records. The Company shall maintain
and shall cause each of its Subsidiaries to maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial transactions and matters
involving the assets and business of the Company and such Subsidiaries. The
Company shall permit, and shall cause each of its Subsidiaries to permit,
representatives and independent contractors of the Agent or any Bank to visit
and inspect any of their respective Properties, to examine their respective
corporate, financial and operating records, and make copies thereof or abstracts
therefrom, and to discuss their respective affairs, finances and accounts with
their respective directors, officers, and independent public accountants, all at
the expense of the Company and at such reasonable times during normal business
hours and as often as may be reasonably desired, upon reasonable advance notice
to the Company; provided, however, when an Event of Default exists the Agent or
any Bank may do any of the foregoing at the expense of the Company at any time
during normal business hours and without advance notice.
6.10 Environmental Laws.
(a) The Company shall, and shall cause each of its Subsidiaries to, conduct its
operations and keep and maintain its Property in compliance with all Environmen
tal Laws.
(b) Upon the written request of the Agent or any Bank, the Company shall submit
and cause each of its Subsidiaries to submit, to the Agent with sufficient
copies for each Bank, at the Company's sole cost and expense, at reasonable
intervals, a report providing an update of the status of any environmental,
health or safety compliance, hazard or liability issue identified in any notice
or report required pursuant to subsection 6.3(d), that could, individually or in
the aggregate, result in liability in excess of $250,000.
6.11 Use of Proceeds. The Company shall use the proceeds of the Loans solely
as follows: (a) for Permitted Real Property Acquisitions, and (b) for working
capital and other general corporate purposes not in contravention of any Require
ment of Law.
6.12 Solvency. The Company shall at all times be, and shall cause each of its
Subsidiaries to be, Solvent.
6.13 Further Assurances.
(a) The Company shall ensure that all written information, exhibits and reports
furnished to the Agent or the Banks do not and will not contain any untrue state
ment of a material fact and do not and will not omit to state any material fact
or any fact necessary to make the statements contained therein not misleading in
light of the circumstances in which made, and will promptly disclose to the
Agent and the Banks and correct any defect or error that may be discovered
therein or in any Loan Document or in the execution, acknowledgement or recorda
tion thereof.
(b) Promptly upon request by the Agent or the Majority Banks, the Company shall
(and shall cause any of its Subsidiaries to) do, execute, acknowledge, deliver,
record, re-record, file, re-file, register and re-register, any and all such
further acts, deeds, conveyances, security agreements, mortgages, assignments,
estoppel certificates, financing statements and continuations thereof,
termination statements, notices of assignment, transfers, certificates,
assurances and other instruments the Agent or such Banks, as the case may be,
may reasonably require from time to time in order (i) to carry out more
effectively the purposes of this Agreement or any other Loan Document, and (ii)
to better assure, preserve, protect and confirm to the Agent and the Banks the
rights granted or now or hereafter intended to be granted to the Banks under any
Loan Document or under any other document executed in connection therewith.
6.14 Qualification as a Real Estate Investment Trust. The Company shall take
all steps necessary, in the opinion of the board of directors and counsel for
the Company, to qualify as a Real Estate Investment Trust as long as a Real
Estate Investment Trust is accorded substantially the same treatment or benefits
under the United States income tax laws from time to time in effect as under
Sections 856-860 of the Code on the Closing Date.
ARTICLE VII
NEGATIVE COVENANTS; FINANCIAL COVENANTS
The Company hereby covenants and agrees that, so long as any Bank shall have any
Commitment hereunder, or any Loan or other Obligation shall remain unpaid or
unsatisfied, unless the Majority Banks waive compliance in writing:
7.1 Limitation on Liens. The Company shall not, and shall not suffer or permit
any of its Subsidiaries to, directly or indirectly, make, create, incur, assume
or suffer to exist any Lien upon or with respect to any part of its Property,
whether now owned or hereafter acquired, other than the following ("Permitted
Liens"):
(a) any Lien securing permitted Secured Indebtedness;
(b) Liens for taxes, fees, assessments or other governmental charges which are
not delinquent or remain payable without penalty, or to the extent that non-pay
ment thereof is permitted by Section 6.7, provided that no Notice of Lien has
been filed or recorded under the Code;
(c) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the Ordinary Course of Business
which are not delinquent or remain payable without penalty or which are being
contested in good faith and by appropriate proceedings, which proceedings have
the effect of preventing the forfeiture or sale of the Property subject thereto;
(d) Liens (other than any Lien imposed by ERISA) consisting of pledges or
deposits required in the Ordinary Course of Business in connection with workers,
compensation, unemployment insurance and other social security legislation;
(e) Liens on the Property of the Company or any of its Subsidiaries securing (i)
the non-delinquent performance of bids, trade contracts (other than for borrowed
money), leases and statutory obligations, (ii) contingent obligations on surety
and appeal bonds, and (iii) other non-delinquent obligations of a like nature;
in each case, incurred in the Ordinary Course of Business, provided all such
Liens in the aggregate would not (even if enforced) cause a Material Adverse
Effect;
(f) Liens consisting of judgment or judicial attachment liens, provided that the
enforcement of such Liens is effectively stayed and all such Liens in the
aggregate at any time outstanding for the Company and its Subsidiaries do not
exceed $100,000;
(g) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the Ordinary Course of Business which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the Property subject thereto or interfere with the ordinary conduct of
the businesses of the Company and its Subsidiaries;
(h) Liens securing Capital Lease Obligations on assets subject to such Capital
Leases, provided that such Capital Leases are permitted under subsection
7.11(d); and
(i)Liens arising solely by virtue of any statutory or common law provision
relating to banker's liens, rights of set-off or similar rights and remedies as
to deposit accounts or other funds maintained with a creditor depository
institution; provided that (i) such deposit account is not a dedicated cash
collateral account and is not subject to restrictions against access by the
Company in excess of those set forth by regulations promulgated by the Federal
Reserve Board, and (ii) such deposit account is not intended by the Company or
any of its Subsidiaries to provide collateral to the depository institution.
7.2 Disposition of Assets. The Company shall not, and shall not suffer or
permit any of its Subsidiaries to, directly or indirectly, sell, assign, lease,
convey, transfer or otherwise dispose of (whether in one or a series of
transactions) any Property (including accounts and notes receivable, with or
without recourse) or enter into any agreement to do any of the foregoing,
except:
(a) dispositions of inventory, or used, worn-out or surplus equipment, all in
the Ordinary Course of Business;
(b) the sale of equipment to the extent that such equipment is exchanged for
credit against the purchase price of similar replacement equipment, or the
proceeds of such sale are reasonably promptly applied to the purchase price of
such replacement equipment; and
(c) dispositions not otherwise permitted hereunder which are made for fair
market value and mandatory prepayment in the amount of the Net Proceeds of such
dispositions are made as provided in subsection 2.7(a); provided, that the
aggregate sales price from such dispositions shall be paid in cash.
7.3 Consolidations and Mergers. The Company shall not, and shall not suffer or
permit any of its Subsidiaries to, merge, consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except:
(a) any Subsidiary of the Company may merge with the Company, provided that the
Company shall be the continuing or surviving corporation, or with any one or
more Subsidiaries of the Company, provided that if any transaction shall be
between a Subsidiary and a Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary
shall be the continuing or surviving corporation; and
(b) any Subsidiary of the Company may sell all or substantially all of its
assets (upon voluntary liquidation or otherwise), to the Company or a Wholly-
Owned Subsidiary of the Company.
7.4 Loans and Investments. The Company shall not purchase or acquire, or
suffer or permit any of its Subsidiaries to purchase or acquire, or make any
commitment therefor, any capital stock, equity interest, or any obligations or
other securities of, or any interest in, any Person, or make or commit to make
any Other Acquisitions, or make or commit to make any advance, loan, extension
of credit or capital contribution to or any other investment in, any Person
including any Affiliate of the Company, except for:
(a) investments in the following Cash Equivalents:
(i) securities issued or fully guaranteed or insured by the United States
Government or any agency thereof and backed by the full faith and credit of the
United States having maturities of not more than six months from the date of
acquisition;
(ii) certificates of deposit, time deposits, LIBOR time deposits, repur
chase agreements, reverse repurchase agreements, or bankers' acceptances, having
in each case a tenor of not more than six months, issued by any Bank, or by any
U.S. commercial bank or any branch or agency of a non-U.S. bank licensed to
conduct business in the U.S. having combined capital and surplus of not less
than $100,000,000 whose short term securities are rated at least A-1 by Standard
& Poor's Rating Service Group and P-1 by ▇▇▇▇▇'▇ Investors' Service, Inc.;
(iii) commercial paper of an issuer rated at least A-1 by Standard & Poor's
Rating Group or P-1 by ▇▇▇▇▇'▇ Investors' Service, Inc. and in either case
having a tenor of not more than six months;
(iv) investments in money market funds, including short-term adjustable
rate money market funds;
(b) advances or allocations for tenant improvements to the extent permitted
under Section 7.13;
(c) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods or services in the Ordinary
Course of Business;
(d) extensions of credit by the Company to any of its Wholly-Owned Subsidiaries
or by any of its Wholly-Owned Subsidiaries to another of its Wholly-Owned Subsid
iaries;
(e) investments incurred in order to consummate Permitted Real Property
Acquisitions; provided that (i) the book value (as to the purchaser) of any such
Permitted Real Property Acquisition shall not exceed at the time of such
investment 25% of Tangible Net Worth as calculated immediately prior to such
Permitted Real Property Acquisition; (ii) such Permitted Real Property Acquisi
tions are undertaken in accordance with all applicable Requirements of Law; and
(iii) (x) if any Person or business so acquired (the "Acquiree") is subject to
Section 12 of the Exchange Act or subject to the requirements of Section 15(d)
of such Act, the prior, effective written consent of the board of directors or
equivalent governing body of the Acquiree is obtained and delivered to the
Agent, or (y) if the Acquiree does not meet the qualifications set forth in
subclause (x) of this clause (iii), the prior effective written consent of the
board of directors or equivalent governing body and the percent of any and all
classes of stock or other equity of such Acquiree the consent of which, notwith
standing any provisions in Organization Documents of the Acquiree to the
contrary, is required by applicable statute to consummate the Permitted Real
Property Acquisition, is obtained and delivered to the Agent;
(f) additional purchases of or investments in the stock of Subsidiaries, or the
capital stock, assets, obligations or other securities of or interest in other
Persons not exceeding $5,000,000 in any fiscal year as to all such purchases and
investments in the aggregate; or
(g) investments in Joint Ventures, which investments, inclusive of Smithtown
Ventures LLC, Centrepoint Associates, Hayden Plaza North Associates, Price/Fry
L.L.C., and Bridewater Community Retail Center LLC, shall be no greater than
12.5% of Gross Asset Value.
7.5 Limitation on Indebtedness. The Company shall not, and shall not suffer or
permit any of its Subsidiaries to, create, incur, assume, suffer to exist, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) provided that the Company, as of the date of incurrence, has a senior
unsecured debt rating of not less than "BBB-" from Standard & Poor's Rating
Service or "Baa3" from ▇▇▇▇▇'▇ Investor Service, Inc., Unsecured Indebtedness
which, as of the date of incurrence, would not cause the Company to breach com
pliance with the financial covenant set forth in Section 7.21(b);
(c) Secured Indebtedness which, as of the date of incurrence, would not cause
the Company to breach compliance with the financial covenant set forth in Sec
tion 7.21(d);
(d) Indebtedness consisting of Contingent Obligations permitted pursuant to
Section 7.8;
(e) Secured Indebtedness permitted by Sections 7.1(h) and (i) in an aggregate
amount outstanding not to exceed $1,000,000; and
(f) Indebtedness incurred in connection with leases permitted pursuant to
Section 7.11.
7.6 Transactions with Affiliates. The Company shall not, and shall not suffer
or permit any of its Subsidiaries to, enter into any transaction with any
Affiliate of the Company or of any such Subsidiary, except (a) as expressly
permitted by this Agreement, or (b) in the Ordinary Course of Business and
pursuant to the reasonable requirements of the business of the Company or such
Subsidiary; in each case (a) and (b), upon fair and reasonable terms no less
favorable to the Company or such Subsidiary than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate of the Company or such
Subsidiary.
7.7 Use of Proceeds. The Company shall not and shall not suffer or permit any
of its Subsidiaries to use any portion of the Loan proceeds, directly or indi
rectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise
refinance indebtedness of the Company or others incurred to purchase or carry
Margin Stock, (iii) to extend credit for the purpose of purchasing or carrying
any Margin Stock, or (iv) to acquire any security in any transaction that is
subject to Section 13 or 14 of the Exchange Act.
7.8 Contingent Obligations. The Company shall not, and shall not suffer or
permit any of its Subsidiaries to, create, incur, assume or suffer to exist any
Contingent Obligations, except:
(a) endorsements for collection or deposit in the Ordinary Course of Business;
and
(b) Contingent Obligations of the Company and its Subsidiaries existing as of
the Closing Date and listed in Schedule 7.8.
7.9 Joint Ventures. The Company shall not, and shall not suffer or permit any
of its Subsidiaries to enter into any Joint Venture, other than as set forth in
subsection 7.4(g) hereto.
7.10 Compliance with ERISA. The Company shall not, and shall not suffer or
permit any of its Subsidiaries to, (i) terminate any Plan subject to Title IV of
ERISA so as to result in any material (in the opinion of the Majority Banks)
liability to the Company or any ERISA Affiliate, (ii) permit to exist any ERISA
Event or any other event or condition, which presents the risk of a material (in
the opinion of the Majority Banks) liability to any member of the Controlled
Group, (iii) make a complete or partial withdrawal (within the meaning of ERISA
Section 4201) from any Multiemployer Plan so as to result in any material (in
the opinion of the Majority Banks) liability to the Company or any ERISA
Affiliate, (iv) enter into any new Plan or modify any existing Plan so as to in
crease its obligations thereunder which could result in any material (in the
opinion of the Majority Banks) liability to any member of the Controlled Group,
or (v) permit the present value of all nonforfeitable accrued benefits under any
Plan (using the actuarial assumptions utilized by the PBGC upon termination of a
Plan) materially (in the opinion of the Majority Banks) to exceed the fair
market value of Plan assets allocable to such benefits, all determined as of the
most recent valuation date for each such Plan.
7.11 Lease Obligations. The Company shall not, and shall not suffer or permit
any of its Subsidiaries to, create or suffer to exist any obligations for the
payment of rent for any Property under lease or agreement to lease, except for:
(a) leases of the Company and its Subsidiaries in existence as of November 1,
1995 and disclosed to the Banks and any renewal, extension or refinancing
thereof;
(b) Operating Leases entered into by the Company or any of its Subsidiaries
after the Closing Date in the Ordinary Course of Business; provided that aggre
gate annual rental payment for all such Operating Leases shall not exceed in any
fiscal year $500,000;
(c) leases entered into by the Company or any of its Subsidiaries after the
Closing Date, provided, that:
(i) immediately prior to giving effect to such lease, the Property subject
to such lease was sold by the Company or any such Subsidiary to the lessor
pursuant to a transaction permitted under Section 7.2;
(ii) the Net Proceeds of such sale are applied simultaneously to reduce the
Loans as provided in subsection 2.7; and
(iii) no Default or Event of Default exists or would occur as a result of
such sale and subsequent lease;
(d) long-term ground leases constituting Permitted Real Property Acquisitions;
and
(e) Capital Leases other than those permitted under clauses (a) and (c) of this
Section 7.11, entered into by the Company or any of its Subsidiaries after the
Closing Date to finance the acquisition of equipment; provided that the
aggregate annual rental payments for all such Capital Leases shall not exceed in
any fiscal year $500,000.
7.12 Restricted Payments. The Company shall not, and shall not suffer or
permit any of its Subsidiaries to, declare or make any dividend payment or other
distribution of assets, properties, cash, rights, obligations or securities on
account of any shares of any class of its capital stock, or purchase, redeem or
otherwise acquire for value any shares of its capital stock or any warrants,
rights or options to acquire such shares, now or hereafter outstanding; except
that the Company and any Wholly-Owned Subsidiary of the Company may:
(a) purchase, redeem or otherwise acquire shares of its common stock or warrants
or options to acquire any such shares with the proceeds received from the
substantially concurrent issue of new shares of its common stock;
(b) only to the extent necessary to reduce its tax liability under Section 857
(b)(3)(A)(ii) of the Code to zero and to maintain the Company's qualification as
a Real Estate Investment Trust, declare or pay cash dividends to its
stockholders and purchase, redeem or otherwise acquire shares of its capital
stock or warrants, rights or options to acquire any such shares for cash solely
out of 95% of FFO of the Company and its Subsidiaries, computed on a rolling
four-quarter period, on a consolidated basis;
(c) distribute shares of any class of its capital stock as consideration for
making any Permitted Real Property Acquisition; and
(d) convert Series A Common Stock issued by the Company into Series B Common
Stock issued by the Company.
7.13 Capital Expenditures. Except in connection with Smithtown Ventures LLC
and Centrepoint Associates, the Company and its Subsidiaries shall not make or
commit to make Capital Expenditures in any fiscal year to exceed $10,000,000
plus the amount permitted to be made but not made in the previous fiscal year
(or shorter period).
7.14 Net Operating Income. The Company shall not permit Net Operating Income,
calculated on a rolling four-quarter basis, to be less than the amount set forth
opposite each date set forth below:
Four-Quarter
Period Ending Amount
------------- ------------
September 30, 1997 $34,000,000
December 31, 1997 and
each fiscal quarter
thereafter $35,000,000
7.15 Tangible Net Worth. The Company shall not permit Tangible Net Worth to be
less at any time than $275,000,000; provided, however, that such amount,
shall be increased by 90% of the amount of any Net Issuance Proceeds received by
the Company.
7.16 Change in Business. The Company shall not, and shall not permit any of
its Subsidiaries to, engage in any material line of business substantially
different from those lines of business carried on by it on the date hereof.
Without limiting the foregoing, the Company shall continue to maintain a real
estate portfolio consisting of properties substantially similar in nature, size,
tenant mix, and cash flow stream to the properties presently maintained in the
Company's portfolio; provided, however, that the Company may own an office
building that it occupies whose value in accordance with GAAP does not exceed
$9,000,000.
7.17 Change in Structure. Except as expressly permitted under Section 7.3, the
Company shall not and shall not permit any of its Subsidiaries to, make any
changes in its equity capital structure (including in the terms of its
outstanding stock), or amend its certificate of incorporation or by-laws in any
material respect, excluding amendments to change the corporate name of the Compa
ny and conversion of Series A Common Stock issued by the Company into Series B
Common Stock issued by the Company.
7.18 Accounting Changes. The Company shall not, and shall not suffer or permit
any of its Subsidiaries to, make any significant change in accounting treatment
or reporting practices, except as required by GAAP, or change the fiscal year of
the Company or of any of its consolidated Subsidiaries.
7.19 Other Contracts. The Company shall not enter into any employment
contracts or other employment or service-retention arrangements whose terms, in
cluding salaries, benefits and other compensation, are not normal and customary
in the industry.
7.20 Other Prohibited Business Activities. The Company shall not, and shall
not permit its Subsidiaries to, engage in the construction of improvements or
other development of any real property, make any acquisition of real property
located outside of the United States or which consists of raw land, or make
loans to any Person to acquire, finance, or develop any real estate or any inter
est therein, except as expressly permitted under this Agreement.
7.21 Financial Covenants.
(a) Fixed Charge Coverage. The ratio of Net Operating Income to Fixed Charges
(for any period of four consecutive fiscal quarters) shall, as of the first day
of each quarter with respect to the previous four quarters, be equal to or great
er than 2.25:1.
(b) Unleveraged Asset Ratio. The ratio of Unleveraged Asset Value (excluding
Unimproved Assets) to Unsecured Indebtedness shall at no time be less than 2:1.
