REVOLVING CREDIT AGREEMENT
DATED AS OF SEPTEMBER 19, 2001
AMONG
PRICE LEGACY CORPORATION
AND
FLEET NATIONAL BANK
AND
THE OTHER BANKS WHICH ARE
A PARTY TO THIS AGREEMENT
AND
THE OTHER BANKS WHICH MAY BECOME
PARTIES TO THIS AGREEMENT
AND
FLEET NATIONAL BANK
AS AGENT
AND
FLEET SECURITIES, INC.
AS CO-LEAD ARRANGER
▇▇▇▇▇ FARGO BANK, N.A.
AS CO-LEAD ARRANGER AND SYNDICATION AGENT
AND
U.S. BANK NATIONAL ASSOCIATION
AS DOCUMENTATION AGENT
TABLE OF CONTENTS
PAGE
Section 1. DEFINITIONS AND RULES OF INTERPRETATION............................................................ 1
Section 1.1 Definitions......................................................................... 1
Section 1.2 Rules of Interpretation............................................................. 19
Section 2. THE REVOLVING CREDIT FACILITY...................................................................... 20
Section 2.1 Commitment to Lend.................................................................. 20
Section 2.2 Facility Unused Fee................................................................. 20
Section 2.3 Reduction and Termination of Commitment............................................. 21
Section 2.4 Notes............................................................................... 21
Section 2.5 Swing Loan Commitments.............................................................. 21
Section 2.6 Interest on Loans................................................................... 24
Section 2.7 Requests for Loans.................................................................. 24
Section 2.8 Funds for Loans..................................................................... 25
Section 2.9 Letters of Credit................................................................... 25
Section 2.10 Use of Proceeds..................................................................... 28
Section 3. REPAYMENT OF THE LOANS............................................................................. 29
Section 3.1 Stated Maturity..................................................................... 29
Section 3.2 Mandatory Prepayments............................................................... 29
Section 3.3 Optional Prepayments................................................................ 29
Section 3.4 Prepayments......................................................................... 29
Section 3.5 Effect of Prepayments............................................................... 30
Section 3.6 Proceeds from Debt or Equity Offering............................................... 30
Section 4. CERTAIN GENERAL PROVISIONS......................................................................... 30
Section 4.1 Conversion Options.................................................................. 30
Section 4.2 Closing Fee......................................................................... 31
Section 4.3 Agent's Fee......................................................................... 31
Section 4.4 Funds for Payments.................................................................. 31
Section 4.5 Computations........................................................................ 33
Section 4.6 Inability to Determine LIBOR Rate................................................... 33
Section 4.7 Illegality.......................................................................... 33
Section 4.8 Additional Interest................................................................. 33
-i-
TABLE OF CONTENTS
(continued)
PAGE
Section 4.9 Additional Costs, Etc............................................................... 34
Section 4.10 Capital Adequacy.................................................................... 35
Section 4.11 Indemnity of Borrower............................................................... 35
Section 4.12 Interest on Overdue Amounts; Late Charge............................................ 36
Section 4.13 Certificate......................................................................... 36
Section 4.14 Limitation on Interest.............................................................. 36
Section 5. SECURITY........................................................................................... 36
Section 5.1 Unsecured Loan...................................................................... 36
Section 5.2 Additional Guarantors............................................................... 36
Section 5.3 Release of Certain Guarantors....................................................... 37
Section 6. REPRESENTATIONS AND WARRANTIES..................................................................... 37
Section 6.1 Corporate Authority, Etc............................................................ 37
Section 6.2 Approvals........................................................................... 38
Section 6.3 Title to Properties; Leases......................................................... 39
Section 6.4 Financial Statements................................................................ 39
Section 6.5 No Material Changes................................................................. 39
Section 6.6 Franchises, Patents, Copyrights, Etc................................................ 39
Section 6.7 Litigation.......................................................................... 39
Section 6.8 No Materially Adverse Contracts, Etc................................................ 40
Section 6.9 Compliance with Other Instruments, Laws, Etc........................................ 40
Section 6.10 Tax Status.......................................................................... 40
Section 6.11 No Event of Default................................................................. 40
Section 6.12 Holding Company and Investment Company Acts......................................... 41
Section 6.13 Absence of U.C.C. Financing Statements, Etc......................................... 41
Section 6.14 Certain Transactions................................................................ 41
Section 6.15 Employee Benefit Plans.............................................................. 41
Section 6.16 Regulations T, U and X.............................................................. 41
Section 6.17 Environmental Compliance............................................................ 42
Section 6.18 Subsidiaries........................................................................ 43
Section 6.19 Loan Documents and the Guarantors................................................... 43
-ii-
TABLE OF CONTENTS
(continued)
PAGE
Section 6.20 Property............................................................................ 44
Section 6.21 Brokers............................................................................. 44
Section 6.22 Other Debt; Material Agreements..................................................... 44
Section 6.23 Solvency............................................................................ 45
Section 6.24 Transaction in Best Interests of Borrower; Consideration............................ 45
Section 6.25 The Ownership of Guarantors......................................................... 45
Section 6.26 Contribution Agreement.............................................................. 45
Section 7. AFFIRMATIVE COVENANTS OF THE BORROWER.............................................................. 45
Section 7.1 Punctual Payment.................................................................... 46
Section 7.2 Maintenance of Office............................................................... 46
Section 7.3 Records and Accounts................................................................ 46
Section 7.4 Financial Statements, Certificates and Information.................................. 46
Section 7.5 Notices............................................................................. 49
Section 7.6 Existence; Maintenance of Properties................................................ 50
Section 7.7 Insurance........................................................................... 51
Section 7.8 Taxes............................................................................... 51
Section 7.9 Inspection of Properties and Books.................................................. 51
Section 7.10 Compliance with Laws, Contracts, Licenses, and Permits.............................. 52
Section 7.11 Further Assurances.................................................................. 52
Section 7.12 Management; Business Operations..................................................... 52
Section 7.13 Unencumbered Borrowing Base Properties.............................................. 52
Section 7.14 Limiting Agreements................................................................. 54
Section 7.15 Distributions of Income to the Borrower............................................. 55
Section 7.16 More Restrictive Agreements......................................................... 55
Section 7.17 Plan Assets......................................................................... 55
Section 8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER......................................................... 56
Section 8.1 Restrictions on IndebtedneSection .................................................. 56
Section 8.2 Restrictions on Liens, Etc.......................................................... 57
Section 8.3 Restrictions on Investments......................................................... 58
Section 8.4 Merger, Consolidation............................................................... 60
-iii-
TABLE OF CONTENTS
(continued)
PAGE
Section 8.5 Sale and Leaseback.................................................................. 60
Section 8.6 Compliance with Environmental Laws.................................................. 60
Section 8.7 Distributions....................................................................... 61
Section 8.8 Asset Sales......................................................................... 62
Section 8.9 Development Activity................................................................ 62
Section 8.10 Sources of Capital.................................................................. 63
Section 8.11 Restriction on Prepayment of IndebtedneSection ..................................... 63
Section 8.12 Interest in Guarantors.............................................................. 63
Section 8.13 Derivative Obligations.............................................................. 63
Section 8.14 Bankruptcy Remote Subsidiaries...................................................... 63
Section 9. FINANCIAL COVENANTS OF THE BORROWER................................................................ 63
Section 9.1 Borrowing Base...................................................................... 64
Section 9.2 Liabilities to Assets Ratio......................................................... 64
Section 9.3 Interest Coverage................................................................... 64
Section 9.4 Fixed Charge Coverage............................................................... 64
Section 9.5 Net Worth........................................................................... 65
Section 9.6 Land Assets......................................................................... 65
Section 10. CLOSING CONDITIONS................................................................................. 65
Section 10.1 Loan Documents...................................................................... 65
Section 10.2 Certified Copies of Organizational Documents........................................ 65
Section 10.3 Bylaws; Resolutions................................................................. 65
Section 10.4 Incumbency Certificate; Authorized Signers.......................................... 65
Section 10.5 Opinion of Counsel.................................................................. 66
Section 10.6 Payment of Fees..................................................................... 66
Section 10.7 Performance; No Default............................................................. 66
Section 10.8 Representations and Warranties...................................................... 66
Section 10.9 Proceedings and Documents........................................................... 66
Section 10.10 Compliance Certificate.............................................................. 66
Section 10.11 Consummation of Transaction......................................................... 66
Section 10.12 Equity in Borrower.................................................................. 67
-iv-
TABLE OF CONTENTS
(continued)
PAGE
Section 10.13 Contribution Agreement.............................................................. 67
Section 10.14 Other............................................................................... 67
Section 11. CONDITIONS TO ALL BORROWINGS....................................................................... 67
Section 11.1 Prior Conditions Satisfied.......................................................... 67
Section 11.2 Representations True; No Default.................................................... 67
Section 11.3 No Legal Impediment................................................................. 67
Section 11.4 Governmental Regulation............................................................. 67
Section 11.5 Proceedings and Documents........................................................... 68
Section 11.6 Borrowing Documents................................................................. 68
Section 12. EVENTS OF DEFAULT; ACCELERATION; ETC............................................................... 68
Section 12.1 Events of Default and Acceleration.................................................. 68
Section 12.2 Termination of Commitments.......................................................... 71
Section 12.3 Remedies............................................................................ 71
Section 12.4 Distribution of Proceeds............................................................ 72
Section 13. SETOFF............................................................................................. 73
Section 14. THE AGENT.......................................................................................... 73
Section 14.1 Authorization....................................................................... 73
Section 14.2 Employees and Agents................................................................ 73
Section 14.3 No Liability........................................................................ 74
Section 14.4 No Representations.................................................................. 74
Section 14.5 Payments............................................................................ 74
Section 14.6 Holders of Notes.................................................................... 75
Section 14.7 Indemnity........................................................................... 75
Section 14.8 Agent as Bank....................................................................... 76
Section 14.9 Resignation......................................................................... 76
Section 14.10 Duties in the Case of Enforcement................................................... 76
Section 15. EXPENSES........................................................................................... 76
Section 16. INDEMNIFICATION.....................................................................................77
Section 17. SURVIVAL OF COVENANTS, ETC..........................................................................78
Section 18. ASSIGNMENT AND PARTICIPATION........................................................................78
-v-
TABLE OF CONTENTS
(continued)
PAGE
Section 18.1 Conditions to Assignment by Banks................................................... 78
Section 18.2 Register............................................................................ 79
Section 18.3 New Notes........................................................................... 79
Section 18.4 Participations...................................................................... 80
Section 18.5 Pledge by Bank...................................................................... 80
Section 18.6 No Assignment by Borrower........................................................... 80
Section 18.7 Disclosure.......................................................................... 80
Section 18.8 Co-Agents........................................................................... 80
Section 18.9 Mandatory Assignment................................................................ 80
Section 19. NOTICES............................................................................................ 81
Section 20. RELATIONSHIP....................................................................................... 82
Section 21. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE................................................. 82
Section 22. HEADINGS........................................................................................... 82
Section 23. COUNTERPARTS....................................................................................... 82
Section 24. ENTIRE AGREEMENT, ETC.............................................................................. 82
Section 25. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS..................................................... 83
Section 26. DEALINGS WITH THE BORROWER......................................................................... 83
Section 27. CONSENTS, AMENDMENTS, WAIVERS, ETC................................................................. 83
Section 28. SEVERABILITY....................................................................................... 84
Section 29. TIME OF THE ESSENCE................................................................................ 84
Section 30. NO UNWRITTEN AGREEMENTS............................................................................ 84
Section 31. REPLACEMENT NOTES.................................................................................. 84
Section 32. NO THIRD PARTIES BENEFITED......................................................................... 85
-vi-
REVOLVING CREDIT AGREEMENT
THIS
REVOLVING CREDIT AGREEMENT is made as of the 19th day of September,
2001 by and among
PRICE LEGACY CORPORATION (the "Borrower"), a Maryland
corporation having its principal place of business at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, FLEET NATIONAL BANK ("Fleet"),
the other lending institutions which are parties to this Agreement and the other
lending institutions which may become parties hereto pursuant to Section 18
(collectively, Fleet (except when acting as the Agent), and each other lending
institution which is or may become a party hereto shall be referred to as the
"Banks," and individually as a "Bank"), and FLEET NATIONAL BANK, as Agent for
the Banks (the "Agent").
RECITALS
WHEREAS, Borrower has requested that the Banks provide a revolving
credit facility to Borrower; and
WHEREAS, Agent and the Banks are willing to provide such facility to
Borrower upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the recitals herein and the mutual
covenants contained herein, the parties hereto hereby covenant and agree as
follows:
Section 1. DEFINITIONS AND RULES OF INTERPRETATION
Section 1.1 DEFINITIONS. The following terms shall have the meanings set
forth in this Section 1 or elsewhere in the provisions of this Agreement
referred to below:
ADDITIONAL GUARANTOR. See Section 5.2.
ADJUSTED CONSOLIDATED TOTAL ASSETS. On a consolidated basis for the
Borrower and its Subsidiaries, Adjusted Consolidated Total Assets shall mean the
sum (without duplication) of the following:
(i) an amount equal to the sum of (A) the product of (x) the
Net Operating Income for the four (4) fiscal quarters just ended prior to the
date of determination, divided by (y) 0.10 (which is the capitalization rate),
from each separate Real Estate that is a Stabilized Property owned by the
Borrower or any of its Subsidiaries, MINUS (B) the portion of the amount
determined pursuant to clause (A) above allocable to minority interests of
Persons other than Borrower in such Real Estate; plus
(ii) the book value of Land Assets, Construction in Progress
and Notes Receivable of Borrower and its Subsidiaries on the last day of the
fiscal quarter just ended; plus
(iii) the aggregate amount of (x) all unrestricted cash and
marketable securities of the Borrower and its Subsidiaries PLUS (y) all
restricted cash held by any Person serving as a "qualified intermediary" for
purposes of an exchange pursuant to Section 1031 of the Code on behalf of the
Borrower or any of its Subsidiaries PLUS (z) all cash held in a reserve
account for capital expenditures pursuant to the GMAC CMBS transaction,
provided that no default or event of default has occurred under such loan;
plus
(iv) the book value of Borrower's pro rata economic interests
in Joint Ventures as calculated in accordance with SCHEDULE 1.2 hereto with
respect to existing Joint Ventures (or in the same manner with respect to Joint
Ventures formed or acquired after the date hereof); plus
(v) the book value (before depreciation) of Borrower and its
Subsidiaries in Real Estate that is an operating property but is not a
Stabilized Property.
Any interest of the Borrower or its Subsidiaries in any of the assets
described in clauses (i), (ii), (iii) or (v) above which are owned through Joint
Ventures shall be included in clause (iv) above. Adjusted Consolidated Total
Assets will be adjusted, as appropriate, for acquisitions, dispositions and
other changes to the portfolio during a quarter. All income, expense and value
associated with the Real Estate disposed of during any quarter will be
eliminated from calculations. For the purpose of clause (i) above, in the event
that Borrower or a Subsidiary of Borrower shall have owned a Stabilized Property
for less than four (4) fiscal quarters, the Net Operating Income from such
property for the period during which such property has been owned by Borrower or
such Subsidiary shall be annualized in such manner as Agent shall reasonably
determine.
ADJUSTED CONSOLIDATED TOTAL LIABILITIES. The Consolidated Total
Liabilities of Borrower and its Subsidiaries, adjusted (without duplication)
such that the liabilities of any Person in which Borrower or any of its
Subsidiaries has an Investment (for example, an unconsolidated joint venture or
partnership) shall be determined and reported as if the same were consolidated
with Borrower in accordance with generally accepted accounting principles as if
such consolidation was permitted by generally accepted accounting principles.
For the purposes of this definition, the Borrower's and its Subsidiaries' share
of non-recourse debt of any Joint Venture, the accounts of which are not
consolidated with those of Borrower, shall be equal to the amount of such
non-recourse Indebtedness of such Joint Venture multiplied by Borrower's pro
rata economic interests in such Joint Venture calculated as provided in SCHEDULE
1.2 hereto with respect to existing Joint Ventures (or in the same manner with
respect to Joint Ventures formed or acquired after the date hereof).
ADJUSTED NET OPERATING INCOME. As of the end of any fiscal quarter, the
sum of (i) the product of (A) the aggregate Net Operating Income for all of the
Unencumbered Borrowing Base Properties for such quarter and the immediately
preceding fiscal quarter, multiplied by (B) two (2), MINUS (ii) the Capital
Expenditure Reserve for such Unencumbered Borrowing Base Properties.
Notwithstanding the foregoing, Adjusted Net Operating Income shall be determined
through December 31, 2001 in the following manner: Adjusted Net Operating Income
shall be calculated for the period prior to September 30, 2001 by using Net
Operating Income for the previous two (2) fiscal quarters. Adjusted Net
Operating Income shall be calculated for the quarter ending September 30, 2001
by annualizing the Net Operating Income for all of the Unencumbered Borrowing
Base Properties for the period commencing on the Closing Date
2
through and including September 30, 2001; and Adjusted Net Operating Income
shall be calculated for the quarter ending December 31, 2001 by annualizing
the Net Operating Income for all of the Unencumbered Borrowing Base
Properties for the period commencing on the Closing Date and continuing
through and including December 31, 2001.
AFFILIATES. An Affiliate, as applied to any Person, shall mean any other
Person directly or indirectly controlling, controlled by, or under common
control with, that Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as applied to any Person, means (a) the
possession, directly or indirectly, of the power to vote ten percent (10%) or
more of the stock, shares, voting trust certificates, beneficial interest,
partnership interests, member interests or other interests having voting power
for the election of directors of such Person or otherwise to direct or cause the
direction of the management and policies of that Person, whether through the
ownership of voting securities or by contract or otherwise, or (b) the ownership
of (i) a general partnership interest, (ii) a managing member's interest in a
limited liability company or (iii) a limited partnership interest or preferred
stock (or other ownership interest) representing ten percent (10%) or more of
the outstanding limited partnership interests, preferred stock or other
ownership interests of such Person.
AGENT. Fleet National Bank acting as administrative agent for the
Banks, and its successors and assigns.
AGENT'S HEAD OFFICE. The Agent's head office located at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other location as the Agent may
designate from time to time by notice to the Borrower and the Banks.
AGENT'S SPECIAL COUNSEL. Long ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP or such other
counsel as may be approved by the Agent.
AGREEMENT. This
Revolving Credit Agreement, including the SCHEDULES
and EXHIBITS hereto.
AGREEMENT REGARDING FEES. The Agreement Regarding Fees dated of even
date herewith between the Borrower and Fleet.
APPLICABLE MARGIN. On any date that the lower of the Ratings issued from
time to time by the Rating Agencies for the Borrower is a Qualifying Rating, the
Applicable Margin shall be as set forth below:
PRICING LEVEL LIBOR RATE LOANS BASE RATE LOANS
Pricing ▇▇▇▇▇ ▇ 1.45% 0%
In the event that any of the Rating Agencies issues a Rating for the Borrower
that is a Qualifying Rating, or in the event of any change in a Rating of the
Borrower by any of the Rating Agencies, or if the Borrower's Rating, after
having obtained a Qualifying Rating, shall cease at any time to
3
be a Qualifying Rating by any of the Rating Agencies (but subject to the
provisions within the definition of the term "Qualifying Rating"), such
change shall effect a change in the Applicable Margin, as applicable, on the
first (1st) day of the first (1st) month following the Rating Notice Date. On
any date that the lower of the Ratings for the Borrower is not a Qualifying
Rating, or the Borrower has not obtained a Qualifying Rating from either S&P
or ▇▇▇▇▇'▇, the Applicable Margin shall be based upon the ratio of the
Adjusted Consolidated Total Liabilities of the Borrower to the Adjusted
Consolidated Total Assets of the Borrower as set forth below. It is the
intention of the parties that if the Borrower shall only obtain a Qualifying
Rating from one of S&P or ▇▇▇▇▇'▇ without seeking a Qualifying Rating from
the other of S&P or ▇▇▇▇▇'▇, the Borrower shall be entitled to the benefit of
the Pricing Level 1 described above; provided that if the Borrower shall have
obtained a Qualifying Rating from both of S&P and ▇▇▇▇▇'▇ (or Fitch (as
provided below)), the lower of the ratings (or the loss of the Qualifying
Rating from either or both of S&P or ▇▇▇▇▇'▇ thereafter) shall control. The
Borrower may obtain a Rating from Fitch in lieu of a Rating from S&P or
▇▇▇▇▇'▇, which Rating shall be considered for the purposes hereof, provided
that in no event may a Rating from Fitch be the sole Rating for the purposes
hereof.
On any date on which the Applicable Margin is to be determined based upon the
ratio of the Adjusted Consolidated Total Liabilities of the Borrower to the
Adjusted Consolidated Total Assets of the Borrower, the applicable margin set
forth below based on the ratio of the Adjusted Consolidated Total Liabilities of
Borrower to the Adjusted Consolidated Total Assets of Borrower:
-------------------------------------------------------------------------------
PRICING LEVEL RATIO LIBOR RATE BASE RATE
LOANS LOANS
-------------------------------------------------------------------------------
Pricing Level 2 Less than 40% 1.500% 0%
-------------------------------------------------------------------------------
Pricing Level 3 Greater than or equal to 1.625% 0.05%
40% but less than 45%
-------------------------------------------------------------------------------
Pricing Level 4 Greater than or equal to 1.750% 0.10%
45% but less than 50%
-------------------------------------------------------------------------------
Pricing Level 5 Greater than or equal to 1.875% 0.15%
50% but not greater than 55%
-------------------------------------------------------------------------------
The initial Applicable Margin shall be at Pricing Level 3. The Applicable Margin
shall not be adjusted based upon such ratio, if at all, until the first (1st)
day of the first (1st) month following the delivery by Borrower to the Agent of
the Compliance Certificate at the end of a fiscal quarter. In the event that
Borrower shall fail to deliver to the Agent a quarterly Compliance Certificate
on or before the date required by Section 7.4(c), then without limiting any
other rights of the Agent and the Banks under this Agreement, the Applicable
Margin shall be at Pricing Level 5 until such failure is cured within any
applicable cure period.
4
ASSET VALUE. The Asset Value of the Unencumbered Borrowing Base Properties
shall be an amount equal to (a) the sum of the aggregate Adjusted Net Operating
Income from the Unencumbered Borrowing Base Properties divided by (b) 0.105 (the
capitalization rate).
BALANCE SHEET DATE. The date of this Agreement.
BANKS. Fleet, the other lending institutions party to this Agreement, and
any other Person who becomes an assignee of any rights of a Bank pursuant to
Section 18 (but not including any Participant, as defined in Section 18). The
Issuing Bank shall be a Bank, as applicable.
BASE RATE. The greater of (a) the variable annual rate of interest
announced from time to time by Agent at Agent's Head Office as its "prime rate",
and (b) one-half of one percent (0.5%) above the Federal Funds Effective Rate
(rounded upwards, if necessary, to the next one-eighth of one percent). The Base
Rate is a reference rate and does not necessarily represent the lowest or best
rate being charged to any customer. Any change in the rate of interest payable
hereunder resulting from a change in the Base Rate shall become effective as of
the opening of business on the day on which such change in the Base Rate becomes
effective, without notice or demand of any kind.
BASE RATE LOANS. Those Loans bearing interest calculated by reference
to the Base Rate.
BORROWER. As defined in the preamble hereto.
BORROWING BASE. The Borrowing Base shall be the amount which is the lesser
of (a) fifty percent (50%) of the aggregate Asset Value of the Unencumbered
Borrowing Base Properties and (b) the Debt Service Coverage Amount for the
Unencumbered Borrowing Base Properties.
BUSINESS DAY. Any day on which banking institutions located in the same
city and State as Agent's Head Office are located and are open for the
transaction of banking business and, in the case of LIBOR Rate Loans, which also
is a LIBOR Business Day.
CAPITAL EXPENDITURE RESERVE. With respect to an Unencumbered Borrowing
Base Property or any other improved Real Estate, a reserve in the aggregate
amount of (a) fifteen cents ($0.15) per annum multiplied by the average Net
Rentable Area contained therein of each such property that is not a Hospitality
Property PLUS (b) 3.5% of the gross revenues of each Hospitality Property
(nothing in this definition shall imply that a Hospitality Property may be
included as an Unencumbered Borrowing Base Property).
CAPITALIZED LEASE. A lease under which a Person is the lessee or obligor,
the discounted future rental payment obligations under which are required to be
capitalized on the balance sheet of the lessee or obligor in accordance with
generally accepted accounting principles.
CERCLA. See Section 6.17(a).
CHANGE IN CONTROL. A Change in Control shall exist upon the occurrence
of any of the following:
5
(a) any of the following Persons shall cease to hold the position
set forth below: ▇▇▇▇ ▇. ▇▇▇▇▇ - Chief Executive Officer of Borrower; ▇▇▇▇▇▇▇ ▇.
▇▇▇▇ - Vice Chairman of Borrower; or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ - President of Borrower;
and a competent and experienced successor for such Person shall not be approved
by the Majority Banks within six (6) months of such event, such approval not to
be unreasonably withheld; or
(b) any Person (including a Person's Affiliates and associates) or
group (as that term is understood under Section 13(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and the rules and regulations
thereunder) shall have acquired after the Closing Date beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act) of a percentage (based
on voting power, in the event different classes of stock shall have different
voting powers) of the voting stock of Borrower equal to at least twenty percent
(20%); or
(c) as of any date a majority of the Board of Directors of Borrower
consists of individuals who were not either (i) directors of Borrower as of the
corresponding date of the previous year (provided, however, that the initial
Board of Directors for reference purposes of this clause (c)(i) shall be the
Board of Directors as of the Closing Date), (ii) selected or nominated to become
directors by the Board of Directors of Borrower of which a majority consisted of
individuals described in clause (c)(i) above, or (iii) selected or nominated to
become directors by the Board of Directors of Borrower of which a majority
consisted of individuals described in clause (c)(i), above and individuals
described in clause (c)(ii), above.
CLOSING DATE. The first date on which all of the conditions set forth
in Section 10 and Section 11 have been satisfied.
CODE. The Internal Revenue Code of 1986, as amended.
CO-LEAD ARRANGERS. Fleet Securities, Inc. and ▇▇▇▇▇ Fargo Bank, N.A.
COMMITMENT. With respect to each Bank, the amount set forth on SCHEDULE 1
hereto as the amount of such Bank's Commitment to make or maintain Loans (other
than Swing Loans) to the Borrower, as the same may be changed from time to time
in accordance with the terms of this Agreement.
COMMITMENT PERCENTAGE. With respect to each Bank, the percentage set
forth on SCHEDULE 1 hereto as such Bank's percentage of the aggregate
Commitments of all of the Banks.
COMPLETED PROPERTY. At any time, Real Estate (i) which is at least
eighty-five percent (85%) leased (pursuant to written Leases which have been
signed by both landlord and tenant and under which the payment of base rent has
commenced) or (ii) which is at least eighty percent (80%) occupied by tenants
which have signed (together with the landlord) a Lease, accepted the premises,
opened for business, and with respect to which the date for the commencement of
payment of base rent has been established.
COMPLIANCE CERTIFICATE. See Section 7.4(c).
6
CONSOLIDATED or COMBINED. With reference to any term defined herein, that
term as applied to the accounts of a Person and its Subsidiaries, consolidated
or combined in accordance with generally accepted accounting principles.
CONSOLIDATED EBITDA. With respect to any period of a Person, an amount
equal to the EBITDA of such Person and its Subsidiaries for such period
consolidated in accordance with generally accepted accounting principles.
CONSOLIDATED TANGIBLE NET WORTH. The amount by which GAAP Consolidated
Total Assets exceeds GAAP Consolidated Total Liabilities, and LESS the sum of:
(a) the total book value of all assets of a Person and its
Subsidiaries properly classified as intangible assets under generally accepted
accounting principles, including such items as goodwill, the purchase price of
acquired assets in excess of the fair market value thereof, trademarks, trade
names, service marks, brand names, copyrights, patents and licenses, and rights
with respect to the foregoing; plus
(b) all amounts representing any write-up in the book value of any
assets of such Person or its Subsidiaries resulting from a revaluation thereof
subsequent to the Balance Sheet Date; plus
(c) all amounts representing minority interests which are
applicable to third parties.
CONSOLIDATED TOTAL LIABILITIES. All liabilities of a Person and its
Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles and all Indebtedness of such Person and its
Subsidiaries, whether or not so classified.
CONSTRUCTION IN PROGRESS. For any Real Estate, calculated on a
consolidated basis for the Borrower and its Subsidiaries, the sum of (x)
construction-in-progress as shown from time to time on the books and records of
the Borrower and its Subsidiaries, maintained in accordance with generally
accepted accounting principles, plus (y) the book value, calculated in
accordance with generally accepted accounting principles, of any Real Estate
that (i) previously constituted construction-in-progress and (ii) has not yet
become a Completed Property. For the purposes of calculating Construction in
Progress of Borrower and its Subsidiaries with respect to development of Joint
Ventures pursuant to Section 8.9, the Construction in Progress of Borrower and
its Subsidiaries with respect to development of Joint Ventures shall be the
Investment of Borrower and its Subsidiaries in such Joint Ventures.
CONTRIBUTION AGREEMENT. That certain Contribution Agreement dated of even
date herewith among the Borrower, the Guarantors and each Additional Guarantor
which may hereafter become a party thereto.
CONVERSION REQUEST. A notice given by the Borrower to the Agent of its
election to convert or continue a Loan in accordance with Section 4.1.
7
DEBT OFFERING. The issuance and sale by the Borrower or any Guarantor
of any debt securities of the Borrower or such Guarantor.
DEBT SERVICE. For any period, the sum of all interest (including
capitalized interest) and mandatory or scheduled principal payments due and
payable during such period excluding any balloon payments due upon maturity of
any indebtedness.
DEBT SERVICE COVERAGE AMOUNT. At any time determined by the Agent, an
amount equal to the maximum principal amount of Loans that may be outstanding
pursuant to the following formula:
ADJUSTED NOI = P
------------
2.0 x D
Where P = maximum principal balance of Loans that may be
outstanding
D = the greater of (a) the greater of (i) the
then-current annual yield on ten (10) year
obligations issued by the United States Treasury most
recently prior to the date of determination plus 2.0%
payable on a 25-year mortgage style amortization
schedule (expressed as a decimal), or (ii) .095, and
(b) the actual blended rate of interest then payable
with respect to the Loans (expressed as a decimal)
NOI = the product of (a) Net Operating Income from the
Unencumbered Borrowing Base Properties for the
preceding two (2) fiscal quarters most recently ended
multiplied by (b) two (2) (subject to the provisions
for the calculation of Adjusted Net Operating Income
for the period through December 31, 2001 as set forth
in the definition of Adjusted Net Operating Income)
Adjusted NOI = the sum of (a) NOI less (b) the Capital
Expenditure Reserve for the Unencumbered Borrowing Base
Properties
Attached hereto as SCHEDULE 2 is an example of the calculation of Debt Service
Coverage Amount (such example is meant only as an illustration based upon the
assumptions set forth in such example, and shall not be interpreted so as to
limit the Agent in its good faith determination of the Debt Service Coverage
Amount hereunder as hereinafter provided). The determination of the Debt Service
Coverage Amount and the components thereof by the Agent shall, so long as the
same shall be determined in good faith, be conclusive and binding absent
manifest error.
DEFAULT. See Section 12.1.
DEFAULT RATE. See Section 4.12.
DERIVATIVE OBLIGATIONS. All Interest Rate Contracts and all other
obligations of any Person in respect of any interest rate swap transaction,
basis swap, forward rate transaction, commodity swap, commodity option, equity
or equity index swap, forward equity transaction, equity or equity index option,
bond option, interest rate option, foreign exchange transaction, cap
8
transaction, forward transaction, collar transaction, currency swap,
cross-currency rate swap transaction, currency option or any other similar
transaction (including any option with respect to any of the foregoing
transactions) or any combination of the foregoing transactions.
DISTRIBUTION. With respect to any Person, the declaration or payment of
any cash, cash flow, dividend or distribution on or in respect of any shares of
any class of stock or other beneficial interest of a Person, other than
dividends or distributions payable solely in equity securities of such Person;
the purchase, redemption, exchange or other retirement of any shares of any
class of stock or other beneficial interest of a Person, directly or indirectly
through a Subsidiary of such Person or otherwise; the return of capital by a
Person to its shareholders, partners, members or other owners as such; or any
other distribution on or in respect of any shares of any class of stock or other
beneficial interest of a Person. Notwithstanding the foregoing, Distributions
shall include distributions paid to the holders of Borrower's Series B Preferred
Stock in the form of additional shares of Series B Preferred Stock in accordance
with the terms of such Series B Preferred Stock on the date hereof.