For the purposes of this Section 7.21(b) only, (A) Unleveraged Assets shall not
be deemed to include any Unleveraged Assets that are owned by a Joint Venture or
unconsolidated subsidiary of the Company rather than by Company or its Subsid
iaries unless (x) the Unleveraged Assets owned by such Joint Venture or
unconsolidated subsidiary are (i) managed and controlled by the Company (such
management and control to included, without limitation, control over financing
and sale decisions) and (ii) approved by each of the Banks for inclusion in the
calculation of this covenant and (y) the Joint Venture or unconsolidated
subsidiary that owns such Unleveraged Assets is not in default under or with
respect to any Indebtedness (beyond any applicable period of grace); and (B)
Unsecured Indebtedness shall not be deemed to include any Unsecured Indebtedness
of a Joint Venture or unconsolidated subsidiary of the Company unless the
Unleveraged Assets of such Joint Venture or unconsolidated subsidiary have been
approved by each of the Banks for inclusion in this covenant. As of the date
hereof, each of the Banks has approved the Unleveraged Assets owned by Smithtown
Ventures LLC for inclusion in the calculation of this covenant.
(c) Unimproved Asset Value Percentage. Unimproved Asset Value shall at no time
exceed five percent (5%) of Gross Asset Value.
(d) Secured Indebtedness. Secured Indebtedness shall at no time exceed fifteen
percent (15%) of Gross Asset Value.
(e) Leverage Ratio. Indebtedness of the Company and its Subsidiaries, together
with the Company's allocable share, based on the Company's percentage ownership
interest of such Joint Venture or unconsolidated subsidiary, of Indebtedness of
the Company's unconsolidated subsidiaries and Joint Ventures, shall at no time
exceed 46% of Gross Asset Value.
(f) Limits on Negative Pledges. Neither the Company nor any Subsidiary shall
agree to limits on Liens on Unleveraged Assets. The foregoing restriction on
negative pledges shall not be deemed to include: (i) covenants in any other
Indebtedness instruments which are not more restrictive than the terms of the
Loan Documents or (ii) covenants identical to those contained as of the Closing
Date in the Company's public 7-1/8% Senior Notes due 2004.
(g) Construction Asset Costs. Construction Asset Costs of the Company and its
Subsidiaries, together with the Company's allocable share (based on the
Company's percentage ownership interest of such Joint Venture or unconsolidated
subsidiary) of Construction Asset Costs of the Company's unconsolidated
subsidiaries and Joint Ventures, shall at no time exceed ten percent (10%) of
the Gross Asset Value.
(h) Proforma Interest Expense Ratio. As of the first day of each quarter, the
ratio of Proforma Net Operating Income to Proforma Interest Expense for the
previous four quarters shall at no time be less than 2:1.
(i) Base Rental Income Per Tenant. No single tenant of any Real Property Asset
shall be responsible for contributing more than 12.5% of the aggregate base
rental income from all Real Property Assets; provided, however, that
Price/Costco may contribute not more than 17.5% and Home Depot, Inc. may contrib
ute not more than 25% to the aggregate base rental income.
(j) Rental Income Per Real Property Asset. The base rental income from any one
Real Property Asset may not represent more than 15% of the total base rental
income from all Real Property Assets.
(k) Other Indebtedness. The Company shall not agree to covenants in any other
Indebtedness instruments which are more restrictive than the terms of the Loan
Documents; provided however that covenants identical to those contained as of
the Closing Date in the Company's public 7-1/8% Senior Notes due 2004 shall not
be deemed to violate this Section 5.21(k).
ARTICLE VIII
EVENTS OF DEFAULT
8.1 Event of Default. Any of the following shall constitute an "Event of
Default":
(a) Non-Payment. The Company fails to pay, (i) when and as required to be paid
herein, any amount of principal of any Loan, or (ii) within two (2) Business
Days after the same shall become due, any interest, fee or any other amount pay
able hereunder or pursuant to any other Loan Document; or
(b) Representation or Warranty. Any representation or warranty by the Company
or any of its Subsidiaries made or deemed made herein, in any Loan Document, or
which is contained in any certificate, document or financial or other statement
by the Company, any of its Subsidiaries, or their respective Responsible Offi
cers, furnished at any time under this Agreement, or in or under any Loan
Document, shall prove to have been incorrect in any material respect on or as of
the date made or deemed made; or
(c) Specific Defaults. The Company fails to perform or observe any term,
covenant or agreement contained in Sections 6.1, 6.2, 6.3 and 6.11 or Article
VII; or
(d) Other Defaults. The Company fails to perform or observe any other term or
covenant contained in this Agreement or any Loan Document, and such default
shall continue unremedied for a period of 20 days after the earlier of (i) the
date upon which a Responsible Officer of the Company knew or should have known
of such failure or (ii) the date upon which written notice thereof is given to
the Company by the Agent; or
(e) Cross-Default. The Company or any of its Subsidiaries: (i) fails to make
any payment in respect of any Indebtedness or Contingent Obligation and such
failure continues after the applicable grace or notice period, if any, specified
in the document relating thereto on the date of such failure; or (ii) fails to
perform or observe any other condition or covenant, or any other event shall
occur or condition exist, under any agreement or instrument relating to any such
Indebtedness or Contingent Obligation, and such failure continues after the
applicable grace or notice period, if any, specified in the document relating
thereto on the date of such failure if the effect of such failure, event or
condition is to cause the holder or holders of such Indebtedness or beneficiary
or beneficiaries of such Indebtedness (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to have the right to cause
such Indebtedness to be declared to be due and payable prior to its stated
maturity, or such Contingent Obligation to become payable or cash collateral in
respect thereof to be demanded; or
(f) Insolvency; Voluntary Proceedings. The Company or any of its Subsidiaries
(i) ceases or fails to be Solvent, or generally fails to pay, or admits in writ
ing its inability to pay, its debts as they become due, subject to applicable
grace periods, if any, whether at stated maturity or otherwise; (ii) voluntarily
ceases to conduct its business in the ordinary course; (iii) commences any
Insolvency Proceeding with respect to itself; or (iv) takes any action to
effectuate or authorize any of the foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency Proceeding is
commenced or filed against the Company or any Subsidiary of the Company, or any
writ, judgment, warrant of attachment, execution or similar process, is issued
or levied against a substantial part of the Company's or any of its
Subsidiaries' Properties, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or similar
process shall not be released, vacated or fully bonded within 60 days after
commencement, filing or levy; (ii) the Company or any of its Subsidiaries admits
the material allegations of a petition against it in any Insolvency Proceeding,
or an order for relief (or similar order under non-U.S. law) is ordered in any
Insolvency Proceeding; or (iii) the Company or any of its Subsidiaries
acquiesces in the appointment of a receiver, trustee, custodian, conservator,
liquidator, mortgagee in possession (or agent therefor), or other similar Person
for itself or a substantial portion of its Property or business;
(h) ERISA. (i) A member of the Controlled Group shall fail to pay when due,
after the expiration of any applicable grace period, any installment payment
with respect to its withdrawal liability under a Multiemployer Plan; (ii) the
Company or an ERISA Affiliate shall fail to satisfy its contribution require
ments under Section 412(c)(11) of the Code, whether or not it has sought a
waiver under Section 412(d) of the Code; (iii) in the case of an ERISA Event
involving the withdrawal from a Plan of a "substantial employer (as defined in
Section 4001(a)(2) or Section 4062(e) of ERISA), the withdrawing employer's
proportionate share of that Plan's Unfunded Pension Liabilities is more than
$250,000; (iv) in the case of an ERISA Event involving the complete or partial
withdrawal from a Multiemployer Plan, the withdrawing employer has incurred a
withdrawal liability in an aggregate amount exceeding $250,000; (v) in the case
of an ERISA Event not described in clause (iii) or (iv), the Unfunded Pension
Liabilities of the relevant Plan or Plans exceed $250,000; (vi) a Plan that is
intended to be qualified under Section 401(a) of the Code shall lose its
qualification, and the loss can reasonably be expected to impose on members of
the Controlled Group liability (for additional taxes, to Plan participants, or
otherwise) in the aggregate amount of $250,000 or more; (vii) the commencement
or increase of contributions to, or the adoption of or the amendment of a Plan
by, a member of the Controlled Group shall result in a net increase in unfunded
liabilities to the controlled Group in excess of $250,000; (viii) any member of
the Controlled Group engages in or otherwise becomes liable for a non-exempt
prohibited transaction and the initial tax or additional tax under section 4975
of the Code relating thereto might reasonably be expected to exceed $250,000;
(ix) a violation of section 404 or 405 of ERISA or the exclusive benefit rule
under section 401(a) of the Code if such violation might reasonably be expected
to expose a member or members of the Controlled Group to monetary liability in
excess of $250,000; (x) any member of the Controlled Group is assessed a tax
under section 4980B of the Code in excess of $250,000; or (xi) the occurrence of
any combination of events listed in clauses (iii) through (x) that involves a
potential liability, net increase in aggregate Unfunded Pension Liabilities, un
funded liabilities, or any combination thereof, in excess of $250,000.
(i) Monetary Judgments. One or more noninterlocutory judgments, orders or
decrees shall be entered against the Company or any of its Subsidiaries
involving in the aggregate a liability (not fully covered by independent third-
party insurance) as to any single or related series of transactions, incidents
or conditions, of $250,000 or more, and the same shall remain unsatisfied,
unvacated and unstayed pending appeal for a period of 30 days after the entry
thereof; or
(j) Non-Monetary Judgments. Any non-monetary judgment, order or decree shall be
rendered against the Company or any of its Subsidiaries which does or would
reasonably be expected to have a Material Adverse Effect, and there shall be any
period of 10 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(k) Management. At any time, more than one-half of the current composition of
the Company's board of directors changes, or any of the following current prin
cipal members of senior management cease for any reason to occupy such
positions: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇.
(l) Loss of Licenses. The Governmental Authority shall revoke or fail to renew
any material license, permit or franchise of the Company or any of its
Subsidiaries or the Company or any of its Subsidiaries shall for any reason lose
any material license, permit or franchise or the Company or any of its Subsid
iaries shall suffer the imposition of any restraining order, escrow, suspension
or impound of funds in connection with any proceeding (judicial or
administrative) with respect to any material license, permit or franchise; or
(m) Change of Control. Any Person (including affiliates of such Person) shall
acquire more than twenty percent (20%) of the common shares of the Company); or
(n) REIT Status. The Company shall cease at any time to qualify as a Real
Estate Investment Trust under the Code.
8.2 Remedies. If any Event of Default occurs, the Agent shall, at the request
of the Majority Banks, or may:
(a) declare the Revolving Commitment of each Bank to make Loans to be
terminated, whereupon such Revolving Commitments shall forthwith be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable; without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Company; and
(c) exercise on behalf of itself and the Banks all rights and remedies available
to it and the Banks under the Loan Documents or applicable law; provided,
however, that upon the occurrence of any event specified in paragraph (f) or (g)
of Section 8.1 above (in the case of clause (i) of paragraph (g) upon the
expiration of the 60-day period mentioned therein), the obligation of each Bank
to make Loans shall automatically terminate and the unpaid principal amount of
all outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable without further act of the Agent or any
Bank.
8.3 Rights Not Exclusive. The rights provided for in this Agreement and the
other Loan Documents are cumulative and are not exclusive of any other rights,
powers, privileges or remedies provided by law or in equity, or under any other
instrument, document or agreement now existing or hereafter arising.
ARTICLE IX
THE AGENT
9.1 Appointment and Authorization. Each Bank hereby irrevocably appoints,
designates and authorizes the Agent to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall the Agent have or be deemed to have any fiduciary relationship
with any Bank, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agent.
9.2 Delegation of Duties. The Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
9.3 Liability of Agent. None of the Agent-Related Persons shall (i) be liable
for any action taken or omitted to be taken by any of them under or in connec
tion with this Agreement or any other Loan Document (except for its own gross
negligence or willful misconduct), or (ii) be responsible in any manner to any
of the Banks for any recital, statement, representation or warranty made by the
Company or any Subsidiary or Affiliate of the Company, or any officer thereof,
contained in this Agreement or in any other Loan Document, or in any certifi
cate, report, statement or other document referred to or provided for in, or
received by the Agent under or in connection with, this Agreement or any other
Loan Document, or for the value of any Collateral or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Company or any other party to
any Loan Document to perform its obligations hereunder or thereunder. No Agent-
Related Person shall be under any obligation to any Bank to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or to inspect
the Properties, books or records of the Company or any of the Company's Subsid
iaries or Affiliates.
9.4 Reliance by Agent.
(a) The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, statement or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to the Company), independent
accountants and other experts selected by the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Majority Banks as it deems appropriate and, if it so requests, it shall
first be indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the Majority
Banks and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions specified in
Section 4.1, each Bank that has executed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with each document or
other matter either sent by the Agent to such Bank for consent, approval,
acceptance or satisfaction, or required thereunder to be consented to or ap
proved by or acceptable or satisfactory to the Bank.
9.5 Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default, except with respect
to defaults in the payment of principal, interest and fees required to be paid
to the Agent for the account of the Banks, unless the Agent shall have received
written notice from a Bank or the Company referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". In the event that the Agent receives such a notice, the
Agent shall give notice thereof to the Banks. The Agent shall take such action
with respect to such Default or Event of Default as shall be requested by the
Majority Banks in accordance with Article VIII; provided, however, that unless
and until the Agent shall have received any such request, the Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable or
in the best interest of the Banks.
9.6 Credit Decision. Each Bank expressly acknowledges that none of the Agent-
Related Persons has made any representation or warranty to it and that no act by
the Agent hereinafter taken, including any review of the affairs of the Company
and its Subsidiaries shall be deemed to constitute any representation or
warranty by the Agent to any Bank. Each Bank represents to the Agent that it
has, independently and without reliance upon the Agent and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, prospects, operations, property,
financial and other condition and creditworthiness of the Company and its
Subsidiaries, and all applicable bank regulatory laws relating to the
transactions contemplated thereby, and made its own decision to enter into this
Agreement and extend credit to the Company hereunder. Each Bank also represents
that it will, independently and without reliance upon the Agent and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Company. Except for notices, reports and other
documents expressly herein required to be furnished to the Banks by the Agent,
the Agent shall not have any duty or responsibility to provide any Bank with any
credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of the Company which
may come into the possession of any of the Agent-Related Persons.
9.7 Indemnification. Whether or not the transactions contemplated hereby shall
be consummated, the Banks shall indemnify upon demand the Agent-Related Persons
(to the extent not reimbursed by or on behalf of the Company and without
limiting the obligation of the Company to do so), ratably from and against any
and all liabilities, obligations, losses, damages, penalties, actions, judg
ments, suits, costs, expenses and disbursements of any kind whatsoever which may
at any time (including at any time following the repayment of the Loans and the
termination or resignation of the related Agent) be imposed on, incurred by or
asserted against any such Person any way relating to or arising out of this
Agreement or any document contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by any such Person under or in connection with any of the foregoing; provided,
however, that no Bank shall be liable for the payment to the Agent-Related
Persons of any portion of such liabilities, obligations, losses, damages, penal
ties, actions, judgments, suits, costs, expenses or disbursements resulting
solely from such Person's gross negligence or willful misconduct. Without
limitation of the foregoing, each Bank shall reimburse the Agent upon demand for
its ratable share of any costs or out-of-pocket expenses (including Attorney
Costs) 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, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein to the extent
that the Agent is not reimbursed for such expenses by or on behalf of the
Company. Without limiting the generality of the foregoing, if the Internal
Revenue Service or any other Governmental Authority of the United States or
other jurisdiction asserts a claim that the Agent did not properly withhold tax
from amounts paid to or for the account of any Bank (because the appropriate
form was not delivered, was not properly executed, or because such Bank failed
to notify the Agent of a change in circumstances which rendered the exemption
from, or reduction of, withholding tax ineffective, or for any other reason)
such Bank shall indemnify the Agent fully for all amounts paid, directly or
indirectly, by the Agent as tax or otherwise, including penalties and interest,
and including any taxes imposed by any jurisdiction on the amounts payable to
the Agent under this Section, together with all costs and expenses (including
Attorney Costs). The obligation of the Banks in this Section shall survive the
payment of all Obligations hereunder.
9.8 Agent in Individual Capacity. MGT and its Affiliates may make loans to,
issue letters of credit for the account of, accept deposits from, acquire equity
interests in and generally engage in any kind of banking, trust, financial
advisory or other business with the Company and its Subsidiaries and Affiliates
as though MGT were not the Agent hereunder and without notice to or consent of
the Banks. With respect to its Loans, MGT shall have the same rights and powers
under this Agreement as any other Bank and may exercise the same as though it
were not the Agent, and the terms "Bank" and "Banks" shall include MGT in its
individual capacity.
9.9 Successor Agent. The Agent may resign as Agent upon 30 days' notice to the
Banks. The Majority Banks may remove the Agent as agent in the event of gross
negligence or willful misconduct by the Agent. If the Agent shall resign or be
removed as Agent under this Agreement, the Majority Banks shall appoint from
among the Banks a successor agent for the Banks. If no successor agent is
appointed prior to the effective date of the resignation of the Agent, the Agent
may appoint, after consulting with the Banks and the Company, a successor agent
from among the Banks. Upon the acceptance of its appointment as successor agent
hereunder, such successor agent shall succeed to all the rights, powers and
duties of the retiring Agent and the term "Agent" shall mean such successor
agent and the retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article IX and Sections 10.4 and 10.5 shall inure to its bene
fit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement. If no successor agent has accepted appointment as Agent
by the date which is 30 days following a retiring Agent's notice of resignation,
the retiring Agent's resignation shall nevertheless thereupon become effective
and the Banks shall perform all of the duties of the Agent hereunder until such
time, if any, as the Majority Banks appoint a successor agent as provided for
above.
ARTICLE X
MISCELLANEOUS
10.1 Amendments and Waivers. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent with respect to any depar
ture by the Company therefrom, shall be effective unless the same shall be in
writing and signed by the Majority Banks, the Company and acknowledged by the
Agent, and then such waiver shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no such
waiver, amendment, or consent shall, unless in writing and signed by all the
Banks, the Company and acknowledged by the Agent, do any of the following:
(a) increase or extend the Revolving Commitment of any Bank, whether pursuant to
Section 2.1 (b) or otherwise, (or reinstate any Revolving Commitment terminated
pursuant to subsection 8.2(a)) or subject any Bank to any additional
obligations;
(b) postpone or delay any date fixed for any payment of principal, interest,
fees or other amounts due to the Banks (or any of them) hereunder or under any
Loan Document;
(c) reduce the principal of, or the rate of interest specified herein on any
Loan, or of any fees or other amounts payable hereunder or under any Loan Docu
ment;
(d) change the percentage of the Revolving Commitments or of the aggregate
unpaid principal amount of the Loans which shall be required for the Banks or
any of them to take any action hereunder;
(e) amend this Section 10.1 or Section 2.14 or any provision providing for
consent or other action by all Banks;
(f) amend or waive the Company's failure to comply with Sections 6.11 or 7.7; or
(g) modify so as to make less demanding on the Company any of the provisions of
Sections 7.1, 7.5, 7.8, 7.9, 7.12, 7.14, 7.15, 7.16, 7.20 or 7.21.
10.2 Notices.
(a) All notices, requests and other communications provided for hereunder shall
be in writing (including, unless the context expressly otherwise provides, by
facsimile transmission, provided that any matter transmitted by the Company by
facsimile (i) shall be immediately confirmed by a telephone call to the recipi
ent at the number specified on the applicable signature page hereof, and (ii)
shall be followed promptly by a hard copy original thereof) and mailed, faxed or
delivered, to the address or facsimile number specified for notices on the
applicable signature page hereof; or, as directed to the Company or the Agent,
to such other address as shall be designated by such party in a written notice
to the other parties, and as directed to each other party, at such other address
as shall be designated by such party in a written notice to the Company and the
Agent.
(b) All such notices, requests and communications shall, when transmitted by
overnight delivery, or faxed, be effective when delivered for overnight (next
day) delivery, or transmitted by facsimile machine, respectively, or if mailed,
upon the third Business Day after the date deposited into the U.S. mail, or if
delivered, upon delivery; except that notices pursuant to Article II or IX shall
not be effective until actually received by the Agent.
(c) The Company acknowledges and agrees that any agreement of the Agent and the
Banks at Article II herein to receive certain notices by telephone and facsimile
is solely for the convenience and at the request of the Company. The Agent and
the Banks shall be entitled to rely on the authority of any Person purporting to
be a Person authorized by the Company to give such notice and the Agent and the
Banks shall not have any liability to the Company or other Person on account of
any action taken or not taken by the Agent or the Banks in reliance upon such
telephonic or facsimile notice. The obligation of the Company to repay the
Loans shall not be affected in any way or to any extent by any failure by the
Agent and the Banks to receive written confirmation of any telephonic or
facsimile notice or the receipt by the Agent and the Banks of a confirmation
which is at variance with the terms understood by the Agent and the Banks to be
contained in the telephonic or facsimile notice.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Agent or any Bank, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege.
10.4 Costs and Expenses. The Company shall, whether or not the transactions
contemplated hereby shall be consummated:
(a) pay or reimburse MGT (including in its capacity as Agent) within five
Business Days after demand (subject to subsection 4.1(f)) for all costs and
expenses incurred by MGT (including in its capacity as Agent) in connection with
the development, preparation, delivery, administration and execution of, and any
amendment, supplement, waiver or modification to (in each case, whether or not
consummated), this Agreement, any Loan Document and any other documents prepared
in connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including the reasonable Attorney Costs
incurred by MGT (including in its capacity as Agent) with respect thereto;
(b) pay or reimburse each Bank and the Agent within five Business Days after
demand (subject to subsection 4.1(e)) for all costs and expenses incurred by
them in connection with the enforcement, attempted enforcement or preservation
of any rights or remedies (including in connection with any "workout" or restruc
turing regarding the Loans, and including in any Insolvency Proceeding or
appellate proceeding) under this Agreement, any other Loan Document, and any
such other documents, including Attorney costs incurred by the Agent and any
Bank; and
(c) pay or reimburse MGT (including in its capacity as Agent) within five
Business Days after demand (subject to subsection 4.1(e)) for all appraisal
(including the allocated cost of internal appraisal services), audit,
environmental inspection and review (including the allocated cost of such
internal services), search and filing costs, fees and expenses, incurred or
sustained by MGT (including in its capacity as Agent) in connection with the
matters referred to under subsections (a) and (b) of this Section.
10.5 Indemnity. Whether or not the transactions contemplated hereby shall be
consummated:
(a) General Indemnity. The Company shall pay, indemnify, and hold each Bank,
the Agent and each of their respective officers, directors, employees, counsel,
agents and attorneys-in-fact (each, an "Indemnified Person") harmless from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses or disbursements (including
Attorney Costs) of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement and any
other Loan Documents, or the transactions contemplated hereby and thereby, and
with respect to any investigation, litigation or proceeding (including any
Insolvency Proceeding or appellate proceeding) related to this Agreement or the
Loans or the use of the proceeds thereof, whether or not any Indemnified Person
is a party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"); provided, that the Company shall have no obligation hereunder to
any Indemnified Person with respect to Indemnified Liabilities arising from the
gross negligence or willful misconduct of such Indemnified Person.
(b) Environmental Indemnity. (i) The Company hereby agrees to indemnify, defend
and hold harmless each Indemnified Person, from and against any and all liabili
ties, obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses or disbursements (including Attorney Costs and the allocated
cost of internal environmental audit or review services), which may be incurred
by or asserted against such Indemnified Person in connection with or arising out
of any pending or threatened investigation, litigation or proceeding, or any
action taken by any Person, with respect to any Environmental Claim arising out
of or related to any Property subject to a Mortgage in favor of the Agent or any
Bank. No action taken by legal counsel chosen by the Agent or any Bank in de
fending against any such investigation, litigation or proceeding or requested
remedial, removal or response action shall vitiate or any way impair the
Company's obligation and duty hereunder to indemnify and hold harmless the Agent
and each Bank.
(ii) In no event shall any site visit, observation, or testing by the Agent
or any Bank (or any contractee of the Agent or any Bank) be deemed a representa
tion or warranty that Hazardous Materials are or are not present in, on, or un
der, the site, or that there has been or shall be compliance with any Environ
mental Law. Neither the Company nor any other Person is entitled to rely on any
site visit, observation, or testing by the Agent or any Bank. Neither the Agent
nor any Bank owes any duty of care to protect the Company or any other Person
against, or to inform the Company or any other party of, any Hazardous Materials
or any other adverse condition affecting any site or Property. Neither the
Agent nor any Bank shall be obligated to disclose to the Company or any other
Person any report or findings made as a result of, or in connection with, any
site visit, observation, or testing by the Agent or any Bank.
(c) Survival; Defense. The obligations in this Section 10.5 shall survive
payment of all other Obligations. At the election of any Indemnified Person,
the Company shall defend such Indemnified Person using legal counsel
satisfactory to such Indemnified Person in such Person's sole discretion, at the
sole cost and expense of the Company. All amounts owing under this Section 10.5
shall be paid within 30 days after demand.
10.6 Marshalling; Payments Set Aside. Neither the Agent nor the Banks shall be
under any obligation to ▇▇▇▇▇▇▇▇ any assets in favor of the Company or any other
Person or against or in payment of any or all of the Obligations. To the extent
that the Company makes a payment or payments to the Agent or the Banks, or the
Agent or the Banks enforce their Liens or exercise their rights of set-off, and
such payment or payments or the proceeds of such enforcement or set-off or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Agent in its discretion) to be repaid to a trustee, receiver
or any other party in connection with any Insolvency Proceeding, or otherwise,
then (a) to the extent of such recovery the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such enforcement or set-off
had not occurred, and (b) each Bank severally agrees to pay to the Agent upon
demand its ratable share of the total amount so recovered from or repaid by the
Agent.
10.7 Successors and Assigns. The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective suc
cessors and assigns, except that the Company may not assign or transfer any of
its rights or obligations under this Agreement without the prior written consent
of the Agent and each Bank.
10.8 Assignments, Participations, etc.
(a) Any Bank may, with the written consent of the Company (which consent shall
not be unreasonably withheld) and the Agent, at any time assign and delegate to
one or more Eligible Assignees (provided that no written consent of the Agent
shall be required in connection with any assignment and delegation by a Bank to
an Eligible Assignee that is an Affiliate of such Bank) (each an "Assignee")
all, or any ratable part of all, of the Loans, the Commitments and the other
rights and obligations of such Bank hereunder, in a minimum amount of
$10,000,000; provided, however, that (i) at the time of each such assignment,
the Bank making such assignment retains no less than $10,000,000 of the Commit
ments, or none of them; (ii) if the assigning Bank is the Agent, and retains
none of the Commitments following the assignment, such Agent shall immediately
resign, in accordance with Section 9.9 of this Agreement; and (iii) the Company
and the Agent may continue to deal solely and directly with such Bank in
connection with the interest so assigned to an Assignee until (A) written notice
of such assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the Company
and the Agent by such Bank and the Assignee; (B) such Bank and its Assignee
shall have delivered to the Company and the Agent an Assignment and Acceptance
in the form of Exhibit E ("Assignment and Acceptance") together with any Note or
Notes subject to such assignment and (C) the assignor Bank or Assignee has paid
to the Agent a processing fee in the amount of $2,500.
(b) From and after the date that the Agent notifies the assignor Bank that it
has received (and provided its consent with respect to) an executed Assignment
and Acceptance and payment of the above-referenced processing fee, (i) the
Assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, shall have the rights and obligations of a Bank under the Loan
Documents, and (ii) the assignor Bank shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be re
leased from its obligations under the Loan Documents.
(c) Within five Business Days after its receipt of notice by the Agent that it
has received an executed Assignment and Acceptance and payment of-the processing
fee (and provided that it consents to such assignment pursuant to subsection
10.8(a)), the Company shall execute and deliver to the Agent, new Notes evi
dencing such Assignee's assigned Loans and Revolving Commitment and, if the
assignor Bank has retained a portion of its Loans and its Revolving Commitment,
replacement Notes in the principal amount of the Loans retained by the assignor
Bank (such Notes to be in exchange for, but not in payment of, the Notes held by
such Bank). Immediately upon each Assignee's making its processing fee payment
under the Assignment and Acceptance, this Agreement, shall be deemed to be
amended to the extent, but only to the extent, necessary to reflect the addition
of the Assignee and the resulting adjustment of the Revolving Commitments
arising therefrom. The Revolving Commitment allocated to each Assignee shall
reduce such Revolving Commitments of the assigning Bank pro tanto.
(d) Prior to assigning all or any ratable part of the Loans, the Commitments,
and other rights and obligations hereunder to any Person which is not a Bank
hereunder, an assigning Bank shall first offer (through the Agent) the interest
to be assigned to the other Banks. The offer shall contain all material terms
of the proposed assignment. The Agent, once it receives the offer from the
assigning Bank, shall promptly advise each other Bank thereof. Each other Bank
shall then have ten Business Days within which to accept such offer. Any other
Bank accepting the offer must accept the entire interest so offered unless one
or more other Banks have accepted a portion thereof such that, when added to the
other portion(s) accepted by one or more other Banks, the entire interest
offered has been accepted by such other Banks. If more than one other Bank
accepts the entire interest offered, then the interest shall be assigned to such
accepting Banks pro rata in the proportion of their Revolving Commitments. If
no other Bank accepts the offer of the assigning Bank within ten Business Days
from receiving the Agent's advice of the offer, then the assigning Bank shall be
free to assign its interest to an Eligible Assignee other than a Bank.
(e) Any Bank may at any time sell to one or more commercial banks or other
Persons not Affiliates of the Company (a "Participant") participating interests
in any Loans, the Commitment of that Bank and the other interests of that Bank
(the "originating Bank") hereunder and under the other Loan Documents; provided,
however, that (i) the originating Bank's obligations under this Agreement shall
remain unchanged, (ii) the originating Bank shall remain solely responsible for
the performance of such obligations, (iii) the Company and the Agent shall con
tinue to deal solely and directly with the originating Bank in connection with
the originating Bank's rights and obligations under this Agreement and the other
Loan Documents, and (iv) no Bank shall transfer or grant any participating
interest under which the Participant shall have rights to approve any amendment
to, or any consent or waiver with respect to, this Agreement or any other Loan
Document, except to the extent such amendment, consent or waiver would require
unanimous consent of the Banks as described in the first proviso to Section
10.1. In the case of any such participation, the Participant shall be entitled
to the benefit of Sections 3.1, 3.3 and 10.5 as though it were also a Bank here
under, and if amounts outstanding under this Agreement are due and unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of set-off in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Bank under this Agreement.
(f) Each Bank agrees to take normal and reasonable precautions and exercise due
care to maintain the confidentiality of all information identified as "confi
dential" by the Company and provided to it by the Company or any Subsidiary of
the Company, or by the Agent on such Company's or Subsidiary's behalf, in
connection with this Agreement or any other Loan Document, and neither it nor
any of its Affiliates shall use any such information for any purpose or in any
manner other than pursuant to the terms contemplated by this Agreement; except
to the extent such information (i) was or becomes generally available to the
public other than as a result of a disclosure by the Bank, or (ii) was or
becomes available on a non-confidential basis from a source other than the
Company, provided that such source is not bound by a confidentiality agreement
with the Company known to the Bank; provided further, however, that any Bank may
disclose such information (A) at the request or pursuant to any requirement of
any Governmental Authority to which the Bank is subject or in connection with an
examination of such Bank by any such authority; (B) pursuant to subpoena or
other court process; (C) when required to do so in accordance with the
provisions of any applicable Requirement of Law; (D) to the extent reasonably
required in connection with any litigation or proceeding to which the Agent, any
Bank or their respective Affiliates may be party, (E) to the extent reasonably
required in connection with the exercise of any remedy hereunder or under any
other Loan Document, and (F) to such Bank's independent auditors and other
professional advisors. Notwithstanding the foregoing, the Company authorizes
each Bank to disclose to any Participant or Assignee (each, a "Transferee") and
to any prospective Transferee, such financial and other information in such
Bank's possession concerning the Company or its Subsidiaries which has been
delivered to Agent or the Banks pursuant to this Agreement or which has been
delivered to the Agent or the Banks by the Company in connection with the Banks'
credit evaluation of the Company prior to entering into this Agreement; provided
that, unless otherwise agreed by the Company, such Transferee agrees in writing
to such Bank to keep such information confidential to the same extent required
of the Banks hereunder.
(g) Notwithstanding any other provision contained in this Agreement or any other
Loan Document to the contrary, any Bank may assign all or any portion of the
Loans or Notes held by it to any Federal Reserve Bank or the United States
Treasury as collateral security pursuant to Regulation A of the Federal Reserve
Board and any Operating Circular issued by such Federal Reserve Bank, provided
that any payment in respect of such assigned Loans or Notes made by the Company
to or for the account of the assigning or pledging Bank in accordance with the
terms of this Agreement shall satisfy the Company's obligations hereunder in
respect to such assigned Loans or Notes to the extent of such payment. No such
assignment shall release the assigning Bank from its obligations hereunder.
(h) Notwithstanding any other provision contained in this Agreement or any other
Loan Document to the contrary, from and after an Event of Default, any Bank may
assign all or any part of the Loans, the Commitments and the other rights and
obligations of such Bank hereunder, without the consent of the Company or the
Agent, to any person, provided that such person shall execute and deliver an
Assignment and Acceptance.
10.9 Set-off. In addition to any rights and remedies of the Banks provided by
law, if an Event of Default exists, each Bank is authorized at any time and from
time to time, without prior notice to the Company, any such notice being waived
by the Company to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held by, and other indebtedness at any time owing to, such Bank to or
for the credit or the account of the Company against any and all Obligations
owing to such Bank, now or hereafter existing, irrespective of whether or not
the Agent or such Bank shall have made demand under this Agreement or any Loan
Document and although such Obligations may be contingent or unmatured. Each
Bank agrees promptly to notify the Company and the Agent after any such set-off
and application made by such Bank; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Bank under this Section 10.9 are in addition to the other rights
and remedies (including other rights of set-off) which the Bank may have.
10.10 Automatic Debits of Fees. With respect to any commitment fee, or other
fee, or any other cost or expense (including Attorney Costs) due and payable to
the Agent or MGT under the Loan Documents, the Company hereby irrevocably
authorizes MGT to debit any deposit account of the Company with MGT in an amount
such that the aggregate amount debited from all such deposit accounts does not
exceed such fee or other cost or expense. If there are insufficient funds in
such deposit accounts to cover the amount of the fee or other cost or expense
then due, such debits will be reversed (in whole or in part, in MGT's sole
discretion) and such amount not debited shall be deemed to be unpaid. No such
debit under this Section 10.10 shall be deemed a set-off. MGT shall notify the
Company, which notice may be given by telephone, of the estimated amount to be
debited at least 5 Business Days prior to the date of the next scheduled debit.
10.11 Notification of Addresses, Lending Offices, Etc. Each Bank shall notify
the Agent in writing of any changes in the address to which notices to the Bank
should be directed, of addresses of its LIBOR Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.
10.12 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement in any number of separate counterparts, each of which,
when so executed, shall be deemed an original, and all of said counterparts
taken together shall be deemed to constitute but one and the same instrument. A
set of the copies of this Agreement signed by all the parties shall be lodged
with the Company and the Agent.
10.13 Severability. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
10.14 No Third Parties Benefited. This Agreement is made and entered into for
the sole protection and legal benefit of the Company, the Banks and the Agent,
and their permitted successors and assigns, and no other Person shall be a
direct or indirect legal beneficiary of, or have any direct or indirect cause of
action or claim in connection with, this Agreement or any of the other Loan
Documents. Neither the Agent nor any Bank shall have any obligation to any
Person not a party to this Agreement or other Loan Documents.
10.15 Time. Time is of the essence as to each term or provision of this
Agreement and each of the other Loan Documents.
10.16 Governing Law and Jurisdiction.
(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK; PROVIDED THAT THE AGENT AND
THE BANKS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT AND ANY OTHER
LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE
UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY, THE AGENT AND THE BANKS CON
SENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDIC
TION OF THOSE COURTS. EACH OF THE COMPANY, THE AGENT AND THE BANKS IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE COMPANY, THE AGENT AND THE BANKS
EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH
MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
10.17 Waiver of Jury Trial. THE COMPANY, THE BANKS AND THE AGENT EACH WAIVE
THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS,
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR
OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER
PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR
OTHERWISE. THE COMPANY, THE BANKS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM
OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO
A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTER
CLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE
VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY
PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMEND
MENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS.
10.18 Entire Agreement. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the Company,
the Banks and the Agent, and supersedes all prior or contemporaneous Agreements
and understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof, except for the fee letters referenced in subsections
2.10(a) and 2.10(c), and any prior arrangements made with respect to the payment
by the Company of (or any indemnification for) any fees, costs or expenses
payable to or incurred (or to be incurred) by or on behalf of the Agent or the
Banks.
10.19 Collateral. Each of the Banks represents to the Agent and each of the
other Banks that it in good faith is not relying upon any "margin stock" (as
defined in Regulation U) as collateral in the extension or maintenance of the
credit provided for in this Agreement.
10.20 Survival. All indemnities set forth herein shall survive the execution
and delivery of this Agreement and the other Loan Documents and the making and
repayment of the Loans hereunder.
10.21 Domicile of Loans. Each Bank may transfer and carry its Loans at, to or
for the account of any domestic or foreign branch office, Subsidiary or Affili
ate of such Bank.
10.22 Limitation of Liability. No claim may be made by the Company or any
other Person acting by or through the Company against the Agent or any Bank or
the Affiliates, Directors, Officers, employees, attorneys or agent of any of
them for any consequential or punitive damages in respect of any claim for
breach of contract or any other theory of liability arising out of or related to
the transactions contemplated by this Agreement or by the other Loan Documents,
or any act, omission or event occurring in connection therewith; and the Company
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.
10.23 Recourse Obligation. This Agreement and the Obligations hereunder are
fully recourse to the Company. Notwithstanding the foregoing, no recourse under
or upon any obligation, covenant, or agreement contained in this Agreement shall
be had against any Officer, director, shareholder or employee of the Company
except in the event of fraud or misappropriation of funds on the part of such
Officer, Director, shareholder or employee.
10.24 Legal Rate. Notwithstanding anything in this Credit Agreement or any
Loan Document to the contrary, if at any time the interest rate applicable to
the Notes, together with all fees and charges which are treated as interest
under applicable law (collectively, the "Charges"), as provided for in this
Credit Agreement or in any other document executed in connection herewith, or
otherwise contracted for, charged, received, taken or reserved by the Agent, on
behalf of the Banks, shall exceed the maximum lawful rate (the "Legal Rate")
which may be contracted for, charged, taken, received or reserved by the Agent,
on behalf of the Banks in accordance with applicable law, the rate of interest
payable under such Notes, together with all Charges payable, shall be limited to
the Legal Rate and any interest or Charges not so charged, taken, received or
reserved by the Agent, on behalf of the Banks at such time shall be spread,
prorated or amortized over the term of such Notes to the fullest extent permit
▇▇▇ by law.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized Officers as of the
day and year first above written.
THE PRICE REIT, INC.
By: /▇▇▇▇▇▇ ▇. ▇▇▇▇▇/
-----------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
Address for notices:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF
NEW YORK, as Agent and as a Bank
By: /▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇/
----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇
Title: Vice President
Address for notices:
c/o ▇.▇. ▇▇▇▇▇▇ Services Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Address for payments:
▇▇▇▇▇▇ Guaranty Trust Company of New York
ABA No. ▇▇▇▇▇▇▇▇▇
Attn: Loan Department
Account No. ▇▇▇-▇▇-▇▇▇
Reference: The Price REIT, Inc.