DOCUMENTATION AGENT. U.S. Bank National Association.
DOLLARS or $. Dollars in lawful currency of the United States of America.
DOMESTIC LENDING OFFICE. Initially, the office of each Bank designated as
such in SCHEDULE 1 hereto; thereafter, such other office of such Bank, if any,
located within the United States that will be making or maintaining Base Rate
Loans.
DRAWDOWN DATE. The date on which any Loan is made or is to be made, and
the date on which any Loan which is made prior to the Maturity Date is converted
or combined in accordance with Section 4.1.
EBITDA. With respect to the Borrower or a Subsidiary of Borrower (or any
asset of the Borrower or a Subsidiary of Borrower) for any period, an amount
equal to the sum of (a) the Net Income (or Loss) of such Person (or attributable
to such asset) for such period PLUS (b) depreciation and amortization, interest,
income taxes and any extraordinary or non-recurring losses deducted in
calculating such Net Income MINUS (c) any extraordinary or non-recurring gains
included in calculating such Net Income, MINUS (d) Net Income of any Joint
Venture (other than a Subsidiary of Borrower) in which Borrower or one of its
Subsidiaries has an interest (to the extent of their interest in such Net
Income) PLUS (e) cash distributions received by Borrower or any of its
Subsidiaries from Joint Ventures, all as determined in accordance with generally
accepted accounting principles.
EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the meaning of
Section 3(3) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate, other than a Multiemployer Plan.
ENVIRONMENTAL LAWS. See Section 6.17(a).
EQUITY OFFERING. The issuance and sale by the Borrower or any Guarantor of
any equity securities of the Borrower or such Guarantor; provided, however, that
the issuance by the
9
Borrower or any Guarantor of any equity securities of such Person or any
securities or instruments convertible, exchangeable or exercisable for equity
securities of such Person to any of the following shall not be deemed an
Equity Offering: (i) any Person not previously employed by the Borrower or
any Guarantor as a material inducement to such Person's entering into an
employment contract with the Borrower or a Guarantor; (ii) directors,
officers and employees of the Borrower or any Guarantor pursuant to an
incentive stock or stock option, employee stock purchase, long-term incentive
or stock bonus plans, whether now in effect or adopted in the future; or
(iii) any Person pursuant to a dividend reinvestment or stock purchase
program sponsored by the Borrower or any Guarantor, whether now in effect or
adopted in the future.
ERISA. The Employee Retirement Income Security Act of 1974, as amended and
in effect from time to time and any rules and regulations promulgated pursuant
thereto.
ERISA AFFILIATE. Any Person which is treated as a single employer with
the Borrower or its Subsidiaries under Section 414 of the Code.
ERISA REPORTABLE EVENT. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
EXCEL LEGACY HOLDINGS. Excel Legacy Holdings, Inc., a Delaware
corporation.
EVENT OF DEFAULT. See Section 12.1.
FEDERAL FUNDS EFFECTIVE RATE. For any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by the Agent.
FITCH. Fitch IBCA, Inc.
FIXED CHARGES. With respect to Borrower and its Subsidiaries for any Test
Period, an amount equal to the sum of (a) the product of the Debt Service of
Borrower and its Subsidiaries for such Test Period multiplied by two (2) PLUS
(b) the aggregate Capital Expenditure Reserve for all of the Real Estate of the
Borrower and its Subsidiaries PLUS (c) the product of the Preferred
Distributions of Borrower and its Subsidiaries for such Test Period multiplied
by two (2).
FLEET. Fleet National Bank.
FUNDS FROM OPERATIONS. With respect to any Person for any fiscal period,
an amount equal to the Net Income (or Deficit) of such Person computed in
accordance with generally accepted accounting principles, excluding gains (or
losses) from sales of property, plus depreciation and amortization and after
adjustments for unconsolidated partnerships and joint
10
ventures. Adjustments for unconsolidated partnerships and joint ventures will
be calculated to reflect funds from operations on the same basis. Funds from
Operations shall be reported in accordance with NAREIT "best practices"
disclosure models.
GAAP CONSOLIDATED TOTAL ASSETS. All assets of a Person and its
Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles.
GAAP CONSOLIDATED TOTAL LIABILITIES. All liabilities of a Person and
its Subsidiaries determined on a consolidated basis in accordance with
generally accepted accounting principles.
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. Principles that are (a)
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, as in effect from time to time
and (b) consistently applied with past financial statements of the Person
adopting the same principles; PROVIDED that a certified public accountant would,
insofar as the use of such accounting principles is pertinent, be in a position
to deliver an unqualified opinion (other than a qualification regarding changes
in generally accepted accounting principles) as to financial statements in which
such principles have been properly applied.
GUARANTEED PENSION PLAN. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by the Borrower or
any ERISA Affiliate the benefits of which are guaranteed on termination in full
or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
GUARANTORS. Collectively, each of the entities listed on SCHEDULE
6.1(a) hereto and each Additional Guarantor, and individually any one of them.
GUARANTY. Collectively, the Unconditional Guaranty of Payment and
Performance dated of even date herewith made by the Guarantors in favor of Agent
and the Banks, and each Unconditional Guaranty of Payment and Performance made
by each Additional Guarantor in favor of Agent and the Banks, as the same may be
modified or amended, such Guaranty to be in form and substance satisfactory to
the Agent.
HAZARDOUS SUBSTANCES. See Section 6.17(b).
HOSPITALITY PROPERTY. A property that is utilized principally as a hotel
or similar lodging use.
INDEBTEDNESS. All obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles should be classified
upon the obligor's balance sheet as liabilities, or to which reference should be
made by footnotes thereto, including in any event and whether or not so
classified: (a) all debt and similar monetary obligations, whether direct or
indirect (including, without limitation, any obligations evidenced by bonds,
debentures, notes or similar debt instruments and all subordinated debt); (b)
all liabilities secured by any mortgage, pledge, security interest, lien, charge
or other encumbrance existing on property owned or acquired subject thereto,
whether or not the liability secured thereby shall have been assumed; (c) all
guarantees, endorsements and other contingent obligations whether direct or
indirect in
11
respect of indebtedness of others, including any unconditional obligation to
supply funds to or in any manner to invest directly or indirectly in a Person
other than in the ordinary course of business, to purchase indebtedness, or
to assure the owner of indebtedness against loss through an agreement to
purchase goods, supplies or services for the purpose of enabling the debtor
to make payment of the indebtedness held by such owner, through indemnity or
otherwise, and the obligation to reimburse the issuer in respect of any
letter of credit; (d) any obligation as a lessee or obligor under a
Capitalized Lease; (e) all obligations with respect to letters of credit or
similar instruments issued by a Person; and (f) all indebtedness, obligations
or other liabilities (other than interest expense liability) determined in
accordance with generally accepted accounting principles under or with
respect to (i) Interest Rate Contracts (valued as the termination value
thereof computed in accordance with a method approved by the International
Swap Dealers Association and agreed to by such Person in the applicable
hedging agreement), and (ii) foreign currency exchange agreements, and (g)
all obligations of a Person in respect of any equity or equity index swap,
forward equity transaction, equity or equity index option or any other
similar transaction. Notwithstanding the foregoing, in the event that a
Person has incurred Indebtedness with respect to which another Person
included within the consolidated financial statements of the first Person is
also liable (by reason of a guaranty or otherwise), such Indebtedness shall
only be counted once for the purposes of such consolidated financial
statements.
INTEREST EXPENSE. For any period, the sum of all interest expensed
during such period.
INTEREST PAYMENT DATE. As to each Loan, the first day of each calendar
month during the term of such Loan.
INTEREST PERIOD. With respect to each LIBOR Rate Loan (a) initially, the
period commencing on the Drawdown Date of such Loan and ending one, two, three
or six months thereafter, and (b) thereafter, each period commencing on the day
following the last day of the next preceding Interest Period applicable to such
Loan and ending on the last day of one of the periods set forth above, as
selected by the Borrower in a Conversion Request; PROVIDED that all of the
foregoing provisions relating to Interest Periods are subject to the following:
(i) if any Interest Period with respect to a LIBOR Rate Loan
would otherwise end on a day that is not a LIBOR Business Day, that Interest
Period shall end and the next Interest Period shall commence on the next
succeeding LIBOR Business Day, unless such next succeeding LIBOR Business Day
occurs in the next calendar month, in which case such Interest Period shall end
on the next preceding LIBOR Business Day as determined conclusively by the Agent
in accordance with the then current bank practice in London;
(ii) if the Borrower shall fail to give notice as provided in
Section4.1, the Borrower shall be deemed to have requested a conversion of the
affected LIBOR Rate Loan to a Base Rate Loan on the last day of the then current
Interest Period with respect thereto; and
(iii) no Interest Period relating to any LIBOR Rate Loan shall
extend beyond the Maturity Date.
12
INTEREST RATE CONTRACTS. Interest rate swap, collar, cap or similar
agreements providing interest rate protection.
INVESTMENTS. With respect to any Person, all shares of capital stock,
evidences of Indebtedness and other securities issued by any other Person, all
loans, advances, or extensions of credit to, or contributions to the capital
of, any other Person and all purchases of the securities or business or
integral part of the business of any other Person, all interests in real
property, and all other investments; PROVIDED, HOWEVER, that the term
"Investment" shall not include (i) equipment, inventory and other tangible
personal property acquired in the ordinary course of business, or (ii) current
trade and customer accounts receivable for services rendered in the ordinary
course of business and payable in accordance with customary trade terms. In
determining the aggregate amount of Investments outstanding at any particular
time: (a) there shall be included as an Investment all interest accrued with
respect to Indebtedness constituting an Investment unless and until such
interest is paid; (b) there shall be deducted in respect of each such
Investment any amount received as a return of capital (but only by repurchase,
redemption, retirement, repayment, liquidating dividend or liquidating
distribution); (c) there shall not be deducted or increased in respect of any
Investment any amounts received as earnings on such Investment, whether as
dividends, interest or otherwise, except that accrued interest included as
provided in the foregoing clause (a) may be deducted when paid; and (d) there
shall not be deducted from the aggregate amount of Investments any decrease in
the value thereof.
ISSUING BANK. Fleet, in its capacity as the Bank issuing the Letters of
Credit.
JOINT VENTURE. An Investment by Borrower or any of its Subsidiaries with
third persons in joint ventures, general partnerships, limited partnerships,
limited liability companies or any other business association. Joint Ventures
include non-wholly owned Subsidiaries of Borrower.
LAND ASSETS. Land with respect to which the commencement of grading,
construction of improvements or infrastructure has not yet commenced, and all
unimproved land according to generally accepted accounting principles. Land
Assets shall not include "outparcels" held in the ordinary course of business
for sale or lease. With respect to the Land commonly known as Anaheim and
Orlando, such Land shall initially be valued using the book value prior to the
consummation of the Transaction, adjusted to reflect any sales after the date
hereof.
LETTER OF CREDIT. Any standby letter of credit issued at the request of
the Borrower and for the account of the Borrower in accordance with Section
2.9.
LETTER OF CREDIT REQUEST. See Section 2.9(a).
LIBOR BUSINESS DAY. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in the London
interbank market.
LIBOR LENDING OFFICE. Initially, the office of each Bank designated as
such in SCHEDULE 1 hereto; thereafter, such other office of such Bank, if any,
that shall be making or maintaining LIBOR Rate Loans.
13
LIBOR RATE. As applicable to any Interest Period for any LIBOR Rate Loan,
the rate per annum (rounded upwards, if necessary, to the nearest 1/32nd of one
percent) as determined on the basis of the offered rates for deposits in
Dollars, for the period of time comparable to such Interest Period which
appears on the Telerate page 3750 as of 11:00 a.m. London time on the day that
is two (2) LIBOR Business Days preceding the first day of such Interest Period;
provided, however, if the rate described above does not appear on the Telerate
System on any applicable interest determination date, the LIBOR Rate shall be
the rate (rounded upwards as described above, if necessary) for deposits in
Dollars for a period substantially equal to the Interest Period on the Reuters
Page "LIBO" (or such other page as may replace the LIBO Page on that service
for the purpose of displaying such rates), as of 11:00 a.m. (London Time), on
the day that is two (2) LIBOR Business Days prior to the beginning of such
Interest Period. If both the Telerate and Reuters systems are unavailable, then
the rate for that date will be determined on the basis of the offered rates for
deposits in Dollars for a period of time comparable to such Interest Period
which are offered by four major banks in the London interbank market at
approximately 11:00 a.m. London time, on the day that is two (2) LIBOR Business
Days preceding the first day of such Interest Period as selected by Agent. The
principal London office of each of the four major London banks will be
requested to provide a quotation of its U.S. dollar deposit offered rate. If at
least two such quotations are provided, the rate for that date will be the
arithmetic mean of the quotations. If fewer than two quotations are provided,
the rate for that date will be determined on the basis of the rates quoted for
loans in Dollars to leading European banks for a period of time comparable to
such Interest Period offered by major banks in New York City at approximately
11:00 a.m. (New York City time), on the day that is two (2) LIBOR Business Days
preceding the first day of such Interest Period. In the event that Agent is
unable to obtain any such quotation as provided above, it will be deemed that
the LIBOR Rate pursuant to a LIBOR Rate Loan cannot be determined and the
provisions of Section 4.6 shall apply. In the event that the Board of Governors
of the Federal Reserve System shall impose a Reserve Percentage with respect to
LIBOR deposits of Agent, then for any period during which such Reserve
Percentage shall apply, the LIBOR Rate shall be equal to the amount determined
above divided by an amount equal to 1 minus the Reserve Percentage.
LIBOR RATE LOANS. Loans bearing interest calculated by reference to a
LIBOR Rate.
LIENS. See Section 8.2.
LOAN DOCUMENTS. This Agreement, the Notes, the Letter of Credit Requests,
the Guaranty and all other documents, instruments or agreements now or hereafter
executed or delivered by or on behalf of the Borrower or the Guarantor in
connection with the Loans.
LOAN REQUEST. See Section 2.7.
LOANS. The aggregate Loans (including Swing Loans) to be made by the
Banks hereunder.
MAJORITY BANKS. As of any date, the Bank or Banks whose aggregate
Commitment Percentage is equal to or greater than the required percentage, as
determined by the Banks, required to approve such matter, as disclosed by the
Agent to the Borrower from time to time.
14
MATURITY DATE. September 19, 2004 or such earlier date on which the
Loans shall become due and payable pursuant to the terms hereof.
MOODY'S. ▇▇▇▇▇'▇ Investor Service, Inc.
MULTIEMPLOYER PLAN. Any multiemployer plan within the meaning of
Section 3(37) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate.
NET INCOME (OR LOSS). With respect to any Person (or any asset of any
Person) for any fiscal period, the net income (or loss) of such Person (or
attributable to such asset), after deduction of all expenses, taxes and other
proper charges, determined in accordance with generally accepted accounting
principles.
NET OPERATING INCOME. For each Unencumbered Borrowing Base Property, for
any period of time, the sum of the following amounts: (a) the portion of the Net
Income of Borrower attributable to such Unencumbered Borrowing Base Property,
PLUS (b) depreciation and amortization, interest expense and any taxes and
extraordinary or non-recurring losses deducted in calculating such Net Income,
MINUS (c) any extraordinary or non-recurring gains included in calculating such
Net Income, MINUS (d) any accrued rent or other amounts with respect to tenants
or other users that are more than ninety (90) days in arrears in the payment of
rent, and adjusted for non-cash revenue attributable to Rent Adjustments or
other adjustments in accordance with generally accepted accounting principles
for free rent. For purposes of the foregoing, income attributable to third-party
leasing commissions or management fees shall be excluded. In determining Net
Operating Income, the expense of management fees attributable to an Unencumbered
Borrowing Base Property shall be calculated based upon the greater of (i) actual
property management expenses of such Unencumbered Borrowing Base Property or
(ii) 3.0% of the sum of base rents and percentage rents from such Unencumbered
Borrowing Base Property. If such period is less than a year, expenses described
in clause (i) above that are payable less frequently than monthly during the
course of a year (E.G., real estate taxes and insurance premiums) shall be
adjusted by "straight lining" the amounts so that such expenses are accrued on a
monthly basis over the course of a year and fairly stated for each period.
NET RENTABLE AREA. With respect to any Real Estate, the floor area of any
buildings, structures or improvements available for leasing to tenants
determined in accordance with the Rent Roll for such Real Estate, the manner of
such determination to be consistent for all Real Estate unless otherwise
approved by the Agent.
NOTES. Collectively the Revolving Credit Notes and the Swing Loan Note.
NOTES RECEIVABLE. Mortgage and notes receivable, including interest
payable thereunder, of Borrower.
NOTICE. See Section 19.
OBLIGATIONS. All indebtedness, obligations and liabilities of the Borrower
to any of the Banks and the Agent, individually or collectively, under this
Agreement or any of the other Loan Documents or in respect of any of the Loans,
the Notes or the Letters of Credit, or other
15
instruments at any time evidencing any of the foregoing, whether existing on
the date of this Agreement or arising or incurred hereafter, direct or
indirect, joint or several, absolute or contingent, matured or unmatured,
liquidated or unliquidated, secured or unsecured, arising by contract,
operation of law or otherwise.
OUTSTANDING. With respect to the Loans, the aggregate unpaid principal
thereof as of any date of determination. With respect to Letters of Credit, the
aggregate undrawn face amount of issued Letters of Credit (including Letters of
Credit accepted but unpaid).
PBGC. The Pension Benefit Guaranty Corporation created by Section 4002
of ERISA and any successor entity or entities having similar responsibilities.
PERMITTED LIENS. Liens, security interests and other encumbrances
permitted by Section 8.2.
PERSON. Any individual, corporation, partnership, trust, limited liability
company, unincorporated association, business, or other legal entity, and any
government or any governmental agency or political subdivision thereof.
PLAN ASSETS. Assets of any employee benefit plan subject to Part 4,
Subtitle A, Title I of ERISA.
PREFERRED DISTRIBUTIONS. For any period, the amount of any and all
Distributions paid, declared but not yet paid or otherwise due and payable to
the holders of any form of preferred stock or partnership interest (whether
perpetual, convertible or otherwise) or other ownership or beneficial interest
in Borrower or any of its Subsidiaries that entitles the holders thereof to
preferential payment or distribution priority with respect to dividends,
distributions, assets or other payments over the holders of any other stock,
partnership interest or other ownership or beneficial interest in such Person.
Notwithstanding the foregoing, Preferred Distributions shall not include
Distributions paid to the holders of Borrower's Series B Preferred Stock in the
form of additional shares of Series B Preferred Stock in accordance with the
terms of such Series B Preferred Stock on the date hereof.
PROSPECTUS. The 10K of the Borrower dated December 31, 2000 and filed
with the SEC.
PRICING LEVEL. Such term shall have the meaning established within the
definition of Applicable Margin.
QUALIFYING RATING. With respect to Borrower, a Rating equal to or more
favorable than BBB- with respect to a rating issued by S&P, a rating of Baa3 in
the case of a Rating issued by Moody's, or BBB- in the case of a Rating by
Fitch. If, at any time after Borrower obtains a Qualifying Rating, (a) the
rating system of any of the Rating Agencies (as opposed to the rating of the
Borrower) shall change, or (b) any of the Rating Agencies shall no longer
perform the functions of a securities rating agency, then the Borrower and the
Agent shall promptly negotiate in good faith to amend the reference to the
specific ratings in this definition for the determination of the Qualifying
Rating, and pending such amendment, the applicable rating in effect as of the
date the event described in this paragraph occurred shall continue to apply.
16
RATING. With respect to the Borrower, the most recent rating issued from
time to time by a Rating Agency as is applicable to Borrower as an issuer with
respect to long-term debt (I.E., a corporate credit or issuer rating with
respect to long-term debt), or if no such Rating is in effect, then the rating
applicable to Borrower's senior unsecured debt.
RATING AGENCIES. S&P, ▇▇▇▇▇'▇ and ▇▇▇▇▇.
RATING NOTICE. See Section 7.4(h).
RATING NOTICE DATE. The earlier of (a) the date a Rating Notice is
received by the Agent, or (b) the date the Agent, having received actual notice
of a change by one of the Rating Agencies of its Rating, sends notice to the
Borrower of such change, provided that nothing contained herein shall imply any
obligation of the Agent to monitor such rating changes.
REAL ESTATE. All real property at any time owned or leased (as lessee
or sublessee) by the Borrower, a Guarantor or any of their respective
Subsidiaries.
RECORD. The grid attached to any Note, or the continuation of such grid,
or any other similar record, including computer records, maintained by any Bank
with respect to any Loan referred to in such Note.
REGISTER. See Section 18.2.
REIT STATUS. The status of the Borrower as a real estate investment
trust as defined in Section 856(a) of the Code.
RELEASE. See Section 6.17(c)(iii).
RENT ADJUSTMENTS. For any Person, straight line adjustments to rent
payable under leases, as determined in accordance with generally accepted
accounting principles.
RENT ROLL. A report prepared by the Borrower showing for any Real Estate,
its location, Net Rentable area, occupancy status, rent and other information in
substantially the form presented to the Banks prior to the date hereof or in
such other form as may have been approved by the Agent, such approval not to be
unreasonably withheld.
RESERVE PERCENTAGE. For any day with respect to a LIBOR Rate Loan, the
maximum rate (expressed as a decimal) at which any lender subject thereto would
be required to maintain reserves (including, without limitation, all base,
supplemental, marginal and other reserves) under Regulation D of the Board of
Governors of the Federal Reserve System (or any successor or similar regulations
relating to such reserve requirements) against "Eurocurrency Liabilities" (as
that term is used in Regulation D or any successor or similar regulation), if
such liabilities were outstanding. The Reserve Percentage shall be adjusted
automatically on and as of the effective date of any change in the Reserve
Percentage.
RETAIL CENTER. An income producing operating property utilized principally
for Retail Uses. With respect to any Retail Center to be included in the
Unencumbered Borrowing Base
17
Properties, other than those set forth on SCHEDULE 1.1 hereto, a Retail Center
shall be an anchored multi-tenant shopping center (with the anchor tenants
located within such shopping center) used principally for Retail Uses. The
determination of whether such property is an anchored, multi-tenant shopping
center shall be determined by the Agent in its good faith judgment.
RETAIL USES. Stores engaged in the sale of products directly to consumers
and shopping centers occupied primarily by such stores but which may also
include Service Retail Uses, movie cinemas, banks and office uses of the type
commonly located in shopping centers.
REVOLVING CREDIT NOTES. See Section 2.4.
SEC. The federal Securities and Exchange Commission.
SERVICE RETAIL USES. Restaurants, health clubs, child care facilities,
automotive repair facilities, and other similar types of uses which Agent may
agree to designate as Service Retail Uses.
SHORT-TERM INVESTMENTS. Investments described in subsections (a) through
(g), inclusive, of Section 8.3. For all purposes of this Agreement and the other
Loan Documents, the value of Short-term Investments at any time shall be the
current market value thereof determined in a manner reasonably satisfactory to
the Agent.
S&P. Standard & Poor's Ratings Group.
STABILIZED PROPERTY. Real Estate which for the three month period most
recently ended has an occupancy level of tenants in possession and operating and
which are paying rent on a current basis of at least eighty-five percent (85%)
of the Net Rentable Area within such Real Estate and with respect to which the
rental income actually received with respect to such Real Estate during such
period exceeds the expenses of owning and operating such Real Estate during such
period (including without limitation, debt service and the allocable portion of
such expenses not payable on a monthly basis), as reasonably determined by
Agent.
STATE. A state of the United States of America.
SUBSIDIARY. Any corporation, association, partnership, trust, or other
business entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes or controlling interests) of the outstanding Voting Interests, and any
other entity the accounts of which are consolidated with the accounts of the
designated parent.
SWING LOAN. See Section 2.5.
SWING LOAN BANK. Fleet, in its capacity as Swing Loan Bank.
SWING LOAN COMMITMENT. The sum of $10,000,000.00, as the same may be
changed from time to time in accordance with the terms of this Agreement.
18
SWING LOAN NOTE. See Section 2.5.
SYNDICATION AGENT. ▇▇▇▇▇ Fargo Bank, N.A.
TEST PERIOD. See Section 9.3.
TOTAL COMMITMENT. The sum of the Commitments of the Banks, as in
effect from time to time. As of the date hereof, the Total Commitment is
$100,000,000.00.
TRANSACTION. The merger and related transactions described in that certain
Agreement and Plan of Merger dated as of March 21, 2001 among Price Enterprises,
Inc., PEI Merger Sub, Inc. and Excel Legacy Corporation and all exhibits and
schedules thereto, as the same may be modified or amended from time to time with
the prior written consent of the Agent.
TYPE. As to any Loan, its nature as a Base Rate Loan or a LIBOR Rate
Loan.
UNENCUMBERED BORROWING BASE PROPERTIES. Unencumbered Borrowing Base
Properties shall mean Real Estate which satisfies all of the conditions set
forth in Section 7.13. The initial properties designated by Borrower to be
Unencumbered Borrowing Base Properties are described on SCHEDULE 1.1 hereto.
VOTING INTERESTS. Stock or similar ownership interests, of any class or
classes (however designated), the holders of which are at the time entitled, as
such holders, (a) to vote for the election of a majority of the directors (or
persons performing similar functions) of the corporation, association,
partnership, limited liability company, trust or other business entity involved,
or (b) to control, manage, or conduct the business of the corporation,
partnership, association, trust or other business entity involved.
Section 1.2 RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall include
such document or agreement as amended, modified or supplemented from time to
time in accordance with its terms and the terms of this Agreement.
(b) The singular includes the plural and the plural includes
the singular.
(c) A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by generally accepted accounting principles applied
on a consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not
limiting.
19
(g) The words "approval" and "approved", as the context so
requires, means an approval in writing given to the party seeking approval
after full and fair disclosure to the party giving approval of all material
facts necessary in order to determine whether approval should be granted.
(h) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, have the
meanings assigned to them therein.
(i) Reference to a particular "Section", refers to that
section of this Agreement unless otherwise indicated.
(j) The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Agreement as a whole and not to any particular
section or subdivision of this Agreement.
Section 2. THE REVOLVING CREDIT FACILITY
Section 2.1 COMMITMENT TO LEND. Subject to the terms and conditions set
forth in this Agreement, each of the Banks severally agrees to lend to the
Borrower, and the Borrower may borrow (and repay and reborrow) from time to
time between the Closing Date and the Maturity Date upon notice by the Borrower
to the Agent given in accordance with Section 2.7, such sums as are requested
by the Borrower for the purposes set forth in Section 2.10 up to the lesser of
(a) a maximum aggregate principal amount outstanding (after giving effect to
all amounts requested) at any one time equal to such Bank's Commitment and (b)
such Bank's Commitment Percentage of the sum of (i) the Borrowing Base MINUS
(ii) the aggregate Letters of Credit Outstanding, PROVIDED, that, in all events
no Default or Event of Default shall have occurred and be continuing; and
PROVIDED, FURTHER, that the outstanding principal amount of the Loans (after
giving effect to all amounts requested) and Letters of Credit Outstanding shall
not at any time exceed the Total Commitment or cause a violation of Section
9.1. The Loans (other than Swing Loans) shall be made PRO RATA in accordance
with each Bank's Commitment Percentage. Each request for a Loan hereunder shall
constitute a representation and warranty by the Borrower that all of the
conditions set forth in Section 10 and Section 11, in the case of the initial
Loan, and Section 11, in the case of all other Loans, have been satisfied on
the date of such request. No Bank shall have any obligation to make Loans to
the Borrower in the maximum aggregate principal amount outstanding of more than
the principal face amount of its Note.
Section 2.2 FACILITY UNUSED FEE. The Borrower agrees to pay to the Agent
for the account of the Banks in accordance with their respective Commitment
Percentages a facility unused fee calculated at the rate per annum as set forth
below on the average daily amount by which the Total Commitment exceeds the
outstanding principal amount of Loans and the Letters of Credit Outstanding
during each calendar quarter or portion thereof commencing on the date hereof
and ending on the Maturity Date. The facility unused fee shall be calculated for
each day based on the ratio (expressed as a percentage) of (a) the average daily
amount of the outstanding principal amount of the Loans and the Letters of
Credit Outstanding during such quarter to (b) the Total Commitment, and if such
ratio is less than fifty percent (50%), the facility unused fee shall be
20
payable at the rate of 0.25%, and if such ratio is equal to or greater than
fifty percent (50%), the facility unused fee shall be payable at the rate of
0.15%. The facility unused fee shall be payable quarterly in arrears on the
first day of each calendar quarter for the immediately preceding calendar
quarter or portion thereof, and on any earlier date on which the Commitments
shall be reduced or shall terminate as provided in Section 2.3, with a final
payment on the Maturity Date.
Section 2.3 REDUCTION AND TERMINATION OF COMMITMENT. The Borrower shall
have the right at any time and from time to time upon five Business Days' prior
written notice to the Agent to reduce by $10,000,000 or an integral multiple of
$1,000,000 in excess thereof (provided that in no event shall the Total
Commitment be reduced to an amount less than $50,000,000.00) or to terminate
entirely the unborrowed portion of the Commitments, whereupon the Commitments of
the Banks shall be reduced PRO RATA in accordance with their respective
Commitment Percentages of the amount specified in such notice or, as the case
may be, terminated, any such termination or reduction to be without penalty
(unless such termination or reduction requires repayment of a LIBOR Rate Loan);
provided, however, that no such termination or reduction shall be permitted if,
after giving effect thereto, the Outstanding Loans and the Outstanding Letters
of Credit would exceed the Commitments of the Banks as so terminated or reduced.
In the event that as a result of the reduction or termination of the
Commitments, the Commitment of the Swing Loan Bank shall be reduced to an amount
less than the Swing Loan Commitment, the Swing Loan Commitment shall
automatically and without further action of the parties be reduced to an equal
amount. Promptly after receiving any notice of the Borrower delivered pursuant
to this Section 2.3, the Agent will notify the Banks of the substance thereof.
Upon the effective date of any such reduction or termination, the Borrower shall
pay to the Agent for the respective accounts of the Banks the full amount of any
facility fee under Section 2.2 then accrued on the amount of the reduction. No
reduction or termination of the Commitment or Swing Loan Commitment may be
reinstated.
Section 2.4 NOTES. The Loans (other than Swing Loans) shall be evidenced
by separate promissory notes of the Borrower in substantially the form of
EXHIBIT A hereto (collectively, the "Revolving Credit Notes"), dated the date
of this Agreement and completed with appropriate insertions. One Revolving
Credit Note shall be payable to the order of each Bank in the principal face
amount equal to such Bank's Commitment and shall be payable as set forth below.
The Borrower irrevocably authorizes each Bank to make or cause to be made, at
or about the time of the Drawdown Date of any Loan (other than Swing Loans) or
at the time of receipt of any payment of principal thereof, an appropriate
notation on such Bank's Record reflecting the making of such Loan or (as the
case may be) the receipt of such payment. The outstanding amount of the Loans
(other than Swing Loans) set forth on such Bank's Record shall be PRIMA FACIE
evidence of the principal amount thereof owing and unpaid to such Bank, but the
failure to record, or any error in so recording, any such amount on such Bank's
Record shall not limit or otherwise affect the obligations of the Borrower
hereunder or under any Revolving Credit Note to make payments of principal of
or interest on any Revolving Credit Note when due.
Section 2.5 SWING LOAN COMMITMENTS.
(a) Subject to the terms and conditions set forth in this
Agreement, and if necessary to meet the Borrower's funding deadlines, Swing
Loan Bank agrees to lend to the Borrower (the "Swing Loans"), and the Borrower
may borrow (and repay and reborrow) from
21
time to time between the Closing Date and the date which is seven (7) Business
Days prior to the Maturity Date upon notice by the Borrower to the Swing Loan
Bank given in accordance with this Section 2.5, such sums as are requested by
the Borrower for the purposes set forth in Section 2.10 in an aggregate
principal amount at any one time outstanding not exceeding the Swing Loan
Commitment; PROVIDED that at no time shall the aggregate principal balance of
Swing Loans then outstanding, when added to the Swing Loan Bank's Commitment
Percentage of all other Outstanding Loans (after giving effect to all amounts
requested) and Letters of Credit Outstanding, exceed the lesser of (i) such
Bank's Commitment and (ii) such Bank's Commitment Percentage of the Borrowing
Base, PROVIDED, FURTHER, that in all events no Default or Event of Default
shall have occurred and be continuing; and PROVIDED, FURTHER, that the
outstanding principal amount of the Loans (after giving effect to all amounts
requested) and Letters of Credit Outstanding shall not at any time exceed the
Total Commitment. Swing Loans shall constitute "Loans" for all purposes
hereunder, but shall not be considered the utilization of a Bank's Commitment.