▇▇▇▇▇ FARGO BANK, N.A. as a Bank
By: /▇▇▇ ▇▇▇▇▇▇▇▇/
--------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
CORESTATES BANK, N.A., as a Bank
By: /▇▇▇▇ ▇. ▇▇▇▇▇/
---------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice PresidentS
Schedule 2.1
REVOLVING COMMITMENTS
AND PRO RATA SHARES
Pro Rata
Bank Commitment Share
----------------------------- --------------- --------------
▇▇▇▇▇▇ Guaranty Trust Company U.S.$25,000,000 33.333333334%
▇▇▇▇▇ Fargo Bank, ▇.▇. ▇.▇.$25,000,000 33.333333333%
CoreStates Bank, ▇.▇. ▇.▇.$25,000,000 33.333333333%
--------------- --------------
TOTAL U.S.$75,000,000 100.000000000%
SCHEDULE 5.5
LITIGATION
----------
NONE
SCHEDULE 5.7
ERISA COMPLIANCE
----------------
The Employees' 401(K) Plan of The Price REIT, Inc.
SCHEDULE 5.11
PERMITTED LIABILITIES
---------------------
NONE
SCHEDULE 5.12
ENVIRONMENTAL MATTERS
---------------------
NONE
SCHEDULE 5.19
SUBSIDIARIES
------------
Price Texas, Inc., a qualified REIT subsidiary
SCHEDULE 7.8
CONTINGENT OBLIGATIONS
----------------------
NONE
EXHIBIT A
FORM OF NOTICE OF BORROWING
Date:
To: ▇▇▇▇▇▇ Guaranty Trust Company of New York, as Agent for the Banks parties to
the Second Amended and Restated Credit Agreement dated as of July 1, 1997 (as
extended, renewed, amended or restated from time to time, the "Credit
Agreement") among The Price REIT, Inc., certain Banks which are signatories
thereto and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as Agent.
Ladies and Gentlemen:
The undersigned The Price REIT, Inc. (the "Company") refers to the Credit
Agreement, the terms defined therein being used herein as therein defined, and
hereby gives you notice irrevocably, pursuant to Section 2.3 of the Credit
Agreement, of the Borrowing specified herein:
1. The purpose(s) of the proposed Borrowing is/are:
2. The Business Day of the proposed Borrowing is , 19 .
3. The aggregate amount of the proposed Borrowing is $ .
4. The Borrowing is to be comprised of $ of [LIBOR Rate] [Base
Rate] Loan(s).
5. [If applicable:] The duration of the Interest Period for the LIBOR Rate
Loans included in the Borrowing shall be month(s).
The undersigned hereby certifies that the following statements are true on the
date hereof, and will be true on the date of the proposed Borrowing, before and
after giving effect thereto and to the application of the proceeds therefrom:
(a) the representations and warranties of the Company contained in Article V
of the Credit Agreement are true and correct as though made on and as of such
date (except to the extent such representations and warranties relate to an
earlier date, in which case they are true and correct as of such date);
(b) no Default or Event of Default has occurred and is continuing, or would
result from such proposed Borrowing;
(c) the proposed Borrowing will not cause the Aggregate Principal Amount of
all Outstanding Loans to exceed the Aggregate Revolving Commitment.
THE PRICE REIT, INC.
By:
------------------------
Title:
EXHIBIT B
FORM OF NOTICE CONVERSION/CONTINUATION
Date:
To: ▇▇▇▇▇▇ Guaranty Trust Company of New York, as Agent for the Banks parties to
the Second Amended and Restated Credit Agreement dated as of July 1, 1997 (as
extended, renewed, amended or restated from time to time, the "Credit
Agreement") among The Price REIT, Inc., certain Banks which are signatories
thereto and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as Agent.
Ladies and Gentlemen:
The undersigned The Price REIT, Inc. (the "Company") refers to the Credit
Agreement, the terms defined therein being used herein as therein defined, and
hereby gives you notice irrevocably, pursuant to Section 2.4 of the Credit
Agreement, of the Borrowing specified herein:
1. The date of the [conversion] [continuation] is , 19 .
2. The aggregate amount of the Loans [converted] is $ or
[continued] is $ .
3. The nature of each Loan to be [converted] [continued] is [LIBOR Rate] [Base
Rate] Loan.
4. The Loans are to be [converted into] [continued as] [LIBOR Rate] [Base
Rate] Loan.
5. [If applicable:] The duration of the Interest Period for the Loans included
in the [conversion] [continuation] shall be month(s).
The undersigned hereby certifies that the following statements are true on the
date hereof, and will be true on the date of the proposed [conversion]
[continuation], before and after giving effect thereto and to the application of
the proceeds therefrom:
(a) the representations and warranties of the Company contained in Article V
of the Credit Agreement are true and correct as though made on and as of such
date (except to the extent such representations and warranties relate to an
earlier date, in which case they are true and correct as of such date); and
(b) no Default or Event of Default has occurred and is continuing, or would
result from such proposed [conversion] [continuation].
THE PRICE REIT, INC.
By:
-------------------------
Title:
EXHIBIT C
FORM OF REVOLVING NOTE
$
------------------------ July 1, ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇ the Revolving Termination Date, THE PRICE REIT, INC., a Maryland corporation
(the "Company"), for value received, hereby promises to pay to the order of
("Bank") the sum of (i) Dollars ($ ) or (ii)
if less, the total unpaid principal amount of all Base Rate Loans and LIBOR Rate
Loans made by Bank to the Company from the date of this Note through the
Revolving Termination Date pursuant to that certain Second Amended and Restated
Credit Agreement dated as of the date hereof (the "Credit Agreement"), among the
Company, ▇▇▇▇▇▇ Guaranty Trust Company of New York (as Agent and as a bank), and
certain banks named therein, including Bank. Terms not defined herein have the
meanings assigned to such terms in the Credit Agreement.
Payments under this Note shall be made in lawful money of the United States at
the address for payments provided in the Credit Agreement.
This Note shall bear interest as set forth in the Credit Agreement for Base Rate
Loans and LIBOR Rate Loans. Interest payable under this Note shall be payable
at the times specified in the Credit Agreement. This Note may be declared to
be, or be and become, due prior to its expressed maturity, voluntary prepayments
may be made hereon, and certain prepayments are required to be made hereon, all
as provided in the Credit Agreement.
This Note is being delivered to Bank under Section 4.1(a) of the Credit
Agreement and is subject to the terms of the Credit Agreement, including without
limitation acceleration of maturity.
This Note shall be governed by, and construed and interpreted in accordance
with, the laws of the State of New York.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
All Base Rate Loans and LIBOR Rate Loans made by Bank to the Company pursuant to
the Credit Agreement and all payments of principal thereof may be indicated by
Bank upon the grid attached hereto which is a part of this Note or by records
maintained by Bank. Such notations or records shall be presumptive as to the
aggregate unpaid principal amount of all Base Rate Loans and LIBOR Rate Loans
made by Bank pursuant to the Credit Agreement.
THE PRICE REIT, INC.
By: /▇▇▇▇▇▇ ▇. ▇▇▇▇▇/
-----------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
Base Rate Loans and LIBOR Rate Loans
Payments of Principal
Name of
Amount Interest Amount of Person
& Type Period Interest Principal Unpaid Making
Date of Loan if any Rate Paid Balance Negotiation
---- ------- -------- -------- --------- ------- -----------
EXHIBIT E
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
THIS ASSIGNMENT AND ACCEPTANCE AGREEMENT ("Agreement") dated as of ,
199 is made with reference to that certain Second Amended and Restated Credit
Agreement dated as of July 1, 1997 (the "Credit Agreement"), among THE PRICE
REIT, INC. (the "Company"), the Banks therein named and ▇▇▇▇▇▇ GUARANTY TRUST
COMPANY OF NEW YORK, as Agent for itself and for the Banks (in such capacity,
the "Agent") and is entered into between the "Assignor" described below, in its
capacity as a Bank under the Credit Agreement, and the "Assignee" described
below.
The Assignor and the Assignee hereby represent, warrant and agree as follows:
1. Definitions. Except as otherwise provided herein, capitalized terms
defined in the Credit Agreement are used herein with the meanings set forth
therein. As used in this Agreement, the following capitalized terms shall have
the meanings set forth below:
"Assignee" means .
"Assigned Pro-Rata Share" means the percentage of the Aggregate Revolving
Commitment and Loans of the Assignor under the Credit Agreement being assigned
hereunder and the corresponding dollar amount with respect to such percentage of
the Aggregate Revolving Commitment under the Credit Agreement as set forth
below:
Percentage: %
Dollar Amount: $
"Assignor" means .
"Effective Date" means , 199 .
2. Representations and Warranties of the Assignor. The Assignor represents
and warrants to the Assignee as follows:
(a) As of the date hereof, the Pro-Rata Share of the Assignor is %
of the Aggregate Revolving Commitment under the Credit Agreement, which is equal
to $ (without giving effect to assignment thereof which has not
yet become effective). The Assignor is the legal and beneficial owner of the
Assigned Pro-Rata Share and the Assigned Pro-Rata Share is free and clear of any
adverse claim.
[(b) As of the date hereof, there are no outstanding Loans made under the
Aggregate Revolving Commitment under the Credit Agreement.]
[(b) As of the date hereof, the outstanding principal balance of Loans made
under the Aggregate Revolving Commitment under the Credit Agreement is
$ .]
(c) If required pursuant to Section 10.8 of the Credit Agreement, the
Assignor has obtained the prior approval of the Company to the assignment to the
Assignee provided for herein.
(d) The Assignor has full power and authority, and has taken all action
necessary, to execute and deliver this Agreement and any and all other documents
required or permitted to be executed or delivered by it in connection with this
Agreement and to fulfill its obligations under, and to consummate the
transactions contemplated by, this Agreement, and no governmental authorizations
or other authorizations are required in connection therewith.
(e) This Agreement constitutes the legal, valid and binding obligation of
the Assignor.
The Assignor makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Company or the performance by the
Company of the Obligations, and assumes no responsibility with respect to any
statements, warranties or representations made under or in connection with the
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any other documents
under the Credit Agreement, other than as expressly set forth above.
3. Representations and warranties of the Assignee. The Assignee hereby
represents and warrants to the Assignor as follows:
(a) The Assignee has full power and authority, and has taken all action
necessary, to execute and deliver this Agreement, and any and all other
documents required or permitted to be executed or delivered by it in connection
with this Agreement and to fulfill its obligations under, and to consummate the
transactions contemplated by, this Agreement, and no governmental authorizations
or other authorizations are required in connection therewith.
(b) This Agreement constitutes the legal, valid and binding obligation of
the Assignee.
(c) The Assignee has independently and without reliance upon the Assignor
and based on such information as the Assignee has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. The Assignee
will, independently and without reliance upon the Agent or any Bank, and based
upon 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 Credit Agreement.
(d) If the Assignee is organized under the laws of a jurisdiction outside
the United States of America, attached hereto are the forms certifying the
Assignee's exemption from United States withholding taxes with respect to all
payments to be made to the Assignee under the Credit Agreement.
4. Assignment. On the terms set forth herein, the Assignor, as of the
Effective Date, hereby irrevocably sells, assigns and transfers to the Assignee
all of the rights and obligations of the Assignor under the Credit Agreement and
the Loans owing to the Assignor under the Credit Agreement, to the extent of the
Assigned Pro Rata Share, and the Assignee irrevocably accepts such assignment of
rights and assumes such obligations from the Assignor on such terms and
effective as of the Effective Date. As of the Effective Date, the Assignee
shall have the rights and obligations of a "Bank" under the Credit Agreement.
Assignee hereby appoints and authorizes the Agent to exercise such powers under
the Credit Agreement as are delegated to the Agent by Article IX of the Credit
Agreement.
5. Payment. on the Effective Date, the Assignee shall pay to the Assignor, in
immediately available funds, an amount equal to the purchase price of the
Assigned Pro Rata Share, as agreed between the Assignor and the Assignee
pursuant to a letter agreement of even date herewith.
The Assignor and the Assignee hereby agree that if either receives any payment
of interest, principal, fees or any other amount under any Loan Document which
is for the account of the other, it shall hold the same in trust for such party
to the extent of such party's interest therein and shall promptly pay the same
to such party.
6. Principal, Interest, Fees, etc. Any principal that would be payable and any
interest, fees and other amounts that would accrue from and after the Effective
Date to or for the account of the Assignor pursuant to the Credit Agreement
shall be payable to or for the account of the Assignor and the Assignee, in
accordance with their respective interests as adjusted pursuant to this
Agreement. Payments to be made to the Assignee shall be made to its address set
forth on the signature pages hereof, or to such other address as the Assignee
may designate.
7. Transfer Fee. On the Effective Date, the Assignor or Assignee shall pay to
the Agent the transfer fees provided for in Section 10.8(a) of the Credit
Agreement.
8. Further Assurances. Concurrently with the execution of this Agreement, the
Assignor shall execute two counterpart original Requests for Registration, in
the form of Exhibit A to this Agreement, to be forwarded to the Agent. The
Assignor and the Assignee further agree to execute and deliver such other
instruments, and take such other action, as either party may reasonably request
in connection with the transactions contemplated by this Agreement, and the
Assignor specifically agrees to cause the delivery of (a) two original
counterparts of this Agreement and (b) the Requests for Registration, to the
Agent for the purpose of registration of the Assignee as a "Bank."
9. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACTUAL OBLIGATION
UNDER, AND SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK. FOR ANY DISPUTE ARISING IN CONNECTION
WITH THIS AGREEMENT, THE ASSIGNEE HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF THE COURTS OF THE STATE OF NEW YORK.
10. Notices. All communications among the parties or notices in connection
herewith must be in writing and must be mailed, telegraphed, telecopied,
delivered or sent by telex or cable, addressed to the appropriate party at its
address set forth on the signature pages hereof. All communications and notices
shall, if sent by telegraph, telex or telecopy, be deemed to have been given
when received by the Person to whom addressed; if sent by overnight courier
service, be deemed to have been given one day after the date when sent; and if
sent by mail, be given to have been given three days after the date when sent by
registered or certified mail, postage prepaid.
11. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns; provided,
however, that the Assignee shall not assign its rights or obligations without
the prior written consent of the Assignee and any purported assignment, absent
such consent, shall be void.
12. Interpretation. The headings of the various sections hereof are for
convenience of reference only and shall not affect the meaning or construction
of any provision hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered by their respective officials, officers or agents thereunder duly
authorized as of the date first above written.
"Assignor"
By:
---------------------------
Its:
Address:
Attn:
Telephone:
Telecopy:
Telex:
"Assignee"
By:
--------------------------
Its:
Address:
Attn:
Telephone:
Telecopy:
Telex:
EXHIBIT A TO ASSIGNMENT AND ACCEPTANCE AGREEMENT
REQUEST FOR REGISTRATION
TO: ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK, as Agent
THIS REQUEST FOR REGISTRATION is made as of the date of the enclosed Assignment
and Acceptance Agreement with reference to that certain Second Amended and
Restated Credit Agreement, dated as of July 1, 1997 among THE PRICE REIT, INC.
(the "Company"), the Banks therein named and ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF
NEW YORK, as Agent for itself and for the Banks (in such capacity, the "Agent")
(as amended, the "Credit Agreement").
The Assignor and Assignee described below hereby request that the Agent register
the Assignee as a Bank pursuant to the Credit Agreement effective as of the
Effective Date described in the Assignment and Acceptance Agreement and, in
connection with this request, certify to the Agent that the Assignment and
Acceptance Agreement sets forth the correct Pro-Rata Share of the Aggregate
Revolving Commitment under the Credit Agreement held by the Assignor and the
Assigned Pro-Rata Share of the Assignee.
Enclosed with this Request are two counterpart originals of the Assignment and
Acceptance Agreement.
IN WITNESS WHEREOF, the Assignor and Assignee have executed this Request for
Registration by their duly authorized officers as of this day of ,
199 .
"Assignor"
By:
------------------------
Its:
"Assignee"
By:
------------------------
Its:
The Agent has registered the Assignee as a Bank under the Credit Agreement,
effective as of the Effective Date described above, with a Pro-Rata Share of the
Aggregate Revolving Commitment under the Credit Agreement corresponding to the
Assigned Pro-Rata Share and has adjusted the registered Pro-Rata Share of the
Aggregate Revolving Commitment of the Assignor under the Credit Agreement to
reflect the assignment of the Assigned Pro-Rata Share.
Dated this day of , 199
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK
By:
----------------------
Name:
Title:
EXHIBIT F
THE PRICE REIT, INC.
REPORTING QUARTER:
Property Occupancy Revenus Expenses (before) Net Operating Budgeted Net
depreciation and Income Operating
debt service) Income
-------------------------------------------------------------------------------
PURCHASE AND SALE AGREEMENT
AND ESCROW INSTRUCTIONS
THIS PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS ("Agreement") is made
and entered into as of April 17, 1997, by and among THE PRICE REIT, INC., a
Maryland corporation ("Seller"), WESTRUST ASSET MANAGEMENT, INC., a California
corporation ("Buyer"), and CHICAGO TITLE INSURANCE COMPANY ("Escrow Holder"),
with reference to the following facts:
A. Seller is the owner of the Property, as hereinafter
B. Buyer desires to purchase from Seller and Seller desires to sell to Buyer the
Property, all on the terms and conditions set forth herein.
NOW, THEREFORE, IN CONSIDERATION of the foregoing and the mutual agreements
herein set forth, and other valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Seller and Buyer, and where appropriate Escrow
Holder, agree as follows:
ARTICLE 1
PROPERTY
Seller hereby agrees to sell and convey to Buyer, and Buyer hereby agrees to
purchase from Seller, subject to the terms and conditions set forth herein, the
following:
1.1 Land. That certain real property (the "Land") described in Schedule A
hereto, all of which shall be conveyed to Buyer pursuant to a deed in the form
of Schedule B hereto (the "Deed");
1.2 Appurtenances. All rights, privileges and easements appurtenant to and for
the benefit of the Land, including, without limitation, all minerals, oil, gas
and other hydrocarbon substances on and under the Land, as well as all
development rights, air rights, water, water rights and water stock relating to
the Land and any other easements, rights-of-way or appurtenances owned by Seller
and used in connection with the beneficial operation, use and enjoyment of the
Land, the Leases, the Rents, the Improvements, the Intangible Property, or any
other appurtenance, together with all rights of Seller in and to streets,
sidewalks, alleys, driveways, parking areas and areas adjacent thereto or used
in connection therewith, and all rights of Seller in any land lying in the bed
of any existing or proposed street adjacent to the Land (all of which are
collectively referred to as the "Appurtenances");
1.3 Improvements. All improvements and fixtures located or to be located on the
Land, including, without limitation, all buildings and structures presently
located on the Land or to be located thereon on the Closing Date, all apparatus,
equipment and appliances presently located on the Land and used in connection
with the operation or occupancy thereof, such as heating and air conditioning
systems and facilities used to provide any utility services, parking services,
refrigeration, ventilation, garbage disposal, recreation or other services
thereto, and all landscaping and leasehold improvements of tenants, if any,
which become the property of the owner of the Land (all of which are
collectively referred to as the "Improvements");
1.4 Leases and Rents. All leases, occupancy agreements and other similar
agreements to which Seller is a party or by which it is bound, together with all
modifications, extensions and renewals thereof, and any guarantees of any of the
foregoing with respect to or demising any part of the Land, Appurtenances or
Improvements (the "Leases"), all income, receipts, funds and revenues of any
kind whatsoever payable under the Leases or otherwise with respect to all or any
portion of the Land, Appurtenances or Improvements (the "Rents"), all of which
Leases and Rents shall be transferred and assigned to Buyer pursuant to an
instrument in the form of Schedule C hereto (the "Assignment and Assumption of
Leases and Rents");
1.5 Personal Property. All equipment, appliances, furniture, furnishings and
other tangible personal property located or to be located on, or situated or to
be situated in and used in connection with, the Land and/or the Improvements
("Personal Property"), and all of which Personal Property shall be transferred
and assigned to Buyer pursuant to an instrument in the form of Schedule D hereto
(the "▇▇▇▇ of Sale"). Buyer and Seller agree that the Personal Property has no
monetary value separate and apart form the Real Property.
1.6 Intangible Property. All of the interest of Seller in (i) any intangible
personal property which relates to and is reasonably required for the operation
and functioning of the Land, Improvements or Personal Property generally, (ii)
any and all warranties, guarantees, permits, contracts and other rights owned by
Seller relating to the ownership, operation or functioning of all or any part of
the Property, as defined below (including without limitation all third party
guarantees and warranties, express or implied, in connection with the
construction of the Improvements) (iii) all trade names and trade marks
associated with the Real Property including without limitation the name of the
Improvements; (iv) the plans and specifications for the Improvements and (v) all
books and records relating to the Property. Notwithstanding anything to the
contrary contained herein, Seller shall not be obligated to provide to Buyer
books or records relating to the Property unless the following conditions are
satisfied: the books and records are in the possession or control of Seller, the
books and records relate solely to the Real Property and do not also relate to
any other property, the books and records are not confidential communications to
Seller's legal counsel or communications with Seller's lender's (or their agents
or employees); provided, however, notwithstanding the foregoing, the books and
records shall include all books and records relating exclusively to tenant
leases and the physical condition of the Property (all of which are collectively
referred to as the "Intangible Property"), and all of which shall be assigned to
Buyer pursuant to an assignment in the form of Schedule E hereto (the
"Assignment and Assumption of Contracts, Intangible Property Warranties and
Guarantees"); and
All of the items described in Sections 1.1, 1.2, 1.3, 1.4, 1.5 and 1.6 above are
hereinafter collectively referred to as the "Property." The items described in
Sections 1.1, 1.2, and 1.3 above are hereinafter referred to collectively as the
"Real Property."
ARTICLE 2
PURCHASE PRICE
2.1 Purchase Price. The purchase price for the Property shall be
Seventeen Million Five Hundred Fifty Thousand Dollars ($17,550,000.00) (the
"purchase Price"). The Purchase Price shall be allocated between the Land and
Improvements as Buyer and Seller shall reasonably determine prior to the
expiration of the Review Period.
2.2 Payment of Purchase Price. The Purchase Price shall be paid by Buyer into
the escrow for this Agreement to be maintained by Escrow Holder ("Escrow") at
the Closing by wire transfer of immediately available funds in accordance with
wiring instructions to be provided by Escrow Holder; provided, however, that
Buyer shall adjust the funds to be wired pursuant to this Section 2.2 for the
following: (i) the amount of credits due to Buyer, or debits due from Buyer (as
the case may be) for prorations hereunder plus (ii) the amount of the ▇▇▇▇▇▇▇
Money Deposit (hereinafter defined) plus earnings thereon;
2.3 ▇▇▇▇▇▇▇ Money Deposit. Within two (2) business days after the delivery of
one (1) fully executed copy of this Agreement to Escrow Holder and Buyer, Buyer
shall deposit with Escrow Holder the sum of One Hundred Thousand Dollars
($100,000.00) (the "Initial ▇▇▇▇▇▇▇ Money Deposit") in the form of a check or
wire transfer. Upon conclusion of the Review Period, unless Buyer terminates
this Agreement pursuant hereto, Buyer shall deposit with Escrow Holder the
additional sum of One Hundred Thousand Dollars ($100,000.00) (the "Subsequent
▇▇▇▇▇▇▇ Money Deposit"). The Subsequent ▇▇▇▇▇▇▇ Money Deposit and the Initial
▇▇▇▇▇▇▇ Money Deposit and any interest accrued thereon are hereinafter
collectively referred to as the "▇▇▇▇▇▇▇ Money Deposit") in the form of a check
or wire transfer.
2.4 Investment of Deposit. While the Escrow Holder holds the ▇▇▇▇▇▇▇ Money
Deposit, Escrow Holder shall place the ▇▇▇▇▇▇▇ Money Deposit in an
interest-bearing account with a bank or savings association, the deposits of
which are federally insured, as Buyer may select. All interest on the ▇▇▇▇▇▇▇
Money Deposit so earned shall accrue for the benefit of Buyer. Notwithstanding
the foregoing, however, in the event of any default by Buyer hereunder, all
interest earned on such account shall accrue to the benefit of Seller.
2.5 Deposit As Liquidated Damages. IF THE SALE OF THE PROPERTY AS CONTEMPLATED
HEREUNDER IS NOT CONSUMMATED DUE TO A DEFAULT UNDER THIS AGREEMENT ON THE PART
OF BUYER, SELLER SHALL BE ENTITLED TO RETAIN THE ▇▇▇▇▇▇▇ MONEY DEPOSIT AS
LIQUIDATED DAMAGES. THE PARTIES ACKNOWLEDGE THAT SELLER'S ACTUAL DAMAGES IN THE
EVENT OF A DEFAULT BY BUYER WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO
DETERMINE. THEREFORE, BY PLACING THEIR SIGNATURES BELOW, THE PARTIES EXPRESSLY
AGREE AND ACKNOWLEDGE THAT THE ▇▇▇▇▇▇▇ MONEY DEPOSIT HAS BEEN AGREED UPON, AFTER
NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES. THEREFORE,
IF, AFTER SATISFACTION OR WAIVER OF ALL CONDITIONS PRECEDENT TO BUYER'S
OBLIGATIONS UNDER THIS AGREEMENT (OTHER THAN CONDITIONS IN BUYER'S CONTROL),
BUYER BREACHES THIS AGREEMENT AND FAILS TO COMPLETE THE PURCHASE OF THE PROPERTY
AS PROVIDED HEREIN, SELLER SHALL BE ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT
OF THE ▇▇▇▇▇▇▇ MONEY DEPOSIT. THE PARTIES FURTHER ACKNOWLEDGE THAT THE ▇▇▇▇▇▇▇
MONEY DEPOSIT HAS BEEN AGREED UPON AS SELLER'S EXCLUSIVE REMEDY AGAINST BUYER IN
THE EVENT OF A DEFAULT ON THE PART OF BUYER AND SELLER HEREBY WAIVES ANY OTHER
REMEDY INCLUDING BUT NOT LIMITED TO A SUIT FOR DAMAGES OR SPECIFIC PERFORMANCE.
Seller:
The PRICE REIT, INC.
Dated: April 11, 1997 By: /▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇/
-----------------
Its: Senior Executive Vice President
Buyer:
WESTRUST ASSET MANAGEMENT, INC.
a California corporation
Dated: April 17, 1997 By: /▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇/
------------------
Its: President
ARTICLE 3
TITLE TO PROPERTY
3.1 Title. At the Closing, Seller shall convey title to the Property
pursuant to the Deed. In furtherance thereof, Seller shall cause Chicago Title
Insurance Company (the "Title Company") to issue an ALTA extended coverage
Owner's Policy of Title Insurance (1970 Form) (the "Title Policy") in the full
amount of the Purchase Price, insuring fee simple title to the Real Property in
Buyer, subject only to (i) the lien of real property taxes for the then
applicable fiscal year, to the extent not yet due and payable, (ii) the lien of
supplemental taxes imposed by reason of transfer on or after the Closing, and
(iii) the Permitted Exceptions.
3.2 Other Conveyance Documents. At the Closing, Seller shall (i) assign the
Leases and Rents to Buyer pursuant to the Assignment and Assumption of Leases
and Rents; (ii) transfer title to the Personal Property to Buyer pursuant to the
▇▇▇▇ of Sale, (iii) transfer and assign to Buyer all of Seller's rights in and
to the Intangible Property pursuant to the Assignment and Assumption of
Contracts, Intangible Property, Warranties and Guarantees, and (iv) execute and
deliver Tenant Notification Letters addressed to each tenant detailing the
ownership change in the form set forth on Schedule I attached hereto.
ARTICLE 4
CONDITIONS TO CLOSING
A. Buyer's Conditions to Closing.The satisfaction of the
following matters at the times described below, is a condition precedent to
Buyer's obligation to purchase the Property:
4.1 Non-Foreign Status of Seller. Seller's execution and delivery to Buyer, on
the Closing Date, of Seller's certificate in the form attached hereto as
Schedule E (the "Non-Foreign Certificate") stating, under penalty of perjury,
that Seller is not a "foreign person" for the purposes of Section 1445 of the
Internal Revenue Code of 1986, as amended (the "Code"), and that withholding of
tax will not be required thereunder. In addition, Seller shall execute and
deliver to Buyer, on the Closing Date, a California Form 590 which relieves
Buyer of any obligation to withhold any portion of the Purchase Price for the
payment of California tax.
4.2 Review and Approval of Title. There shall be no exceptions to title to the
Property other than the Permitted Exceptions. In connection with Buyer's review
of title and related matters, Seller shall, within five (5) days of the date of
the opening of Escrow, cause Escrow Holder to deliver to Buyer, at Seller's sole
cost and expense, a current commitment for title insurance for the Property
issued by the Title Company (the "Title Report"), accompanied by legible record
copies of all of the documents referred to in the Title Report. Within five (5)
days of the date of the opening of Escrow, Seller shall, at its sole cost and
expense, deliver to Buyer a current survey of the Land and Improvements which is
sufficient to satisfy Title Company's requirements for the issuance of the Title
Policy on the Closing Date (the "Survey"). Buyer shall have until twenty-five
(25) days from the receipt of the Title Report and Survey to notify Escrow
Holder and Seller in writing of Buyer's approval of the condition of title,
which approval may be given or withheld by Buyer, in Buyer's sole and absolute
discretion. Buyer shall give Seller and Escrow Holder written notice outlining
in detail any title items objected to and specifying Buyer's desired cure
(hereinafter "Disapproved Exceptions"). Seller shall have ten (10) business days
after receipt of Buyer's notice to advise Buyer and Escrow Holder, in writing,
as to whether Seller shall cure said objections prior to the Closing (and should
Seller fail to advise Buyer of Seller's objection within such 10-day period,
Seller shall be deemed to have elected to refuse to cure said objections). In
the event Seller elects not to cure such objections, Buyer shall have the
option, which must be exercised within five (5) business days after receipt of
written notice of Seller's election not to cure an exception Buyer has objected
to (a) to waive Buyer's objections and purchase the Property as otherwise
contemplated in this Agreement, notwithstanding such objections, in which event
the subject matter of such waived objections shall be included within Permitted
Exceptions, and Seller shall convey the Property to Buyer, subject to the
Permitted Exceptions, or (b) to terminate this Agreement by written notice to
Seller and Escrow Holder, whereupon any and all right and obligations of Buyer
and Seller hereunder shall terminate, except as set forth in Sections 4.4,
5.2(b) and 9.6 hereof, and Escrow Holder shall immediately return the ▇▇▇▇▇▇▇
Money Deposit to Buyer (without the need of any further instructions from
Seller). To the extent necessary, the Closing Date shall be extended to
accommodate the foregoing approval and disapproval periods. The following shall
constitute "Permitted Exceptions": (x) all exceptions to title to, and/or
encumbrances against, the Property shown on the Title Report or Survey but not
objected to by Buyer, and (y) those items referred to in items (i) and (ii) of
the second sentence of Section 3.1 hereof. Seller shall have no duty to cause
any of the title matters disapproved by Buyer to be eliminated; provided,
however, that Seller shall be obligated to remove prior to the Closing Date any
mortgage or deed of trust encumbering the Property, at Seller's sole expense,
and at Buyer's request, Seller shall cooperate with Buyer in causing Disapproved
Exceptions to be removed, at no cost to Seller.
4.3 Leases Service and Other Contracts.
Buyer's review and approval, in its sole and absolute discretion, of all Leases,
utility contracts, water and sewer service contracts, service
contracts, warranties, permits, soils reports, and other contracts
or documents of any nature relating to the Property or any portion
thereof (such agreements, other than the Leases, shall be referred
to herein as the "Contracts").
4.4 Physical Characteristics of the Property. Buyer's review and approval, in
its sole and absolute discretion, of (a) an environmental assessment (which
shall, without limiting the scope of the report, contain an assessment of
asbestos and radon affecting the Property) by an environmental consultant of
Buyer's choice and at Buyer's cost (the "Phase I Report"), and (b) the results
of Buyer's physical inspection and testing of the Property, or any portion
thereof (which testing shall be conducted at Buyer's expense, but shall not
include any intrusive (i.e., drilling, core sampling, etc.) testing for
Hazardous Materials, as defined below, without Seller's prior written consent),
which may be given or withhold in Seller's sole discretion, including, but not
limited to, the structural, mechanical, electrical and other physical or
environmental characteristics of the Property. Seller shall allow Buyer
reasonable access to the Property to perform any physical inspection thereof
which Buyer reasonably deems appropriate; provided that: (i) Buyer shall provide
Seller with reasonable advance notice prior to any such physical inspection, and
provided further that Seller shall have the right to accompany (or have an agent
of Seller accompany) Buyer during such physical inspection; and (ii) Buyer shall
not materially disturb any tenant of the Property during any such physical
inspection. Buyer agrees to indemnify, defend and hold Seller harmless from any
and all loss, liability, damage, claims, costs or expenses, including reasonable
attorney's fees, if any, arising or resulting from or relating to any physical
inspection of the Property pursuant hereto. Notwithstanding the foregoing, Buyer
shall have no liability to Seller due to the fact that Buyer's inspections
discover preexisting conditions at the Property (e.g., hazardous waste,
construction defects etc.).
4.5 Due Diligence Information. To the extent in Seller's possession and control,
Seller shall make available to Buyer for review, inspection and approval of the
following types of information: (a) Seller's most current rent roll for the
Property on its standard form; (b) operating statements for the Property on
Seller's standard form for the current year (i.e., to the extent they exist
monthly and quarterly statements) and the 1995 and 1996 calendar years; (c)
copies of real property tax bills applicable to the Property; (d) copies
of-Tenant Leases and guaranties or other securities in connection therewith; (e)
copies of commission agreements presently in full force and effect relating to
the Tenant Leases; (f) copies of tenant lease files, including any financial
statements or other information relative to the tenants' payment history; (g)
copies of management agreements and service contracts; (h) maintenance work
orders for the twenty four (24) months preceding the date of this Agreement; (i)
environmental, soil, structural, engineering, drainage and other physical
inspection reports, assessments, audits and surveys related to the Property; (j)
construction plans and specifications relating to the original development of
the Property and other construction which has occurred thereon; (k) documents or
materials relating to any litigation, investigation or condemnation proceeding
presently effecting any of the Property or the ability of Seller to consummate
the transaction contemplated by this Agreement; (l) a copy of Seller's existing
title insurance binder relating to the Property and (m) other information
relating solely to the operation or management of the Property. Except as
expressly set forth herein, Seller makes no representation or warranty
concerning the accuracy or the completeness of the information provided to
Buyer. Buyer acknowledges that all of the information provided to Buyer pursuant
to this paragraph (the "Due Diligence Information") has been provided without
warranty by Seller, except that Seller hereby represents and warrants that it
has not intentionally modified any of the documents it has or will deliver to
Buyer in an effort to mislead Buyer and that it will not intentionally withhold
any documents from Buyer in an effort to mislead Buyer. Except as provided in
the next sentence, Seller shall have no obligation to update any Due Diligence
Information during the term of this Agreement. Seller shall have the obligation
to deliver to Buyer written notice of any changes of which Seller has actual
knowledge (as defined below) of in the Due Diligence Information if such changes
relate to the matters described on Schedule J attached hereto. The written
notice shall disclose to Buyer the changes to the Due Diligence Information
which have occurred. Notwithstanding the foregoing, Seller shall have no
obligation to make any investigation or to otherwise take any action to
determine whether any of the matters described on Schedule J have or will change
and Seller's obligation to notify Buyer of changes to matters described on
Schedule J shall only apply if such changes are actually known to ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇▇▇. During Seller's management company's normal business
hours and upon not less than one (1) business days advance written notice to
Seller, Seller shall provide Buyer with access to its files relating solely to
the Property at the location where such files are kept by Seller or its
management company. Buyer shall have the right to contact any tenant of the
Property or any governmental entity with jurisdiction over the Property provided
that Buyer shall give Seller at least two (2) business days advance written
notice of its desire to contact a tenant or governmental entity, Seller shall
have the right to be present during any discussions with a tenant or
representative of a governmental entity and any discussion shall occur at a
mutually convenient time for Buyer and Seller. Buyer's obligations under this
Agreement are conditioned upon Buyer's approval of the Due Diligence Information
by the end of the Review Period, in Buyer's sole and absolute discretion.
4.6 Objections to Property or Other Matters. Buyer shall have a period
commencing on the date of this Agreement and concluding on thirty (30) days
after the delivery to Buyer of the Title Report and Survey (the "Review Period")
to review the Due Diligence Information and to conduct such physical,
engineering or feasibility studies as Buyer deems appropriate in an effort to
determine whether to proceed with the Closing of this transaction. In the event
Buyer does not give Seller written notice of its approval of the information
referred to in the previous sentence on or before the last day of the Review
Period, Buyer shall be deemed to have disapproved such information. If Buyer
disapproves such information, this Agreement shall terminate and any and all
right and obligations of Buyer and Seller hereunder shall terminate except as
set forth in Sections 4.4, 5.2(b) and 9.6 hereof), the ▇▇▇▇▇▇▇ Money Deposit
shall be immediately returned to Buyer, and the parties hereto shall have no
further obligations one to the other (except as set forth in Sections 4.4,
5.2(b) and 9.6 hereof).
4.7 Tenant Estoppel Certificates. Seller shall use reasonable efforts (but shall
not be obligated to provide a tenant with monetary compensation) to cause each
tenant of the Property to provide Buyer with an estoppel certificate in the form
attached hereto as Schedule G. Seller shall deliver the estoppel certificates to
the tenants for execution on or before the date which is five (5) days after the
date of this Agreement. Buyer's obligations under this Agreement are conditioned
upon its receipt of an estoppel certificate in the form attached hereto as
Schedule G five days prior to the end of the Review Period from the following
tenants: AMC, Home Depot and LA Fitness Club (individually, each a "Major
Tenant") and with respect to other tenants occupying not less than seventy five
percent (75~) of the net rentable square footage of the Property which is not
leased to a Major Tenant. Buyer shall have the right to approve or disapprove an
estoppel certificate, in Buyer's sole and absolute discretion. Buyer shall be
conclusively deemed to have accepted the executed estoppel certificates with
respect to any tenant at the Property if Buyer has failed to object in writing
to Seller with respect to such certificate on or before the expiration of three
(3) business days after receipt of the estoppel certificate. If Buyer
disapproves an estoppel certificate, Buyer shall provide Seller with a written
explanation of the reason for its disapproval. Within three (3) business days
after receipt of Buyer's written notice of disapproval, Seller shall have the
right to elect to remedy the objection of Buyer to such certificate. Seller's
remedy shall be acceptable to Buyer, in Buyer's sole and absolute discretion.
Seller shall have no obligation to remedy an objection of Buyer to an estoppel
certificate, but Seller shall cooperate with Buyer in attempting to cause the
tenant that provided the unacceptable estoppel certificate to provide an
acceptable estoppel certificate. If Seller does not elect to remedy Buyer's
objection to any estoppel certificate, Buyer shall have the right to terminate
this Agreement without liability to either party (except as set forth in Section
4.4, 5.2(b) and 9.6 hereof) and the ▇▇▇▇▇▇▇ Money Deposit shall be returned to
Buyer.
The foregoing conditions contained in this Article IV.A are intended solely for
the benefit of, and may be waived by, Buyer.
B. Seller's Conditions to Closing.
The following conditions are conditions precedent to Seller's obligation to sell
the Property:
4.8 Evidence of Availability of Funds. On or prior to the conclusion of the
Review Period, Buyer shall have demonstrated to Seller's reasonable satisfaction
that Buyer has the financial wherewithal to fund, out of cash and cash
equivalents on hand, an amount at closing equal to the Purchase Price, plus
Buyer's share of closing costs.
4.9 Delivery of Documents and Purchase Price. Buyer's due and timely execution
and/or delivery of all documents and items to be executed and delivered by Buyer
(including without limitation the Purchase Price) pursuant to this Agreement,
including without limitation all of the documents and items specified in Section
5.4 below.
The foregoing conditions contained in this Article IV.B are intended solely for
the benefit of Seller.