The funding of a Swing Loan hereunder shall constitute a representation and
warranty by the Borrower that all of the conditions set forth in Section 10 and
Section 11, in the case of the initial Swing Loan, and Section 11, in the case
of all other Swing Loans, have been satisfied on the date of such funding.
(b) The Swing Loans shall be evidenced by a separate
promissory note of the Borrower in substantially the form of EXHIBIT B hereto
(the "Swing Loan Note"), dated the date of this Agreement and completed with
appropriate insertions. The Swing Loan Note shall be payable to the order of
the Swing Loan Bank in the principal face amount equal to the Swing Loan
Commitment and shall be payable as set forth below. The Borrower irrevocably
authorizes the Swing Loan Bank to make or cause to be made, at or about the
time of the Drawdown Date of any Swing Loan or at the time of receipt of any
payment of principal thereof, an appropriate notation on the Swing Loan Bank's
Record reflecting the making of such Swing Loan or (as the case may be) the
receipt of such payment. The outstanding amount of the Swing Loans set forth on
the Swing Loan Bank's Record shall be PRIMA FACIE evidence of the principal
amount thereof owing and unpaid to the Swing Loan Bank, but the failure to
record, or any error in so recording, any such amount on the Swing Loan Bank's
Record shall not limit or otherwise affect the obligations of the Borrower
hereunder or under the Swing Loan Note to make payments of principal of or
interest on any Swing Loan Note when due.
(c) Each borrowing of Swing Loan shall be subject to the
limits for Base Rate Loans and LIBOR Rate Loans set forth in Section 2.7.
Borrower shall request a Swing Loan by delivering to the Swing Loan Bank a Loan
Request no later than 9:00 a.m. (Boston time) on the requested Drawdown Date
specifying the amount of the requested Swing Loan. The Loan Request shall also
contain the statements and certifications required by Section 2.7(i) and (ii).
Each such Loan Request shall be irrevocable and binding on the Borrower and
shall obligate the Borrower to accept such Swing Loan on the Drawdown Date.
Notwithstanding anything herein to the contrary, a Swing Loan shall either be a
Base Rate Loan or a LIBOR Rate Loan with the interest rate calculated based
upon an Interest Period of one month, and in the event that the Borrower fails
to specify whether it has selected a Base Rate Loan or a LIBOR Rate Loan, the
Borrower shall be deemed conclusively to have selected a LIBOR Rate Loan with
the interest rate calculated based upon an Interest Period of one month.
Notwithstanding the foregoing, upon the date that the Banks shall be required
to fund the Loans pursuant to Section 2.5(d) to refund such
22
Swing Loan, the interest rate shall be reset to a LIBOR Rate Loan with an
Interest Period as specified in the Loan Request given by the Borrower to the
Agent in connection with such Swing Loan, or if no Interest Period is
specified, then as a Base Rate Loan. The proceeds of the Swing Loan will be
made available by the Swing Loan Bank to the Borrower at the Agent's Head
Office by crediting the account of the Borrower at such office with such
proceeds.
(d) The Swing Loan Bank shall within three (3) Business Days
after the Drawdown Date with respect to such Swing Loan, request each Bank,
including the Swing Loan Bank, to make a Loan pursuant to Section 2.1 in an
amount equal to such Bank's Commitment Percentage of the amount of the Swing
Loan outstanding on the date such notice is given. Borrower hereby irrevocably
authorizes and directs the Swing Loan Bank to so act on its behalf, and agrees
that any amount advanced to the Agent for the benefit of the Swing Loan Bank
pursuant to this Section 2.5(d) shall be considered a Loan pursuant to Section
2.1. Unless any of the events described in paragraph (h), (i) or (j) of Section
12.1 shall have occurred (in which event the procedures of Section 2.5(e) shall
apply), each Bank shall make the proceeds of its Loan available to the Agent
for the account of the Swing Loan Bank at the Agent's Head Office prior to
12:00 noon (Boston time) in funds immediately available no later than the third
(3rd) Business Day after the date such notice is given just as if the Banks
were funding directly to the Borrower, so that thereafter such Obligations
shall be evidenced by the Revolving Credit Notes. The proceeds of such Loan
shall be immediately paid by Agent to Swing Loan Bank and applied to repay the
Swing Loans.
(e) If prior to the making of a Loan pursuant to Section
2.5(d) by all of the Banks, one of the events described in Section 12.1(h), (i)
or (j) shall have occurred, each Bank will, on the date such Loan pursuant to
Section 2.5(d) was to have been made, purchase an undivided participation
interest in the Swing Loan in an amount equal to its Commitment Percentage of
such Swing Loan. Each Bank will immediately transfer to the Agent for payment
to the Swing Loan Bank in immediately available funds the amount of its
participation and upon receipt thereof the Swing Loan Bank will deliver to such
Bank a Swing Loan participation certificate dated the date of receipt of such
funds and in such amount.
(f) Whenever at any time after the Swing Loan Bank has
received from any Bank such Bank's participation interest in a Swing Loan, the
Swing Loan Bank receives any payment on account thereof, the Swing Loan Bank
will distribute to such Bank its participating interest in such amount
(appropriately adjusted in the case of interest payments to reflect the period
of time during which such Bank's participating interest was outstanding and
funded); PROVIDED, HOWEVER, that in the event that such payment received by the
Swing Loan Bank is required to be returned, such Bank will return to the Swing
Loan Bank any portion thereof previously distributed by the Swing Loan Bank to
it.
(g) Each Bank's obligation to fund a Loan as provided in
Section 2.5(d) or to purchase participation interests pursuant to Section
2.5(e) shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any setoff, counterclaim,
recoupment, defense or other right which such Bank or the Borrower or
Guarantors may have against the Swing Loan Bank, the Borrower or Guarantors or
anyone else for any reason whatsoever; (ii) the occurrence or continuance of a
Default or an Event of Default; (iii) any adverse change in the condition
(financial or otherwise) of the Borrower or Guarantors or any of
23
their respective Subsidiaries; (iv) any breach of this Agreement or any of the
other Loan Documents by the Borrower or Guarantors or any Bank; or (v) any
other circumstance, happening or event whatsoever, whether or not similar to
any of the foregoing. Any portions of a Swing Loan not so purchased or
converted may be treated by the Swing Loan Bank as a Loan which was not funded
by the non-purchasing Bank as contemplated by Section 2.8 and Section 12.4.
Each Swing Loan, once so sold or converted, shall cease to be a Swing Loan for
the purposes of this Agreement, but shall be a Loan made by each Bank under its
Commitment.
Section 2.6 INTEREST ON LOANS.
(a) Each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the date on which such
Base Rate Loan is repaid or converted to a LIBOR Rate Loan at the rate per
annum equal to the sum of the Applicable Margin plus the Base Rate.
(b) Each LIBOR Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of the
Interest Period with respect thereto at the rate per annum equal to the sum of
the Applicable Margin plus the LIBOR Rate determined for such Interest Period.
(c) The Borrower promises to pay interest on each Loan in
arrears on each Interest Payment Date with respect thereto.
(d) Base Rate Loans and LIBOR Rate Loans may be converted to
Loans of the other Type as provided in Section 4.1.
Section 2.7 REQUESTS FOR LOANS. Except with respect to the initial Loan
on the Closing Date and Swing Loans, the Borrower shall give to the Agent
written notice in the form of EXHIBIT C hereto (or telephonic notice confirmed
in writing in the form of EXHIBIT C hereto) of each Loan requested hereunder (a
"Loan Request") by 11:00 a.m. (Boston Time) no less than one (1) Business Day
prior to the proposed Drawdown Date with respect to Base Rate Loans and three
(3) Business Days prior to the proposed Drawdown Date with respect to LIBOR
Rate Loans. Each such notice shall specify with respect to the requested Loan
the proposed principal amount, Drawdown Date, Interest Period (if applicable)
and Type. Each such notice shall also contain (i) a statement as to the purpose
for which such advance shall be used (which purpose shall be in accordance with
the terms of Section 2.10), and (ii) a certification by the chief financial or
chief accounting officer of the Borrower that the Borrower and the Guarantors
are and will be in compliance with all covenants under the Loan Documents after
giving effect to the making of such Loan. Promptly upon receipt of any such
notice, the Agent shall notify each of the Banks thereof. Except as provided in
this Section 2.7, each such Loan Request shall be irrevocable and binding on
the Borrower and shall obligate the Borrower to accept the Loan requested from
the Banks on the proposed Drawdown Date, provided that, in addition to the
Borrower's other remedies against any Bank which fails to advance its
proportionate share of a requested Loan, such Loan Request may be revoked by
the Borrower by notice received by the Agent no later than the Drawdown Date if
any Bank fails to advance its proportionate share of the requested Loan in
accordance with the terms of this Agreement, provided further that the Borrower
shall be
24
liable in accordance with the terms of this Agreement to any Bank which is
prepared to advance its proportionate share of the requested Loan for any
costs, expenses or damages incurred by such Bank as a result of the Borrower's
election to revoke such Loan Request. Nothing herein shall prevent the Borrower
from seeking recourse against any Bank that fails to advance its proportionate
share of a requested Loan as required by this Agreement. The Borrower may
without cost or penalty revoke a Loan Request by delivering notice thereof to
each of the Banks no later than one (1) Business Day prior to the Drawdown Date
of any Base Rate Loan or three (3) Business Days prior to the Drawdown Date of
any LIBOR Rate Loan. Each Loan Request shall be (a) for a Base Rate Loan in a
minimum aggregate amount of $1,000,000 or an integral multiple of $100,000 in
excess thereof, or (b) for a LIBOR Rate Loan in a minimum aggregate amount of
$2,000,000 or an integral multiple of $100,000 in excess thereof; PROVIDED,
HOWEVER, that there shall be no more than eight (8) LIBOR Rate Loans
outstanding at any one time.
Section 2.8 FUNDS FOR LOANS.
(a) Not later than 1:00 p.m. (Boston time) on the proposed
Drawdown Date of any Loans (other than Swing Loans), each of the Banks will
make available to the Agent, at the Agent's Head Office, in immediately
available funds, the amount of such Bank's Commitment Percentage of the amount
of the requested Loans which may be disbursed pursuant to Section 2.1. Upon
receipt from each Bank of such amount, and upon receipt of the documents
required by Section 10 and Section 11 and the satisfaction of the other
conditions set forth therein, to the extent applicable, the Agent will make
available to the Borrower the aggregate amount of such Loans made available to
the Agent by the Banks by crediting such amount to the account of the Borrower
maintained at the Agent's Head Office. The failure or refusal of any Bank to
make available to the Agent at the aforesaid time and place on any Drawdown
Date the amount of its Commitment Percentage of the requested Loans shall not
relieve any other Bank from its several obligation hereunder to make available
to the Agent the amount of such other Bank's Commitment Percentage of any
requested Loans, including any additional Loans that may be requested subject
to the terms and conditions hereof to provide funds to replace those not
advanced by the Bank so failing or refusing, provided that the Borrower may by
notice received by the Agent no later than the Drawdown Date refuse to accept
any Loan which is not fully funded in accordance with the Borrower's Loan
Request subject to the terms of Section 2.7. In the event of any such failure
or refusal, the Banks not so failing or refusing shall be entitled to a
priority position as against the Bank or Banks so failing or refusing for such
Loans as provided in Section 12.4.
(b) Unless Agent shall have been notified by any Bank prior
to the applicable Drawdown Date that such Bank will not make available to Agent
such Bank's Commitment Percentage of a proposed Loan, Agent may in its
discretion assume that such Bank has made such Loan available to Agent in
accordance with the provisions of this Agreement and Agent may, if it chooses,
in reliance upon such assumption make such Loan available to Borrower, and such
Bank shall be liable to the Agent for the amount of such advance. If such Bank
does not pay such corresponding amount upon the Agent's demand therefor, the
Agent will promptly notify the Borrower, and the Borrower shall promptly pay
such corresponding amount to the Agent. The Agent shall also be entitled to
recover from the Bank or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Agent to the Borrower to the date such
25
corresponding amount is recovered by the Agent at a per annum rate equal to (i)
from the Borrower at the applicable rate for such Loan or (ii) from a Bank at
the Federal Funds Effective Rate.
Section 2.9 LETTERS OF CREDIT.
(a) Subject to the terms and conditions set forth in this
Agreement, at any time and from time to time from the Closing Date through the
day that is thirty (30) days prior to the Maturity Date, the Issuing Bank shall
issue such Letters of Credit as the Borrower may request upon the delivery of a
written request in the form of EXHIBIT D hereto (a "Letter of Credit Request")
to the Issuing Bank, PROVIDED that (i) no Default or Event of Default shall
have occurred and be continuing, (ii) upon issuance of such Letter of Credit,
the Outstanding Letters of Credit shall not exceed Ten Million Dollars
($10,000,000.00), (iii) in no event shall the sum of (A) the Loans Outstanding,
(B) the sum of Swing Loans Outstanding and (C) the amount of Letters of Credit
Outstanding (after giving effect to all Letters of Credit requested and any
Letters of Credit accepted but unpaid) exceed the lesser of (1) the Borrowing
Base or (2) the Total Commitment, (iv) the conditions set forth in Sections 10
and 11 shall have been satisfied, and (v) in no event shall any amount drawn
under a Letter of Credit be available for reinstatement or a subsequent drawing
under such Letter of Credit. Each Letter of Credit Request shall be executed by
an officer of Borrower. The Issuing Bank shall be entitled to conclusively rely
on such Person's authority to request a Letter of Credit on behalf of Borrower.
The Issuing Bank shall have no duty to verify the authenticity of any signature
appearing on a Letter of Credit Request. The Borrower assumes all risks with
respect to the use of the Letters of Credit. Unless the Issuing Bank and the
Majority Banks otherwise consent, the term of any Letter of Credit shall not
exceed a period of time commencing on the issuance of the Letter of Credit and
ending on the date which is fifteen (15) days prior to the Maturity Date (but
in any event the term shall not extend beyond the Maturity Date). The amount
available to be drawn under any Letter of Credit shall reduce on a
dollar-for-dollar basis the amount available to be drawn under the Total
Commitment as a Loan.
(b) Each Letter of Credit Request shall be submitted to the
Issuing Bank at least ten (10) Business Days (or such shorter period as the
Issuing Bank may approve) prior to the date upon which the requested Letter of
Credit is to be issued. Each such Letter of Credit Request shall contain (i) a
statement as to the purpose for which such Letter of Credit shall be used
(which purpose shall be in accordance with the terms of this Agreement), and
(ii) a certification by the chief financial or chief accounting officer of
Borrower that the Borrower and Guarantors are and will be in compliance with
all covenants under the Loan Documents after giving effect to the issuance of
such Letter of Credit. The Borrower shall further deliver to the Issuing Bank
such additional applications and documents as the Issuing Bank may require, in
conformity with the then standard practices of its letter of credit department,
in connection with the issuance of such Letter of Credit; provided that in the
event of any conflict, the terms of this Agreement shall control.
(c) The Issuing Bank shall, if it approves of the content of
the Letter of Credit Request (which approval shall not be unreasonably
withheld), and subject to the conditions set forth in this Agreement, issue the
Letter of Credit on or before ten (10) Business Days following
26
receipt of the documents last due pursuant to Section 2.9(b). Each Letter of
Credit shall be in form and substance reasonably satisfactory to the Issuing
Bank in its reasonable discretion. Upon issuance of a Letter of Credit, the
Issuing Bank shall provide notice of the issuance of such Letter of Credit to
the Banks and shall provide a copy of such Letter of Credit to any Bank that
requests a copy.
(d) Upon the issuance of a Letter of Credit, each Bank shall
be deemed to have purchased a participation therein from Issuing Bank in an
amount equal to its respective Commitment Percentage of the amount of such
Letter of Credit. No Bank's obligation to participate in a Letter of Credit
shall be affected by any other Bank's failure to perform as required herein
with respect to such Letter of Credit or any other Letter of Credit.
(e) Upon the issuance of each Letter of Credit, the Borrower
shall pay to the Issuing Bank (i) for its own account, a Letter of Credit fee
calculated at the rate of one-eighth of one percent (0.125%) per annum of the
amount available to be drawn under such Letter of Credit (which fee shall not
be less than $1,000.00 in any event), and (ii) for the accounts of the Banks in
accordance with their respective percentage shares of participation in such
Letter of Credit, a Letter of Credit fee calculated at the rate per annum equal
to the Applicable Margin then applicable to LIBOR Rate Loans on the amount
available to be drawn under such Letter of Credit. Such fees shall be payable
in quarterly installments in arrears with respect to each Letter of Credit on
the first day of each calendar quarter following the date of issuance and
continuing on each quarter or portion thereof thereafter, as applicable, or on
any earlier date on which the Commitments shall terminate and on the expiration
or return of any Letter of Credit. In addition, the Borrower shall pay to
Issuing Bank for its own account within five (5) days of demand of Issuing Bank
the standard issuance, documentation and service charges for Letters of Credit
issued from time to time by Issuing Bank.
(f) In the event that any amount is drawn under a Letter of
Credit by the beneficiary thereof, the Borrower shall reimburse the Issuing
Bank by having such amount drawn treated as an outstanding Base Rate Loan under
this Agreement and the Agent shall promptly notify each Bank by telex,
telecopy, telegram, telephone (confirmed in writing) or other similar means of
transmission, and each Bank shall promptly and unconditionally pay to the
Agent, for the Issuing Bank's own account, an amount equal to such Bank's
Commitment Percentage of such Letter of Credit (to the extent of the amount
drawn). If and to the extent any Bank shall not make such amount available on
the Business Day on which such draw is funded, such Bank agrees to pay such
amount to the Agent forthwith on demand, together with interest thereon, for
each day from the date on which such draw was funded until the date on which
such amount is paid to the Agent, at the Federal Funds Effective Rate. Further,
such Bank shall be deemed to have assigned any and all payments made of
principal and interest on its Loans, amounts due with respect to its
participations in Letters of Credit and any other amounts due to it hereunder
to the Agent to fund the amount of any drawn Letter of Credit which such Bank
was required to fund pursuant to this Section 2.9(f) until such amount has been
funded (as a result of such assignment or otherwise). In the event of any such
failure or refusal, the Banks not so failing or refusing shall be entitled to a
priority secured position for such amounts as provided in Section 12.4. The
failure of any Bank to make funds available to the Agent in such amount shall
not relieve
27
any other Bank of its obligation hereunder to make funds available to the Agent
pursuant to this Section 2.9(f).
(g) If after the issuance of a Letter of Credit pursuant to
Section 2.9(c) by the Issuing Bank, but prior to the funding of any portion
thereof by a Bank, one of the events described in Section 12.1(h), (i) or (j)
shall have occurred, each Bank will, on the date such Loan pursuant to Section
2.9(f) was to have been made, purchase an undivided participation interest in
the Letter of Credit in an amount equal to its Commitment Percentage of the
amount of such Letter of Credit. Each Bank will immediately transfer to the
Issuing Bank in immediately available funds the amount of its participation and
upon receipt thereof the Issuing Bank will deliver to such Bank a Letter of
Credit participation certificate dated the date of receipt of such funds and in
such amount.
(h) Whenever at any time after the Issuing Bank has received
from any Bank any such Bank's payment of funds under a Letter of Credit and
thereafter the Issuing Bank receives any payment on account thereof, then the
Issuing Bank will distribute to such Bank its participation interest in such
amount (appropriately adjusted in the case of interest payments to reflect the
period of time during which such Bank's participation interest was outstanding
and funded); PROVIDED, HOWEVER, that in the event that such payment received by
the Issuing Bank is required to be returned, such Bank will return to the
Issuing Bank any portion thereof previously distributed by the Issuing Bank to
it.
(i) The issuance of any supplement, modification, amendment,
renewal or extension to or of any Letter of Credit shall be treated in all
respects the same as the issuance of a new Letter of Credit.
(j) Borrower assumes all risks of the acts, omissions, or
misuse of any Letter of Credit by the beneficiary thereof. Neither Agent,
Issuing Bank nor any Bank will be responsible for (i) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any Letter of Credit or
any document submitted by any party in connection with the issuance of any
Letter of Credit, even if such document should in fact prove to be in any or
all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
instrument transferring or assigning or purporting to transfer or assign any
Letter of Credit or the rights or benefits thereunder or proceeds thereof in
whole or in part, which may prove to be invalid or ineffective for any reason;
(iii) failure of any beneficiary of any Letter of Credit to comply fully with
the conditions required in order to demand payment under a Letter of Credit;
(iv) errors, omissions, interruptions or delays in transmission or delivery of
any messages, by mail, cable, telegraph, telex or otherwise; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission
or otherwise of any document or draft required by or from a beneficiary in
order to make a disbursement under a Letter of Credit or the proceeds thereof;
(vii) for the misapplication by the beneficiary of any Letter of Credit of the
proceeds of any drawing under such Letter of Credit; and (viii) for any
consequences arising from causes beyond the control of Agent or any Bank. None
of the foregoing will affect, impair or prevent the vesting of any of the
rights or powers granted to Agent, Issuing Bank or the Banks hereunder. In
furtherance and extension and not in limitation or derogation of any of the
foregoing, any act taken or omitted to be taken by Agent, Issuing Bank or the
other Banks in
28
good faith will be binding on Borrower and will not put Agent, Issuing Bank or
the other Banks under any resulting liability to Borrower.
Section 2.10 USE OF PROCEEDS. The Borrower will use the proceeds of the
Loans (a) for refinancing certain indebtedness of Price Enterprises, Inc. (the
predecessor of Borrower) and Excel Legacy Corporation existing as of the Closing
Date, (b) for paying certain expenses relating to the Transaction, and (c) for
working capital purposes of the Borrower (including without limitation the
payment of Distributions and Preferred Distributions).
Section 3. REPAYMENT OF THE LOANS.
Section 3.1 STATED MATURITY. The Borrower promises to pay on the Maturity
Date and there shall become absolutely due and payable on the Maturity Date, all
of the Loans outstanding on such date, together with any and all accrued and
unpaid interest thereon.
Section 3.2 MANDATORY PREPAYMENTS.
(a) If at any time the sum of the aggregate outstanding
principal amount of the Loans and the Letters of Credit Outstanding exceeds the
Total Commitment or the Borrowing Base, then the Borrower shall immediately pay
the amount of such excess to the Agent for the respective accounts of the Banks
for application to the Loans, except that the amount of any Swing Loans shall
be paid solely to the Swing Loan Bank.
(b) Unless the Borrower shall have provided to the Agent a
Compliance Certificate with respect to any proposed or completed sale,
transfer, casualty, condemnation or other disposition of any of the
Unencumbered Borrowing Base Properties, adjusted in the best good-faith
estimate of the Borrower to give effect to such event and demonstrating that no
Default or Event of Default with respect to the covenants referred to therein
shall exist after giving effect to such event, all of the Borrower's interest
in the gross proceeds of each and every sale, transfer, casualty, condemnation
or other disposition of any of the Unencumbered Borrowing Base Properties, less
all reasonable costs, expenses and commissions paid to unrelated parties as a
part of such sale, transfer, casualty, condemnation or other disposition, shall
be promptly paid by the Borrower to the Agent for the account of the Banks as a
prepayment of the Loans to the extent of the outstanding balance of the Loans.
Section 3.3 OPTIONAL PREPAYMENTS. The Borrower shall have the right, at
its election, to prepay the outstanding amount of the Loans, as a whole or in
part, at any time without penalty or premium; PROVIDED, that if any full or
partial prepayment of the outstanding amount of any LIBOR Rate Loans is made on
a date that is not the last day of the Interest Period relating thereto, such
payment shall be accompanied by the payment of any amounts payable pursuant to
Section 4.8. The Borrower shall give the Agent, no later than 10:00 a.m.,
Boston time, at least one (1) Business Day prior written notice of any
prepayment pursuant to this Section 3.3 of any Base Rate Loans and at least
three (3) LIBOR Business Days notice of any proposed prepayment pursuant to
this Section 3.3 of any LIBOR Rate Loans, in each case specifying the proposed
date of payment of Loans and the principal amount to be paid. Notwithstanding
the foregoing, no prior notice shall be required for the prepayment of any
Swing Loan.
29
Section 3.4 PREPAYMENTS. Each partial prepayment of the Loans under
Section 3.2 and Section 3.3 shall be in an integral multiple of $100,000, shall
be accompanied by the payment of accrued interest on the principal prepaid to
the date of payment and, after payment of such interest, shall be applied, in
the absence of instruction by the Borrower, first to the principal of any
Outstanding Swing Loans, and next to the principal of Base Rate Loans and then
to the principal of LIBOR Rate Loans.
Section 3.5 EFFECT OF PREPAYMENTS. Amounts of the Loans prepaid under
Section 3.2 and Section 3.3 prior to the Maturity Date may be reborrowed as
provided in Section 2.
Section 3.6 PROCEEDS FROM DEBT OR EQUITY OFFERING. Unless otherwise
waived by the Majority Banks, the Borrower shall cause all gross proceeds of
each and every Debt Offering and Equity Offering, less all reasonable costs,
fees, expenses, underwriting commissions, fees and discounts incurred in
connection therewith, to be paid to the Agent for the account of the Banks as a
prepayment of the Loans within thirty (30) days of the date of such offering to
the extent of the outstanding balance of the Loans.
Section 4. CERTAIN GENERAL PROVISIONS
Section 4.1 CONVERSION OPTIONS.
(a) The Borrower may elect from time to time to convert any
outstanding Loan to a Loan of another Type and such Loan shall thereafter bear
interest as a Base Rate Loan or a LIBOR Rate Loan, as applicable; PROVIDED that
(i) with respect to any such conversion of a LIBOR Rate Loan to a Base Rate
Loan, the Borrower shall give the Agent at least one (1) Business Day prior
written notice of such election, and such conversion shall only be made on the
last day of the Interest Period with respect to such LIBOR Rate Loan; (ii) with
respect to any such conversion of a Base Rate Loan to a LIBOR Rate Loan, the
Borrower shall give the Agent at least three (3) LIBOR Business Days' prior
written notice of such election and the Interest Period requested for such
Loan, the principal amount of the Loan so converted shall be in a minimum
aggregate amount of $2,000,000 or an integral multiple of $100,000 in excess
thereof and, after giving effect to the making of such Loan, there shall be no
more than eight (8) LIBOR Rate Loans outstanding at any one time; and (iii) no
Loan may be converted into a LIBOR Rate Loan when any Default or Event of
Default has occurred and is continuing. Promptly upon receipt of any such
Conversion Request, the Agent shall notify each of the Banks thereof. All or
any part of the outstanding Loans of any Type may be converted as provided
herein, PROVIDED that no partial conversion shall result in a Base Rate Loan in
an aggregate principal amount of less than $1,000,000 or a LIBOR Rate Loan in
an aggregate principal amount of less than $2,000,000 and that the aggregate
principal amount of each Loan shall be in an integral multiple of $100,000. On
the date on which such conversion is being made, each Bank shall take such
action as is necessary to transfer its Commitment Percentage of such Loans to
its Domestic Lending Office or its LIBOR Lending Office, as the case may be.
Each Conversion Request relating to the conversion of a Base Rate Loan to a
LIBOR Rate Loan shall be irrevocable by the Borrower.
30
(b) Any LIBOR Rate Loan may be continued as such Type upon
the expiration of an Interest Period with respect thereto by compliance by the
Borrower with the terms of Section 4.1; PROVIDED that no LIBOR Rate Loan may be
continued as such when any Default or Event of Default has occurred and is
continuing, but shall be automatically converted to a Base Rate Loan on the
last day of the Interest Period relating thereto ending during the continuance
of any Default or Event of Default.
(c) In the event that the Borrower does not notify the Agent
of its election hereunder with respect to any LIBOR Rate Loan, such Loan shall
be automatically converted to a Base Rate Loan at the end of the applicable
Interest Period.
Section 4.2 CLOSING FEE. On the Closing Date, the Borrower shall pay to
Fleet a facility and loan structuring fee pursuant to the Agreement Regarding
Fees, which fees shall be fully earned and non-refundable. Fleet shall pay on
the Closing Date to the other Banks a closing fee in accordance with their
separate agreement.
Section 4.3 AGENT'S FEE. The Borrower shall pay to the Agent, for the
Agent's own account, an annual Agent's fee as provided in the Agreement
Regarding Fees. The Agent's fee shall be payable quarterly in arrears on the
first day of each calendar quarter for the immediately preceding calendar
quarter or portion thereof. The Agent's fee shall also be paid upon the
Maturity Date or earlier termination of the Commitments. The Agent's fee for
any partial quarter shall be prorated.
Section 4.4 FUNDS FOR PAYMENTS.
(a) All payments of principal, interest, facility fees,
Agent's fees, letter of credit fees, closing fees, and any other amounts due
hereunder or under any of the other Loan Documents shall be made to the Agent,
for the respective accounts of the Banks and the Agent, as the case may be, at
the Agent's Head Office, not later than 11:00 a.m. (Boston time) on the day
when due, in each case in lawful money of the United States in immediately
available funds. The Agent is hereby authorized to charge the account of the
Borrower with Fleet, on the dates when the amount thereof shall become due and
payable, with the amounts of the principal of and interest on the Loans and all
fees, charges, expenses and other amounts owing to the Agent and/or the Banks
(including the Swing Loan Bank) under the Loan Documents.
(b) All payments by the Borrower hereunder and under any of
the other Loan Documents shall be made without setoff or counterclaim and free
and clear of and without deduction for any taxes, levies, imposts, duties,
charges, fees, deductions, withholdings, compulsory loans, restrictions or
conditions of any nature now or hereafter imposed or levied by any jurisdiction
or any political subdivision thereof or taxing or other authority therein
unless the Borrower is compelled by law to make such deduction or withholding.
If any such obligation is imposed upon the Borrower with respect to any amount
payable by it hereunder or under any of the other Loan Documents, the Borrower
will pay to the Agent, for the account of the Banks (including the Swing Loan
Bank) or (as the case may be) the Agent, on the date on which such amount is
due and payable hereunder or under such other Loan Document, such additional
amount in Dollars as shall be necessary to enable the Banks or the Agent to
receive the same net
31
amount which the Banks or the Agent would have received on such due date had no
such obligation been imposed upon the Borrower. The Borrower will deliver
promptly to the Agent certificates or other valid vouchers for all taxes or
other charges deducted from or paid with respect to payments made by the
Borrower hereunder or under such other Loan Document.
(c) Each Bank organized under the laws of a jurisdiction
outside the United States, if requested in writing by the Borrower (but only so
long as such Bank remains lawfully able to do so), shall provide the Borrower
with such duly executed form(s) or statement(s) which may, from time to time,
be prescribed by law and, which, pursuant to applicable provisions of (i) an
income tax treaty between the United States and the country of residence of
such Bank, (ii) the Code, or (iii) any applicable rules or regulations in
effect under (i) or (ii) above, indicates the withholding status of such Bank;
provided that nothing herein (including without limitation the failure or
inability to provide such form or statement) shall relieve the Borrower of its
obligations under Section 4.4(b). In the event that the Borrower shall have
delivered the certificates or vouchers described above for any payments made by
the Borrower and such Bank receives a refund of any taxes paid by the Borrower
pursuant to Section 4.4(b), such Bank will pay to the Borrower the amount of
such refund promptly upon receipt thereof; PROVIDED that if at any time
thereafter such Bank is required to return such refund, the Borrower shall
promptly repay to such Bank the amount of such refund.