ARTICLE 5
CLOSING, RECORDING AND TERMINATION
5.1 Deposit with Escrow Holder and Escrow Instructions. Promptly after execution
of this Agreement, the parties hereto shall deliver one (1) fully executed copy
of this Agreement to the Escrow Holder and this instrument shall serve as the
escrow instructions to the Escrow Holder for consummation of the purchase and
sale contemplated hereby. Seller and Buyer agree to execute such additional and
supplementary escrow instructions as may be appropriate to enable the Escrow
Holder to comply with the terms of this Agreement; provided, however, that in
the event of any conflict between the provisions of this Agreement and any
supplementary escrow instructions, the terms of this Agreement shall control.
5.2 Closing.
(a) The Closing Date shall occur no later than thirty-five (35) days after the
date Escrow is opened (the "Outside Closing Date"), or such other date as Buyer
and Seller may mutually agree in writing. Provided that Buyer has waived the
conditions described in Section 4.2 through 4.7, Buyer shall have the right on
three (3) days advance written notice to Seller to elect to have the Closing
occur on the last day of the Review Period. Except as otherwise expressly
provided herein, the Outside Closing Date may not be extended without the
written approval of both Seller and Buyer. The Closing and the Closing Date
shall not have occurred until the Purchase Price shall have been paid by Buyer
to Escrow Holder as provided herein. The "Closing" shall be deemed to have
occurred on the date that the Deed is recorded in the Official Records. The
"Closing Date" shall be the date on which the Closing occurs.
(b) In the event the Closing does not occur on or before the Outside Closing
Date, the Escrow Holder shall return to the depositor thereof all items which
may be on deposit with Escrow Holder hereunder; provided, however, that the
▇▇▇▇▇▇▇ Money Deposit shall be delivered to Seller if Buyer has defaulted
hereunder and, in the event Seller has defaulted hereunder, the ▇▇▇▇▇▇▇ Money
Deposit shall be delivered to Buyer. Any such return shall not, however, relieve
either party hereto of any liability it may have for its wrongful failure to
close.
5.3 Delivery by Seller. At the Closing, Seller shall deposit with the Escrow
Holder, for the benefit of Buyer, or deliver directly to Buyer the following:
(a) The Deed (which shall not show documentary transfer tax) and the Assignment
and Assumption of Leases and Rents, each duly executed and acknowledged by
Seller, in recordable form, and ready for recordation in the official records of
the jurisdiction in which the Land is located (the "Official Records");
(b) The ▇▇▇▇ of Sale duly executed by Seller;
(c) The Assignment and Assumption of Contracts, Intangible Property, Warranties
and Guarantees, duly executed by Seller;
(d) The Non-Foreign Certificate together with a form FTB 590 RE, duly executed
by Seller;
(e) Original Tenant leases which are in the po-ssession of Seller;
(f) A current rent roll;
(g) The Contracts which are in the possession of Seller;
(h) Keys and passcards which are in the possession of Seller; and
(i) Tenant Notification Letters.
Buyer may waive compliance on Seller's part under any of the foregoing items by
an instrument in writing.
5.4 Delivery By Buyer. At the Closing, Buyer shall deliver to Escrow Holder the
Purchase Price, less the ▇▇▇▇▇▇▇ Money Deposit, such funds as are necessary to
fulfill Buyer's obligations hereunder, and Buyer's executed counterpart of the
Assignment and Assumption of Leases and Rents, and the Assignment and Assumption
of Contracts, Intangible Property, Warranties and Guarantees.
5.5 Other Instruments. Seller and Buyer shall each deposit such other
instruments as are reasonably required by Escrow Holder or otherwise required to
close the escrow and consummate the purchase of the Property in accordance with
the terms hereof.
5.6 Prorations. At Closing, the parties shall prorate (with Buyer being deemed
to be the owner of the Property for the date of the Closing) as of the date on
which the Closing occurs (on the basis of the actual number of days elapsed in
the calendar month in which the Closing occurs) the following with respect to
the Property:
(a) Rents. All rents and other receipts actually received by Seller for the
month in which the Closing occurs shall be prorated as of the Closing. Buyer
shall use reasonable efforts after the Closing to collect delinquent rents for
the period up to the Closing; provided, however, that all collections shall be
applied first to periods commencing after the Closing, and then to periods prior
to the Closing. Provided Buyer has complied with the conditions set forth in the
next sentence, Buyer shall have no obligation to pay any delinquent rent to
Seller if the delinquent rent is received by Buyer more than ninety (90) days
after the Closing Date and Buyer shall be entitled to retain all such delinquent
rent. With respect to rent which is delinquent on the Closing Date, after the
Closing Date Buyer shall give each tenant owing delinquent rent a written notice
of the delinquent rent due and if the tenant does not pay the delinquent rent
described in the written notice, Buyer shall give the tenant a notice to pay
rent or quit. Buyer shall have no obligation to file an unlawful detainer action
or any other legal action to collect delinquent rent. After the Closing Date,
Seller shall not have the right to take any action to collect delinquent rent.
Buyer may deduct from delinquent rent it collects the reasonable cost of
collecting such delinquent rent, including, but not limited to, attorneys' fees.
At Closing, Buyer shall receive a credit in an amount equal to the Security
Deposits set forth in the Leases.
(b) Common Area Maintenance Charges. All reimbursable expenses shall be
reconciled at Closing, such that if Seller has collected sums in excess of its
reimbursable expenses under the Leases, Seller shall pay such excess to Buyer.
In the event that such reconciliation shows that Seller has collected less than
its incurred reimbursable expenses under the Leases, Buyer shall remit the
excess to Seller, within thirty (30) days after the reimbursement funds from
tenants. Expense reimbursements received from tenants shall be first applied to
current expense reimbursement obligations and then in the order of the least
delinquent obligations. For purposes of this paragraph, "reimbursable expenses"
shall include taxes, utilities, the cost of service contracts, and other
expenses reimbursed by tenants to Landlord under the Lease.
(c) Taxes. Real estate taxes, recurring assessments, and personal property
taxes, if any, on all or any portion of the Property, based on the regular and
supplemental tax bills for the calendar year in which the Closing occurs (or, if
such tax ▇▇▇▇ has not been issued as of the date of Closing the regular and
supplemental tax ▇▇▇▇ for the calendar year preceding that in which the Closing
occurs, with such increase thereto as Buyer reasonably estimates will occur)
shall be prorated as of the Closing. If Seller has received any real property
tax refunds or receives such refunds in the future, and in order not to violate
the terms of a tenant lease the refund must be rebated or credited to the
tenant, Seller shall promptly, at Seller's sole cost and expense, cause such
amounts to be refunded to such tenants.
(d) Utilities. Seller shall notify all water, gas, electric and other utility
companies servicing the Property (collectively, "Utility Companies") of the sale
of the Property to Buyer and shall request that all Utility Companies send
Seller a final ▇▇▇▇ for the period ending on the last day prior to the Close of
Escrow. Buyer shall notify all Utility Companies servicing the Property that as
of the Close of Escrow, Buyer shall own the Property and that all utility bills
for the period commencing on the Close of Escrow are to be sent to Buyer. If any
of the Utility Companies sends Seller or Buyer a ▇▇▇▇ for a period in which the
Close of Escrow occurs, Buyer and Seller shall prorate such bills outside the
Escrow. In connection with such proration, it shall be presumed that utility
charges-were uniformly incurred during the billing period.
(e) Service Contracts. Amounts payable under Contracts shall be prorated on an
accrual basis. Seller shall pay, prior to the Closing Date, all such amounts for
which a ▇▇▇▇ has been received prior to the Closing Date, and Buyer shall be
credited, and Seller shall be debited, with an amount equal to all amounts
accrued under the Contracts from the date such bills were issued or such
payments were due until the Closing Date.
(f) Percentage Rent. Percentage rent or overage rent (referred to herein as
"Percentage Rent") under the Leases shall be prorated between Buyer and Seller
on a Lease by Lease basis with Seller entitled to the portion of total
Percentage Rent paid under each Lease for the "Lease Year" in which the Close of
Escrow occurs (the "Subject Lease Year") which is in the same ratio to total
Percentage Rent paid with respect to such Lease Year under the subject Lease as
the ratio of (a) the number of days of said Lease Year which Seller was the
landlord under the subject Lease to (b) the total number of days in said Lease
Year. Buyer shall be entitled to the balance of Percentage Rent paid under each
Lease with respect to the Subject Lease Year. As used herein, the term "Lease
Year" means the twelve (12) month period as to which annual Percentage Rent is
owed under each Lease. The foregoing proration shall be made as follows on a
Lease by Lease basis: (a) subject to the balance of this subparagraph, Seller
shall retain all Percentage Rent payments received by it on and prior to the
Close of Escrow and Buyer shall retain all Percentage Rent payments received by
it after the Close of Escrow; (b) as promptly as possible after the Closing Date
Seller shall deliver to Buyer a statement of all Percentage Rent collected by
Seller with respect to the Subject Lease Year on a Lease by Lease basis along
with a copy of the Percentage Rent invoices and sales reports which support such
collections, (c) for each Lease, not later than forty five (45) days after the
date the last Percentage Rent payment with respect to the Subject Lease Year is
due, Buyer shall deliver to Seller a statement of all Percentage Rent collected
by Buyer with respect to such Lease along with a copy of the annual
reconciliation of Percentage Rent owed under the subject Lease for the Subject
Lease Year and the related sales information backup; and, (d) for each Lease,
within fifteen (15) days after the date the statement and reconciliation
described in clause (c) above is delivered to Seller, Buyer shall pay to Seller
or Seller shall pay to Buyer, whichever is applicable, the positive difference
between (a) the total Percentage Rental collected by such party with respect to
the Subject Lease Year and (b) the product of (x) the average daily Percentage
Rental received with respect to the Subject Lease Year after taking into account
the annual reconciliation and (y) the actual number of days such party was the
owner of the Project during the Subject Lease Year (with Buyer being deemed to
be the owner as of the Closing Date).
Buyer and Seller's obligation to prorate shall survive the Closing for a period
of one (1) year (unless within such time Buyer or Seller makes a claim against
the other party to this Agreement with respect to such obligation to prorate, in
which case such obligation shall survive without limitation), and Buyer and
Seller shall use good faith efforts to conclude prorations with respect to
percentage rent and common area maintenance charges as soon as practicable after
the determination of the amounts thereof.
5.7 Costs and Expenses. Seller shall bear and pay the premium for the Title
Policy (exclusive of the cost of endorsements thereto), the cost of obtaining
the Survey and all documentary transfer taxes; provided, however, if the Closing
occurs, Buyer shall pay to Seller through Escrow on the Closing the out of
pocket cost incurred by Seller in causing the Survey to be updated. Seller shall
pay all legal fees and costs incurred by Seller and charges and other fees and
charges which are typically borne by sellers of real property located in Los
Angeles, California. Buyer shall pay for its out-of-pocket expenses, all due
diligence expenses, all endorsements to the Title Policy, all legal fees and
costs incurred by Buyer in connection herewith, and charges and other fees and
charges which are typically borne by buyers of real property located in Los
Angeles, California. Buyer and Seller shall each pay one-half of Escrow Holder's
fees unless the reason escrow is canceled is that Buyer or Seller has failed to
perform its obligations hereunder, in which event the party that failed to
perform its obligations shall pay all escrow cancellation fees.
5.8 Closing and Recordation. Provided that Escrow Holder has received all of the
items required to be delivered pursuant to this Article V (or a waiver from the
party for whose benefit such item is being delivered) and that it has not
received prior written notice from Buyer that Buyer has elected to terminate its
rights and obligations hereunder pursuant to Article IV, and/or Section 5.9, and
provided that Buyer has either received the Title Policy or the irrevocable
commitment of Title Company to provide it with the Title Policy immediately
after recordation of the Deed, Escrow Holder is authorized and instructed (a)
with respect to the Property, to cause the Title Company to record the documents
delivered to the Escrow Holder in accordance with recording instructions set
forth in a letter to be delivered to Escrow Holder and Title Company by Buyer
(or if no such letter is received prior to the Closing, in accordance with
customary practice), (b) to deliver those other documents and instruments
delivered into Escrow to the party for whose benefit such documents or
instruments were made and (c) to deliver the Purchase Price, as adjusted
pursuant to Section 5.6 hereof to Seller.
5.9 Termination of Agreement.
(a) Failure of Buyer's Conditions. If any one or more of the conditions to
Buyer's obligations, as set forth in Article IV.A, Section 5.3 or elsewhere in
this Agreement, is not either fully performed, satisfied or waived in writing
(or deemed waived as provided herein) on or before the Closing Date or such
earlier date as provided elsewhere herein, then Buyer may elect, by written
notice as provided in Section 9.11 hereof, to terminate this Agreement, in which
case neither party shall have any further obligation to the other (except as set
forth in Sections 4.4, 5.2(b) and 9.6 hereof) and Escrow Holder shall
immediately return the ▇▇▇▇▇▇▇ Money Deposit to Buyer (without the need of any
further instructions from Seller). Nothing in this paragraph shall be construed
to limit any of Buyer's rights or remedies at law or equity in the event of a
default by Seller.
(b) Failure of Seller's Conditions. If any one or more of the conditions to
Seller's obligations, as set forth in Article IV.B, Section 5.4 or elsewhere in
this Agreement, is not either fully performed, satisfied or waived in writing
(or deemed waived as provided herein) on or before the Closing Date or such
earlier date as provided elsewhere herein, then Seller may elect, by written
notice as provided in Section 9.11 hereof, to terminate this Agreement and
neither party shall have any further obligation to the other (except as set
forth in Sections 4.4, 5.2(b) and 9.6 hereof).
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF SELLER; RELEASE
As an inducement to Buyer to enter into this Agreement and the consummation of
the transaction contemplated hereby, Seller hereby represents and warrants to
and agrees with Buyer both as of the date hereof and again as of the Closing
Date, and as of all dates and times in between (except as specifically provided
to the contrary herein), as set forth below. As used herein and elsewhere in
this Agreement, the term "Seller's actual knowledge" shall mean the actual
knowledge of each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇, without any duty of
investigation of any kind. Seller hereby represents and warrants that the
foregoing person is the person employed by Seller or Seller's manager with
executive, managerial or daily supervisory responsibility with respect to the
Property.
6.1 Authority. Seller is duly organized and validly existing under the laws of
the jurisdiction of its organization, is duly qualified to conduct business and
own real property in the State of California, and has all requisite power to own
all of its properties and assets and to carry on its business as presently
conducted. The execution, delivery and performance of this Agreement and all
other agreements contemplated hereby has been duly and validly authorized by all
necessary action of Seller and the Agreement and all other agreements
contemplated thereby are and will be valid and binding obligations of Seller,
enforceable against Seller in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting generally the enforcement of
creditors' rights and general principles of equity.
6.2 The Leases. A list of the current Leases is set forth in the rent roll
attached hereto as Schedule ~ t the "Rent Roll"). The Rent Roll is true and
correct in all respects and except for the Leases set forth in the Rent Roll,
there are no other leases, licenses or other agreements affecting the occupancy
of the Property. With respect to each Lease: (i) to Seller's actual knowledge,
the Lease is in full force and effect, and constitutes the valid and binding
legal obligation of Seller and the respective tenant, enforceable against each
of them in accordance with its terms; (ii) except as indicated on the Rent Roll,
there is no default by Seller under the Lease, and to Seller's actual knowledge,
by the tenant under the Lease; and (iii) no rent or additional rent under the
Lease has been paid for more than thirty (30) days in advance of its due date.
6.3 No Litigation or Adverse Events. Seller has received no written notice of,
and to Seller's actual knowledge, there are no, pending or threatened
investigations, actions, suits, proceedings or claims against or affecting
Seller, the Property, any tenant with respect to its Lease, at law or in equity
or before or by any federal, state, municipal or other governmental department,
commission, board, agency, or instrumentality, domestic or foreign.
6.4 Compliance with Laws. To Seller's actual knowledge, Seller is in compliance
in all material respects with all applicable laws, ordinances, rules and
regulations (including without limitation those relating to zoning) applicable
to the ownership or operation of the Property. Seller has not received from any
insurance company or Board of Fire Underwriters any notice, which remains
uncured, of any defect or inadequacy in connection with the Property or its
operation.
6.5 Licenses Permits CO's Zoning etc. To Seller's actual knowledge, all permits,
certificates of occupancy, business licenses and all other notices, licenses,
permits, certificates and authority required as of the date hereof and as of the
Closing Date in connection with the use or occupancy of the Property have been
obtained and are in full force and effect and in good standing.
6.6 Environment. To Seller's actual acknowledge: (i) Seller has not engaged in
any operations or activities upon, or any use or occupancy of the Property, or
any portion thereof, for the purpose of or in any way involving the handling,
manufacture, treatment, storage, use, generation, release, discharge, refining,
dumping or disposal of any Hazardous Materials (whether legal or illegal,
accidental or intentional) on, under, in or about the Property, or transported
any Hazardous Materials to, from or across the Property, except in all cases in
material compliance with Environmental Requirements and only in the course of
legitimate business operations at the Property (which shall not include any
business primarily or substantially devoted to the handling, manufacture,
treatment, storage, use, generation, release, discharge, refining, dumping or
disposal of Hazardous Materials); (ii) no tenant, occupant or user of the
Property, nor any other person, has engaged in or permitted any operations or
activities upon, or any use or occupancy of the Property, or any portion
thereof, for the purpose of or in any material way involving the handling,
manufacture, treatment, storage, use, generation, release, discharge, refining,
dumping or disposal of any Hazardous Materials (whether legal or illegal,
accidental or intentional) on, under, in or about the Property, or transported
any Hazardous Materials to, from or across the Property, except in all cases in
material compliance with Environmental Requirements and only in the course of
legitimate business operations at the Property (which shall not include any
business primarily or substantially devoted to the handling, manufacture,
treatment, storage, use, generation, release, discharge, refining, dumping or
disposal of Hazardous Materials) and (iii) no Hazardous Materials are presently
constructed, deposited, stored, or otherwise located on, under, in or about the
Property except in all cases in material compliance with Environmental
Requirements and only in the course of legitimate business operations at the
Property (which shall not include any business primarily or substantially
devoted to the handling, manufacture, treatment, storage, use, generation,
release, discharge, refining, dumping or disposal of Hazardous Materials).
As used herein:
"Environmental Requirements" shall mean all applicable present statutes,
regulations, rules, ordinances, codes, licenses, permits, orders, approvals,
plans, authorizations, concessions, franchises and similar items, of all
governmental agencies, departments, commissions, boards, bureaus or
instrumentalities of the United States, states and political subdivisions
thereof and all applicable judicial and administrative and regulatory decrees,
judgments and orders relating to the environment, including, without limitation,
all requirements, including but not limited to those pertaining to reporting,
licensing, permitting, investigation and remediation of emissions, discharges,
releases or threatened releases of "Hazardous Materials," chemical substances,
pollutants, contaminants or hazardous or toxic substances, materials or wastes
whether solid, liquid or gaseous in nature, into the air, surface water, ground
water or land, or relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of chemical substances,
pollutants, contaminants or hazardous or toxic substances, materials, or wastes,
whether solid, liquid or gaseous in nature.
"Hazardous Materials" shall mean (i) any flammable, explosive or radioactive
materials, hazardous wastes, toxic substances or related materials including,
without limitation, substances defined as "hazardous substances," "hazardous
materials," "toxic substances" or "solid waste" in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Sec. 9601, et seq.; the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801, et seq.; the Toxic Substances Control Act, 15 U.S.C., Section 2601
et seq.; the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section
6901 et seq.; and in the regulations adopted and publications promulgated
pursuant to said laws; (ii) those substances listed in the United States
Department of Transportation Table (49 C.F.R. 172.101 and amendments thereto) or
by the Environmental Protection Agency (or any successor agency) as hazardous
substances (40 C.F.R. Part 302 and amendments thereto); (iii) those substances
defined as "hazardous wastes," "hazardous substances" or "toxic substances" in
any similar federal, state or local laws or in the regulations adopted and
publications promulgated pursuant to any of the foregoing laws or which
otherwise are regulated by any governmental authority, agency, department,
commission, board or instrumentality of the United States of America, the State
of California or any political subdivision thereof, (iv) any pollutant or
contaminant or hazardous, dangerous or toxic chemicals, materials, or substances
within the meaning of any other applicable federal, state, or local law,
regulation, ordinance, or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards of conduct
concerning any hazardous, toxic or dangerous waste, substance or material, all
as amended; (v) petroleum or any by-products thereof; (vi) any radioactive
material, including any source, special nuclear or by-product material as
defined at 42 U.S.C. Sections 2011 et seq., as amended, and in the regulations
adopted and publications promulgated pursuant to said law; (vii) asbestos in any
form or condition; and (viii) polychlorinated biphenyls.