(d) The obligations of the Borrower to the Banks under this
Agreement (and of the Banks to make payments to the Issuing Bank with respect
to Letters of Credit) shall be absolute, unconditional and irrevocable, and
shall be paid and performed strictly in accordance with the terms of this
Agreement, under all circumstances whatsoever, including, without limitation,
the following circumstances: (i) any lack of validity or enforceability of this
Agreement, any Letter of Credit or any of the other Loan Documents; (ii) any
improper use which may be made of any Letter of Credit or any improper acts or
omissions of any beneficiary or transferee of any Letter of Credit in
connection therewith; (iii) the existence of any claim, set-off, defense or any
right which the Borrower or any of its Subsidiaries or Affiliates may have at
any time against any beneficiary or any transferee of any Letter of Credit (or
persons or entities for whom any such beneficiary or any such transferee may be
acting) or the Banks (other than the defense of payment to the Banks in
accordance with the terms of this Agreement) or any other person, whether in
connection with any Letter of Credit, this Agreement, any other Loan Document,
or any unrelated transaction; (iv) any draft, demand, certificate, statement or
any other documents presented under any Letter of Credit proving to be
insufficient, forged, fraudulent or invalid in any respect or any statement
therein being untrue or inaccurate in any respect whatsoever; (v) any breach of
any agreement between Borrower or any of its Subsidiaries or Affiliates and any
beneficiary or transferee of any Letter of Credit; (vi) any irregularity in the
transaction with respect to which any Letter of Credit is issued, including any
fraud by the beneficiary or any transferee of such Letter of Credit; (vii)
payment by the Issuing Bank under any Letter of Credit against presentation of
a sight draft, demand, certificate or other document which does not comply with
the terms of such Letter of Credit, provided that such payment shall not have
constituted gross negligence or willful misconduct on the part of the Issuing
Bank; (viii) any non-application or misapplication by the beneficiary of a
Letter of Credit of the proceeds of such Letter of Credit; (ix) the legality,
validity, form, regularity or enforceability of the Letter of Credit; (x) the
failure of any payment by Issuing Bank to conform to the terms of a Letter of
32
Credit (if, in Issuing Bank's good faith judgment, such payment is determined
to be appropriate); (xi) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan Documents;
(xii) the occurrence of any Default or Event of Default; and (xiii) any other
circumstance or happening whatsoever, whether or not similar to any of the
foregoing, provided that such other circumstances or happenings shall not have
been the result of gross negligence or willful misconduct on the part of the
Issuing Bank.
Section 4.5 COMPUTATIONS. All computations of interest on the Loans and
of other fees to the extent applicable shall be based on a 360-day year and
paid for the actual number of days elapsed. Except as otherwise provided in the
definition of the term "Interest Period" with respect to LIBOR Rate Loans,
whenever a payment hereunder or under any of the other Loan Documents becomes
due on a day that is not a Business Day, the due date for such payment shall be
extended to the next succeeding Business Day, and interest shall accrue during
such extension. The outstanding amount of the Loans as reflected on the records
of the Agent from time to time shall be considered PRIMA FACIE evidence of such
amount.
Section 4.6 INABILITY TO DETERMINE LIBOR RATE. In the event that, prior
to the commencement of any Interest Period relating to any LIBOR Rate Loan, the
Agent shall determine in the exercise of its good faith business judgment that
adequate and reasonable methods do not exist for ascertaining the LIBOR Rate
for such Interest Period, the Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the Borrower and the
Banks) to the Borrower and the Banks. In such event (a) any Loan Request with
respect to LIBOR Rate Loans shall be automatically withdrawn and shall be
deemed a request for Base Rate Loans, and (b) each LIBOR Rate Loan will
automatically, on the last day of the then current Interest Period thereof,
become a Base Rate Loan, and the obligations of the Banks to make LIBOR Rate
Loans shall be suspended until the Agent determines that the circumstances
giving rise to such suspension no longer exist, whereupon the Agent shall so
notify the Borrower and the Banks.
Section 4.7 ILLEGALITY. Notwithstanding any other provisions herein, if
any present or future law, regulation, treaty or directive or the
interpretation or application thereof shall make it unlawful, or any central
bank or other governmental authority having jurisdiction over a Bank or its
LIBOR Lending Office shall assert that it is unlawful, for any Bank to make or
maintain LIBOR Rate Loans, such Bank shall forthwith give notice of such
circumstances to the Agent and the Borrower and thereupon (a) the commitment of
the Banks to make LIBOR Rate Loans or convert Loans of another type to LIBOR
Rate Loans shall forthwith be suspended and (b) the LIBOR Rate Loans then
outstanding shall be converted automatically to Base Rate Loans on the last day
of each Interest Period applicable to such LIBOR Rate Loans or within such
earlier period as may be required by law.
Section 4.8 ADDITIONAL INTEREST. If any LIBOR Rate Loan or any portion
thereof is repaid or is converted to a Base Rate Loan for any reason on a date
which is prior to the last day of the Interest Period applicable to such LIBOR
Rate Loan, or if repayment of the Loans has been accelerated as provided in
Section 12.1, the Borrower will pay to the Agent upon demand for the account of
the applicable Banks in accordance with their respective Commitment Percentages
(or to the Swing Loan Bank with respect to a Swing Loan), in addition to any
amounts of interest otherwise payable hereunder, any amounts required to
compensate such Banks for any losses,
33
costs or expenses which may reasonably be incurred as a result of such payment
or conversion, including, without limitation, an amount equal to daily interest
for the unexpired portion of such Interest Period on the LIBOR Rate Loan or
portion thereof so repaid or converted at a per annum rate equal to the excess,
if any, of (a) the interest rate calculated on the basis of the LIBOR Rate
applicable to such LIBOR Rate Loan (including any spread over such LIBOR Rate)
MINUS (b) the yield obtainable by the Agent upon the purchase of debt
securities customarily issued by the Treasury of the United States of America
which have a maturity date most closely approximating the last day of such
Interest Period (it being understood that the purchase of such securities shall
not be required in order for such amounts to be payable and that a Bank shall
not be obligated or required to have actually obtained funds at the LIBOR Rate
or to have actually reinvested such amount as described above). Such amount
shall be reduced to present value by using the rate on the United States
Treasury Securities described in the foregoing sentence and the number of days
remaining in the unexpired portion of the Interest Period in question.
Section 4.9 ADDITIONAL COSTS, ETC. Notwithstanding anything herein to the
contrary, if any present or future applicable law, which expression, as used
herein, includes statutes, rules and regulations thereunder and legally binding
interpretations thereof by any competent court or by any governmental or other
regulatory body or official with appropriate jurisdiction charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon
or otherwise issued to any Bank or the Agent by any central bank or other
fiscal, monetary or other authority (whether or not having the force of law),
shall:
(a) subject any Bank or the Agent to any tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature with respect to this
Agreement, the other Loan Documents, such Bank's Commitment (including the
Swing Loan Commitment), a Letter of Credit or the Loans (other than taxes based
upon or measured by the income or profits of such Bank or the Agent), or
(b) materially change the basis of taxation (except for
changes in taxes on income or profits) of payments to any Bank of the principal
of or the interest on any Loans or any other amounts payable to any Bank under
this Agreement or the other Loan Documents, or
(c) impose or increase or render applicable any special
deposit, reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held by,
or deposits in or for the account of, or loans by, or letters of credit from,
or commitments of an office of any Bank, or
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Agreement, the other Loan Documents, the
Loans, such Bank's Commitment (including the Swing Loan Commitment), a Letter
of Credit or any class of loans or commitments of which any of the Loans or
such Bank's Commitment (including the Swing Loan Commitment) forms a part; and
the result of any of the foregoing is
34
(i) to increase the cost to any Bank of making, funding,
issuing, renewing, extending or maintaining any of the Loans, the Letters of
Credit or such Bank's Commitment (including the Swing Loan Commitment), or
(ii) to reduce the amount of principal, interest or other
amount payable to such Bank or the Agent hereunder on account of such Bank's
Commitment (including the Swing Loan Commitment) or any of the Loans or the
Letters of Credit, or
(iii) to require such Bank or the Agent to make any payment
or to forego any interest or other sum payable hereunder, the amount of which
payment or foregone interest or other sum is calculated by reference to the
gross amount of any sum receivable or deemed received by such Bank or the Agent
from the Borrower hereunder,
then, and in each such case, the Borrower will, within fifteen (15) days of
demand made by such Bank or (as the case may be) the Agent at any time and from
time to time and as often as the occasion therefor may arise, pay to such Bank
or the Agent such additional amounts as such Bank or the Agent shall determine
in good faith to be sufficient to compensate such Bank or the Agent for such
additional cost, reduction, payment or foregone interest or other sum. Each
Bank and the Agent in determining such amounts may use any reasonable averaging
and attribution methods, generally applied by such Bank or the Agent.
Notwithstanding the foregoing, the Borrower shall have the right, in lieu of
making the payment referred to in this Section 4.9, to prepay the Loans and
terminate the Commitments within thirty (30) days of such demand and avoid the
payment of the amounts otherwise due under this Section 4.9, provided, however,
that the Borrower shall be required to pay together with such prepayment of the
Loans all other costs, damages and expenses otherwise due under Section 4.8 of
this Agreement.
Section 4.10 CAPITAL ADEQUACY. If after the date hereof any Bank
determines that (a) the adoption of or change in any law, rule, regulation,
guideline, directive or request (whether or not having the force of law)
regarding capital requirements for banks or bank holding companies or any
change in the interpretation or application thereof by any governmental
authority, central bank or comparable agency charged with the administration
thereof, or (b) compliance by such Bank or its parent bank holding company with
any guideline, request or directive of any such entity regarding capital
adequacy (whether or not having the force of law), has the effect of reducing
the return on such Bank's or such holding company's capital as a consequence of
such Bank's commitment to make Loans or participate in Letters of Credit
hereunder to a level below that which such Bank or holding company could have
achieved but for such adoption, change or compliance (taking into consideration
such Bank's or such holding company's then existing policies with respect to
capital adequacy and assuming the full utilization of such entity's capital) by
any amount deemed by such Bank to be material, then such Bank may notify the
Borrower thereof. The Borrower agrees to pay to such Bank the amount of such
reduction in the return on capital as and when such reduction is determined,
upon presentation by such Bank of a statement of the amount setting forth the
Bank's calculation thereof. In determining such amount, such Bank may use any
reasonable averaging and attribution methods. Notwithstanding the foregoing,
the Borrower shall have the right, in lieu of making the payment referred to in
this Section 4.10, to prepay the Loans and terminate the Commitments within
thirty (30) days of such demand and avoid the payment of the amounts otherwise
due under this Section 4.10, provided,
35
however, that the Borrower shall be required to pay together with such
prepayment of the Loans all other costs, damages and expenses otherwise due
under Section 4.8 of this Agreement.
Section 4.11 INDEMNITY OF BORROWER. The Borrower agrees to indemnify each
Bank and to hold each Bank harmless from and against any loss, cost or expense
that such Bank may sustain or incur as a consequence of (a) default by the
Borrower in payment of the principal amount of or any interest on any LIBOR
Rate Loans as and when due and payable, including any such loss or expense
arising from interest or fees payable by such Bank to lenders of funds obtained
by it in order to maintain its LIBOR Rate Loans, or (b) default by the Borrower
in making a borrowing or conversion after the Borrower has given (or is deemed
to have given) a Loan Request or a Conversion Request.
Section 4.12 INTEREST ON OVERDUE AMOUNTS; LATE CHARGE. Following the
occurrence and during the continuance of any Event of Default, and regardless
of whether or not the Agent or the Banks shall have accelerated the maturity of
the Loans, all Loans shall bear interest payable on demand at a rate per annum
equal to four percent (4%) above the rate that would otherwise be applicable at
such time (the "Default Rate"), until such amount shall be paid in full (after
as well as before judgment), or if such rate shall exceed the maximum rate
permitted by law, then at the maximum rate permitted by law. In addition, the
Borrowers shall pay a late charge equal to five percent (5%) of any amount of
interest and/or principal payable on the Loans or any other amounts payable
hereunder or under the Loan Documents, which is not paid within ten days of the
date when due.
Section 4.13 CERTIFICATE. A certificate setting forth any amounts payable
pursuant to Section 4.8, Section 4.9, Section 4.10, Section 4.11 or Section
4.12 and a brief explanation of such amounts which are due, submitted by any
Bank or the Agent to the Borrower, shall be conclusive in the absence of
manifest error.
Section 4.14 LIMITATION ON INTEREST. Notwithstanding anything in this
Agreement or the other Loan Documents to the contrary, all agreements between
or among the Borrower and the Banks and the Agent, whether now existing or
hereafter arising and whether written or oral, are hereby limited so that in no
contingency, whether by reason of acceleration of the maturity of any of the
Obligations or otherwise, shall the interest contracted for, charged or
received by the Banks exceed the maximum amount permissible under applicable
law. If, from any circumstance whatsoever, interest would otherwise be payable
to the Banks in excess of the maximum lawful amount, the interest payable to
the Banks shall be reduced to the maximum amount permitted under applicable
law; and if from any circumstance the Banks shall ever receive anything of
value deemed interest by applicable law in excess of the maximum lawful amount,
an amount equal to any excessive interest shall be applied to the reduction of
the principal balance of the Obligations and to the payment of interest or, if
such excessive interest exceeds the unpaid balance of principal of the
Obligations, such excess shall be refunded to the Borrower. All interest paid
or agreed to be paid to the Banks shall, to the extent permitted by applicable
law, be amortized, prorated, allocated and spread throughout the full period
until payment in full of the principal of the Obligations (including the period
of any renewal or extension thereof) so that the interest thereon for such full
period shall not exceed the maximum amount permitted by applicable law. This
section shall control all agreements between the Borrower and the Banks and the
Agent.
36
Section 5. SECURITY
Section 5.1 UNSECURED LOAN. The Banks have agreed to make the Loans and
issue the Letters of Credit to the Borrower on an unsecured basis.
Notwithstanding the foregoing, the Obligations shall be guaranteed by the
Guarantors pursuant to the Guaranty.
Section 5.2 ADDITIONAL GUARANTORS. In the event that Borrower shall,
after the Closing Date, have an Investment in any Subsidiary in which Borrower
directly or indirectly owns a one hundred percent (100%) interest, Borrower
shall cause each such Subsidiary to execute and deliver to Agent a Guaranty,
and such Subsidiary shall become a Guarantor hereunder (each such Subsidiary is
an "Additional Guarantor"); provided, however, to the extent Borrower has an
Investment in any such Subsidiary which is established as a special purpose
entity to own Real Estate or equity interests related thereto and any loan
documents, if any, to which any new Subsidiary directly owning title to any
Real Estate is a party prohibit such new Subsidiary from guarantying the
Obligations, Borrower shall not be obligated to cause such new Subsidiary to
become a Guarantor. Borrower further covenants and agrees that Borrower shall
cause each Subsidiary of Borrower that becomes a Guarantor pursuant to this
Section 5.2 to become a party to the Contribution Agreement. The organizational
agreements of each such Subsidiary created after the Closing Date shall
specifically authorize each such Subsidiary to guarantee the Obligations and to
execute the Contribution Agreement. Borrower shall further cause all
representations, covenants and agreements in the Loan Documents with respect to
Guarantors to be true and correct with respect to each such Subsidiary. In
connection with the delivery of such Guaranty, Borrower shall deliver to the
Agent such organizational agreements, resolutions, consents, opinions and other
documents and instruments as the Agent may reasonably require.
Section 5.3 RELEASE OF CERTAIN GUARANTORS. In the event that a Guarantor
shall transfer all of its assets for fair value and for cash in the ordinary
course of its business, then such Guarantor may be released by Agent from
liability under the Guaranty provided that the Borrower shall deliver to Agent
evidence satisfactory to Agent that (a) the Borrower will be in compliance with
all covenants of this Agreement after giving effect to such sale and release,
(b) such Guarantor shall be legally dissolved after its release from the
Guaranty, and (c) the net cash proceeds from such sale are being distributed to
Borrower as part of such dissolution. The provisions of this Section 5.3 shall
not apply to Excel Legacy Holdings, Excel Legacy Corporation or any Guarantor
which may own an Unencumbered Borrowing Base Property or any direct or indirect
interest in an Unencumbered Borrowing Base Property.
Section 6. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Agent and the Banks as
follows:
Section 6.1 CORPORATE AUTHORITY, ETC.
(a) INCORPORATION; GOOD STANDING. The Borrower is a Maryland
corporation duly organized pursuant to its Articles of Incorporation and
amendments thereto filed with the Secretary of the State of Maryland and is
validly existing and in good standing under the laws of Maryland. Each
Guarantor is a corporation, limited partnership, limited liability company or
37
other form of entity specified in SCHEDULE 6.1(a) hereto pursuant to its
organizational agreements and is validly existing and in good standing under
the laws of the state of its organization set forth in SCHEDULE 6.1(a) hereto.
Each of the Borrower and the Guarantors (i) has all requisite power to own its
respective property and conduct its respective business as now conducted and as
presently contemplated, and (ii) is in good standing as a foreign entity and is
duly authorized to do business in the jurisdictions where the Unencumbered
Borrowing Base Properties are located and in each other jurisdiction where a
failure to be so qualified in such other jurisdiction could have a materially
adverse effect on the business, assets or financial condition of such Person.
The Borrower conducts its business in a manner which enables it to qualify as a
real estate investment trust under, and to be entitled to the benefits of,
Section 856 of the Code, and has elected to be treated and is entitled to the
benefits of a real estate investment trust thereunder. The Guarantors are
Subsidiaries of the Borrower. All of the capital stock of the Borrower and its
Subsidiaries has been issued in compliance with all applicable laws.
(b) SUBSIDIARIES. Each of the Subsidiaries of the Borrower
and the Guarantors (i) is a corporation, limited partnership, limited liability
company or trust duly organized under the laws of its State of organization and
is validly existing and in good standing under the laws thereof, (ii) has all
requisite power to own its property and conduct its business as now conducted
and as presently contemplated, and (iii) is in good standing and is duly
authorized to do business in each jurisdiction where a failure to be so
qualified could have a materially adverse effect on the business, assets or
financial condition of the Borrower, the Guarantors or such Subsidiary. Excel
Legacy Holdings and Borrower have elected to treat Excel Legacy Holdings as a
taxable REIT subsidiary of Borrower pursuant to the Code.
(c) AUTHORIZATION. The execution, delivery and performance of
this Agreement and the other Loan Documents to which any of the Borrower or the
Guarantors are or are to become a party and the transactions contemplated
hereby and thereby (i) are within the authority of such Person, (ii) have been
duly authorized by all necessary proceedings on the part of such Person, (iii)
do not and will not conflict with or result in any breach or contravention of
any provision of law, statute, rule or regulation to which such Person is
subject or any judgment, order, writ, injunction, license or permit applicable
to such Person, (iv) do not and will not conflict with or constitute a default
(whether with the passage of time or the giving of notice, or both) under any
provision of the articles of incorporation, partnership agreement, declaration
of trust or other charter documents or bylaws of, or any mortgage, indenture,
agreement, contract or other instrument binding upon, such Person or any of its
properties or to which such Person is subject, (v) do not and will not result
in or require the imposition of any lien or other encumbrance on any of the
properties, assets or rights of such Person, and (vi) do not require the
approval or consent of any Person other than those already obtained and
delivered to Agent.
(d) ENFORCEABILITY. The execution and delivery of this
Agreement and the other Loan Documents to which any of the Borrower or the
Guarantors are or are to become a party are valid and legally binding
obligations of such Person enforceable in accordance with the respective terms
and provisions hereof and thereof, except as enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors' rights and except to the
extent that availability of the
38
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be brought.
Section 6.2 APPROVALS. The execution, delivery and performance by the
Borrower and the Guarantors of this Agreement and the other Loan Documents to
which such Person is a party and the transactions contemplated hereby and
thereby do not require the approval or consent of any Person or the
authorization, consent or approval of, or any license or permit issued by, or
any filing or registration with, or the giving of any notice to, any court,
department, board, commission or other governmental agency or authority other
than those already obtained.
Section 6.3 TITLE TO PROPERTIES; LEASES. The Borrower and its
Subsidiaries own all of the assets reflected in the consolidated balance sheet
of the Borrower as of the Balance Sheet Date or acquired since that date except
the minority interests reflected therein (except property and assets sold or
otherwise disposed of in the ordinary course of business since that date),
subject to no rights of others, including any mortgages, leases, conditional
sales agreements, title retention agreements, liens or other encumbrances
except Permitted Liens. Without limiting the foregoing, the Borrower and its
Subsidiaries have good and marketable fee simple title to all real property
reasonably necessary for the operation of its business in whole, free from all
liens or encumbrances of any nature whatsoever, except for Permitted Liens. The
Borrower or one of its Subsidiaries, as the case may be, is the insured under
owner's policies of title insurance covering all real property owned by it, in
each case in an amount not less than the purchase price for such real property.
Section 6.4 FINANCIAL STATEMENTS. The Borrower has furnished to the
Agent: (a) the pro forma consolidated balance sheet of the Borrower and its
Subsidiaries as of the Balance Sheet Date and their related pro forma
consolidated statements of operations and cash flows certified by an officer of
the Borrower, (b) an unaudited statement of operating income for each of the
properties within the Unencumbered Borrowing Base Properties as of the Closing
Date for the fiscal quarter ended March 31, 2001 satisfactory in form to the
Agent and certified by the chief financial officer of the Borrower, as fairly
presenting the operating income for such parcels for such periods, and (c)
certain other financial information relating to the Borrower, the Guarantors
and the Real Estate. Such balance sheet and statements have been prepared in
accordance with generally accepted accounting principles and fairly present the
financial condition of the Borrower and the Guarantors and their respective
Subsidiaries as of such dates and the results of the operations of the
Borrower, the Guarantors and their respective Subsidiaries for such periods.
There are no liabilities, contingent or otherwise, of the Borrower, the
Guarantors or any of their respective Subsidiaries involving material amounts
not disclosed in said financial statements and the related notes thereto.
Section 6.5 NO MATERIAL CHANGES. Since the Balance Sheet Date, there has
occurred no materially adverse change in the financial condition or business of
the Borrower, the Guarantors and their respective Subsidiaries taken as a whole
as shown on or reflected in the consolidated balance sheet of the Borrower, as
of the Balance Sheet Date, or its consolidated statement of income or cash
flows for the fiscal year then ended, other than changes in the ordinary course
of business that have not had any materially adverse effect either individually
or in the aggregate on the business or financial condition of such Person.
39
Section 6.6 FRANCHISES, PATENTS, COPYRIGHTS, ETC. The Borrower, the
Guarantors and their respective Subsidiaries possess all franchises, patents,
copyrights, trademarks, trade names, service marks, licenses and permits, and
rights in respect of the foregoing, adequate for the conduct of their business
substantially as now conducted without known conflict with any rights of
others.
Section 6.7 LITIGATION. Except as set forth on SCHEDULE 6.7 hereto,
there are no actions, suits, proceedings or investigations of any kind pending
or to the knowledge of such Person threatened against the Borrower, the
Guarantors or any of their respective Subsidiaries before any court, tribunal,
administrative agency or board, mediator or arbitrator (a) that, if adversely
determined, might, either in any case or in the aggregate, materially
adversely affect the properties, assets, financial condition or business of
such Person or materially impair the right of such Person to carry on business
substantially as now conducted by it, or result in any liability not
adequately covered by insurance, or for which adequate reserves are not
maintained on the balance sheet of such Person, or which question the validity
of this Agreement or any of the other Loan Documents, any action taken or to
be taken pursuant hereto or thereto or any lien or security interest created
or intended to be created pursuant hereto or thereto, or which will adversely
affect the ability of the Borrower or the Guarantors to pay and perform the
Obligations in the manner contemplated by this Agreement and the other Loan
Documents, or (b) that arise out of or relate to the Transaction. There are no
judgments outstanding against or affecting the Borrower, the Guarantors or any
of their respective Subsidiaries or any of their properties individually or in
the aggregate involving amounts in excess of $5,000,000.00.
Section 6.8 NO MATERIALLY ADVERSE CONTRACTS, ETC. None of the Borrower,
the Guarantors or any of their respective Subsidiaries is subject to any
charter, corporate or other legal restriction, or any judgment, decree, order,
rule or regulation that has or is expected in the future to have a materially
adverse effect on the business, assets or financial condition of such Person.
None of the Borrower, the Guarantors or any of their respective Subsidiaries
is a party to any mortgage, indenture, contract, agreement or other instrument
that has or is expected, in the judgment of the officers or partners of such
Person, to have any materially adverse effect on the business, assets or
financial condition of any of them.
Section 6.9 COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. None of the
Borrower, the Guarantors or any of their respective Subsidiaries is in
violation of any provision of its charter or other organizational documents,
bylaws, or any agreement or instrument to which it may be subject or by which
it or any of its properties may be bound or any decree, order, judgment,
statute, license, rule or regulation, in any of the foregoing cases in a
manner that could result in the imposition of substantial penalties or
materially and adversely affect the financial condition, properties or
business of such Person.
Section 6.10 TAX STATUS. The Borrower, the Guarantors and each of their
respective Subsidiaries (a) has made or filed all federal and state income and
all other tax returns, reports and declarations required by any jurisdiction
to which it is subject, except in such cases as a valid extension has been
obtained, (b) has paid all taxes and other governmental assessments and
charges shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and by appropriate
proceedings and (c) has set aside on its books
40
provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due by
the taxing authority of any jurisdiction, and the officers or partners of such
Person know of no basis for any such claim.
Section 6.11 NO EVENT OF DEFAULT. No Default or Event of Default has
occurred and is continuing.
Section 6.12 HOLDING COMPANY AND INVESTMENT COMPANY ACTS. None of the
Borrower, the Guarantors or any of their respective Subsidiaries is a "holding
company", or a "subsidiary company" of a "holding company", or an "affiliate"
of a "holding company", as such terms are defined in the Public Utility
Holding Company Act of 1935; nor is any of such Persons an "investment
company", or an "affiliated company" or a "principal underwriter" of an
"investment company", as such terms are defined in the Investment Company Act
of 1940.
Section 6.13 ABSENCE OF U.C.C. FINANCING STATEMENTS, ETC. Except with
respect to Permitted Liens, there is no financing statement, security
agreement, chattel mortgage, real estate mortgage or other document filed or
recorded with any filing records, registry, or other public office, that
purports to cover, affect or give notice of any present or possible future
lien on, or security interest or security title in, any property of the
Borrower, the Guarantors or their respective Subsidiaries or rights thereunder.
Section 6.14 CERTAIN TRANSACTIONS. Except as set forth in the Prospectus
and other arms-length transactions on terms that would be acceptable to an
unaffiliated entity, none of the partners, officers, trustees, directors, or
employees of the Borrower, the Guarantors or any of their respective
Subsidiaries is a party to any transaction with the Borrower or any of its
Subsidiaries (other than for services as partners, employees, officers,
trustees and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring
payments to or from any partner, officer, trustee, director or such employee
or, to the knowledge of the Borrower, any corporation, partnership, trust or
other entity in which any partner, officer, trustee, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
Section 6.15 EMPLOYEE BENEFIT PLANS. The Borrower and each ERISA
Affiliate has fulfilled its obligations under the minimum funding standards of
ERISA and the Code with respect to each Employee Benefit Plan, Multiemployer
Plan or Guaranteed Pension Plan and is in compliance in all material respects
with the presently applicable provisions of ERISA and the Code with respect to
each Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan.
Neither the Borrower nor any ERISA Affiliate has (a) sought a waiver of the
minimum funding standard under Section 412 of the Code in respect of any
Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan, (b)
failed to make any contribution or payment to any Employee Benefit Plan,
Multiemployer Plan or Guaranteed Pension Plan, or made any amendment to any
Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan, which
has resulted or could result in the imposition of a Lien or the posting of a
bond or other security under ERISA or the Code, or (c) incurred any liability
under Title IV of ERISA other
41
than a liability to the PBGC for premiums under Section 4007 of ERISA. None of
the Unencumbered Borrowing Base Properties constitutes a "plan asset" of any
Employee Plan, Multiemployer Plan or Guaranteed Pension Plan.
Section 6.16 REGULATIONS T, U AND X. No portion of any Loan is to be
used for the purpose of purchasing or carrying any "margin security" or
"margin stock" as such terms are used in Regulations T, U and X of the Board
of Governors of the Federal Reserve System, 12 C.F.R. Parts 220, 221 and 224.
Neither the Borrower nor any Guarantor is engaged, nor will it engage,
principally or as one of its important activities in the business of extending
credit for the purpose of purchasing or carrying any "margin security" or
"margin stock" as such terms are used in Regulations T, U and X of the Board
of Governors of the Federal Reserve System, 12 C.F.R. Parts 220, 221 and 224.
Section 6.17 ENVIRONMENTAL COMPLIANCE. The Borrower has taken or caused
to be taken all commercially reasonable steps to investigate the past and
present conditions and usage of the Real Estate and the operations conducted
thereon and, based upon such investigation, makes the following
representations and warranties.
(a) With respect to the Unencumbered Borrowing Base Properties,
and to the best of the Borrower's knowledge with respect to any other Real
Estate, except as set forth in SCHEDULE 6.17, none of the Borrower, the
Guarantors or their respective Subsidiaries or any operator of the Real
Estate, or any operations thereon is in violation, or alleged violation, of
any judgment, decree, order, law, license, rule or regulation pertaining to
environmental matters, including without limitation, those arising under the
Resource Conservation and Recovery Act ("RCRA"), the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 as amended
("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986 ("▇▇▇▇"),
the Federal Clean Water Act, the Federal Clean Air Act, the Toxic Substances
Control Act, or any state or local statute, regulation, ordinance, order or
decree relating to the environment (hereinafter "Environmental Laws"), which
violation involves the Unencumbered Borrowing Base Properties or other Real
Estate and would have a material adverse effect on the environment or the
business, assets or financial condition of the Borrower, the Guarantors or any
of their respective Subsidiaries.
(b) Neither the Borrower, the Guarantors nor any of their
respective Subsidiaries has received notice from any third party including,
without limitation, any federal, state or local governmental authority, (i)
that it has been identified by the United States Environmental Protection
Agency ("EPA") as a potentially responsible party under CERCLA with respect to
a site listed on the National Priorities List, 40 C.F.R. Part ▇▇▇ ▇▇▇▇▇▇▇▇ ▇
(1986); (ii) that any hazardous waste, as defined by 42 U.S.C. Section
9601(5), any hazardous substances as defined by 42 U.S.C. Section 9601(14),
any pollutant or contaminant as defined by 42 U.S.C. Section 9601(33) or any
toxic substances, oil or hazardous materials or other chemicals or substances
regulated by any Environmental Laws ("Hazardous Substances") which it has
generated, transported or disposed of have been found at any site at which a
federal, state or local agency or other third party has conducted or has
ordered that the Borrower, the Guarantors or any of their respective
Subsidiaries conduct a remedial investigation, removal or other response
action pursuant to any Environmental Law; or (iii) that it is or shall be a
named party to any
42
claim, action, cause of action, complaint, or legal or administrative
proceeding (in each case, contingent or otherwise) arising out of any third
party's incurrence of costs, expenses, losses or damages of any kind
whatsoever in connection with the release of Hazardous Substances.
(c) With respect to the Unencumbered Borrowing Base Properties,
and to the best of the Borrower's knowledge, with respect to any other Real
Estate, except as set forth in SCHEDULE 6.17, or in the case of Real Estate
acquired after the date hereof, except as may be disclosed in writing to the
Agent upon the acquisition of the same: (i) no portion of the Real Estate has
been used for the handling, processing, storage or disposal of Hazardous
Substances except in accordance with applicable Environmental Laws, and no
underground tank or other underground storage receptacle for Hazardous
Substances is located on any portion of such Real Estate except for such tanks
as are monitored and maintained in accordance with applicable Environmental
Laws; (ii) in the course of any activities conducted by the Borrower, the
Guarantors or any of their respective Subsidiaries or the operators of any of
their properties, no Hazardous Substances have been generated or are being
used on the Real Estate of such Person except in the ordinary course of
business and in accordance with applicable Environmental Laws; (iii) there has
been no past or present releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, disposing or dumping (a
"Release") or threatened Release of Hazardous Substances on, upon, into or
from such Real Estate or on, upon, into or from the other properties of the
Borrower, the Guarantors or any of their respective Subsidiaries, which
Release would have a material adverse effect on the value of any of such Real
Estate or adjacent properties or the environment; (iv) there have been no
Releases on, upon, from or into any real property in the vicinity of any of
such Real Estate which, through soil or groundwater contamination, may have
come to be located on, and which would have a material adverse effect on the
value of, such Real Estate; and (v) any Hazardous Substances that have been
generated on any of such Real Estate have been transported off-site only by
carriers having an identification number issued by the EPA or approved by a
state or local environmental regulatory authority having jurisdiction
regarding the transportation of such substance and treated or disposed of only
by treatment or disposal facilities maintaining valid permits as required
under all applicable Environmental Laws, which transporters and facilities
have been and are, to the best of the Borrower's knowledge operating in
compliance with such permits and applicable Environmental Laws. Upon the
receipt by the Agent of any such disclosure, the Agent shall promptly notify
the Banks thereof.
(d) To the best of the Borrower's knowledge and belief, neither
the Borrower, the Guarantors, their respective Subsidiaries nor any Real
Estate of such Person is subject to any applicable Environmental Law requiring
the performance of Hazardous Substances site assessments, or the removal or
remediation of Hazardous Substances, or the giving of notice to any
governmental agency or the recording or delivery to other Persons of an
environmental disclosure document or statement by virtue of the transactions
set forth herein and contemplated hereby, or as a condition to the
effectiveness of any other transactions contemplated hereby.
Section 6.18 SUBSIDIARIES. SCHEDULE 6.18 sets forth all of the
Subsidiaries of the Borrower and the Guarantors. The form and jurisdiction of
organization of each of the Subsidiaries, the Borrower's or Guarantor's and
each other Person's ownership interest therein, and the Real Estate owned by
such Subsidiary is set forth in said SCHEDULE 6.18.
43
Section 6.19 LOAN DOCUMENTS AND THE GUARANTORS. All of the
representations and warranties of the Borrower and the Guarantors made in this
Agreement and the other Loan Documents or any document or instrument delivered
to the Agent or the Banks pursuant to or in connection with any of such Loan
Documents are true and correct in all material respects, and neither the
Borrower nor the Guarantors has failed to disclose such information as is
necessary to make such representations and warranties not misleading. There is
no material fact or circumstance that has not been disclosed to the Agent and
the Banks, and the written information, reports and other papers and data with
respect to the Borrower, any Subsidiary, any Guarantor or the Unencumbered
Borrowing Base Properties (other than projections and estimates) furnished to
the Agent or the Banks in connection with this Agreement or the obtaining of
the Commitments of the Banks hereunder was, at the time so furnished, complete
and correct in all material respects, or has been subsequently supplemented by
other written information, reports or other papers or data, to the extent
necessary to give in all material respects a true and accurate knowledge of
the subject matter in all material respects; provided that such representation
shall not apply to (a) the accuracy of any engineering and environmental
reports prepared by third parties or legal conclusions or analysis provided by
the Borrower's and/or Guarantors' counsel (although the Borrower and the
Guarantors have no reason to believe that the Agent and the Banks may not rely
on the accuracy thereof) or (b) budgets, projections and other forward-looking
speculative information prepared in good faith by the Borrower (except to the
extent the related assumptions were when made manifestly unreasonable).
Section 6.20 PROPERTY. All of the Borrower's, the Guarantors' and their
respective Subsidiaries' properties are in good repair and condition, subject
to ordinary wear and tear, other than with respect to deferred maintenance
existing as of the date of acquisition of such property as permitted in this
Section 6.20. The Borrower further has completed or caused to be completed an
appropriate investigation of the environmental condition of each such property
as of the later of the date of the Borrower's, the Guarantors' or such
Subsidiaries' purchase thereof or the date upon which such property was last
security for Indebtedness of the Borrower, the Guarantors or such Subsidiary,
including preparation of a "Phase I" report and, if appropriate, a "Phase II"
report, in each case prepared by a recognized environmental engineer in
accordance with customary standards which discloses that such property is not
in violation of the representations and covenants set forth in this Agreement,
unless such violation has been disclosed in writing to the Agent and
remediation actions satisfactory to Agent are being taken. There are no unpaid
or outstanding real estate or other taxes or assessments on or against any
property of the Borrower, the Guarantors or any of their respective
Subsidiaries which are payable by such Person (except only real estate or
other taxes or assessments, that are not yet due and payable). Except as set
forth in SCHEDULE 6.20 hereto, there are no pending eminent domain proceedings
against any property of the Borrower, the Guarantors or their respective
Subsidiaries or any part thereof, and, to the knowledge of the Borrower, no
such proceedings are presently threatened or contemplated by any taking
authority which may individually or in the aggregate have any materially
adverse effect on the business or financial condition of the Borrower or the
Guarantors. None of the property of Borrower, the Guarantors or their
respective Subsidiaries is now damaged or injured as a result of any fire,
explosion, accident, flood or other casualty in any manner which individually
or in the aggregate would have any materially adverse effect on the business
or financial condition of the Borrower or the Guarantors.
44
Section 6.21 BROKERS. Neither the Borrower nor any of its Subsidiaries
has engaged or otherwise dealt with any broker, finder or similar entity in
connection with this Agreement or the Loans contemplated hereunder.
Section 6.22 OTHER DEBT; MATERIAL AGREEMENTS. None of the Borrower, the
Guarantors or any of their respective Subsidiaries is in default in the
payment of any other Indebtedness or under any agreement, mortgage, deed of
trust, security agreement, financing agreement, indenture or lease to which
any of them is a party. The Borrower is not a party to or bound by any
agreement, instrument or indenture that may require the subordination in right
or time of payment of any of the Obligations to any other indebtedness or
obligation of the Borrower. SCHEDULE 6.22 hereto describes all agreements,
mortgages, deeds of trust, financing agreements or other material agreements
binding upon the Borrower and each Subsidiary or their respective properties
and entered into by the Borrower and/or such Subsidiary as of the date of this
Agreement with respect to any Indebtedness of the Borrower or any Subsidiary
in an amount equal to or greater than $1,000,000.00 and all other material
agreements or contemplated transactions of the Borrower and its Subsidiaries.
Section 6.23 SOLVENCY. As of the Closing Date and after giving effect to
the transactions contemplated by this Agreement and the other Loan Documents,
including all of the Loans made or to be made hereunder, neither the Borrower
nor any Guarantor is insolvent on a balance sheet basis such that the sum of
such Person's assets exceeds the sum of such Person's liabilities, the
Borrower and each Guarantor is able to pay its debts as they become due, and
the Borrower and each Guarantor has sufficient capital to carry on its
business.
Section 6.24 TRANSACTION IN BEST INTERESTS OF BORROWER; CONSIDERATION.
The transactions evidenced by this Agreement and the other Loan Documents are
in the best interests of the Borrower, each Guarantor, their respective
Subsidiaries and the creditors of such Persons. The direct and indirect
benefits to inure to the Borrower, the Guarantors and their respective
Subsidiaries pursuant to this Agreement and the other Loan Documents
constitute substantially more than "reasonably equivalent value" (as such term
is used in Section 548 of the Bankruptcy Code) and "valuable consideration,"
"fair value," and "fair consideration," (as such terms are used in any
applicable state fraudulent conveyance law), in exchange for the benefits to
be provided by the Borrower, the Guarantors and their respective Subsidiaries
pursuant to this Agreement and the other Loan Documents, and but for the
willingness of each Guarantor to guaranty the Loan, the Borrower would be
unable to obtain the financing contemplated hereunder which financing will
enable the Borrower, each Guarantor and their respective Subsidiaries to have
available financing to conduct and expand their business.
Section 6.25 THE OWNERSHIP OF GUARANTORS. Borrower is the sole
shareholder of Excel Legacy Corporation. Excel Legacy Corporation is the sole
shareholder of Excel Legacy Holdings.
Section 6.26 CONTRIBUTION AGREEMENT. The Borrower and the Guarantors
have executed and delivered the Contribution Agreement, and the Contribution
Agreement constitutes the valid and legally binding obligations of such
parties enforceable against them in accordance with the terms and provisions
thereof, except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting generally
the enforcement of
45
creditors' rights and except to the extent that availability of the remedy of
specific performance or injunctive relief is subject to the discretion of the
court before which any proceeding therefor may be brought.
Section 7. AFFIRMATIVE COVENANTS OF THE BORROWER
The Borrower covenants and agrees that, so long as any Loan, Note or
Letter of Credit is outstanding or any Bank has any obligation to make any
Loans or issue Letters of Credit:
Section 7.1 PUNCTUAL PAYMENT. The Borrower will duly and punctually pay
or cause to be paid the principal and interest on the Loans and all interest
and fees provided for in this Agreement, all in accordance with the terms of
this Agreement and the Notes as well as all other sums owing pursuant to the
Loan Documents.
Section 7.2 MAINTENANCE OF OFFICE. The Borrower will maintain its chief
executive office at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or at such other place in the United States of America as the
Borrower shall designate upon prior written notice to the Agent and the Banks,
where notices, presentations and demands to or upon the Borrower in respect of
the Loan Documents may be given or made.
Section 7.3 RECORDS AND ACCOUNTS. The Borrower will (a) keep, and cause
each of its Subsidiaries to keep, true and accurate records and books of
account in which full, true and correct entries will be made in accordance
with generally accepted accounting principles and (b) maintain adequate
accounts for all taxes (including income taxes), depreciation, depletion and
amortization of its properties and the properties of its Subsidiaries,
contingencies and other reserves. Neither the Borrower nor its Subsidiaries
shall, without the prior written consent of the Majority Banks, make any
material change to the accounting procedures used by such Person in preparing
the financial statements and other information described Section 6.4. The
Borrower shall not, without the prior written consent of the Majority Banks,
change its fiscal year.
Section 7.4 FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The
Borrower will deliver or cause to be delivered to the Agent with sufficient
copies for delivery to each of the Banks:
(a) as soon as practicable, but in any event not later than 90
days after the end of each fiscal year of the Borrower, the audited
consolidated balance sheet of the Borrower and its Subsidiaries at the end of
such year, and the related audited consolidated statements of income, changes
in shareholder's equity and cash flows for such year, each setting forth in
comparative form the figures for the previous fiscal year and all such
statements to be in reasonable detail, prepared in accordance with generally
accepted accounting principles, and accompanied by an auditor's report
prepared without qualification by Price Waterhouse Coopers, Ernst & Young or
by another "Big Five" accounting firm, the Form 10-K filed with the SEC
(unless the SEC has approved an extension, in which event the Borrower will
deliver to the Agent and each of the Banks a copy of the Form 10-K
simultaneously with delivery to the SEC), and any other information the Banks
may need to complete a financial analysis of the Borrower and its
Subsidiaries, together with a written statement from such accountants to the
effect that they have read a copy of this Agreement and the Guaranty, and
that, in making the examination
46
necessary to said certification, they have obtained no knowledge of any
Default or Event of Default, or, if such accountants shall have obtained
knowledge of any then existing Default or Event of Default they shall disclose
in such statement any such Default or Event of Default; PROVIDED that such
accountants shall not be liable to the Agent or the Banks for failure to
obtain knowledge of any Default or Event of Default;
(b) as soon as practicable, but in any event not later than 45
days after the end of each of the first three fiscal quarters of the Borrower,
(i) copies of Form 10-Q filed with the SEC, or in the event that the Borrower
is not required to file a Form 10-Q, then (ii) copies of the unaudited
consolidated balance sheet of the Borrower and its Subsidiaries as at the end
of such quarter, and the related unaudited consolidated statements of income,
changes in shareholder's equity and cash flows for the portion of the
Borrower's fiscal year then elapsed, all in reasonable detail and prepared in
accordance with generally accepted accounting principles, together with a
certification by the principal financial or accounting officer of the Borrower
that the information contained in such financial statements fairly presents
the financial position of the Borrower and its Subsidiaries on the date
thereof (subject to year-end adjustments);
(c) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above and within thirty (30) days of
the filing by the Borrower of a Form 8-K with the SEC, or the filing with the
SEC of any other document amending any other filing made by the Borrower, a
statement (a "Compliance Certificate") certified by the principal financial or
accounting officer of the Borrower in the form of EXHIBIT E hereto (or in such
other form as the Agent may approve from time to time) setting forth in
reasonable detail computations evidencing compliance with the covenants
contained in Section 9 and the other covenants described therein, and (if
applicable) reconciliations to reflect changes in generally accepted
accounting principles since the Balance Sheet Date. The Compliance Certificate
shall also be accompanied by the following:
(i) a Borrowing Base Certificate in the form attached to
the Compliance Certificate pursuant to which the Borrower shall calculate the
amount of the Borrowing Base as of the end of the immediately preceding fiscal
quarter of the Borrower. All income, expense and value associated with
Unencumbered Borrowing Base Properties disposed of during any quarter will be
eliminated from calculations, where applicable. The Compliance Certificate
shall be accompanied by copies of the statements of Net Operating Income for
such fiscal quarter for each of the Unencumbered Borrowing Base Properties,
prepared on a basis consistent with the statements furnished to the Agent
prior to the date hereof and otherwise in form and substance reasonably
satisfactory to the Agent, together with a certification by the chief
financial officer or chief accounting officer of Borrower that the information
contained in such statement fairly presents the Net Operating Income of the
Unencumbered Borrowing Base Properties for such periods;
(ii) a statement of Consolidated EBITDA for such fiscal
quarter for the Borrower and its Subsidiaries, prepared on a basis consistent
with the statement furnished pursuant to Section 6.4, together with a
certification by the chief financial or chief accounting officer of the
Borrower that the information contained in such statement fairly presents the
Consolidated EBITDA of the Borrower and its Subsidiaries for such period;
47
(iii) a consolidated operating statement and a summary
Rent Roll with respect to the Unencumbered Borrowing Base Properties in a form
reasonably satisfactory to the Agent;
(iv) a list setting forth the following information with
respect to each new Subsidiary of the Borrower: (A) the name and structure of
the Subsidiary, (B) a description of the property owned by such Subsidiary,
and (C) such other information as the Agent may reasonably request;
(v) a statement (A) listing the Real Estate owned by the
Borrower and its Subsidiaries (or in which the Borrower or its Subsidiaries
owns an interest) and stating the location thereof, the date acquired, the
acquisition cost, its Net Rentable Area, its occupancy level for the quarter
most recently ended, its Net Operating Income for rolling two (2) quarters,
and major tenants and percentage of Net Rentable Area occupied, (B) listing
the Indebtedness of the Borrower and its Subsidiaries (excluding Indebtedness
of the type described in Section 8.1(b)-(e)), which statement shall include,
without limitation, a statement of the current outstanding amount of such
Indebtedness and unfunded amounts available under any such facilities, the
holder thereof, the maturity date and any extension options, the interest
rate, the collateral provided for such Indebtedness and whether such
Indebtedness is recourse or non-recourse, and (C) listing the properties of
the Borrower and its Subsidiaries which are under "development" (as used in
Section 8.9) and providing a brief summary of the status of such development;
and
(vi) a list of the Unencumbered Borrowing Base Properties
and the certification of the chief financial or chief accounting officer of
the Borrower that the Unencumbered Borrowing Base Properties comply with the
terms of Sections 6.17, 6.20 and 7.13;
(d) concurrently with the delivery of the financial statements
described in subsection (b) above, a certificate signed by the President or
Chief Financial Officer of the Borrower to the effect that, having read this
Agreement, and based upon an examination which they deem sufficient to enable
them to make an informed statement, there does not exist any Default or Event
of Default, or if such Default or Event of Default has occurred, specifying
the facts with respect thereto;
(e) concurrently with the delivery of the financial statement
referred to in Section 7.4(a), a certification that Section 7.8 has been
satisfied with respect to the Unencumbered Borrowing Base Properties;
(f) contemporaneously with the filing or mailing thereof, copies
of all material of a financial nature filed with the SEC or sent to the
stockholders of the Borrower;
(g) promptly after they are filed with the Internal Revenue
Service, copies of all annual federal income tax returns and amendments
thereto of each of the Borrower and Guarantors;
(h) not later than five (5) Business Days after the Borrower
receives notice of the same from any Rating Agency or otherwise learns of the
same, notice of the issuance of any change in the Rating by any Rating Agency
in respect of any debt of the Borrower (including
48
any change in a Rating), together with the details thereof, and of any
announcement by such Rating Agency that any such Rating is "under review" or
that any such Rating has been placed on a watch list or that any similar
action has been taken by such Rating Agency (collectively a "Rating Notice");
(i) as soon as practicable, and, in any event, within sixty (60)
days after each June 30 and December 31, projected consolidated cash flows for
Borrower and its Subsidiaries for the current fiscal quarter and the
immediately following four (4) fiscal quarters;
(j) upon the request of Agent following the occurrence of a
material capital event affecting Borrower, projected compliance with the
covenants set forth in Sections 7.13, 8.1, 8.2, 8.3, 8.7, 8.9 and Article 9;
and
(k) from time to time such other financial data and information
in the possession of the Borrower or its respective Subsidiaries (including
without limitation auditors' management letters, evidence of payment of taxes,
property inspection and environmental reports and information as to zoning and
other legal and regulatory changes affecting any of such Persons) as the Agent
may reasonably request.
Section 7.5 NOTICES.
(a) DEFAULTS. The Borrower will promptly notify the Agent in
writing of the occurrence of any Default or Event of Default. If any Person
shall give any notice or take any other action in respect of a claimed default
(whether or not constituting an Event of Default) under this Agreement or
under any note, evidence of indebtedness, indenture or other obligation to
which or with respect to which the Borrower, the Guarantors or any of their
respective Subsidiaries is a party or obligor, whether as principal or surety,
and such default would permit the holder of such note or obligation or other
evidence of indebtedness to accelerate the maturity thereof or the existence
of which claimed default might become an Event of Default under Section
12.1(g), the Borrower shall forthwith give written notice thereof to the Agent
and each of the Banks, describing the notice or action and the nature of the
claimed default.
(b) ENVIRONMENTAL EVENTS. The Borrower will promptly give notice
to the Agent (i) upon the Borrower or the Guarantors obtaining knowledge of
any potential or known Release, or threat of Release, of any Hazardous
Substances at or from any Real Estate; (ii) of any violation of any
Environmental Law that the Borrower, the Guarantors or any of their respective
Subsidiaries reports in writing or is reportable by such Person in writing (or
for which any written report supplemental to any oral report is made) to any
federal, state or local environmental agency; and (iii) upon becoming aware
thereof, of any inquiry, proceeding, investigation, or other action, including
a notice from any agency of potential environmental liability, of any federal,
state or local environmental agency or board, that in either case involves any
Real Estate or has the potential to materially affect the assets, liabilities,
financial conditions or operations of such Person.
(c) NOTICE OF LITIGATION AND JUDGMENTS. The Borrower will give
notice to the Agent in writing within 15 days of becoming aware of any
litigation or proceedings threatened in
49
writing or any pending litigation and proceedings affecting the Borrower, the
Guarantors or any of their respective Subsidiaries or to which any of such
Persons is or is to become a party involving an uninsured claim against such
Person that could reasonably be expected to have a materially adverse effect
on the Borrower or the Guarantors and stating the nature and status of such
litigation or proceedings. The Borrower will give notice to the Agent, in
writing, in form and detail satisfactory to the Agent and each of the Banks,
within ten days of any judgment not covered by insurance, whether final or
otherwise, against the Borrower, the Guarantors, any of their respective
Subsidiaries in an amount individually or in the aggregate in excess of
$5,000,000.00.
(d) NOTICE OF PROPOSED SALES, ENCUMBRANCES, REFINANCE OR
TRANSFER. The Borrower will give notice to the Agent of any proposed or
completed sale, encumbrance, refinance or transfer of any Unencumbered
Borrowing Base Property or any other Investment within any fiscal quarter of
the Borrower, such notice to be submitted together with the Compliance
Certificate provided or required to be provided to the Banks under Section 7.4
with respect to such fiscal quarter. For the purposes hereof, a proposed sale
shall mean a sale with respect to which a letter of intent or contract has
been executed. The Compliance Certificate shall with respect to any proposed
or completed sale, encumbrance, refinance or transfer be adjusted in the best
good-faith estimate of the Borrower to give effect to such sale, encumbrance,
refinance or transfer and demonstrate that no Default or Event of Default with
respect to the covenants referred to therein shall exist after giving effect
to such sale, encumbrance, refinance or transfer. Notwithstanding the
foregoing, in the event of any sale, encumbrance, refinance or transfer of any
assets of Borrower or its Subsidiaries involving individually or in a series
of related transactions an aggregate amount in excess of $50,000,000.00, the
Borrower shall promptly give notice to the Agent of such transaction, which
notice shall be accompanied by a certification of the chief financial officer
of the Borrower that no Default or Event of Default shall exist after giving
affect to such event.
(e) ERISA. The Borrower will give notice to the Agent within
five (5) Business Days after the Borrower or any ERISA Affiliate (i) gives or
is required to give notice to the PBGC of any "reportable event" (as defined
in Section 4043 of ERISA) with respect to any Guaranteed Pension Plan,
Multiemployer Plan or Employee Benefit Plan, or knows that the plan
administrator of any such plan has given or is required to give notice of any
such reportable event; (ii) gives a copy of any notice of complete or partial
withdrawal liability under Title IV of ERISA; or (iii) receives any notice
from the PBGC under Title IV or ERISA of an intent to terminate or appoint a
trustee to administer any such plan.
(f) NOTIFICATION OF BANKS. Promptly after receiving any notice
under this Section 7.5, the Agent will forward a copy thereof to each of the
Banks, together with copies of any certificates or other written information
that accompanied such notice.
Section 7.6 EXISTENCE; MAINTENANCE OF PROPERTIES.
(a) The Borrower will do or cause to be done all things
necessary to preserve and keep in full force and effect its existence as a
Maryland corporation. The Borrower will cause each of its Subsidiaries to do
or cause to be done all things necessary to preserve and keep
50
in full force and effect their respective legal existence. The Borrower will
do or cause to be done all things necessary to preserve and keep in full force
all of its rights and franchises and those of its Subsidiaries. Borrower shall
at all times comply with all requirements and applicable laws and regulations
necessary to maintain REIT Status, and shall continue to elect to receive REIT
Status. The Borrower will, and will cause each of its Subsidiaries to,
continue to engage primarily in the businesses now conducted by it and in
related businesses.
(b) Irrespective of whether proceeds of the Loans are available
for such purpose, the Borrower (i) will cause all of its properties and those
of the Guarantors and their respective Subsidiaries used or useful in the
conduct of its business or the business of such Persons to be maintained and
kept in good condition, repair and working order (ordinary wear and tear
excepted) and supplied with all necessary equipment, and (ii) will cause to be
made all necessary repairs, renewals, replacements, betterments and
improvements thereof in all cases in which the failure so to do would have a
material adverse effect on the condition of its properties or on the financial
condition, assets or operations of the Borrower, the Guarantors or their
respective Subsidiaries.
(c) The common stock of the Borrower shall at all times be
listed for trading and be traded on the American Stock Exchange or the New
York Stock Exchange.
(d) In the event that Borrower obtains a Qualifying Rating for
the purposes of determining the Applicable Margin, Borrower shall at all times
thereafter pay such monitoring, surveillance or similar fees as may be
required by the applicable Rating Agency to continue to monitor the Borrower,
and the Borrower shall upon the request of Agent provide evidence to Agent of
the payment thereof.
Section 7.7 INSURANCE. The Borrower will, at its expense, procure and
maintain or cause to be procured and maintained insurance covering the
Borrower, the Guarantors, their respective Subsidiaries and their respective
properties in such amounts and against such risks and casualties as are
customary for properties of similar character and location, due regard being
given to the type of improvements thereon, their construction, location, use
and occupancy.
Section 7.8 TAXES. The Borrower, the Guarantors and their respective
Subsidiaries will duly pay and discharge, or cause to be paid and discharged,
before the same shall become overdue, all taxes, assessments and other
governmental charges imposed upon it and upon the Real Estate, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by
law become a lien or charge upon any of its property; PROVIDED that any such
tax, assessment, charge, levy or claim need not be paid if the validity or
amount thereof shall currently be contested in good faith by appropriate
proceedings and if such Person shall have set aside on its books adequate
reserves with respect thereto; and PROVIDED, FURTHER, that forthwith upon the
commencement of proceedings to foreclose any lien that may have attached as
security therefor, such Person either (i) will provide a bond issued by a
surety reasonably acceptable to the Agent and sufficient to stay all such
proceedings or (ii) if no such bond is provided, will pay each such tax,
assessment, charge, levy or claim.
51
Section 7.9 INSPECTION OF PROPERTIES AND BOOKS. The Borrower shall
permit the Banks, through the Agent or any representative designated by the
Agent, at the Bank's expense to visit and inspect any of the properties of the
Borrower or any of its Subsidiaries, to examine the books of account of the
Borrower and its Subsidiaries (and to make copies thereof and extracts
therefrom) and to discuss the affairs, finances and accounts of the Borrower
and its Subsidiaries with, and to be advised as to the same by, its officers,
all at such reasonable times and intervals as the Agent or any Bank may
reasonably request; provided that if an Event of Default shall have occurred,
Borrower shall be responsible for the expense of such visits and inspections.
The Banks shall use good faith efforts to coordinate such visits and
inspections so as to minimize the interference with and disruption to the
Borrower's normal business operations.
Section 7.10 COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. The
Borrower will comply with, and will cause the Guarantors and each of their
respective Subsidiaries to comply in all respects with (i) all applicable
laws, ordinances, regulations and requirements now or hereafter in effect
wherever its business is conducted, including all Environmental Laws, (ii) the
provisions of its corporate charter, partnership agreement or declaration of
trust, as the case may be, and other charter documents and bylaws, (iii) all
mortgages, indentures, contracts, agreements and instruments to which it is a
party or by which it or any of its properties may be bound, (iv) all
applicable decrees, orders, and judgments, and (v) all licenses and permits
required by applicable laws and regulations for the conduct of its business or
the ownership, use or operation of its properties. If at any time while any
Loan, Note or Letter of Credit is outstanding or the Banks have any obligation
to make Loans or issue Letters of Credit hereunder, any authorization,
consent, approval, permit or license from any officer, agency or
instrumentality of any government shall become necessary or required in order
that the Borrower may fulfill any of its obligations hereunder, the Borrower
will immediately take or cause to be taken all steps necessary to obtain such
authorization, consent, approval, permit or license and furnish the Agent and
the Banks with evidence thereof.
Section 7.11 FURTHER ASSURANCES. The Borrower will cooperate with, and
will cause each of the Guarantors and their respective Subsidiaries to
cooperate with the Agent and the Banks and execute such further instruments
and documents as the Banks or the Agent shall reasonably request to carry out
to their satisfaction the transactions contemplated by this Agreement and the
other Loan Documents.
Section 7.12 MANAGEMENT; BUSINESS OPERATIONS. The Borrower shall cause
all Unencumbered Borrowing Base Properties at all times to be managed by the
Borrower and no change shall occur in such management without the prior
written approval of the Agent. The Borrower, the Guarantors and their
respective Subsidiaries shall operate their respective businesses as described
in the Prospectus and in compliance with the terms and conditions of this
Agreement and the Loan Documents. The Borrower shall at all time comply with
all requirements of applicable laws necessary to maintain REIT Status on a
self-directed and self-maintained basis, and shall elect to be treated as a
real estate investment trust under the Code.
Section 7.13 UNENCUMBERED BORROWING BASE PROPERTIES.
52
(a) The Unencumbered Borrowing Base Properties shall at all
times satisfy all of the following conditions:
(i) each of the Unencumbered Borrowing Base Properties
shall be owned 100% by the Borrower or, subject to the terms of this
Agreement, a Guarantor free and clear of all Liens other than the Liens
permitted in Section 8.2(i), (iii) and (v);
(ii) to the best of the Borrower's knowledge and belief,
none of the Unencumbered Borrowing Base Properties shall have any material
title, survey, environmental or other defects that would give rise to a
materially adverse effect as to the value, use of or ability to sell or
refinance such property;
(iii) prior to inclusion of Real Estate within the
Unencumbered Borrowing Base Property, Borrower shall have delivered to Agent a
physical description of the Real Estate and current rent rolls, operating
statements and an operating and capital expenditure budget for such Real
Estate reasonably satisfactory to the Agent;
(iv) each of the Unencumbered Borrowing Base Properties
shall consist solely of Real Estate (A) which is located within the contiguous
48 states of the continental United States, (B) which is a Retail Center
approved by the Majority Banks and is consistent with Borrower's business
strategy on the date of this Agreement or, subject to the approval of the
Majority Banks, an income producing operating property that is utilized
principally for office or self-storage uses, (C) which contains improvements
that are in operating condition and available for occupancy, and (D) with
respect to which valid certificates of occupancy or the equivalent for all
buildings thereon have been issued and are in full force and effect; and
(v) the number of properties within the Unencumbered
Borrowing Base Properties shall not be less than ten (10), and the Majority
Banks shall be required to provide their prior approval of the removal of any
property as an Unencumbered Borrowing Base Property;
(vi) each Unencumbered Borrowing Base Property shall
consist solely of Real Estate which has an occupancy level of tenants in
possession (but not on a holdover or month-to-month basis) and operating and
which are no more than thirty (30) days in default of at least eighty-five
percent (85%) of the Net Rentable Area within such Unencumbered Borrowing Base
Property for the previous fiscal quarter of the Borrower based on bona fide
arms-length tenant leases requiring current rental payments and which are in
full force and effect (provided, however, that in the event that the occupancy
level of a Property that has been accepted as an Unencumbered Borrowing Base
Property shall fall below such threshold, such property shall not be required
to be removed as an Unencumbered Borrowing Base Property in the event that the
occupancy level satisfies the foregoing test within six (6) months after the
close of the fiscal quarter in which such property first fell below such
threshold); and
(vii) no more than twenty percent (20%) of the Borrowing
Base (based upon the Asset Value of the Unencumbered Borrowing Base
Properties), other than the
53
Unencumbered Borrowing Base Property commonly known as Pentagon City, shall be
located in any single metropolitan area;
(viii) no one office or retail tenant shall comprise more
than ten percent (10%) (twenty percent (20%) if the tenant has a Rating of
BBB- or better from S&P or Baa3 or better from ▇▇▇▇▇'▇) of the Net Operating
Income generated by the Unencumbered Borrowing Base Properties within the
Borrowing Base;
(ix) no Unencumbered Borrowing Base Property (based upon
the Asset Value of the Unencumbered Borrowing Base Properties), other than the
Unencumbered Borrowing Base Property commonly known as Pentagon City, shall
comprise more than fifteen percent (15%) of the Borrowing Base; and
(x) the Unencumbered Borrowing Base Properties (based
upon the Asset Value of the Unencumbered Borrowing Base Properties) owned by
the Guarantors shall not exceed ten percent (10%) of the Borrowing Base.
(b) In the event that all or any material portion of a property
within the Unencumbered Borrowing Base Properties shall be damaged or taken by
condemnation, then such property shall no longer be a part of the Unencumbered
Borrowing Base Properties unless and until any damage to such Real Estate is
repaired or restored, such Real Estate becomes fully operational and the Agent
shall receive evidence satisfactory to the Agent of the value and Net
Operating Income of such Real Estate following such repair or restoration.
(c) In the event that any Subsidiary of the Borrower that is not
a Guarantor owns Real Estate which would otherwise qualify as an Unencumbered
Borrowing Base Property and the Borrower desires for the same to become an
Unencumbered Borrowing Base Property, then such property may become an
Unencumbered Borrowing Base Property but only in the event that all of the
terms and conditions of this Section 7.13(c) are satisfied:
(i) Such Subsidiary shall be an Additional Guarantor;
(ii) The organizational agreements of such Subsidiary or
such other resolutions or consents satisfactory to Agent shall specifically
authorize such Subsidiary to guaranty the Obligations and to pledge the assets
of such Subsidiary as security for the Obligations and the Borrower shall
certify to the Agent that applicable law does not preclude such Subsidiary
from executing such guaranty or pledging its assets to secure the Obligations;
(iii) All covenants, agreements, and representations in
the Loan Documents herein of the Borrower and the Guarantors and their
Subsidiaries shall be true and correct with respect to such Additional
Guarantor;
(iv) No Default or Event of Default shall exist or might
exist in the event that such Subsidiary becomes an Additional Guarantor or
acquires such assets; and
(v) The Real Estate assets acquired or owned by such
Additional Guarantor shall qualify as Unencumbered Borrowing Base Properties
hereunder, and such assets,
54
when taken together with the other Real Estate assets owned by the Guarantors,
shall not exceed ten percent (10%) of the total Asset Value of the
Unencumbered Borrowing Base Properties.
(d) Notwithstanding the terms of Section 7.13(a)(iv)(B), the
Real Estate commonly known as Maple Shade may be admitted as an Unencumbered
Borrowing Base Property without the approval of the Majority Banks at such
time as ▇▇▇▇'▇ Home Centers, Inc. has executed a lease for all of the vacant
improvements thereon and commenced the payment of rent thereunder, and
provided that the other provisions of this Section 7.13 are satisfied.
Section 7.14 LIMITING AGREEMENTS.
(a) Neither Borrower, any Guarantor nor any of their respective
Subsidiaries shall enter into, any agreement, instrument or transaction which
has or may have the effect of prohibiting or limiting Borrower's or any
Guarantor's ability to pledge to Agent the Unencumbered Borrowing Base
Properties which are owned by the Borrower or such Guarantor as security for
the Loans. Borrower shall take, and shall cause the Guarantors and their
respective Subsidiaries to take, such actions as are necessary to preserve the
right and ability of Borrower and the Guarantors to pledge the Unencumbered
Borrowing Base Properties as security for the Loans without any such pledge
after the date hereof causing or permitting the acceleration (after the giving
of notice or the passage of time, or otherwise) of any other Indebtedness of
Borrower, the Guarantors or any of their respective Subsidiaries.