6.7 No Leases of Property or Assets. No material portion of the Personal
Property or fixtures with respect to the Property (other than fixtures owned or
installed by tenants) is leased by the Seller as lessee and the Personal
Property is owned by Seller and is not subject to any liens.
6.8 Service Contracts. Attached hereto as Schedule K is a complete list of all
service agreements, management agreements and other contracts relating to the
operation or maintenance of the Property (the "Service Contracts"). Seller
represents and warrants that Seller has the contractual right to terminate all
Service Contracts on thirty (30) days advance written noticed to the contractor,
without further liability to the contractor. Seller shall not enter into any new
service contracts prior to the Closing Date that can not be terminated without
further liability to the contractor on thirty (30) days advance written notice
to the contractor.
6.9 Defects. To Seller's actual knowledge, and except as set forth in the Due
Diligence Information, there are no material defects in the Property.
The representations and warranties set forth in this Article VI shall survive
the execution and delivery of this Agreement, and for one (1) year after the
delivery of the Deed and transfer of title to the Property.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF BUYER
7.1 Representations and Warranties of Buyer. Buyer hereby represents and
warrants to Seller as follows: Buyer is a corporation duly organized under the
laws of the State of California; this Agreement and all documents executed by
Buyer which are to be delivered to Seller at the Closing are and as of the
Closing Date will be duly authorized, executed and delivered by Buyer, and are
and as of the Closing Date will be legal, valid and binding obligations of
Buyer, and do not and as of the Closing Date will not violate any provisions of
any agreement or judicial order to which Buyer is a party or to which it is
subject.
ARTICLE 8
POSSESSION, DESTRUCTION AND CONDEMNATION
8.1 Possession. Possession of the Property shall be delivered to Buyer on the
Closing Date.
8.2 Loss Destruction and Condemnation.
(a) Definition of Material Damage. For the purposes of this Section 8.2, damage
to the Property is material if the actual cost of repairing or replacing the
damaged portions of the Improvements on the Property exceeds $250,000.00. For
purposes of this Section 8.2, damage to the Property is substantial if the
actual cost of repairing or replacing the damaged portions of the Improvements
on the Property exceeds $50,000.00 but is less than or equal to $250,000.00. The
cost of repairing or replacing damage shall be determined by a contractor
selected by Seller and reasonably acceptable to Buyer. Notwithstanding anything
to the contrary contained herein, damage to the Property shall be considered
material without respect to the cost of repair if a tenant occupying not less
than seven thousand five hundred (7,500) square feet of space may have the right
to terminate its lease as a result of the damage.
(b) Effect of Non-Material Damage to Improvements. If prior to the Closing the
Improvements on the Property are damaged by casualty and such damage is not
material, (i) this Agreement may not be terminated by reason of such casualty
(provided that this does not waive Buyer's other termination rights under this
Agreement) and (ii) Seller shall pay to Buyer the entire cost of repairing the
damage (Seller shall be entitled to retain any insurance proceeds it may be
entitled to collect from its insurance company).
(c) Effect of Substantial Uninsured Damage to Improvements. If prior to the
Closing the Improvements are damaged by casualty and such damage is substantial,
Seller shall notify Buyer in writing of such casualty as soon as practicable. If
Seller does not maintain any insurance with respect to the casualty which caused
such substantial damage, within ten (10) days after the occurrence of such
casualty, Seller will notify Buyer of Seller's election to commence restoration
of the damaged Improvements or of Seller's election not to restore such
Improvements. If Seller elects to restore such Improvements, Seller shall
promptly restore such Improvements to their condition prior to the occurrence of
the casualty promptly (but in no event more than seventy-five (75) days
thereafter), and the Closing Date shall be extended (but in no event by more
than seventy-five (75) days) until such damaged Improvements are complete. In
such event, Buyer shall have no right to terminate this Agreement. If Seller
does not elect to restore such damaged Improvements within such ten (10) day
period referred to above, then Buyer may elect within the next ten (10) days
pursuant to a writing delivered to Seller and Escrow Holder to (i) continue this
Agreement, in which the Closing shall occur as and when required hereunder,
without any adjustment in the Purchase Price; or (ii) terminate this Agreement,
in which case Buyer and Seller shall have no further rights and obligations to
each other under this Agreement (except for Buyer's obligations to Seller under
Sections 4.4, 5.2(b) and 9.6 hereof). In such event, the ▇▇▇▇▇▇▇ Money Deposit
shall promptly be returned by Escrow Holder to Buyer. Buyer's failure to have
elected any of these options within the time allotted therefor shall be deemed
to be an election of option (ii).
(d) Effect of Material Damage to Improvements. If prior to the Closing the
Improvements are damaged by casualty and such damage is material, Seller shall
notify Buyer in writing of such casualty as soon as practicable. Within ten (10)
days after receipt of such notice Buyer shall elect pursuant to a writing
delivered to Seller and Escrow Holder to (i) continue this Agreement, in which
case Seller shall assign to Buyer at the Closing any insurance proceeds to which
Seller is entitled with respect to such damage and shall credit Buyer with the
amount of any uninsured cost of repair (but in no event shall the Purchase Price
be reduced); or (ii) terminate this Agreement, in which case Buyer shall have no
further rights and obligations to the Seller under this Agreement (except for
Buyer's obligations under Sections 4.4, 5.2(b) and 9.6 hereof). Buyer's failure
to have elected any of these options within the time allotted therefor shall be
deemed to be an election of option (ii). In the event of a termination of this
Agreement pursuant to this Section 8.2(d), the ▇▇▇▇▇▇▇ Money Deposit shall
promptly be returned by Escrow Holder to Buyer.
(e) Definition of Material Taking. For the purposes of this Section 8.2, a
taking or threatened taking by eminent domain or similar proceedings shall be
deemed material if the taking would give a tenant occupying not less than seven
thousand five hundred (7,500) square feet of space the right to terminate its
lease, would substantially reduce access to the Property from a public street or
through an adjoining property owners property or would result in the loss of
enough parking spaces to cause Seller to be in breach of its obligations under a
tenant lease or would cause the Property to be in violation of applicable
statutory parking requirements.
(f) Effect of Non-Material Taking. If prior to the Closing there is a taking or
threatened taking of a portion of the Property which is not material, (i) this
Agreement may not be terminated and (ii) Seller will assign to Buyer at the
Closing all of Seller's rights in and to any condemnation award with respect to
such non-material taking, and there will be no reduction in the Purchase Price.
Seller will deliver written notice to Escrow Holder and Buyer within one (1) day
after Seller receives notice of or otherwise becomes aware of any taking or
threatened taking affecting the Property.
(g) Effect of Material Taking. If prior to the Closing there is a taking or
threatened taking of a material portion of the Property or all of it, Seller
shall notify Buyer in writing of such taking or threatened taking. Within ten
(10) days after receipt of such notice, Buyer shall elect in writing to (i)
continue this Agreement subject to the taking or threatened taking with an
assignment of all of Seller's rights to condemnation awards, severance damages,
payments-in-lieu thereof or the like; or (ii) terminate this Agreement, in which
case Buyer and Seller shall have no further rights or obligations to one another
under this Agreement (except for Buyer's obligations under Sections 4.4, 5.2(b)
and 9.6 hereof). Buyer's failure to have elected any of these options within the
time period allotted therefor shall be deemed to be an election of option (ii).
In the event of a termination of this Agreement pursuant to this Section 8.2(g),
the ▇▇▇▇▇▇▇ Money Deposit shall promptly be returned by Escrow Holder to Buyer.
ARTICLE 9
MISCELLANEOUS
9.1 Leasing. In the event that Seller proposes to enter into a Lease after the
date of this Agreement, Seller shall provide Buyer with written notice of such
Lease, together with any financial statements or credit reports obtained by
Seller with respect to the proposed tenant and a summary of any brokerage
commissions payable with respect to such proposed Lease. Buyer shall have three
(3) business days to approve or disapprove such proposed Lease. In the event
that Buyer fails to respond in writing to such proposed Lease in such three (3)
business day period, Buyer shall be conclusively presumed to have approved such
Lease. In the event that Buyer approves or is deemed to have approved such
Lease, Buyer shall assume upon the Closing all of the landlord's obligations
under or with respect to such Lease, including without limitation the obligation
to install and pay the cost of any tenant improvements contemplated by such
Lease and the obligation to pay any and all brokerage commissions payable with
respect to such Lease. All such commissions shall be paid by Buyer on or prior
to date they are required to be paid by Seller's agreement with the broker
(which agreement shall be provided to Buyer with the proposed tenant lease and
which agreement shall not be modified by Seller if Buyer approves the lease). In
the event that Buyer fails to approve such Lease, Seller may, at its sole
election, enter into such Lease. In the event that Seller executes and delivers
such Lease, Seller shall so notify Buyer in writing (each such notice shall be
referred to herein as a "Lease Notice") and Buyer may, at its election exercised
by written notice to Seller received by Seller within three (3) business days
after Buyer's receipt of Seller's Lease Notice, terminate this Agreement, in
which case Buyer and Seller shall have no further rights or obligations to one
another under this Agreement (except for Buyer's obligations under Sections 4.4,
5.2(b) and 9.5 hereof). If Seller does not receive written notice of Buyer's
election to terminate within such three business day period, Buyer shall be
conclusively presumed to have elected to terminate this Agreement. In the event
of a termination of this Agreement pursuant to this Section 9.1, the ▇▇▇▇▇▇▇
Money Deposit shall promptly be returned by Escrow Holder to Buyer.
9.2 Notices. Any notice required or permitted to be given under this Agreement
shall be in writing and personally delivered or sent by United States mail,
registered or certified mail, postage prepaid, return receipt requested, or sent
by Federal Express or similar nationally recognized overnight courier service,
and addressed as follows, and shall be deemed to have been given upon the date
of delivery (or refusal to accept delivery) at the address specified below as
indicated on the return receipt or air ▇▇▇▇:
If to Seller: THE PRICE REIT, INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Buyer: Westrust Asset Management, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax : (▇▇▇)▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Fried, Bird & ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇)▇▇▇-▇▇▇▇
If to Escrow Holder: Chicago Title Insurance Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
Or such other address as either party may from time to time specify in writing
to the other in the manner aforesaid.9.3 Brokers and Finders. Buyer and Seller
each hereby represents and warrants that no broker was involved in this
Agreement or the transactions contemplated hereby except for ▇▇▇▇▇ & ▇▇▇▇▇,
whose commissions are to be paid by Seller. In the event of a claim for a
broker's fee, finder's fee, commission or other similar compensation in
connection herewith other than as set forth above, (i) Buyer, if such claim is
based upon any agreement alleged to have been made by Buyer, hereby agrees to
reimburse Seller for any liability, loss, cost, damage or expense (including
reasonable attorneys' and paralegals' fees and costs) which Seller may sustain
or incur by reason of such claim and (ii) Seller, if such claim is based upon
any agreement alleged to have been made by Seller, hereby agrees to indemnify,
defend, protect and hold Buyer harmless against any and all liability, loss,
cost, damage or expense (including reasonable attorneys' and paralegals' fees
and costs) which Buyer may sustain or incur by reason of such claim. The
provisions of this Section 9.3 shall survive the Closing or earlier termination
of this Agreement.
9.4 Successors and Assigns. This Agreement shall be binding upon, and inure to
the benefit of, the parties hereto and their respective successors and assigns,
except that Seller's interest under this Agreement may not be assigned,
encumbered or otherwise transferred whether voluntarily, involuntarily, by
operation of law or otherwise, without the prior written consent of the Buyer.
There shall be no third party beneficiaries to this Agreement. Buyer may assign
its rights in and to this Agreement without Seller's prior written consent,
provided any such assignee assumes Buyer's obligations hereunder.
9.5 Amendments. This Agreement may be amended or modified only by a written
instrument executed by the party asserted to be bound thereby.
9.6 Continuation and Survival of Indemnities. Representations, Warranties and
post-Closing Obligations. All indemnities, representations and warranties by,
and all of the post-closing obligations, if any, of, the respective parties
contained herein or made in writing pursuant to this Agreement or any other
instrument delivered by Seller pursuant hereto are intended to and shall remain
true and correct and binding as of the time of Closing and shall survive the
execution and delivery of this Agreement, the delivery of the Deed and transfer
of title, subject in all cases to any applicable limitation on survival set
forth herein.
9.7 Interpretation. Whenever used herein, the term "including" shall be deemed
to be followed by the words "without limitation." Words used in the singular
number shall include the plural, and vice-versa, and any gender shall be deemed
to include each other gender. The captions and headings of the Articles and
Sections of this Agreement are for convenience of reference only, and shall not
be deemed to define or limit the provisions hereof.
9.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
9.9 Merger of Prior Agreements. This Agreement (including the exhibits hereto)
constitutes the entire agreement between the parties with respect to the
purchase and sale of the Property specifically described herein and supersedes
all prior and contemporaneous (whether oral or written) agreements and
understandings between the parties hereto relating to the specific subject
matter hereof.
9.10 Attorneys' Fees. In the event of any action or proceeding at law or in
equity between Buyer and Seller to enforce or interpret any provision of this
Agreement or to protect or establish any right or remedy of either Buyer or
Seller hereunder, the unsuccessful party to such action or proceeding shall pay
to the prevailing party all costs and expenses, including without limitation
reasonable attorneys' and paralegals' fees and expenses (including without
limitation fees, costs and expenses of experts and consultants), incurred in
such action or proceeding and in any appeal in connection therewith by such
prevailing party, together with all costs of enforcement and/or collection of
any judgment or other relief. If such prevailing party shall recover judgment in
any such action, proceeding or appeal, such costs, expenses and attorneys' and
paralegals' and others' fees shall be included in and as a part of such
judgment.
9.11 Notice of Termination. If either Buyer or Seller elects to terminate this
Agreement, it will submit to Escrow Holder and the other party hereto a notice
of termination. If Escrow Holder receives a notice of termination, it is
instructed to mail and fax one copy to the other such party within one (1)
business day. If Escrow Holder has not received a written objection from the
other party within five (5) business days after mailing and faxing the copy,
Escrow Holder is to (i) comply with the instructions contained in the notice of
termination, (ii) pay cancellation charges out of any funds on deposit in this
Escrow, (iii) return the ▇▇▇▇▇▇▇ Money Deposit (and interest thereon) to Buyer
if still held by- Escrow Holder, and (iv) cancel this Agreement.
9.12 Specific Performance: Damages. The parties understand and agree that the
Property is unique and for that reason, among others, Buyer will be irreparably
damaged in the event that this Agreement is not specifically enforced.
Accordingly, in the event of any breach or default in or of this Agreement or
any of the warranties, terms or provisions hereof by Seller, Buyer shall have
the right to demand and have specific performance of this Agreement. Terminating
this Agreement and having its ▇▇▇▇▇▇▇ Money Deposit returned to Buyer, specific
performance of this Agreement and legal action to recover Buyer's damages in an
amount not too exceed One Hundred Thousand Dollars ($100,000) shall be Buyer's
sole remedies for Seller's breach of this Agreement. Buyer hereby irrevocably
waives and disclaims any right to obtain monetary damages from Seller in excess
of the One Hundred Thousand Dollars ($100,000.00).
9.13 Relationship. It is not intended' by this Agreement to, and nothing
contained in this Agreement shall, create any partnership, joint venture,
financing arrangement or other agreement between Buyer and Seller. No term or
provision of this Agreement is intended to be, or shall be, for the benefit of
any person, firm, organization or corporation not a party hereto, and no such
other person, firm, organization or corporation shall have any right or cause of
action hereunder.
9.14 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute but one and the same instrument.
9.15 Time of the Essence. Time is of the essence in this Agreement and with
respect to all of its terms.
9.16 1031 Cooperation. Buyer understands and acknowledges that Seller may desire
to exchange the Property in a tax-deferred exchange under Section 1031 of the
Internal Revenue Code. Buyer hereby agrees to cooperate with any reasonable
request of Seller with respect thereto, including without limitation a
delegation and assignment by Seller of its obligations hereunder to an
accommodator; provided, all costs and expenses (including reasonable attorneys'
fees) incurred by Buyer in connection therewith shall be paid by Seller and in
no event shall the Closing Date be extended due to any such exchange.
Notwithstanding anything to the contrary in this Section, Buyer shall have no
obligation to incur any expense or to assume any liability in order to assist
Seller in consummating an exchange.
9.17 Maintenance Qf Property. Prior to the Closing Date, Seller shall maintain
the Property in its normal course of business, subject to reasonable wear and
tear and further subject to destruction by casualty. Seller shall provide Buyer
with written notice of any single repair or maintenance expense in excess of Ten
Thousand Dollars (~10,000.00) that is incurred by Seller after the date of this
Agreement and prior to the Closing.
IN WITNESS WHEREOF, Seller, Buyer, and Escrow Holder have executed this
Agreement as of the date first above written.
SELLER: THE PRICE REIT, INC.,
a Maryland corporation
By: /▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇/
---------------------
Its: Senior Executive Vice President
BUYER: WESTRUST ASSET MANAGEMENT, INC.,
a California corporation
By: /▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇/
----------------------
Its: President
CONSENT OF ESCROW COMPANY
The undersigned Escrow Company agrees to (i) accept the foregoing Agreement,
(ii) be Escrow Holder under the Agreement, and (iii) be bound by the Agreement
in the performance of its duties as Escrow Holder; however, the undersigned will
have no obligations, liability or responsibility under (a) this consent or
otherwise, unless and until the Agreement, fully signed by the parties, has been
delivered to the undersigned, or (b) any amendment to the Agreement unless and
until the amendment is accepted by the undersigned in writing.
Dated:
CHICAGO TITLE INSURANCE COMPANY
By:
---------------------------
Escrow Officer
INDEX TO SCHEDULES
Schedule A The Land
Schedule B Form of Deed
Schedule C Form of Assignment and Assumption of Leases and Rents -
Schedule D Form of ▇▇▇▇ of Sale
Schedule E Form of Assignment and Assumption of Contracts, Intangible
Property, Warranties and Guarantees
Schedule F Form of Non-Foreign Certificate
Schedule G Form of Estoppel Certificate
Schedule H Rent Roll
Schedule I Form of Tenant Notification Letter
Schedule J Updated Due Diligence Information
Schedule K List of Service Contracts
SCHEDULE A
THE LAND
That certain real property in the County of Los Angeles, State of California
described as follows:
▇▇▇▇ ▇,▇ ▇▇▇ ▇ ▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇ as per map recorded in Book 853 pages 99 and
100 of Maps, in the office of the County Recorder for said County.
SCHEDULE B
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
GRANT DEED
For and in consideration of Ten and No/100 Dollars ($10.00) and other valuable
consideration, The Price REIT, Inc., a Maryland corporation ("Grantor") grants,
sells, transfers and conveys to ("Grantee") the following real property situated
in Los Angeles County, California, together with all appurtenant rights and
privileges (collectively, the "Property"):
See Exhibit A attached hereto and incorporated herein b this reference.
SUBJECT TO: all matters, whether or not of record.
IN WITNESS WHEREOF, the Grantor has executed this instrument this day of ,
1997
THE PRICE REIT, INC.,
a Maryland corporation
By:
--------------------
Its:
EXHIBIT A
DESCRIPTION OF PROPERTY
SCHEDULE C
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
ASSIGNMENT AND ASSUMPTION Q LEASES AND RENTS
For valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, THE PRICE REIT, INC., a Maryland corporation ("Assignor"), hereby
assigns, sets over, transfers and delegates to ("Assignee"), all of Assignor's
right, title, interest, claim and estate in and to all leases, occupancy
agreements and similar agreements, together with all modifications, extensions
and renewals thereof, all security therefor, and all guaranties of any of the
foregoing (collectively, the "Leases") which demise all or any part of, or
interest in, the real property more particularly described on Exhibit ~ attached
hereto and incorporated herein (the "Land"), together with all income, receipts,
fund and revenues of any kind whatsoever payable under the Leases or otherwise
with respect to the Land, hereafter arising.
Assignee assumes all of Assignor's obligations under or with respect to the
Leases that arise from and after the Closing Date (as defined in the Agreement).
Seller hereby agrees to indemnify, defend and hold harmless Buyer from any
obligation, cost or expense arising under the Tenant Leases which relate to a
period prior to the Closing Date and Buyer hereby agrees to indemnify, defend
and hold harmless Seller from any obligation, cost or expense under the Tenant
Leases which relate to a period from and after the Closing Date.
If any litigation between Assignor and Assignee arises out of the obligations of
the parties under this Assignment or concerning the meaning or interpretation of
any provision contained herein, the losing party shall pay the prevailing
party's costs and expenses of such litigation including, without limitation,
reasonable attorneys' fees. Any such attorneys' fees and other expenses incurred
by either party in enforcing a judgment in its favor under this Assignment shall
be recoverable separately from and in addition to any other amount included in
such judgment, and such attorneys' fees obligation is intended to be severable
from the other provisions of this Assignment and to survive and not be merged
into any such judgment.
This Assignment may be executed and delivered in any number of counterparts,
each of which so executed and delivered shall be deemed to be an original and
all of which shall constitute one and the same instrument. ,
IN WITNESS WHEREOF, Assignor and Assignee have executed this Agreement effective
as of this day of , 1997
ASSIGNOR:
THE PRICE REIT, INC.
By:
----------------------
Printed Name:
Its:
ASSIGNEE:
By:
----------------------
Printed Name:
Its:
By:
----------------------
Printed Name:
Its:
EXHIBIT "A"
TO
ASSIGNMENT AND ASSUMPTION OF LEASES AND RENTS
LEGAL DESCRIPTION OF PROPERTY
SCHEDULE D
▇▇▇▇ OF SALE
For valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, THE PRICE REIT, INC., a Maryland corporation ("Seller"), hereby
transfers, conveys and assigns to
("Buyer"), and its successors and assigns forever, without representation,
warranty or recourse of any kind (except as may be provided in the Agreement as
defined below), any and all tangible personal property owned by Seller and
located on or about and used in connection with the real property more
particularly described on Exhibit A attached hereto and made a part hereof (the
"Property") or any improvements thereon, including but not limited to fixtures,
furnishings, furniture, tools machinery and/or equipment, operational
instructions and/or specifications, surveys, drawings and business records.
If any litigation between Seller and Buyer arises out of the obligations of the
parties under this ▇▇▇▇ of Sale or concerning the meaning or interpretation of
any provision contained herein, the losing party shall pay the prevailing
party's costs and expenses of such litigation including, without limitation,
reasonable attorneys, fees. Any such attorneys' fees and other expenses incurred
by either party in enforcing a judgment in its favor under this ▇▇▇▇ of Sale
shall be recoverable separately from and in addition to any other amount
included in such judgment, and such attorneys' fees obligation is intended to be
severable from the other provisions of this ▇▇▇▇ of Sale and to survive and not
be merged into any such judgment.
Capitalized terms not otherwise defined herein shall have the meanings given
them in that certain Purchase and Sale Agreement and Escrow Instructions, dated
as of , 1997, by and among Buyer, Seller and Chicago Title Insurance Company
(the "Agreement").
IN WITNESS WHEREOF, Seller has caused this instrument to be executed and
delivered as of this day of , 1997.
THE PRICE REIT, INC.,
a Maryland corporation
By:
---------------------
Printed Name:
Its:
EXHIBIT "A"
TO
▇▇▇▇ OF SALE
DESCRIPTION OF PROPERTY
SCHEDULE E
ASSIGNMENT AND ASSUMPTION OF CONTRACTS,
INTANGIBLE PROPERTY, WARRANTIES AND GUARANTEES
THIS ASSIGNMENT AND ASSUMPTION OF CONTRACTS, INTANGIBLE PROPERTY, WARRANTIES AND
GUARANTIES (this "Assignment") is made as of the day of , 1997, by and
between THE PRICE REIT, INC., a Maryland corporation ("Assignor"), and
("Assignee").
RECITALS:
Pursuant to that certain Purchase and Sale Agreement and Escrow Instructions
dated as of , 1997 by and between Assignor, Assignee and Title Insurance
Company (the "Agreement"), Assignee has this day acquired from Assignor certain
interests in land, buildings and improvements more particularly described on
Exhibit A attached hereto and made a part hereof (the "Property"). Capitalized
terms not otherwise defined herein shall have the meanings given them in the
Agreement.
In consideration of the acquisition of the Property by Assignee and other good
and valuable consideration, the mutual receipt and legal sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
Assignor hereby assigns, transfers and delegates to Assignee all of Assignor's
right, title and interest in and to the following (collectively, the "Assigned
Property"): (i) any intangible personal property which relates to and is
reasonably required for the operation and functioning of the Land, Improvements
or Personal generally, (ii) any and all warranties, guarantees, contracts and
other rights owned by Seller relating to the ownership, operation or functioning
of all or any part of the Property, as defined below (including without
limitation all third party guarantees and warranties, express or implied, in
connection with the construction of the Improvements) (iii) all trade names and
trade marks associated with the Real Property including without
limitation the name of the Improvements; (iv) the plans and specifications for
the Improvements and (v) all books and records relating to the Property.
Notwithstanding anything to the contrary contained herein, Seller shall not be
obligated to provide to Buyer books or records relating to the Property unless
the following conditions are satisfied: the books and records are in the
possession or control of Seller, the books and records relate solely to the Real
Property and do not also relate to any other property, the books and records are
not confidential communications to Seller's legal counsel or communications with
Seller's lender's Property (or their agents or employees); provided, however,
notwithstanding the foregoing, the books and records shall include all books and
records relating exclusively to tenant leases and the physical condition of the
Property Assignee hereby assumes all obligations of Assignor under or with
respect to the Assigned Property.
If any litigation between Assignor and Assignee arises out of the obligations of
the parties under this Assignment or concerning the meaning or interpretation of
any provision contained herein, the losing party shall pay the prevailing
party's costs and expenses of such litigation including, without limitation,
reasonable attorneys, fees. Any such attorneys' fees and other expenses incurred
by either party in enforcing a judgment in its favor under this Assignment shall
be recoverable separately from and in addition to any other amount included in
such judgment, and such attorneys' fees obligation is intended to be severable
from the other provisions of this Assignment and to survive and not be merged
into any such judgment.
This Assignment may be executed and delivered in any number of counterparts,
each of which so executed and delivered shall be deemed to be an original and
all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
effective as of the date set forth below.
Executed as of the date first above written.
ASSIGNOR:
THE PRICE REIT, INC.
By:
--------------------
Printed Name:
Its:
ASSIGNEE:
By:
--------------------
Printed Name:
Its:
By:
--------------------
Printed Name:
Its:
EXHIBIT "A"
TO
ASSIGNMENT AND ASSUMPTION OF CONTRACTS,
INTAGIBLE PROPERTY, WARRANTIES AND GUARANTEES
LEGAL DESCRIPTION OF PROPERTY
SCHEDULE F
CERTIFICATION OF NON-FOREIGN STATUS
(Foreign Investment in Real Property Tax Act)
Internal Revenue Code Section 1445 provides that a transferee of a United
States real property interest must withhold tax if the transferor is a foreign
person. To inform WESTRUST ASSET MANAGEMENT, INC., a California corporation
("Transferee") that withholding of tax is not required upon the disposition of a
United States real property interest by the undersigned ("Transferor"),
Transferor hereby certifies and declares as follows:
1. Transferor's U.S. tax identification/social security number is: .
2. Transferor's principal office address is ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇; and
3. Transferor is not a foreign person (foreign corporation, foreign partnership,
foreign trust, foreign estate or non-resident alien), as defined in the Internal
Revenue Code and Income Tax Regulations.
Transferor acknowledges that this certification may be disclosed by Transferee
to the Internal Revenue Service and that any false statement contained in this
certification may be punished by fine or imprisonment or both.
Transferor understands that Transferee is relying on this certification to
determine whether withholding is required by Transferee pursuant to Internal
Revenue Code Section 1445.
Under penalties of perjury, the undersigned signatory declares that: I have
examined this certification, to the best of my knowledge and belief it is true
and complete, and I am duly authorized to execute this certification on behalf
of Transferor.
Dated: , 1997
THE PRICE REIT, INC.
a Maryland corporation
By:
--------------------------
Its:
By:
--------------------------
Its:
SCHEDULE G
TENANT ESTOPPEL CERTIFICATE
THIS TENANT ESTOPPEL CERTIFICATE ("Certificate"), dated as of , 1997, is
executed by ("Tenant") in favor of WESTRUST ASSET MANAGEMENT, INC., a
California corporation ("Buyer").
R E C I T A L S
A. Buyer and THE PRICE REIT, INC. ("Landlord"), have entered into that certain
Purchase and Sale Agreement and Escrow Instructions, dated as of , 1997 (the
"Purchase Agreement"), whereby Buyer has agreed to purchase, among other things,
the improved real property located in the City of Cerritos, County of Los
Angeles, State of California, more particularly described on Schedule "A"
attached to the Purchase Agreement (the "Property").
B. Tenant and Landlord have entered into that certain Lease Agreement, dated as
of (together with all amendments, modifications, supplements, guarantees and
restatements thereof, the "Lease"), for a portion of the Property.
C. Pursuant to the Lease, Tenant has agreed that upon the request of Landlord,
Tenant would execute and deliver an estoppel certificate certifying the status
of the Lease.
D. In connection with the Purchase Agreement, Landlord has requested that Tenant
execute this Certificate.
NOW, THEREFORE, Tenant certifies, warrants, and represents to Buyer as follows:
AGREEMENT
Section 1. Lease.
Attached hereto as Exhibit "A" is a true, correct, and complete copy of the
Lease, including the following amendments, modifications, supplements,
guarantees and restatements thereof, which together represent all of the
amendments, modifications, supplements, guarantees and restatements thereof:
(If none, please state "None.")
Section 2. Leased Premises.
Pursuant to the Lease, Tenant leases those certain Premises (the "Leased
Premises") consisting of approximately ( ) rentable square feet
within the Property, as more particularly described in the Lease. In addition,
pursuant to the terms of the Lease, Tenant has the [non-exclusive] right to use
[ parking spaces/the parking area] located on the Property during the term
of the Lease. [Cross-out the preceding sentence or portions thereof if
inapplicable.]
Section 3. Full Force of Lease.
The Lease is in full force and effect, has not been terminated, and is
enforceable in accordance with its terms.
Section 4. Complete Agreement
The Lease constitutes the complete agreement between Landlord and Tenant for the
Leased Premises and the Property.
Section 5. Acceptance of Leased Premises.
Tenant has accepted and is currently occupying the Leased Premises.
Section 6. Lease Term.
The term of the Lease commenced on and ends on , subject to the following
options to extend:
(If none, please state "None.")
Section 7. Purchase Rights.
Tenant has no option, right of first refusal, right of first offer, or other
right to purchase all or any portion of the Leased Premises or all or any
portion of the Property, except as follows:
(If none, please state "None.")
Section 8. Rights of Tenant.
Except as expressly stated in this Certificate, Tenant:
(a) has no right to renew or extend the term of the Lease;
(b) has no option or other right to purchase all or any part of the Leased
Premises or all or any part of the Property;
(c) has no right, title, or interest in the Leased Premises, other than as
Tenant under the Lease.
Section 9. Rent.
(a) The rent under the Lease is current, and Tenant is not in default in the
performance of any of its obligations under the Lease.
(b) Tenant is currently paying base rent under the Lease in the amount of
Dollars ($ ) per month. Tenant has not received and is not, presently,
entitled to any abatement, refunds, rebates, concessions or forgiveness of rent
or other charges, free rent, partial rent, or credits, offsets or reductions in
rent, except as follows:
(If none, please state "None.")
(c) Tenant's estimated share of operating expenses, common area charges,
insurance, real estate taxes and administrative and over-head expenses is
percent ( %) and is currently being paid at the rate of
Dollars ($ ) per month, payable to
(d) There are no existing defenses or offsets against rent due or to become due
under the terms of the Lease, and there presently is no default or other
wrongful act or omission by Landlord under the Lease or otherwise in connection
with Tenant's occupancy of the Leased Premises, except as follows:
(If none, please state "None.")
Section 10. Security Deposit.
The amount of Tenant's security deposit held by Landlord under the Lease is
Dollars ($ )
Section 11. Prepaid Rent.
The amount of prepaid rent, separate from the security deposit, is Dollars
($ ), covering the period from to .
Section 12. Insurance.
All insurance, if any, required to be maintained by Tenant under the Lease is
presently in effect.
Section 13. Pending Actions.
There are no actions, whether voluntary or otherwise, pending against the Tenant
(or any guarantor of the Tenant's obligations under the Lease) pursuant to the
bankruptcy or insolvency laws of the United States or any state thereof.
Section 14. Landlord's Obligations.
As of the date of this Certificate, Landlord has performed all obligations
required of Landlord pursuant to the Lease and no offsets, counterclaims, or
defenses of Tenant under the Lease exist against Landlord. As of the date of
this Certificate, no events have occurred that, with the passage of time or the
giving of notice, would constitute a basis for offsets, counterclaims, or
defenses against the Landlord, except as follows:
(If none, please state "None.")
Section 15. Assignments by Landlord.
Tenant has received no notice of any assignment, hypothecation or pledge of the
Lease or rentals under the Lease by Landlord.
Section 16. Assignments by Tenant.
Tenant has not sublet or assigned the Leased Premises or the Lease or any
portion thereof to any sublessee or assignee. No one except Tenant and its
employees will occupy the Leased Premises except as permitted under the Lease.
The address for notices to be sent to Tenant is as set forth in the Lease.
Section 17. Environmental Matters.
The operation and use of the Leased Premises does not involve the generation,
treatment, storage, disposal or release into the environment of any hazardous
materials, regulated materials and/or solid waste, except those used in the
ordinary course of operating a retail store or restaurant (if so permitted by
the Lease) or otherwise used in accordance with all applicable laws.
Section 18. Notification by Tenant.
From the date of this Certificate and continuing the earlier to occur of (i) ,
1997 and (ii) Buyer's acquisition of title to the Property, Tenant agrees to
immediately notify Buyer, in writing, at the following address, on the
occurrence of any event or the discovery of any fact that would make any
representation contained in this Certificate inaccurate:
Section 19. Percentage Rent.
Tenant is obligated to pay the following percentage rent:
Section 20. Exclusive Use.
Tenant does not have the exclusive right to use the Property for any use except
as specifically described below:
(If none, please state "None")
Section 21. Tenant Improvements.
Landlord has paid any tenant improvement allowance and has completed the
construction of any tenant improvements required by the Lease.
Section 22. Right to Lease Other Space.
Tenant does not have a right of offer or refusal to lease any other space in the
Property.
This Certificate may be relied on by Buyer, its successors and assigns, and any
other person or entity who acquires an interest in the Premises in connection
with the purchase of the Property or any person or entity which may finance such
purchase. The undersigned acknowledges and agrees that the person or entity to
whom this Certificate is addressed may assign this Certificate to a different
person or entity that will complete the purchase of the Property and that the
person or entity to whom the addressee assigns this Certificate shall have the
right to enforce this Certificate to the same extent as if such assignee was the
original addressee of this Certificate. Following the conveyance of the Property
to Buyer or its successors or assigns, Tenant agrees that the Lease shall remain
in full force and effect and shall inure to the benefit of the Buyer and its
successors and assigns. In the event that Buyer acquires the Property, nothing
in this estoppel certificate shall limit Tenant's obligations under the Lease.
Tenant his executed this Certificate as of the date first written above by the
person named below, who is duly authorized to do so.
TENANT
By:
-----------------------
Name:
Its:
SCHEUDLE H
RENT ROLL
SCHEDULE I
TENANT NOTIFICATION LETTER FORM
, 1997
All Tenants of College Square Shopping Center
Dear Tenants:The Price Reit, Inc. is no longer the owner of the College Square
Shopping Center (the "Shopping Center"). The Shopping Center is now owned by ("
"). You will be receiving another letter from instructing you concerning the
future management of the property and where to make all future rental payments.
Very truly yours,
[TO BE SIGNED BY BUYER AND SELLER]
Schedule J
Updated Due Diligence Information
1. A copy of any written notice received by Seller from a Tenant relating to its
ability to perform its obligations under its lease, the default of Seller under
the lease or the failure of Seller to perform its obligations under the lease.
2. A copy of any written notice received by Seller from any governmental or
quasi governmental agency relating to the compliance of the Property with
applicable laws, legal requirements that the Property will be required to comply
with in the future or other governmental notices that affect the value or use of
the Property.
3. Agreements with tenants for the amendment or modification of the tenant's
lease.
4. Copies of any new leases entered into with tenants.
5. To the extent and at the time prepared by Seller, Seller's standard monthly
operating statement for the Property.
6. To the extent and at the time prepared by Seller, an updated rent roll for
the Property.
Schedule K
List of Service Contracts
Klean-Rite Sweeping Service
Shield Security, Inc.
Casa Verde Landscape Maintenance Corporation
Star Kleen Service
Daylite Maintenance
Calsan Waste Collection & Recycling
Exhibit 12.1 - STATEMENT RE: COMPUTATION OF RATIO OF EARNINGS
TO FIXED CHARGES
For the Six
Months Ended Year ended December 31,
June 30, 1997 1996 1995
-----------------------------------------
Net Income $11,120 $16,919 $16,386
Interest 7,232 11,826 7,070
Less interest capitalized
during the period (881) (469) (415)
Amortization of deferred
loan fees and discount 314 714 284
-----------------------------------------
Earnings $17,785 $28,990 $23,325
=========================================
Interest 7,232 11,826 7,070
Amortization of deferred
loan fees and discount 314 714 284
-----------------------------------------
$ 7,546 $12,540 $ 7,354
=========================================
Ratio of Earnings to
Fixed Charges 2.36 2.31 3.17
=========================================
Year ended December 31,
1994 1993 1992
-----------------------------------
Net Income $16,904 $ 9,128 $ 4,118
Interest 4,319 4,287 3,203
Less interest capitalized
during the period (234) (30) -
Amortization of deferred
loan fees and discount 152 99 17
-----------------------------------
Earnings $21,141 $13,484 7,338
===================================
Interest 4,319 4,287 3,203
Amortization of deferred
loan fees and discount 152 99 17
-----------------------------------
$ 4,471 $ 4,386 $ 3,220
===================================
Ratio of Earnings to
Fixed Charges 4.73 3.07 2.28
===================================
Exhibit 15.1 Letter Regarding Unaudited Interim Financial Information
August 14, 1997
The Board of Directors
The Price REIT, Inc.
We are aware of the incorporation by reference in the Registration Statements
(Form S-3 No. 33-75548; Form S-8 No. 33-87812; and Form S-3
No. 333-16787 and related Prospectus) of The Price REIT, Inc. for the
registration of 500,000 shares of its common stock; 600,000 shares of its common
stock; and an aggregate maximum total of $65,021,500 of debt securities,
preferred stock, common stock, and warrants for the purchase of its preferred
stock or common stock, respectively, of our report dated July 23, 1997 relating
to the unaudited condensed consolidated interim financial statements of The
Price REIT, Inc. that is included in its Form 10-Q for the quarter ended June
30, 1997.
Pursuant to Rule 436(c) of the Securities Act of 1933 our report is not a part
of the registration statement prepared or certified by accountants within the
meaning of Section 7 or 11 of the Securities Act of 1933.
/Ernst & Young LLP/
San Diego, California