(b) Borrower shall, upon demand, provide to the Agent such
evidence as the Agent may reasonably require to evidence compliance with this
Section 7.14, which evidence shall include, without limitation, copies of any
agreements or instruments which would in any way restrict or limit the
Borrower's or any Guarantor's ability to pledge assets as security for
Indebtedness, or which provide for the occurrence of a default (after the
giving of notice or the passage of time, or otherwise) if assets are pledged
in the future as security for Indebtedness of the Borrower or any of its
Subsidiaries.
Section 7.15 DISTRIBUTIONS OF INCOME TO THE BORROWER. The Borrower shall
cause all of its Subsidiaries to promptly distribute to the Borrower (but not
less frequently than once each fiscal quarter of the Borrower, unless
otherwise approved by the Agent), whether in the form of dividends,
distributions or otherwise, all profits, proceeds or other income relating to
or arising from its Subsidiaries' use, operation, financing, refinancing, sale
or other disposition of their respective assets and properties after (a) the
payment by each Subsidiary of its Debt Service and operating expenses for such
quarter and (b) the establishment of reasonable reserves for the payment of
operating expenses not paid on at least a quarterly basis and capital
improvements to be made to such Subsidiary's assets and properties approved by
such Subsidiary in the ordinary course of business consistent with its past
practices; provided, however, that Excel Legacy Holdings shall be permitted,
subject to Section 8.3(m), to reinvest such amounts without distributing the
same to Borrower.
Section 7.16 MORE RESTRICTIVE AGREEMENTS. Without limiting the terms of
Section 8.1, should the Borrower or any Guarantor enter into or modify any
agreements or documents pertaining to any existing or future Indebtedness,
Debt Offering or Equity Offering, which agreements or
55
documents include covenants (whether affirmative or negative), warranties,
representations, defaults or events of default (or any other provision which
may have the same practical effect as any of the foregoing) which are
individually or in the aggregate more restrictive against the Borrower, any
Guarantor or their respective Subsidiaries than those set forth herein or in
any of the other Loan Documents, the Borrower shall promptly notify the Agent
and, if requested by Majority Banks, the Borrower, the Agent and the Majority
Banks shall (and, if applicable, the Borrower shall cause the Guarantors to)
promptly amend this Agreement and the other Loan Documents to include some or
all or such more restrictive provisions as determined by the Majority Banks in
their sole discretion.
Section 7.17 PLAN ASSETS. The Borrower will do, or cause to be done, all
things necessary to ensure that none of the Unencumbered Borrowing Base
Properties will be deemed to be Plan Assets at any time.
Section 8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER
The Borrower covenants and agrees that, so long as any Loan, Note or
Letter of Credit is outstanding or any of the Banks has any obligation to make
any Loans or issue Letters of Credit:
Section 8.1 RESTRICTIONS ON INDEBTEDNESS. The Borrower will not, and
will not permit any of its Subsidiaries to, create, incur, assume, guarantee
or be or remain liable, contingently or otherwise, with respect to any
Indebtedness other than:
(a) Indebtedness to the Banks arising under any of the Loan
Documents;
(b) current liabilities of the Borrower and its Subsidiaries
incurred in the ordinary course of business but not incurred through (i) the
borrowing of money, or (ii) the obtaining of credit except for credit on an
open account basis customarily extended and in fact extended in connection
with normal purchases of goods and services;
(c) Indebtedness in respect of taxes, assessments, governmental
charges or levies and claims for labor, materials and supplies to the extent
that payment therefor shall not at the time be required to be made in
accordance with the provisions of Section 7.8;
(d) Indebtedness in respect of judgments or awards only to the
extent, for the period and for an amount not resulting in a Default;
(e) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the ordinary
course of business;
(f) Indebtedness in respect of reverse repurchase agreements
having a term of not more than 180 days with respect to Investments described
in Section 8.3(d) or (e);
(g) subject to the provisions of Section 8.1(h) and Section 9,
secured Indebtedness of the Borrower and its Subsidiaries in an aggregate
outstanding principal amount not exceeding forty percent (40%) of the
Borrower's Adjusted Consolidated Total Assets;
56
(h) subject to the provisions of Section 9, secured or unsecured
recourse Indebtedness, provided that (i) the aggregate outstanding principal
amount of such Indebtedness (excluding the Obligations) shall not exceed
fifteen percent (15%) of the Borrower's Adjusted Consolidated Total Assets,
and (ii) with respect to any Indebtedness of the Borrower and its Subsidiaries
of the type described in clauses (a) and (b) of the definition of
"Indebtedness" that is not traditional project-secured financing (other than
existing Indebtedness of the Borrower and its Subsidiaries described on
SCHEDULE 8.1(h) hereto) at the time such Indebtedness is issued the scheduled
maturity date of such Indebtedness is not sooner than 180 days after the
Maturity Date, and PROVIDED FURTHER that neither the Borrower nor any of its
Subsidiaries shall incur any of the Indebtedness described in this Section
8.1(h) that is not traditional project-secured financing unless it shall have
provided to the Banks prior written notice of the proposed issuance of such
Indebtedness, a statement that no Default or Event of Default exists and a
certificate that the Borrower will be in compliance with its covenants
referred to therein after giving effect to such incurrence; and PROVIDED
FURTHER that the aggregate outstanding principal amount of any unsecured debt
of Borrower and its Subsidiaries otherwise permitted pursuant to this Section
8.1(h) shall not exceed $50,000,000.00. Notwithstanding anything herein to the
contrary, none of the Indebtedness described in this Section 8.1(h) shall have
any of the Unencumbered Borrowing Base Properties as a borrowing base,
unencumbered asset pool or any similar form of credit support for such
Indebtedness.
Section 8.2 RESTRICTIONS ON LIENS, ETC. The Borrower will not, and will
not permit its Subsidiaries to, (a) create or incur or suffer to be created or
incurred or to exist any lien, encumbrance, mortgage, pledge, negative pledge,
charge, restriction or other security interest of any kind upon any of its
property or assets of any character whether now owned or hereafter acquired,
or upon the income or profits therefrom; (b) transfer any of its property or
assets or the income or profits therefrom for the purpose of subjecting the
same to the payment of Indebtedness or performance of any other obligation in
priority to payment of its general creditors; (c) acquire, or agree or have an
option to acquire, any property or assets upon conditional sale or other title
retention or purchase money security agreement, device or arrangement; (d)
suffer to exist for a period of more than 30 days after the same shall have
been incurred any Indebtedness or claim or demand against it that if unpaid
might by law or upon bankruptcy or insolvency, or otherwise, be given any
priority whatsoever over its general creditors, subject to Borrower's rights
pursuant to Section 7.8; (e) assign, pledge or encumber any accounts, contract
rights, general intangibles, chattel paper or instruments, with or without
recourse; or (f) incur or maintain any obligation to any holder of
Indebtedness of the Borrower or such Subsidiary which prohibits the creation
or maintenance of any lien securing the Obligations (collectively "Liens");
PROVIDED that the Borrower and any Subsidiary of the Borrower may create or
incur or suffer to be created or incurred or to exist:
(i) liens on properties to secure taxes, assessments and
other governmental charges or claims for labor, material or supplies in
respect of obligations not overdue;
(ii) liens on properties in respect of judgments or
awards, the Indebtedness with respect to which is permitted by Section 8.1(d);
57
(iii) encumbrances on properties consisting of easements,
rights of way, zoning restrictions, restrictions on the use of real property,
landlord's or lessor's liens under leases to which the Borrower or any
Subsidiary of the Borrower is a party, and other minor non-monetary liens or
encumbrances none of which interferes materially with the use of the property
affected in the ordinary conduct of the business of the Borrower or its
Subsidiaries, which defects do not individually or in the aggregate have a
materially adverse effect on the business of the Borrower individually or of
the Borrower and its Subsidiaries on a consolidated basis;
(iv) liens on Real Estate and Short-term Investments
(other than the Unencumbered Borrowing Base Properties or any interest
therein, including the rents and profits therefrom) securing Indebtedness
permitted by Section 8.1(g) or Section 8.1(h); and
(v) liens in favor of the Agent and the Banks as
security for the Obligations.
Notwithstanding anything herein to the contrary, Borrower shall not create or
incur or suffer to be created or incurred any Lien on any direct or indirect
interest of Borrower in any of its Subsidiaries.
Section 8.3 RESTRICTIONS ON INVESTMENTS. The Borrower will not, and will
not permit its Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United
States of America that mature within one (1) year from the date of purchase by
the Borrower or its Subsidiary;
(b) marketable direct obligations of any of the following:
Federal Home Loan Mortgage Corporation, Student Loan Marketing Association,
Federal Home Loan Banks, Federal National Mortgage Association, Government
National Mortgage Association, Bank for Cooperatives, Federal Intermediate
Credit Banks, Federal Financing Banks, Export-Import Bank of the United
States, Federal Land Banks, or any other agency or instrumentality of the
United States of America;
(c) demand deposits, certificates of deposit, bankers
acceptances and time deposits of any Bank or any United States banks having
total assets in excess of $100,000,000; PROVIDED, HOWEVER, that the aggregate
amount at any time so invested with any single bank having total assets of
less than $1,000,000,000 will not exceed $2,500,000;
(d) securities commonly known as "commercial paper" issued by
any Bank or by a corporation organized and existing under the laws of the
United States of America or any State which at the time of purchase are rated
by ▇▇▇▇▇'▇ or by S&P at not less than "P1" if then rated by ▇▇▇▇▇'▇, and not
less than "A1", if then rated by S&P;
(e) mortgage-backed securities guaranteed by the Government
National Mortgage Association, the Federal National Mortgage Association or
the Federal Home Loan Mortgage Corporation and other mortgage-backed bonds
which at the time of purchase are rated
58
by ▇▇▇▇▇'▇ or by S&P at not less than "Aa" if then rated by ▇▇▇▇▇'▇ and not
less than "AA" if then rated by S&P;
(f) repurchase agreements having a term not greater than 90 days
and fully secured by securities described in the foregoing subsection (a), (b)
or (e) with banks described in the foregoing subsection (c) or with financial
institutions or other corporations having total assets in excess of
$500,000,000;
(g) shares of so-called "money market funds" registered with the
SEC under the Investment Company Act of 1940 which maintain a level per-share
value, invest principally in investments described in the foregoing
subsections (a) through (f) and have total assets in excess of $50,000,000;
(h) Subject to the provisions of this Section 8.3 and Section
9.6 hereof, Investments in fee interests in Real Estate utilized principally
for Retail Uses, and with respect to assets owned as of the date hereof or as
otherwise approved by the Majority Banks, office uses and self-storage uses;
(i) Subject to the provisions of this Section 8.3, Investments
in (a) Joint Ventures the accounts of which are consolidated with the accounts
of Borrower, (b) Joint Ventures the accounts of which are not consolidated
with the accounts of Borrower, and (c) Notes Receivable, provided that in no
event shall such Investments (including, without limitation, any such
Investments by Excel Legacy Holdings) exceed (x) twenty percent (20%) of the
Borrower's Adjusted Consolidated Total Assets for the period through and
including September 30, 2002, (y) fifteen percent (15%) of the Borrower's
Adjusted Consolidated Total Assets for the period of October 1, 2002 through
and including September 30, 2003, and (z) ten percent (10%) of Borrower's
Adjusted Consolidated Total Assets thereafter;
(j) Investments in wholly-owned Subsidiaries of the Borrower
(other than Excel Legacy Holdings) that own assets of the type that Borrower
is permitted to own pursuant to this Agreement;
(k) Any common or preferred stock issued by Borrower which has
been repurchased by Borrower or any Subsidiary of Borrower, provided that in
no event shall such Investment exceed in the aggregate $15,000,000.00 or such
greater amount as may be approved by the Majority Banks;
(l) Subject to the provisions of this Section 8.3 and Section
9.6 hereof, investments in undeveloped or non-income producing land;
(m) Investments in Excel Legacy Holdings, which may engage in
such businesses as Borrower may determine, provided that (i) the aggregate
amount of direct or indirect Investment by Borrower in Excel Legacy Holdings
and the value of Legacy Holding's assets determined in accordance with the
terms of this Agreement shall not exceed the lesser of ten percent (10%) of
Borrower's Adjusted Consolidated Total Assets or $100,000,000.00, and (ii) any
Investments by Excel Legacy Holdings and its Subsidiaries in any of the
Investments described in Section 8.3(i) shall be counted against the
Investments otherwise permitted pursuant to
59
such section, and in no event may any of such Investments by Excel Legacy
Holdings exceed fifty percent (50%) of the Investments permitted pursuant to
such section;
(n) Loans to officers of Borrower, provided that the aggregate
principal amount of such loans outstanding shall not exceed $10,000,000.00; and
(o) For so long as the ratio (expressed as a percentage) of (1)
the sum of the outstanding principal amount of the Loans and the Letters of
Credit Outstanding to (2) the Total Commitment is less than twenty-five
percent (25%), Investments in marketable securities of publicly traded real
estate companies that engage principally in the ownership of Real Estate used
for Retail Uses or office uses, provided that the aggregate amount of such
Investment shall not exceed $25,000,000.00.
Notwithstanding anything in this Agreement to the contrary, the Borrower
will not permit the sum of (i) Investments pursuant to Section 8.3(i), PLUS
(ii) Construction in Progress pursuant to Section 8.9, PLUS (c) its direct and
indirect interests in Land Assets pursuant to Section 9.6, to exceed
thirty-five percent (35%) of Borrower's Adjusted Consolidated Total Assets.
Section 8.4 MERGER, CONSOLIDATION. The Borrower will not, and will not
permit any of its Subsidiaries to, become a party to any dissolution,
liquidation, merger, reorganization, consolidation or other business
combination, or agree to effect any asset acquisition, stock acquisition or
other acquisition which may have a similar effect as any of the foregoing
without the prior written consent of the Majority Banks, except (i) the merger
or consolidation of one or more of the Subsidiaries of the Borrower with and
into the Borrower where the Borrower is the surviving entity and (ii) the
merger or consolidation of two or more Subsidiaries of the Borrower.
Section 8.5 SALE AND LEASEBACK. Without the Agent's prior written
approval, the Borrower will not, and will not permit its Subsidiaries to,
enter into any arrangement, directly or indirectly, whereby the Borrower or
any Subsidiary thereof shall sell or transfer any Real Estate owned by it in
order that then or thereafter such Person shall lease back such Real Estate;
provided that the foregoing limitation shall not apply with respect to the
administrative office of the Borrower.
Section 8.6 COMPLIANCE WITH ENVIRONMENTAL LAWS. The Borrower will not,
and will not permit the Guarantors or any of their respective Subsidiaries to,
do any of the following: (a) use any of the Real Estate or any portion thereof
as a facility for the handling, processing, storage or disposal of Hazardous
Substances, except for Hazardous Substances used in the ordinary course of
business in the operation of such Real Estate and in compliance with all
applicable Environmental Laws, (b) cause or permit to be located on any of the
Real Estate any underground tank or other underground storage receptacle for
Hazardous Substances except in full compliance with Environmental Laws, (c)
generate any Hazardous Substances on any of the Real Estate except in full
compliance with Environmental Laws, (d) conduct any activity at any Real
Estate or use any Real Estate in any manner so as to cause a Release of
Hazardous Substances on, upon or into the Real Estate or any surrounding
properties or any threatened Release of Hazardous Substances which might give
rise to liability under CERCLA or any other Environmental Law, or (e) directly
or indirectly transport or arrange for the transport of any Hazardous
Substances (except in compliance with all Environmental Laws).
60
The Borrower shall:
(i) in the event of any change in Environmental Laws
governing the assessment, release or removal of Hazardous Substances, which
change would lead a prudent lender to require additional testing to avail
itself of any statutory insurance or limited liability, take all action
(including, without limitation, the conducting of engineering tests at the
sole expense of the Borrower) to confirm that no Hazardous Substances are or
ever were Released or disposed of on the Real Estate; and
(ii) if any Release or disposal of Hazardous Substances
shall occur or shall have occurred on the Real Estate of the Borrower, the
Guarantors or any of their respective Subsidiaries (including without
limitation any such Release or disposal occurring prior to the acquisition of
such Real Estate by such Person) cause the prompt containment and removal of
such Hazardous Substances and remediation of such Real Estate in full
compliance with all applicable laws and regulations; PROVIDED, that the
Borrower shall be deemed to be in compliance with Environmental Laws for the
purpose of this clause (ii) so long as it or a responsible third party with
sufficient financial resources is taking reasonable action to remediate or
manage any event of noncompliance to the satisfaction of the Majority Banks
and no action shall have been commenced by any enforcement agency. The
Majority Banks may engage their own environmental engineer to review the
environmental assessments and the Borrower's compliance with the covenants
contained herein.
At any time after an Event of Default shall have occurred hereunder, or,
whether or not an Event of Default shall have occurred, at any time that the
Agent or the Majority Banks shall have reasonable grounds to believe that a
Release or threatened Release of Hazardous Substances may have occurred,
relating to any Real Estate, or that any of the Real Estate is not in
compliance with the Environmental Laws, the Agent may at its election (and
will at the request of the Majority Banks) obtain such environmental
assessments of such Real Estate prepared by an environmental engineer as may
be necessary or advisable for the purpose of evaluating or confirming (i)
whether any Hazardous Substances are present in the soil or water at or
adjacent to such Real Estate and (ii) whether the use and operation of such
Real Estate comply with all Environmental Laws. Environmental assessments may
include detailed visual inspections of such Real Estate including, without
limitation, any and all storage areas, storage tanks, drains, dry ▇▇▇▇▇ and
leaching areas, and the taking of soil samples, as well as such other
investigations or analyses as are necessary or appropriate for a complete
determination of the compliance of such Real Estate and the use and operation
thereof with all applicable Environmental Laws. All such environmental
assessments shall be at the sole cost and expense of the Borrower.
Section 8.7 DISTRIBUTIONS. The Borrower shall not make any Distributions
which would cause it to violate any of the following covenants:
(a) The Borrower shall not pay any Distribution to the
shareholders of the Borrower if such Distribution is in excess of the amount
which, when added to the amount of all other Distributions paid in the same
fiscal quarter and the preceding three (3) fiscal quarters, would exceed
ninety percent (90%) of its Funds from Operations for the four consecutive
fiscal quarters ending prior to the quarter in which such Distribution is
paid; provided that the
61
Borrower shall be permitted to pay an amount in excess of such limit if
necessary to permit the Borrower to maintain its REIT Status, as evidenced by
a certification of the chief financial officer of the Borrower containing
calculations in reasonable detail reasonably satisfactory in form and
substance to the Agent; and
(b) Notwithstanding the terms of Section 8.7(a), Borrower may,
subject to the limitations set forth in this Agreement (including
specifically, but without limitation, those contained in Section 8.7(c) and
Section 8.7(d)) make Distributions in order to enable Borrower or any
Subsidiary of Borrower to repurchase in the aggregate up to $15,000,000.00 in
common and preferred stock of Borrower, so long as (i) no Event of Default
shall have occurred and be continuing on the date of any such repurchase and
(ii) no Default or Event of Default shall occur as a result of any such
repurchase; and
(c) In the event that an Event of Default shall have occurred
and be continuing, the Borrower shall not make any Distributions other than
the minimum Distributions required under the Code to maintain the REIT Status
of Borrower, as evidenced by a certification of the chief financial officer of
the Borrower containing calculations in reasonable detail reasonably
satisfactory in form and substance to the Agent; and
(d) In the event that an Event of Default shall have occurred
and be continuing and the maturity of the Obligations has been accelerated,
the Borrower shall not make any Distributions whatsoever, either directly or
indirectly unless approved by the Majority Banks.
Section 8.8 ASSET SALES. Neither the Borrower nor any of its
Subsidiaries shall sell, assign, lease or dispose of all or substantially all
of their respective businesses or assets (whether now owned or hereafter
acquired), either in a single transaction or in a series of transactions, or
enter into any agreement to do any of the foregoing. Neither the Borrower nor
any of its Subsidiaries shall sell, transfer or otherwise dispose of any asset
other than for fair market value. Neither the Borrower nor any Subsidiary
thereof shall sell, transfer or otherwise dispose of any Real Estate in excess
of $50,000,000.00 (except as the result of a condemnation or casualty and
except for the granting of Permitted Liens, as applicable) unless there shall
have been delivered to the Agent a statement that no Default or Event of
Default exists or will exist and a certification that the Borrower will be in
compliance with its covenants referred to therein after giving effect to such
sale, transfer or other disposition.
Section 8.9 DEVELOPMENT ACTIVITY. Neither the Borrower nor any
Subsidiary or Joint Venture thereof shall engage, directly or indirectly, in
the development of Real Estate or otherwise except for the development of Real
Estate to be used principally for Retail Uses or the development by Excel
Legacy Holdings and its Subsidiaries of Real Estate to be used principally for
such purposes as Excel Legacy Holdings may determine, provided that, subject
to Section 8.3, (a) the aggregate amount of Construction in Progress by
Borrower and its Subsidiaries and Joint Ventures shall not at any time exceed
fifteen percent (15%) of the Borrower's Adjusted Consolidated Total Assets,
and (b) the aggregate amount of Construction in Progress by Excel Legacy
Holdings and its Subsidiaries and Joint Ventures shall not at any time exceed
$50,000,000.00. For purposes of this Section 8.9, the term "development" shall
include new
62
construction or the substantial renovation or expansion of improvements to
real property, but shall not include the addition of amenities or other
related facilities to existing Real Estate which is already used principally
for Retail Uses. Without limiting the foregoing, the Borrower acknowledges
that for the purposes of this Agreement, except for any rights pursuant to
option agreements that do not obligate the Borrower or any Subsidiary or Joint
Venture to act pursuant thereto or pursuant to other agreements that limit the
recourse of the other party thereto upon a default or breach by Borrower or
any Subsidiary or Joint Venture thereunder to a reasonable ▇▇▇▇▇▇▇ money
deposit as liquidated damages, (1) any interest by the Borrower or any
Subsidiary or Joint Venture in a property which is proposed to be developed,
or any interest therein pursuant to which the Borrower or any Subsidiary or
Joint Venture has the right to approve site plans or other plans and
specifications or pursuant to which such parties' obligations are conditioned
upon the achievement of certain leasing levels, (2) any agreement by the
Borrower or any Subsidiary or Joint Venture which obligates such party to
contribute or otherwise advance funds in connection with or upon completion of
the development of a property, or (3) any acquisition of a property which is
proposed to be developed or which is under development and lease-up at the
time such agreement is entered into, shall be considered a "development" for
the purposes of this Section 8.9. For the purposes of this Section 8.9, the
obligation of a Borrower or any of its Subsidiaries under an agreement to
acquire a property subject to this Section 8.9 shall be an amount equal to the
lesser of (i) the purchase price or (ii) the liquidated damages specified in
the acquisition agreement. Notwithstanding the foregoing, but except as
otherwise approved by the Agent, neither the Borrower, any Guarantor nor any
Subsidiary or Joint Venture of Borrower shall commence any development unless
at least seventy percent (70%) (sixty percent (60%) with respect to the
developments commonly known as Anaheim, Los ▇▇▇▇▇, Newport and Glendale) of
the gross leasable area of said project, including all anchors for Real Estate
to be used for Retail Uses, is subject to a fully executed lease pursuant to
which such tenants are unconditionally committed to take occupancy upon
completion of such construction. Nothing herein shall prohibit the Borrower or
any Subsidiary or Joint Venture thereof from entering into an agreement to
acquire Real Estate which has been developed and initially leased by another
Person.
Section 8.10 SOURCES OF CAPITAL. The Borrower shall, at all times that
the Borrower or any of its Subsidiaries is engaging in any development as
provided in Section 8.9 or has entered into any agreement to provide funds
with respect to a development, maintain or have identified available sources
of capital equal to the total cost to acquire and complete such developments
and to satisfy such funding obligations, which sources of capital shall be
acceptable to the Agent in its reasonable discretion. Amounts available to be
disbursed for such purposes pursuant to this Agreement may be considered as a
source of capital for the purposes of this Section 8.10.
Section 8.11 RESTRICTION ON PREPAYMENT OF INDEBTEDNESS. Without the
prior written consent of the Agent, neither Borrower nor any of its
Subsidiaries shall prepay, redeem or purchase the principal amount, in whole
or in part, of any Indebtedness other than the Obligations after the
occurrence of any Event of Default; provided, however, that this Section 8.11
shall not prohibit the prepayment of Indebtedness which is financed solely
from the proceeds of a new loan which would otherwise be permitted by the
terms of Section 8.1.
Section 8.12 INTEREST IN GUARANTORS. The Borrower will not, directly or
indirectly, make or permit to be made, by voluntary or involuntary means, any
sale, assignment, transfer,
63
disposition, mortgage, pledge, hypothecation or encumbrance of its interest in
any Guarantor or any dilution of its interest in any Guarantor.
Section 8.13 DERIVATIVE OBLIGATIONS. Neither the Borrower nor any of its
Subsidiaries shall contract, create, incur, assume or suffer to exist any
Derivative Obligations other than the Interest Rate Contracts permitted
pursuant to Section 8.1.
Section 8.14 BANKRUPTCY REMOTE SUBSIDIARIES. Without the consent of the
Agent, and except for the bankruptcy-remote subsidiaries described on SCHEDULE
8.14 hereto, neither the Borrower nor any of its Subsidiaries shall create any
new single purpose, special purpose or other so-called bankruptcy remote
subsidiaries (such as an entity to be a borrower in a REMIC), as determined by
the Agent in its reasonable discretion.
Section 9. FINANCIAL COVENANTS OF THE BORROWER
The Borrower covenants and agrees that, so long as any Loan, Note or
Letter of Credit is outstanding or any Bank has any obligation to make any
Loans or issue any Letter of Credit:
Section 9.1 BORROWING BASE. The Borrower shall not permit the
outstanding principal balance of the Loans and the Letters of Credit
Outstanding to be greater than the Borrowing Base.
Section 9.2 LIABILITIES TO ASSETS RATIO. The Borrower will not permit
the ratio of the Adjusted Consolidated Total Liabilities of the Borrower and
its Subsidiaries to the Adjusted Consolidated Total Assets of the Borrower and
its Subsidiaries to exceed 0.55 to 1.
Section 9.3 INTEREST COVERAGE. The Borrower will not permit (a) the
product of the Consolidated EBITDA of the Borrower and its Subsidiaries for
the then ending period of two (2) consecutive fiscal quarters (treated as a
single accounting period) (the "Test Period") multiplied by two (2), to be
less than (b) two (2) times the product of (i) the Interest Expense of the
Borrower and its Subsidiaries for the Test Period multiplied by (ii) two (2).
Notwithstanding the foregoing, compliance with the foregoing covenant shall be
determined in the following manner: compliance with the foregoing covenant
shall be first tested for the month ending October 31, 2001 by comparing the
Consolidated EBITDA of Borrower and its Subsidiaries to the Interest Expense
of the Borrower and its Subsidiaries both for the month of October, 2001; and
compliance with the foregoing covenant shall be tested on December 31, 2001 by
comparing the Consolidated EBITDA of Borrower and its Subsidiaries to the
Interest Expense of Borrower and its Subsidiaries both for the period
commencing on October 1, 2001 and continuing through and including December
31, 2001. In addition, for the purpose of calculating compliance with the
foregoing covenant, the EBITDA of Borrower with respect to the Hospitality
Property commonly known as the Grand Hotel at the Grand Canyon, Arizona shall
be the quotient obtained by dividing the EBITDA attributable thereto for the
period of four (4) consecutive fiscal quarters then ended by 2.
Section 9.4 FIXED CHARGE COVERAGE. The Borrower will not permit the
ratio of (a) the product of the Consolidated EBITDA of the Borrower and its
Subsidiaries for the Test Period multiplied by two (2) to (b) the Fixed
Charges of the Borrower and its Subsidiaries for such Test Period, to be less
than the multiples set forth below:
64
Fiscal Quarter
Ending on or before Coverage Ratio
------------------- --------------
March 31, 2002 1.0 to 1.0
September 30, 2002 1.10 to 1.0
September 30, 2003 1.25 to 1.0
Thereafter 1.50 to 1.0
Notwithstanding the foregoing, compliance with the foregoing covenant shall be
determined in the following manner: Compliance with the foregoing covenant
shall be first tested for the month ending October 31, 2001 by comparing the
Consolidated EBITDA of Borrower and its Subsidiaries to the Fixed Charges of
the Borrower and its Subsidiaries both for the month of October, 2001; and
compliance with the foregoing covenant shall be tested on December 31, 2001 by
comparing the Consolidated EBITDA of Borrower and its Subsidiaries to the
Fixed Charges of Borrower and its Subsidiaries both for the period commencing
on October 1, 2001 and continuing through and including December 31, 2001.
Section 9.5 NET WORTH. The Borrower will not permit the Consolidated
Tangible Net Worth of Borrower to be less than the sum of (a) $600,000,000.00
plus (b) ninety percent (90%) of the aggregate net proceeds received by the
Borrower or any Guarantor after the Closing Date in connection with any Equity
Offering to any other Person.
Section 9.6 LAND ASSETS. The Borrower shall not permit the value,
determined in accordance with generally accepted accounting principles, of its
direct and indirect interests in Land Assets to exceed five percent (5%) of
the Adjusted Consolidated Total Assets of the Borrower and its Subsidiaries.
Section 10. CLOSING CONDITIONS
The obligations of the Agent and the Banks to make the initial Loans or
issue a Letter of Credit shall be subject to the satisfaction of the following
conditions precedent on or prior to September 19, 2001:
Section 10.1 LOAN DOCUMENTS. Each of the Loan Documents shall have been
duly executed and delivered by the respective parties thereto, shall be in
full force and effect and shall be in form and substance satisfactory to the
Agent. The Agent shall have received a fully executed copy of each such
document, except that each Bank shall have received a fully executed
counterpart of its Note.
Section 10.2 CERTIFIED COPIES OF ORGANIZATIONAL DOCUMENTS. The Agent
shall have received from the Borrower a copy, certified as of a recent date by
the appropriate officer of each State in which the Borrower and the
Guarantors, as applicable, is organized or in which the Unencumbered Borrowing
Base Properties are located and by a duly authorized officer of such Person to
be true and complete, of (a) the corporate charter or other organizational
agreements of the Borrower and the Guarantors, as applicable, or (b) its
qualification to do business, as applicable, as in effect on such date of
certification.
65
Section 10.3 BYLAWS; RESOLUTIONS. All action on the part of the Borrower
and the Guarantors, as applicable, necessary for the valid execution, delivery
and performance by such Person of this Agreement and the other Loan Documents
to which such Person is or is to become a party shall have been duly and
effectively taken, and evidence thereof satisfactory to the Agent shall have
been provided to the Agent. The Agent shall have received from the Borrower
and the Guarantors true copies of their respective bylaws and the resolutions
adopted by their respective boards of directors or other managers authorizing
the transactions described herein, each certified by its secretary as of a
recent date to be true and complete.
Section 10.4 INCUMBENCY CERTIFICATE; AUTHORIZED SIGNERS. The Agent shall
have received from the Borrower and the Guarantors an incumbency certificate,
dated as of the Closing Date, signed by a duly authorized partner, manager or
officer of such Person and giving the name and bearing a specimen signature of
each individual who shall be authorized to sign, in the name and on behalf of
such Person, each of the Loan Documents to which such Person is or is to
become a party. The Agent shall have also received from the Borrower a
certificate, dated as of the Closing Date, signed by a duly authorized officer
of the Borrower and giving the name of and specimen signature of each
individual who shall be authorized to make Loan and Conversion Requests and to
give notices and to take other action on behalf of the Borrower under the Loan
Documents.
Section 10.5 OPINION OF COUNSEL. The Agent shall have received a
favorable opinion addressed to the Banks and the Agent and dated as of the
Closing Date, in form and substance satisfactory to the Agent, from counsel of
the Borrower and the Guarantors, as to such matters as the Agent shall
reasonably request (including without limitation the effectiveness of the
merger contemplated by the Transaction).
Section 10.6 PAYMENT OF FEES. The Borrower shall have paid to the Agent
the fees required to be paid as of the Closing Date pursuant to Section 4.2.
Section 10.7 PERFORMANCE; NO DEFAULT. The Borrower and the Guarantors
shall have performed and complied with all terms and conditions herein
required to be performed or complied with by it on or prior to the Closing
Date, and on the Closing Date there shall exist no Default or Event of Default.
Section 10.8 REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Borrower and the Guarantors in the Loan Documents or
otherwise made by or on behalf of the Borrower, the Guarantors or any
Subsidiaries thereof in connection therewith or after the date thereof shall
have been true and correct in all material respects when made and shall also
be true and correct in all material respects on the Closing Date.
Section 10.9 PROCEEDINGS AND DOCUMENTS. All proceedings in connection
with the transactions contemplated by this Agreement and the other Loan
Documents shall be reasonably satisfactory to the Agent and the Agent's
Special Counsel in form and substance, and the Agent shall have received all
information and such counterpart originals or certified copies of such
documents and such other certificates, opinions or documents as the Agent and
the Agent's Special Counsel may reasonably require.
66
Section 10.10 COMPLIANCE CERTIFICATE. A Compliance Certificate dated as
of the date of the Closing Date demonstrating compliance (based on historical
information and on a pro forma basis) with each of the covenants calculated
therein as of the most recent fiscal quarter end for which the Borrower has
provided financial statements under Section 6.4 adjusted in the best good
faith estimate of the Borrower dated as of the date of the Closing Date shall
have been delivered to the Agent.
Section 10.11 CONSUMMATION OF TRANSACTION. The Transaction shall have
been consummated or shall be consummated simultaneously with the closing of
the Loan hereunder in accordance with applicable law and otherwise in a manner
satisfactory to the Agent and the Agent shall be satisfied with the
capitalization, debt, structure, equity, ownership and management of the
Borrower and the Guarantors.
Section 10.12 EQUITY IN BORROWER. Agent shall have approved (such
approval not to be unreasonably withheld) the agreements relating to the
issuance of new preferred equity in Borrower to Warburg, ▇▇▇▇▇▇ Equity
Partners, L.P. and certain other Persons, and Agent shall have received
evidence satisfactory to the Agent that Borrower shall have received at least
$100,000,000.00 in gross cash proceeds from such issuance.
Section 10.13 CONTRIBUTION AGREEMENT. The Agent shall have received an
executed original counterpart of the Contribution Agreement.
Section 10.14 SATISFACTION OF LOANS. Agent shall have received evidence
reasonably satisfactory to Agent that the existing $75,000,000.00 unsecured
revolving credit facility agented by ▇▇▇▇▇ Fargo Bank to Price Enterprises,
Inc. (Loan No. 5412SD) and the existing credit facility from Fleet to Excel
Legacy Corporation have been satisfied.
Section 10.15 OTHER. The Agent shall have reviewed such other documents,
instruments, certificates, opinions, assurances, consents and approvals as the
Agent or the Agent's Special Counsel may reasonably have requested.
Section 11. CONDITIONS TO ALL BORROWINGS
The obligations of the Banks to make any Loan or issue any Letter of
Credit, whether on or after the Closing Date, shall also be subject to the
satisfaction of the following conditions precedent:
Section 11.1 PRIOR CONDITIONS SATISFIED. All conditions set forth in
Section 10 shall continue to be satisfied as of the date upon which any Loan
is to be made or any Letter of Credit is to be issued.
Section 11.2 REPRESENTATIONS TRUE; NO DEFAULT. Each of the
representations and warranties made by or on behalf of the Borrower or the
Guarantors contained in this Agreement, the other Loan Documents or in any
document or instrument delivered pursuant to or in connection with this
Agreement shall be true as of the date as of which they were made and shall
also be true at and as of the time of the making of such Loan or the issuance
of such Letter of Credit, with the same effect as if made at and as of that
time (except to the extent of changes resulting from transactions contemplated
or permitted by this Agreement and the other Loan Documents and
67
changes occurring in the ordinary course of business that singly or in the
aggregate are not materially adverse, and except to the extent that such
representations and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be continuing.
Section 11.3 NO LEGAL IMPEDIMENT. There shall be no law or regulations
thereunder or interpretations thereof that in the reasonable opinion of any
Bank would make it illegal for such Bank to make such Loan or issue such
Letter of Credit.
Section 11.4 GOVERNMENTAL REGULATION. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable
regulations of the Comptroller of the Currency or the Board of Governors of
the Federal Reserve System.
Section 11.5 PROCEEDINGS AND DOCUMENTS. All proceedings in connection
with the Loan or Letter of Credit shall be satisfactory in substance and in
form to the Agent, and the Agent shall have received all information and such
counterpart originals or certified or other copies of such documents as the
Agent may reasonably request.
Section 11.6 BORROWING DOCUMENTS. In the case of any request for a Loan,
the Agent shall have received a copy of the request for a Loan required by
Section 2.7 in the form of EXHIBIT C hereto, fully completed, or a fully
completed Letter of Credit Request required by Section 2.9 in the form of
EXHIBIT D hereto, fully completed, as applicable.
Section 12. EVENTS OF DEFAULT; ACCELERATION; ETC.
Section 12.1 EVENTS OF DEFAULT AND ACCELERATION. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time
or both is required, then, prior to such notice or lapse of time, "Defaults")
shall occur:
(a) the Borrower shall fail to pay any principal of the Loans
when the same shall become due and payable, whether at the stated date of
maturity or any accelerated date of maturity or at any other date fixed for
payment;
(b) the Borrower shall fail to pay any interest on the Loans,
any reimbursement obligations with respect to any Letters of Credit, or any
other sums due hereunder or under any of the other Loan Documents, when the
same shall become due and payable, whether at the stated date of maturity or
any accelerated date of maturity or at any other date fixed for payment, and
such failure is not cured within five (5) days following receipt of written
notice of such default, provided, however, that no such cure period shall
apply to any payments due upon the maturity of the Notes;
(c) the Borrower shall fail to comply with any covenant
contained in Section 7.4(c), Section 7.13 or Section 7.14;
68
(d) the Borrower shall fail to comply with any covenant
contained in Section 9, and such failure shall continue for thirty (30) days
after written notice thereof shall have been given to the Borrower by the
Agent;
(e) any of the Borrower, the Guarantors or any of their
respective Subsidiaries shall fail to perform any other term, covenant or
agreement contained herein or in any of the other Loan Documents (other than
those specified in this Section 12), and such failure is not cured within
thirty (30) days following receipt of written notice of such default,
provided, that the provisions of this Section 12.1(e) shall not pertain to any
default excluded from any provision of cure of defaults contained in any other
of the Loan Documents;
(f) any representation or warranty made by or on behalf of the
Borrower, the Guarantors or any of their respective Subsidiaries in this
Agreement or any other Loan Document, or in any report, certificate, financial
statement, request for a Loan, Letter of Credit Request, or in any other
document or instrument delivered pursuant to or in connection with this
Agreement, any advance of a Loan, the issuance of any Letter of Credit or any
of the other Loan Documents shall prove to have been false or misleading in
any respect upon the date when made or deemed to have been made or repeated;
(g) any of the Borrower, the Guarantors or any of their
respective Subsidiaries shall fail to pay at maturity, or within any
applicable period of grace, any obligation for borrowed money or credit
received or other Indebtedness, or fail to observe or perform any material
term, covenant or agreement contained in any agreement by which it is bound,
evidencing or securing any such borrowed money or credit received or other
Indebtedness for such period of time as would permit (assuming the giving of
appropriate notice if required) the holder or holders thereof or of any
obligations issued thereunder to accelerate the maturity thereof; provided
that the events described in this Section 12.1(g) shall not constitute an
Event of Default unless such failure to pay or perform, together with other
failures to pay or perform, involve singly or in the aggregate obligations for
borrowed money or credit received or other Indebtedness totaling in excess of
$5,000,000.00;
(h) any of the Borrower, the Guarantors or any of their
respective Subsidiaries, (i) shall make an assignment for the benefit of
creditors, or admit in writing its general inability to pay or generally fail
to pay its debts as they mature or become due, or shall petition or apply for
the appointment of a trustee or other custodian, liquidator or receiver of any
such Person or of any substantial part of the assets of any thereof, (ii)
shall commence any case or other proceeding relating to any such Person under
any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now or
hereafter in effect, or (iii) shall take any action to authorize or in
furtherance of any of the foregoing;
(i) a petition or application shall be filed for the appointment
of a trustee or other custodian, liquidator or receiver of any of the
Borrower, the Guarantors or any of their respective Subsidiaries or any
substantial part of the assets of any thereof, or a case or other proceeding
shall be commenced against any such Person under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation or similar law of any
69
jurisdiction, now or hereafter in effect, and any such Person shall indicate
its approval thereof, consent thereto or acquiescence therein or such
petition, application, case or proceeding shall not have been dismissed within
60 days following the filing or commencement thereof;
(j) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating any of the Borrower, the
Guarantors or any of their respective Subsidiaries bankrupt or insolvent, or
approving a petition in any such case or other proceeding, or a decree or
order for relief is entered in respect of any such Person, in an involuntary
case under federal bankruptcy laws as now or hereafter constituted;
(k) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than 60 days, whether or not consecutive, any uninsured
final judgment against any of the Borrower, the Guarantors or any of their
respective Subsidiaries that, with other outstanding uninsured final
judgments, undischarged, against such Persons exceeds in the aggregate
$5,000,000.00;
(l) if any of the Loan Documents or the Contribution Agreement
shall be canceled, terminated, revoked or rescinded otherwise than in
accordance with the terms thereof or with the express prior written agreement,
consent or approval of the Banks, or any of the Borrower or the Guarantors or
any of their respective holders of Voting Interests shall assert that any of
the Loan Documents or the Contribution Agreement do not apply to future
advances under this Agreement, or any action at law, suit in equity or other
legal proceeding to cancel, revoke or rescind any of the Loan Documents or the
Contribution Agreement shall be commenced by or on behalf of any of the
Borrower, the Guarantors or any of their respective holders of Voting
Interests, or any court or any other governmental or regulatory authority or
agency of competent jurisdiction shall make a determination that, or issue a
judgment, order, decree or ruling to the effect that, any one or more of the
Loan Documents or the Contribution Agreement is illegal, invalid or
unenforceable in accordance with the terms thereof;
(m) any dissolution, termination, partial or complete
liquidation, merger or consolidation of any of the Borrower, the Guarantors or
any sale, transfer or other disposition of the assets of any of the Borrower,
the Guarantors other than as permitted under the terms of this Agreement or
the other Loan Documents;
(n) any suit or proceeding shall be filed against any of the
Borrower, or the Guarantors or any of their respective assets which in the
good faith business judgment of the Majority Banks after giving consideration
to the likelihood of success of such suit or proceeding and the availability
of insurance to cover any judgment with respect thereto and based on the
information available to them, if adversely determined, would have a
materially adverse affect on the ability of the Borrower or a Guarantor to
perform each and every one of its obligations under and by virtue of the Loan
Documents;
(o) any of the Borrower, the Guarantors or any other Person so
related to any of them shall be indicted for a federal crime, a punishment for
which could include the forfeiture of any assets of the Borrower or the
Guarantor;
70
(p) with respect to any Guaranteed Pension Plan, an ERISA
Reportable Event shall have occurred and the Majority Banks shall have
determined in their reasonable discretion that such event reasonably could be
expected to result in liability of any of the Borrower, the Guarantors or any
of their Subsidiaries to the PBGC or such Guaranteed Pension Plan in an
aggregate amount exceeding $1,000,000 and such event in the circumstances
occurring reasonably could constitute grounds for the termination of such
Guaranteed Pension Plan by the PBGC or for the appointment by the appropriate
United States District Court of a trustee to administer such Guaranteed
Pension Plan; or a trustee shall have been appointed by the United States
District Court to administer such Plan; or the PBGC shall have instituted
proceedings to terminate such Guaranteed Pension Plan;
(q) any of the Guarantors denies that such Guarantor has any
liability or obligation under the Guaranty, or shall notify the Agent or any
of the Banks of such Guarantor's intention to attempt to cancel or terminate
the Guaranty, or shall fail to observe or comply with any term, covenant,
condition or agreement under the Guaranty;
(r) a Change of Control shall occur; or
(s) any Event of Default as defined in any of the other Loan
Documents, shall occur;
then, and in any such event, the Agent may, and upon the request of the
Majority Banks shall, by notice in writing to the Borrower declare all amounts
owing with respect to this Agreement, the Notes, the Letters of Credit and the
other Loan Documents to be, and they shall thereupon forthwith become,
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Borrower;
PROVIDED that in the event of any Event of Default specified in Section
12.1(h), Section 12.1(i) or Section 12.1(j), all such amounts shall become
immediately due and payable automatically and without any requirement of
presentment, demand, protest or other notice of any kind from any of the Banks
or the Agent. Upon demand by Agent or the Majority Banks in their absolute and
sole discretion after the occurrence of an Event of Default, and regardless of
whether the conditions precedent in this Agreement for a Loan have been
satisfied, the Banks will cause a Loan to be made in the undrawn amount of all
Letters of Credit. The proceeds of any such Loan will be pledged to and held
by Agent as security for any amounts that become payable under the Letters of
Credit and all other Obligations. In the alternative, if demanded by Agent in
its absolute and sole discretion after the occurrence of an Event of Default,
Borrower will deposit with and pledge to Agent cash in an amount equal to the
amount of all undrawn Letters of Credit. Such amounts will be pledged to and
held by Agent for the benefit of the Banks as security for any amounts that
become payable under the Letters of Credit and all other Obligations. Upon any
draws under Letters of Credit, at Agent's sole discretion, Agent may apply any
such amounts to the repayment of amounts drawn thereunder and upon the
expiration of the Letters of Credit any remaining amounts will be applied to
the payment of all other Obligations or if there are no outstanding
Obligations and the Banks have no further obligation to make Loans or issue
Letters of Credit or if such excess no longer exists, such proceeds deposited
by Borrower will be released to Borrower. If at any time the aggregate amount
of funds pledged to Agent as collateral for such Letters of Credit shall
exceed one hundred percent (100%) of the aggregate face amount of all
71
amounts available to be drawn under such Letters of Credit, Agent shall
release the amount of such excess deposited by the Borrower to the Borrower.
Notwithstanding the provisions of subsections (d) and (e) of Section
12.1, the cure periods provided therein shall not be allowed and the
occurrence of a Default thereunder immediately shall constitute an Event of
Default for all purposes of this Agreement and the other Loan Documents if,
within the period of twelve months immediately preceding the occurrence of
such Default, there shall have occurred two periods of cure or portions
thereof under any one or more than one of said subsections.
Section 12.2 TERMINATION OF COMMITMENTS. If any one or more Events of
Default specified in Section 12.1(h), Section 12.1(i) or Section 12.1(j) shall
occur, then immediately and without any action on the part of the Agent or any
Bank any unused portion of the credit hereunder shall terminate and the Banks
shall be relieved of all obligations to make Loans or issue Letters of Credit
to the Borrower. If any other Event of Default shall have occurred, the Agent,
upon the election of the Majority Banks, may by notice to the Borrower
terminate the obligation to make Loans or issue Letters of Credit to the
Borrower. No termination under this Section 12.2 shall relieve the Borrower of
its obligations to the Banks arising under this Agreement or the other Loan
Documents.
Section 12.3 REMEDIES. In case any one or more of the Events of
Default shall have occurred and be continuing, and whether or not the Banks
shall have accelerated the maturity of the Loans pursuant to Section 12.1,
the Agent on behalf of the Banks may, and upon direction from the Majority
Banks shall, proceed to protect and enforce their rights and remedies under
this Agreement, the Notes or any of the other Loan Documents by suit in
equity, action at law or other appropriate proceeding, whether for the
specific performance of any covenant or agreement contained in this Agreement
and the other Loan Documents or any instrument pursuant to which the
Obligations are evidenced, including to the full extent permitted by
applicable law the obtaining of the EX PARTE appointment of a receiver, and,
if such amount shall have become due, by declaration or otherwise, proceed to
enforce the payment thereof or any other legal or equitable right. No remedy
herein conferred upon the Agent or the holder of any Note is intended to be
exclusive of any other remedy and each and every remedy shall be cumulative
and shall be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute or any other provision
of law. If Borrower or any Guarantor fails to perform any agreement or
covenant contained in this Agreement or any of the other Loan Documents
beyond any applicable period for notice and cure, Agent may itself perform,
or cause to be performed, any agreement or covenant of such Person contained
in this Agreement or any of the other Loan Documents which such Person shall
fail to perform, and the out-of-pocket costs of such performance, together
with any reasonable expenses, including reasonable attorneys' fees actually
incurred (including attorneys' fees incurred in any appeal) by Agent in
connection therewith, shall be payable by Borrower upon demand and shall
constitute a part of the Obligations and shall if not paid within five (5)
days after demand bear interest at the Default Rate. In the event that all or
any portion of the Obligations is collected by or through an attorney-at-law,
the Borrower shall pay all costs of collection including, but not limited to,
reasonable attorney's fees.
72
Section 12.4 DISTRIBUTION OF PROCEEDS. In the event that, following the
occurrence and during the continuance of any Event of Default, any monies are
received in connection with the enforcement of any of the Loan Documents, or
otherwise with respect to the realization upon any of the assets of the
Borrower or any other Person liable with respect to the Obligations, such
monies shall be distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of, the Agent for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or sustained
by the Agent in connection with the collection of such monies by the Agent,
for the exercise, protection or enforcement by the Agent of all or any of the
rights, remedies, powers and privileges of the Agent under this Agreement or
any of the other Loan Documents or in support of any provision of adequate
indemnity to the Agent against any taxes or liens which by law shall have, or
may have, priority over the rights of the Agent to such monies;
(b) Second, to all other Obligations in such order or preference
as the Majority Banks shall determine; PROVIDED, HOWEVER, that (i) Swing Loans
shall be repaid first, (ii) distributions in respect of such other Obligations
shall be made pari passu among Obligations with respect to the Agent's fee
payable pursuant to Section 4.3, the Issuing Bank's fee payable pursuant to
Section 2.9 and all other Obligations, (iii) in the event that any Bank shall
have wrongfully failed or refused to make an advance under Section 2.8 and
such failure or refusal shall be continuing, advances made by other Banks
during the pendency of such failure or refusal shall be entitled to be repaid
as to principal and accrued interest in priority to the other Obligations
described in this subsection (b) owed to the defaulting Bank, and (iv)
Obligations owing to the Banks with respect to each type of Obligation such as
interest, principal, fees and expenses (but excluding Swing Loans), shall be
made among the Banks PRO RATA; and PROVIDED, further that the Majority Banks
may in their discretion make proper allowance to take into account any
Obligations not then due and payable; and
(c) Third, the excess, if any, shall be returned to the Borrower
or to such other Persons as are entitled thereto.
Section 13. SETOFF
Regardless of the adequacy of any collateral, during the continuance of
any Event of Default, any deposits (general or specific, time or demand,
provisional or final, regardless of currency, maturity, or the branch where
such deposits are held) or other sums credited by or due from any of the Banks
to the Borrower or the Guarantors and any securities or other property of the
Borrower or the Guarantors in the possession of such Bank may be applied to or
set off against the payment of Obligations of such Person and any and all
other liabilities, direct, or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, of such Person to such Bank.
Each of the Banks agrees with each other Bank that if such Bank shall receive
from any of the Borrower or the Guarantors, whether by voluntary payment,
exercise of the right of setoff, or otherwise, and shall retain and apply to
the payment of the Note or Notes held by such Bank (but excluding the Swing
Loan Note) any amount in excess of its ratable portion of the payments
received by all of the Banks with respect to the Notes held by all of the
73
Banks, such Bank will make such disposition and arrangements with the other
Banks with respect to such excess, either by way of distribution, PRO TANTO
assignment of claims, subrogation or otherwise as shall result in each Bank
receiving in respect of the Notes held by it its proportionate payment as
contemplated by this Agreement; PROVIDED that if all or any part of such
excess payment is thereafter recovered from such Bank, such disposition and
arrangements shall be rescinded and the amount restored to the extent of such
recovery, but without interest.
Section 14. THE AGENT
Section 14.1 AUTHORIZATION. The Agent is authorized to take such action
on behalf of each of the Banks and to exercise all such powers as are
hereunder and under any of the other Loan Documents and any related documents
delegated to the Agent, together with such powers as are reasonably incident
thereto, PROVIDED that no duties or responsibilities not expressly assumed
herein or therein shall be implied to have been assumed by the Agent. The
obligations of Agent hereunder are primarily administrative in nature, and
nothing contained in this Agreement or any of the other Loan Documents shall
be construed to constitute the Agent as a trustee for any Bank or to create an
agency or fiduciary relationship. The Borrower and any other Person shall be
entitled to conclusively rely on a statement from the Agent that it has the
authority to act for and bind the Banks pursuant to this Agreement and the
other Loan Documents.
Section 14.2 EMPLOYEES AND AGENTS. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to
its rights and duties under this Agreement and the other Loan Documents. The
Agent may utilize the services of such Persons as the Agent may reasonably
determine, and all reasonable fees and expenses of any such Persons shall be
paid by the Borrower.
Section 14.3 NO LIABILITY. Neither the Agent nor any of its
shareholders, directors, officers or employees nor any other Person assisting
them in their duties nor any agent, or employee thereof, shall be liable to
any of the Banks for any waiver, consent or approval given or any action
taken, or omitted to be taken, in good faith by it or them hereunder or under
any of the other Loan Documents, or in connection herewith or therewith, or be
responsible for the consequences of any oversight or error of judgment
whatsoever, except that the Agent or such other Person, as the case may be,
may be liable for losses due to its willful misconduct or gross negligence.
Section 14.4 NO REPRESENTATIONS. The Agent shall not be responsible for
the execution o validity or enforceability of this Agreement, the Notes, any
of the other Loan Documents or any instrument at any time constituting, or
intended to constitute, collateral security for the Notes, or for the value of
any such collateral security or for the validity, enforceability or
collectability of any such amounts owing with respect to the Notes, or for any
recitals or statements, warranties or representations made herein or in any of
the other Loan Documents or in any certificate or instrument hereafter
furnished to it by or on behalf of the Borrower or the Guarantors or any of
their respective Subsidiaries, or be bound to ascertain or inquire as to the
performance or observance of any of the terms, conditions, covenants or
agreements herein or in any other of the Loan Documents. The Agent shall not
be bound to ascertain whether any notice, consent, waiver
74
or request delivered to it by the Borrower or the Guarantors or any holder of
any of the Notes shall have been duly authorized or is true, accurate and
complete. The Agent has not made nor does it now make any representations or
warranties, express or implied, nor does it assume any liability to the Banks,
with respect to the creditworthiness or financial condition of the Borrower,
the Guarantors or any of their respective Subsidiaries, or the value of any
assets of such Persons. Each Bank acknowledges that it has, independently and
without reliance upon the Agent or any other Bank, and based upon such
information and documents as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent
or any other Bank, based upon such information and documents as it deems
appropriate at the time, continue to make its own credit analysis and
decisions in taking or not taking action under this Agreement and the other
Loan Documents.
Section 14.5 PAYMENTS.
(a) A payment by the Borrower or the Guarantors to the Agent
hereunder or under any of the other Loan Documents for the account of any Bank
shall constitute a payment to such Bank. The Agent agrees to distribute to
each Bank not later than one Business Day after the Agent's receipt of good
funds, determined in accordance with the Agent's customary practices, such
Bank's PRO RATA share of payments received by the Agent for the account of the
Banks except as otherwise expressly provided herein or in any of the other
Loan Documents. In the event that the Agent fails to distribute such amounts
within one (1) Business Day as provided above, the Agent shall pay interest on
such amount at a rate per annum equal to the Federal Funds Effective Rate from
time to time in effect.
(b) If in the opinion of the Agent the distribution of any
amount received by it in such capacity hereunder, under the Notes or under any
of the other Loan Documents might involve it in liability, it may refrain from
making distribution until its right to make distribution shall have been
adjudicated by a court of competent jurisdiction. If a court of competent
jurisdiction shall adjudge that any amount received and distributed by the
Agent is to be repaid, each Person to whom any such distribution shall have
been made shall either repay to the Agent its proportionate share of the
amount so adjudged to be repaid or shall pay over the same in such manner and
to such Persons as shall be determined by such court.
(c) Notwithstanding anything to the contrary contained in this
Agreement or any of the other Loan Documents, any Bank that fails (i) to make
available to the Agent its PRO RATA share of any Loan or (ii) to comply with
the provisions of Section 13 with respect to making dispositions and
arrangements with the other Banks, where such Bank's share of any payment
received, whether by setoff or otherwise, is in excess of its PRO RATA share
of such payments due and payable to all of the Banks, in each case as, when
and to the full extent required by the provisions of this Agreement, shall be
deemed delinquent (a "Delinquent Bank") and shall be deemed a Delinquent Bank
until such time as such delinquency is satisfied. A Delinquent Bank shall be
deemed to have assigned any and all payments due to it from the Borrower and
the Guarantors, whether on account of outstanding Loans, interest, fees or
otherwise, to the remaining nondelinquent Banks for application to, and
reduction of, their respective PRO RATA shares of all outstanding Loans. The
Delinquent Bank hereby authorizes the Agent to distribute
75
such payments to the nondelinquent Banks in proportion to their respective PRO
RATA shares of all outstanding Loans. A Delinquent Bank shall be deemed to
have satisfied in full a delinquency when and if, as a result of application
of the assigned payments to all outstanding Loans of the nondelinquent Banks
or as a result of other payments by the Delinquent Banks to the nondelinquent
Banks, the Banks' respective PRO RATA shares of all outstanding Loans have
returned to those in effect immediately prior to such delinquency and without
giving effect to the nonpayment causing such delinquency.
Section 14.6 HOLDERS OF NOTES. Subject to the terms of Article 18, the
Agent may deem and treat the payee of any Note as the absolute owner or
purchaser thereof for all purposes hereof until it shall have been furnished
in writing with a different name by such payee or by a subsequent holder,
assignee or transferee.
Section 14.7 INDEMNITY. The Banks ratably agree hereby to indemnify and
hold harmless the Agent from and against any and all claims, actions and suits
(whether groundless or otherwise), losses, damages, costs, expenses (including
any expenses for which the Agent has not been reimbursed by the Borrower as
required by Section 15), and liabilities of every nature and character arising
out of or related to this Agreement, the Notes, or any of the other Loan
Documents or the transactions contemplated or evidenced hereby or thereby, or
the Agent's actions taken hereunder or thereunder, except to the extent that
any of the same shall be directly caused by the Agent's willful misconduct or
gross negligence.
Section 14.8 AGENT AS BANK. In its individual capacity, Fleet shall have
the same obligations and the same rights, powers and privileges in respect to
its Commitment and the Loans made by it, and as the holder of any of the Notes
as it would have were it not also the Agent.
Section 14.9 RESIGNATION; REMOVAL. The Agent may resign at any time by
giving 30 days' prior written notice thereof to the Banks and the Borrower.
The Majority Banks (excluding any Bank acting as Agent) may remove the Agent
in the event of the Agent's gross negligence or willful misconduct. Upon any
such resignation or removal, the Majority Banks shall have the right to
appoint as a successor Agent any Bank, or if no such Bank shall accept such
appointment, then any other bank whose senior debt obligations are rated not
less than "A" or its equivalent by ▇▇▇▇▇'▇ or not less than "A" or its
equivalent by S&P and which has a net worth of not less than $500,000,000.
Unless a Default or Event of Default shall have occurred and be continuing,
such successor Agent shall be reasonably acceptable to the Borrower. If no
successor Agent shall have been so appointed by the Majority Banks and shall
have accepted such appointment within 30 days after the retiring Agent's
giving of notice of resignation, then the retiring Agent may, on behalf of the
Banks, appoint a successor Agent, which shall be any Bank or a bank whose debt
obligations are rated not less than "A" or its equivalent by ▇▇▇▇▇'▇ or not
less than "A" or its equivalent by S&P and which has a net worth of not less
than $500,000,000. Upon the acceptance of any appointment as Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring or removed Agent, and the retiring or removed Agent shall be
discharged from its duties and obligations hereunder as Agent. After any
retiring Agent's resignation or the removal of an Agent, the provisions of
this Agreement and the other
76
Loan Documents shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.
Section 14.10 DUTIES IN THE CASE OF ENFORCEMENT. In case one or more
Events of Default have occurred and shall be continuing, and whether or not
acceleration of the Obligations shall have occurred, the Agent shall, if (a)
so requested by the Majority Banks and (b) the Banks have provided to the
Agent such additional indemnities and assurances against expenses and
liabilities as the Agent may reasonably request, proceed to exercise all or
any legal and equitable and other rights or remedies as it may have. The
Majority Banks may direct the Agent in writing as to the method and the extent
of any such exercise, the Banks hereby agreeing to indemnify and hold the
Agent harmless in accordance with their respective Commitment Percentages from
all liabilities incurred in respect of all actions taken or omitted in
accordance with such directions, PROVIDED that the Agent need not comply with
any such direction to the extent that the Agent reasonably believes the
Agent's compliance with such direction to be unlawful or commercially
unreasonable in any applicable jurisdiction.
Section 15. EXPENSES
The Borrower agrees to pay (a) the reasonable costs of producing and
reproducing this Agreement, the other Loan Documents and the other agreements
and instruments mentioned herein, (b) any taxes (including any interest and
penalties in respect thereto) payable by the Agent or any of the Banks (other
than taxes based upon the Agent's or any Bank's gross or net income),
including any recording, mortgage, documentary or intangibles taxes in
connection with the Loan Documents, or other taxes payable on or with respect
to the transactions contemplated by this Agreement, including any such taxes
payable by the Agent or any of the Banks after the Closing Date (the Borrower
hereby agreeing to indemnify the Agent and each Bank with respect thereto),
(c) all reasonable internal charges of the Agent (determined in good faith and
in accordance with the Agent's internal policies applicable generally to its
customers) for commercial finance exams and engineering and environmental
reviews and the reasonable fees, expenses and disbursements of the counsel to
the Agent incurred in connection with the preparation, administration or
interpretation of the Loan Documents and other instruments mentioned herein
(excluding, however, the preparation of agreements evidencing participations
granted under Section 18.4), each closing hereunder, the issuance of Letters
of Credit, and amendments, modifications, approvals, consents or waivers
hereto or hereunder, (d) the reasonable fees, expenses and disbursements of
the Agent incurred by the Agent in connection with the preparation,
administration or interpretation of the Loan Documents and other instruments
mentioned herein, and the making of each advance hereunder, (e) all reasonable
out-of-pocket expenses (including reasonable attorneys' fees and costs, which
attorneys may be employees of any Bank or the Agent and the fees and costs of
appraisers, engineers, investment bankers or other experts retained by any
Bank or the Agent) incurred by any Bank or the Agent in connection with (i)
the enforcement of or preservation of rights under any of the Loan Documents
against the Borrower or the Guarantors or the administration thereof after the
occurrence of a Default or Event of Default and (ii) any litigation,
proceeding or dispute whether arising hereunder or otherwise, in any way
related to the Agent's or any of the Bank's relationship with the Borrower or
the Guarantors, (f) all reasonable actual fees, expenses and disbursements
(including reasonable attorney's fees and costs) incurred by Fleet in
connection
77
with the syndication of interests in the Loan by Fleet, and (g) all reasonable
fees, expenses and disbursements of any Bank or the Agent incurred in
connection with U.C.C. searches, U.C.C. filings, title rundowns or title
searches The covenants of this Section 15 shall survive payment or
satisfaction of payment of amounts owing with respect to the Notes.
Section 16. INDEMNIFICATION
The Borrower agrees to indemnify and hold harmless the Agent and the
Banks and each director, officer, employee, agent and Person who controls the
Agent or any Bank from and against any and all claims, actions and suits,
whether groundless or otherwise, and from and against any and all liabilities,
losses, damages and expenses of every nature and character arising out of or
relating to this Agreement or any of the other Loan Documents or the
transactions contemplated hereby and thereby including, without limitation,
(a) any brokerage, leasing, finders or similar fees, (b) any condition of the
Real Estate, (c) any actual or proposed use by the Borrower of the proceeds of
any of the Loans or Letters of Credit, (d) any actual or alleged infringement
of any patent, copyright, trademark, service ▇▇▇▇ or similar right of the
Borrower, the Guarantors or any of their respective Subsidiaries, (e) the
Borrower and the Guarantors entering into or performing this Agreement or any
of the other Loan Documents, (f) any actual or alleged violation of any law,
ordinance, code, order, rule, regulation, approval, consent, permit or license
relating to the Real Estate, (g) with respect to the Borrower, the Guarantors
and their respective Subsidiaries and their respective properties and assets,
the violation of any Environmental Law, the Release or threatened Release of
any Hazardous Substances or any action, suit, proceeding or investigation
brought or threatened with respect to any Hazardous Substances (including, but
not limited to claims with respect to wrongful death, personal injury or
damage to property), or (h) any claims, actions, or suits or proceedings
relating to the Transaction, including without limitation any shareholder or
other lawsuit threatened or filed, or investigations undertaken, as a result
of the Transactions, in each case including, without limitation, the
reasonable fees and disbursements of counsel and allocated costs of internal
counsel incurred in connection with any such investigation, litigation or
other proceeding; PROVIDED, HOWEVER, that the Borrower shall not be obligated
under this Section 16 to indemnify any Person for liabilities arising from
such Person's own gross negligence or willful misconduct as determined by a
court of competent jurisdiction after the exhaustion of all applicable appeal
periods. The Agent or a Bank, as applicable, shall promptly notify the
Borrower after the Agent or such Bank obtains actual knowledge of the claim to
be indemnified pursuant to this Section 16; provided, that any failure or
delay in providing such notice shall not relieve the Borrower of its
obligations under this Section 16 except to the extent that the Borrower is
actually prejudiced thereby. In litigation, or the preparation therefor, the
Banks and the Agent shall be entitled to select a single law firm as their own
counsel and, in addition to the foregoing indemnity, the Borrower agrees to
pay promptly the reasonable fees and expenses of such counsel. If, and to the
extent that the obligations of the Borrower under this Section 16 are
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment in satisfaction of such obligations which is
permissible under applicable law. The provisions of this Section 16 shall
survive the repayment of the Loans and the termination of the obligations of
the Banks hereunder.
78
Section 17. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein,
in the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of the Borrower, the Guarantors or any of
their respective Subsidiaries pursuant hereto or thereto shall be deemed to
have been relied upon by the Banks and the Agent, notwithstanding any
investigation heretofore or hereafter made by any of them, and shall survive
the making by the Banks of any of the Loans, as herein contemplated, and shall
continue in full force and effect so long as any amount due under this
Agreement or the Notes or any of the other Loan Documents remains outstanding
or any Letters of Credit remain outstanding or any Bank has any obligation to
make any Loans or issue any Letters of Credit. The indemnification obligations
of the Borrower provided herein and the other Loan Documents shall survive the
full repayment of amounts due and the termination of the obligations of the
Banks hereunder and thereunder to the extent provided herein and therein. All
statements contained in any certificate or other paper delivered to any Bank
or the Agent at any time by or on behalf of the Borrower, the Guarantors or
any of their respective Subsidiaries pursuant hereto or in connection with the
transactions contemplated hereby shall constitute representations and
warranties by such Person hereunder.
Section 18. ASSIGNMENT AND PARTICIPATION
Section 18.1 CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided
herein, each Bank may assign to one or more banks or other entities all or a
portion of its interests, rights and obligations under this Agreement
(including all or a portion of its Commitment Percentage and Commitment and
the same portion of the Loans at the time owing to it, and the Notes held by
it); provided that (a) the Agent shall have given its prior written consent to
such assignment, which consent shall not be unreasonably withheld or delayed
(provided that such consent shall not be required for any assignment to
another Bank, to a bank which is under common control with the assigning Bank
or to a wholly-owned Subsidiary of such Bank provided that such assignee shall
remain a wholly-owned Subsidiary of such Bank), (b) each such assignment shall
be of a constant, and not a varying, percentage of all the assigning Bank's
rights and obligations under this Agreement, (c) the parties to such
assignment shall execute and deliver to the Agent, for recording in the
Register (as hereinafter defined), a notice of such assignment in the form of
EXHIBIT F attached hereto and made a part hereof, together with any Notes
subject to such assignment, (d) in no event shall any such assignment be to
any Person controlling, controlled by or under common control with, or which
is not otherwise free from influence or control by, the Borrower or the
Guarantors, (e) such assignee shall have a net worth as of the date of such
assignment of not less than $500,000,000, and (f) such assignee shall acquire
an interest in the Loans of not less than $10,000,000 (or if less, the
remaining Commitment of the assignor). Upon such execution, delivery,
acceptance and recording, of such notice of assignment, (i) the assignee
thereunder shall be a party hereto and all other Loan Documents executed by
the Banks and, to the extent provided in such assignment, have the rights and
obligations of a Bank hereunder, (ii) the assigning Bank shall, to the extent
provided in such assignment and upon payment to the Agent of the registration
fee referred to in Section 18.2, be released from its obligations under this
Agreement, and (iii) the Agent may unilaterally amend SCHEDULE 1 to reflect
such assignment. In connection with each assignment, the assignee shall
represent and warrant to the Agent, the assignor and each other Bank as to
whether such assignee is controlling, controlled by, under common control
79
with or is not otherwise free from influence or control by, the Borrower and
the Guarantors. Notwithstanding anything herein to the contrary, provided no
Default or Event of Default has occurred and is continuing, in the event that
any Bank acting as Agent shall at any time hold a Commitment less than the
lesser of (i) $25,000,000.00 and (ii) the largest Commitment held by any other
Bank, then such Bank shall promptly provide written notice thereof to the
Banks and the Majority Banks (excluding the Bank acting as Agent) shall have
the right, to be exercised within fifteen (15) days of delivery of such notice
by such Bank acting as Agent, to elect to remove such Bank as Agent and
replace such Bank as Agent, subject to the terms of Section 14.9.
Section 18.2 REGISTER. The Agent shall maintain a copy of each
assignment delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Banks and the Commitment
Percentages of, and principal amount of the Loans owing to the Banks from time
to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Agent and the Banks may treat each
Person whose name is recorded in the Register as a Bank hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower and the Banks at any reasonable time and from time to time upon
reasonable prior notice. Upon each such recordation, the assigning Bank agrees
to pay to the Agent a registration fee in the sum of $3,500.
Section 18.3 NEW NOTES. Upon its receipt of an assignment executed by
the parties to such assignment, together with each Note subject to such
assignment, the Agent shall (a) record the information contained therein in
the Register, and (b) give prompt notice thereof to the Borrower. Within five
Business Days after receipt of such notice, the Borrower, at its own expense,
shall execute and deliver to the Agent, in exchange for each surrendered Note,
a new Note to the order of such assignee in an amount equal to the amount
assumed by such assignee pursuant to such assignment and, if the assigning
Bank has retained some portion of its obligations hereunder, a new Note to the
order of the assigning Bank in an amount equal to the amount retained by it
hereunder. Such new Notes shall provide that they are replacements for the
surrendered Notes, shall be in an aggregate principal amount equal to the
aggregate principal amount of the surrendered Notes, shall be dated the
effective date of such assignment and shall otherwise be in substantially the
form of the assigned Notes. The surrendered Notes shall be canceled and
returned to the Borrower.
Section 18.4 PARTICIPATIONS. Each Bank may sell participations to one or
more banks or other entities in all or a portion of such Bank's rights and
obligations under this Agreement and the other Loan Documents; PROVIDED that
(a) any such sale or participation shall not affect the rights and duties of
the selling Bank hereunder to the Borrower, (b) such sale and participation
shall not entitle such participant to any rights or privileges under this
Agreement or the Loan Documents (including, without limitation, the right to
approve waivers, amendments or modifications), (c) such participant shall have
no direct rights against the Borrower or the Guarantors except the rights
granted to the Banks pursuant to Section 13, (d) such sale is effected in
accordance with all applicable laws, and (e) such participant shall not be a
Person controlling, controlled by or under common control with, or which is
not otherwise free from influence or control by, the Borrower or the
Guarantors. Any Bank which sells a participation shall promptly notify the
Agent of such sale and the identity of the purchaser of such interest.
80
Section 18.5 PLEDGE BY BANK. Any Bank may at any time pledge all or any
portion of its interest and rights under this Agreement (including all or any
portion of its Note) to any of the twelve Federal Reserve Banks organized
under Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341. No such
pledge or the enforcement thereof shall release the pledgor Bank from its
obligations hereunder or under any of the other Loan Documents.
Section 18.6 NO ASSIGNMENT BY BORROWER. The Borrower shall not assign or
transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Banks.
Section 18.7 DISCLOSURE. The Borrower agrees that in addition to
disclosures made in accordance with standard banking practices any Bank may
disclose information obtained by such Bank pursuant to this Agreement to
assignees or participants and potential assignees or participants hereunder.
Section 18.8 CO-AGENTS. The Co-Lead Arrangers, Documentation Agent and
Syndication Agent shall not have any additional rights or obligations under
the Loan Documents, except for those rights, if any, as a Bank.
Section 18.9 MANDATORY ASSIGNMENT. In the event Borrower requests that
certain amendments, modifications or waivers be made to this Agreement or any
of the other Loan Documents which request is approved by Agent but is not
approved by one or more of the Banks (any such non-consenting Bank shall
hereafter be referred to as the "Non-Consenting Bank"), then, within thirty
(30) days after Borrower's receipt of notice of such disapproval by such
Non-Consenting Bank, Borrower shall have the right as to such Non-Consenting
Bank, to be exercised by delivery of written notice delivered to the Agent and
the Non-Consenting Bank within thirty (30) days of receipt of such notice, to
elect to cause the Non-Consenting Bank to transfer its Commitment. The Agent
shall promptly notify the remaining Banks that each of such Banks shall have
the right, but not the obligation, to acquire a portion of the Commitment, pro
rata based upon their relevant Commitment Percentages, of the Non-Consenting
Bank (or if any of such Banks does not elect to purchase its pro rata share,
then to such remaining Banks in such proportion as approved by the Agent). In
the event that the Banks do not elect to acquire all of the Non-Consenting
Bank's Commitment, then the Agent shall endeavor to find a new Bank or Banks
to acquire such remaining Commitment. Upon any such purchase of the Commitment
of the Non-Consenting Bank, the Non-Consenting Bank's interests in the
Obligations and its rights hereunder and under the Loan Documents shall
terminate at the date of purchase, and the Non-Consenting Bank shall promptly
execute and deliver any and all documents reasonably requested by Agent to
surrender and transfer such interest, including, without limitation, an
assignment and acceptance agreement in the form attached hereto as EXHIBIT F
and such Non-Consenting Bank's original Note. The purchase price for the
Non-Consenting Bank's Commitment shall equal any and all amounts outstanding
and owed by Borrower to the Non-Consenting Bank, including principal and all
accrued and unpaid interest or fees, plus any applicable prepayment fees which
would be owed to such Non-Consenting Bank if the Loans were to be repaid in
full on the date of such purchase of the Non-Consenting Bank's Commitment.
Section 19. NOTICES
81
Each notice, demand, election or request provided for or permitted to be
given pursuant to this Agreement (hereinafter in this Section 19 referred to
as "Notice") must be in writing and shall be deemed to have been properly
given or served by personal delivery or by sending same by overnight courier
or by depositing same in the United States Mail, postpaid and registered or
certified, return receipt requested, or as expressly permitted herein, by
telegraph, telecopy, telefax or telex, and addressed as follows:
If to the Agent or any Bank, at the address set forth on the signature
page for the Agent or such Bank; and
If to the Borrower:
Price Legacy Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Facsimile: 858/675-9405
and to each other Bank which may hereafter become a party to this Agreement at
such address as may be designated by such Bank. Each Notice shall be effective
upon being personally delivered or upon being sent by overnight courier or
upon being deposited in the United States Mail as aforesaid, or if transmitted
by telegraph, telecopy, telefax or telex is permitted, upon being sent and
confirmation of receipt. The time period in which a response to such Notice
must be given or any action taken with respect thereto (if any), however,
shall commence to run from the date of receipt if personally delivered or sent
by overnight courier or facsimile, or if so deposited in the United States
Mail, the earlier of three (3) Business Days following such deposit or the
date of receipt as disclosed on the return receipt. Rejection or other refusal
to accept or the inability to deliver because of changed address for which no
notice was given shall be deemed to be receipt of the Notice sent. By giving
at least fifteen (15) days prior Notice thereof, the Borrower, a Bank or Agent
shall have the right from time to time and at any time during the term of this
Agreement to change their respective addresses and each shall have the right
to specify as its address any other address within the United States of
America.
Section 20. RELATIONSHIP
The relationship between each Bank and the Borrower is solely that of a
lender and borrower, and nothing contained herein or in any of the other Loan
Documents shall in any manner be construed as making the parties hereto
partners, joint venturers or any other relationship other than lender and
borrower.
Section 21. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE
THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED THEREIN, ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF
82
MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF SUCH STATE (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS
OR CHOICE OF LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS
OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND
CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE SERVICE OF
PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS
SPECIFIED IN SECTION 19. THE BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY
NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT
SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
Section 22. HEADINGS
The captions in this Agreement are for convenience of reference only and
shall not define or limit the provisions hereof.
Section 23. COUNTERPARTS
This Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when
so executed and delivered shall be an original, and all of which together
shall constitute one instrument. In proving this Agreement it shall not be
necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought.
Section 24. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Agreement nor
any term hereof may be changed, waived, discharged or terminated, except as
provided in
Section 25. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS
EACH OF THE BORROWER, THE AGENT AND THE BANKS HEREBY WAIVES ITS RIGHT TO
A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, ANY NOTE OR ANY OF THE OTHER LOAN DOCUMENTS,
ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH
RIGHTS AND OBLIGATIONS. EXCEPT TO THE EXTENT EXPRESSLY PROHIBITED BY LAW, THE
BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE BORROWER (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
83
ATTORNEY OF ANY BANK OR THE AGENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH BANK OR THE AGENT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT THE AGENT AND THE
BANKS HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS TO WHICH THEY ARE PARTIES BY, AMONG OTHER THINGS, THE WAIVERS AND
CERTIFICATIONS CONTAINED IN THIS SECTION 25. BORROWER ACKNOWLEDGES THAT IT HAS
HAD AN OPPORTUNITY TO REVIEW THIS SECTION 25 WITH ITS LEGAL COUNSEL AND THAT
BORROWER AGREES TO THE FOREGOING AS ITS FREE, KNOWING AND VOLUNTARY ACT.
Section 26. DEALINGS WITH THE BORROWER
The Banks and their affiliates may accept deposits from, extend credit
to and generally engage in any kind of banking, trust or other business with
the Borrower, the Guarantors, their respective Subsidiaries, or any of their
affiliates regardless of the capacity of the Bank hereunder.
Section 27. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Except as otherwise expressly provided in this Agreement, any consent or
approval required or permitted by this Agreement may be given, and any term of
this Agreement or of any other instrument related hereto or mentioned herein
may be amended, and the performance or observance by the Borrower of any terms
of this Agreement or such other instrument or the continuance of any Default
or Event of Default may be waived (either generally or in a particular
instance and either retroactively or prospectively) with, but only with, the
written consent of the Majority Banks. Notwithstanding the foregoing, none of
the following may occur without the written consent of each Bank: a decrease
in the rate of interest on the Notes; an increase in the amount of the
Commitments of the Banks; a forgiveness, reduction or waiver of the principal
of any unpaid Loan or any interest thereon or fee payable under the Loan
Documents; a decrease in the amount of any fee payable to a Bank hereunder;
the postponement of any date fixed for any payment of principal of or interest
on the Loan; an extension of the Maturity Date; a change in the manner of
distribution of any payments to the Banks or the Agent; the release of the
Borrower or the Guarantors except as otherwise provided herein; any
modification to require a Bank to fund a pro rata share of a request for an
advance of the Loan made by the Borrower other than based on its Commitment
Percentage; an amendment to this Section 27; an amendment of the definition of
Majority Banks; or an amendment of any provision of this Agreement or the Loan
Documents which requires the approval of all of the Banks or the Majority
Banks to require a lesser number of Banks to approve such action. The amount
of the Agent's fee payable for the Agent's account and the provisions of
Section 14 may not be amended without the written consent of the Agent. There
shall be no amendment, modification or waiver of any provision in the Loan
Documents with respect to Swing Loans without the consent of the Swing Loan
Bank, nor may there be any amendment, modification or waiver of any provision
in the Loan Documents with respect to Letters of Credit without the consent of
the Issuing Bank. The Borrower agrees to enter into such modifications or
amendments of this Agreement or the other Loan Documents as reasonably may be
requested by Fleet in connection with the syndication of the Loan, provided
that no such amendment or modification materially affects or increases any of
the obligations of
84
the Borrower hereunder. No waiver shall extend to or affect any obligation not
expressly waived or impair any right consequent thereon. No course of dealing
or delay or omission on the part of the Agent or any Bank in exercising any
right shall operate as a waiver thereof or otherwise be prejudicial thereto.
No notice to or demand upon the Borrower shall entitle the Borrower to other
or further notice or demand in similar or other circumstances.
Section 28. SEVERABILITY
The provisions of this Agreement are severable, and if any one clause or
provision hereof shall be held invalid or unenforceable in whole or in part in
any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction, and shall not
in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Agreement in any jurisdiction.
Section 29. TIME OF THE ESSENCE
Time is of the essence with respect to each and every covenant,
agreement and obligation of the Borrower under this Agreement and the other
Loan Documents.
Section 30. NO UNWRITTEN AGREEMENTS
THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
Section 31. REPLACEMENT NOTES
Upon receipt of evidence reasonably satisfactory to Borrower of the
loss, theft, destruction or mutilation of any Note, and in the case of any
such loss, theft or destruction, upon delivery of an indemnity agreement
reasonably satisfactory to Borrower or, in the case of any such mutilation,
upon surrender and cancellation of the applicable Note, Borrower will execute
and deliver, in lieu thereof, a replacement Note, identical in form and
substance to the applicable Note and dated as of the date of the applicable
Note and upon such execution and delivery all references in the Loan Documents
to such Note shall be deemed to refer to such replacement Note.
85
Section 32. NO THIRD PARTIES BENEFITED
This Agreement and the other Loan Documents are made and entered into
for the sole protection and legal benefit of the Borrower, the Banks, 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.
[SIGNATURES BEGIN ON NEXT PAGE]
86
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as a
sealed instrument as of the date first set forth above.
PRICE LEGACY CORPORATION,
a Maryland corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------
Title: Vice Chairman
--------------------------------
[CORPORATE SEAL]
87
FLEET NATIONAL BANK,
individually and as Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Title: Vice President
--------------------------------
Fleet National Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Real Estate Division
With a copy to:
Fleet National Bank
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: 770/390-8434
88
▇▇▇▇▇ FARGO BANK, N.A.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------
Title: Vice President
--------------------------
▇▇▇▇▇ Fargo Bank, N.A.
▇▇▇ ▇ ▇▇▇▇▇▇, #▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Facsimile: 619/699-3105
89
U.S. BANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
Title: Senior Vice President
--------------------------
U.S. Bank National Association
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: 949/252-8371
90
COMERICA BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Title: AVP
--------------------------
Comerica Bank
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: 313/222-9295
91
EXHIBIT A
FORM OF REVOLVING CREDIT NOTE
$-------------- ------------------------------
FOR VALUE RECEIVED, the undersigned
PRICE LEGACY CORPORATION, a Maryland
corporation, hereby promises to pay to ______________________________ or
order, in accordance with the terms of that certain
Revolving Credit Agreement
dated as of September 19, 2001 (the "Credit Agreement"), as from time to time
in effect, among the undersigned, Fleet National Bank, for itself and as
Agent, and such other Banks as may be from time to time named therein, to the
extent not sooner paid, on or before the Maturity Date the principal sum of
________________________________________________________ DOLLARS
($______________), or such amount as may be advanced by the payee hereof under
the Credit Agreement (but excluding Swing Loans made pursuant to Section 2.5(a)
of the Credit Agreement) with daily interest from the date hereof, computed as
provided in the Credit Agreement, on the principal amount hereof from time to
time unpaid, at a rate per annum on each portion of the principal amount which
shall at all times be equal to the rate of interest applicable to such portion
in accordance with the Credit Agreement, and with interest on overdue
principal and, to the extent permitted by applicable law, on overdue
installments of interest and late charges at the rates provided in the Credit
Agreement. Interest shall be payable on the dates specified in the Credit
Agreement, except that all accrued interest shall be paid at the stated or
accelerated maturity hereof or upon the prepayment in full hereof. Capitalized
terms used herein and not otherwise defined herein shall have the meanings set
forth in the Credit Agreement.
Payments hereunder shall be made to Fleet National Bank, as Agent for
the payee hereof, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or at
such other address as Agent may specify.
This Note is one of one or more Notes evidencing borrowings under and is
entitled to the benefits and subject to the provisions of the Credit
Agreement. The principal of this Note may be due and payable in whole or in
part prior to the maturity date stated above and is subject to mandatory
prepayment in the amounts and under the circumstances set forth in the Credit
Agreement, and may be prepaid in whole or from time to time in part, all as
set forth in the Credit Agreement.
Notwithstanding anything in this Note to the contrary, all agreements
between the Borrower and the Banks and the Agent, whether now existing or
hereafter arising and whether written or oral, are hereby limited so that in
no contingency, whether by reason of acceleration of the maturity of any of
the Obligations or otherwise, shall the interest contracted for, charged or
received by the Banks exceed the maximum amount permissible under applicable
law. If, from any circumstance whatsoever, interest would otherwise be payable
to the Banks in excess of the maximum lawful amount, the interest payable to
the Banks shall be reduced to the maximum amount permitted under applicable
law; and if from any circumstance the Banks shall ever receive anything of
value deemed interest by applicable law in excess of the maximum lawful
amount, an amount equal to any excessive interest shall be applied to the
reduction of the
principal balance of the Obligations and to the payment of interest or, if
such excessive interest exceeds the unpaid balance of principal of the
Obligations, such excess shall be refunded to the Borrower. All interest paid
or agreed to be paid to the Banks shall, to the extent permitted by applicable
law, be amortized, prorated, allocated and spread throughout the full period
until payment in full of the principal of the Obligations (including the
period of any renewal or extension thereof) so that the interest thereon for
such full period shall not exceed the maximum amount permitted by applicable
law. This paragraph shall control all agreements between the Borrower and the
Banks and the Agent.
In case an Event of Default shall occur, the entire principal amount of
this Note may become or be declared due and payable in the manner and with the
effect provided in said Credit Agreement.
This Note shall be governed by and construed in accordance with the laws
of the Commonwealth of Massachusetts (without giving effect to the conflict of
laws rules of any jurisdiction).
The undersigned maker and all guarantors and endorsers, hereby waive
presentment, demand, notice, protest, notice of intention to accelerate the
indebtedness evidenced hereby, notice of acceleration of the indebtedness
evidenced hereby and all other demands and notices in connection with the
delivery, acceptance, performance and enforcement of this Note, except as
specifically otherwise provided in the Credit Agreement, and assent to
extensions of time of payment or forbearance or other indulgence without
notice.
IN WITNESS WHEREOF the undersigned has by its duly authorized officer
executed this Note under seal as of the day and year first above written.
PRICE LEGACY CORPORATION,
a Maryland corporation
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
[CORPORATE SEAL]
2
EXHIBIT B
FORM OF SWING LOAN NOTE
$-------------- -----------------------
FOR VALUE RECEIVED, the undersigned
PRICE LEGACY CORPORATION, a Maryland
corporation, hereby promises to pay to ______________________________ or order,
in accordance with the terms of that certain
Revolving Credit Agreement dated as
of September 19, 2001 (the "Credit Agreement"), as from time to time in effect,
among the undersigned, Fleet National Bank, for itself and as Agent, and such
other Banks as may be from time to time named therein, to the extent not sooner
paid, on or before the Maturity Date the principal sum of
_____________________________________________________________ DOLLARS
($______________), or such amount as may be advanced by the payee hereof under
the Credit Agreement as Swing Loans with daily interest from the date hereof,
computed as provided in the Credit Agreement, on the principal amount hereof
from time to time unpaid, at a rate per annum on each portion of the principal
amount which shall at all times be equal to the rate of interest applicable to
such portion in accordance with the Credit Agreement, and with interest on
overdue principal and, to the extent permitted by applicable law, on overdue
installments of interest and late charges at the rates provided in the Credit
Agreement. Interest shall be payable on the dates specified in the Credit
Agreement, except that all accrued interest shall be paid at the stated or
accelerated maturity hereof or upon the prepayment in full hereof. Capitalized
terms used herein and not otherwise defined herein shall have the meanings set
forth in the Credit Agreement.
Payments hereunder shall be made to Fleet National Bank, as Agent for the
payee hereof, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or at such
other address as Agent may specify.
This Note is one of one or more Notes evidencing borrowings under and is
entitled to the benefits and subject to the provisions of the Credit Agreement.
The principal of this Note may be due and payable in whole or in part prior to
the maturity date stated above and is subject to mandatory prepayment in the
amounts and under the circumstances set forth in the Credit Agreement, and may
be prepaid in whole or from time to time in part, all as set forth in the Credit
Agreement.
Notwithstanding anything in this Note to the contrary, all agreements
between the Borrower and the Banks and the Agent, whether now existing or
hereafter arising and whether written or oral, are hereby limited so that in no
contingency, whether by reason of acceleration of the maturity of any of the
Obligations or otherwise, shall the interest contracted for, charged or received
by the Banks exceed the maximum amount permissible under applicable law. If,
from any circumstance whatsoever, interest would otherwise be payable to the
Banks in excess of the maximum lawful amount, the interest payable to the Banks
shall be reduced to the maximum amount permitted under applicable law; and if
from any circumstance the Banks shall ever receive anything of value deemed
interest by applicable law in excess of the maximum lawful amount, an amount
equal to any excessive interest shall be applied to the reduction of the
principal balance of the Obligations and to the payment of interest or, if such
excessive interest exceeds the unpaid balance of principal of the Obligations,
such excess shall be refunded to the Borrower. All interest paid or agreed to be
paid to the Banks shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full period until
payment in full of the principal of the Obligations (including the period of any
renewal or extension thereof) so that the interest thereon for such full period
shall not exceed the maximum amount permitted by applicable law. This paragraph
shall control all agreements between the Borrower and the Banks and the Agent.
In case an Event of Default shall occur, the entire principal amount of
this Note may become or be declared due and payable in the manner and with the
effect provided in said Credit Agreement.
This Note shall be governed by and construed in accordance with the laws
of the Commonwealth of Massachusetts (without giving effect to the conflict of
laws rules of any jurisdiction).
The undersigned maker and all guarantors and endorsers, hereby waive
presentment, demand, notice, protest, notice of intention to accelerate the
indebtedness evidenced hereby, notice of acceleration of the indebtedness
evidenced hereby and all other demands and notices in connection with the
delivery, acceptance, performance and enforcement of this Note, except as
specifically otherwise provided in the Credit Agreement, and assent to
extensions of time of payment or forbearance or other indulgence without notice.
IN WITNESS WHEREOF the undersigned has by its duly authorized officer
executed this Note under seal as of the day and year first above written.
PRICE LEGACY CORPORATION,
a Maryland corporation
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
[CORPORATE SEAL]
2
EXHIBIT C
FORM OF REQUEST FOR LOAN
Fleet National Bank, as Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Ladies and Gentlemen:
Pursuant to the provisions of Section 2.7 of the
Revolving Credit
Agreement dated as of September 19, 2001, as from time to time in effect (the
"Credit Agreement"), among
Price Legacy Corporation (the "Borrower"), Fleet
National Bank, for itself and as Agent and the other Banks from time to time
party thereto, the Borrower hereby requests and certifies as follows:
1. LOAN. The Borrower hereby requests a [Loan under Section 2.1]
[Swing Loan under Section 2.5] of the Credit Agreement [strike inapplicable
language]:
Principal Amount: $
LIBOR or Base Rate:
Drawdown Date: , 19
Interest Period:
by credit to the general account of the Borrower with the Agent at the Agent's
Head Office.
[IF THE REQUESTED LOAN IS A SWING LOAN AND THE BORROWER DESIRES FOR
SUCH LOAN TO BE A LIBOR RATE LOAN FOLLOWING ITS CONVERSION AS PROVIDED IN
SECTION 2.5(d), SPECIFY THE INTEREST PERIOD FOLLOWING
CONVERSION:____________________]
2. USE OF PROCEEDS. Such Loan shall be used for the following
purposes permitted by Section 2.10 of the Credit Agreement:
[Describe]
3. NO DEFAULT. The undersigned chief financial or chief accounting
officer of the Borrower certifies that the Borrower is and will be in
compliance with all covenants under the Loan Documents after giving effect to
the making of the Loan requested hereby.
4. REPRESENTATIONS TRUE. Each of the representations and warranties
made by or on behalf of the Borrower, the Guarantors and their respective
Subsidiaries contained in the Credit Agreement, in the other Loan Documents or
in any document or instrument delivered pursuant to or in connection with the
Credit Agreement was true as of the date as of which it was made and shall
also be true at and as of the Drawdown Date for the Loan requested hereby,
with the same effect as if made at and as of such Drawdown Date (except to the
extent of changes resulting from transactions contemplated or permitted by the
Credit Agreement and the other Loan Documents and changes occurring in the
ordinary course of business that singly or in the aggregate are not materially
adverse, and except to the extent that such representations and warranties
relate expressly to an earlier date) and no Default or Event of Default has
occurred and is continuing.
5. OTHER CONDITIONS. All other conditions to the making of the Loan
requested hereby set forth in Section 11 of the Credit Agreement have been
satisfied.
6. DRAWDOWN DATE. Except to the extent, if any, specified by notice
actually received by the Agent prior to the Drawdown Date specified above, the
foregoing representations and warranties shall be deemed to have been made by
the Borrower on and as of such Drawdown Date.
7. DEFINITIONS. Terms defined in the Credit Agreement are used
herein with the meanings so defined.
IN WITNESS WHEREOF, we have hereunto set our hands this _____ day of
_______________, 200__.
PRICE LEGACY CORPORATION,
a Maryland corporation
By:
----------------------------------------
Chief Financial or Chief Accounting
Officer
2
EXHIBIT D
LETTER OF CREDIT REQUEST
EXHIBIT E
FORM OF
COMPLIANCE CERTIFICATE
Fleet National Bank, as Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to the
Revolving Credit Agreement dated as of
September 19, 2001 (the "Credit Agreement") by and among Price Legacy
Corporation (the "Borrower"), Fleet National Bank, for itself and as Agent,
and the other Banks from time to time party thereto. Terms defined in the
Credit Agreement and not otherwise defined herein are used herein as defined
in the Credit Agreement.
Pursuant to the Credit Agreement, the Borrower is furnishing to you
herewith (or have most recently furnished to you) the financial statements of
the Borrower and its respective Subsidiaries for the fiscal period ended
_______________ (the "Balance Sheet Date"). Such financial statements have
been prepared in accordance with generally accepted accounting principles and
present fairly the financial position of the Borrower and the Subsidiaries
covered thereby at the date thereof and the results of their operations for
the periods covered thereby, subject in the case of interim statements only to
normal year-end audit adjustments.
This certificate is submitted in compliance with requirements of Section
7.4(c), Section 7.5(d) and Section 10.10 of the Credit Agreement. If this
certificate is provided under a provision other than Section 7.4(c), the
calculations provided below are made using the financial statements of the
Borrower and its respective Subsidiaries as of the Balance Sheet Date adjusted
in the best good-faith estimate of the Borrower to give effect to the making
of a Loan, acquisition or disposition of property or other event that
occasions the preparation of this certificate; and the nature of such event
and the Borrower's estimate of its effects are set forth in reasonable detail
in an attachment hereto. The undersigned officer is the chief financial or
chief accounting officer of the Borrower.
The undersigned officer has caused the provisions of the Credit
Agreement and the Guaranty to be reviewed and have no knowledge of any Default
or Event of Default. (Note: If the signer does have knowledge of any Default
or Event of Default, the form of certificate should be revised to specify the
Default or Event of Default, the nature thereof and the actions taken, being
taken or proposed to be taken by the Borrower with respect thereto.)
The Borrower is providing the information set forth in the schedule
attached hereto to demonstrate compliance as of the date hereof with the
covenants described therein.
IN WITNESS WHEREOF, the undersigned hereunto set its hand this ___ day of
________________, 200_.
PRICE LEGACY CORPORATION,
a Maryland corporation
By:
----------------------------------------
Chief Financial or Chief Accounting
Officer
EXHIBIT F
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
THIS ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Agreement") dated
_____________, 200__, by and between ("Assignor"), and ("Assignee").
W I T N E S S E T H:
WHEREAS, Assignor is a party to that certain
revolving Credit Agreement
dated as of September 19, 2001 (as amended and in effect from time to time, the
"
Revolving Credit Agreement"), by and among Price Legacy Corporation (the
"Borrower"), the lenders listed from time to time party thereto (collectively,
the "Banks") and Fleet National Bank, as Agent for the Banks (in such capacity,
the "Agent"); and
WHEREAS, Assignor desires to transfer to Assignee a Commitment under the
Revolving Credit Agreement and its rights under the Revolving Credit Agreement
with respect to the Commitment being assigned and its outstanding Loans with
respect to the Commitment;
NOW, THEREFORE, for and in consideration of the sum of Ten and No/100
Dollars ($10.00) and other good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree
as follows:
1. DEFINITIONS. Terms defined in the Revolving Credit Agreement and
used herein without definition shall have the respective meanings assigned to
such terms in the Revolving Credit Agreement.
2. ASSIGNMENT.
(a) Subject to the terms and conditions of this Agreement and in
consideration of the payment to be made by Assignee to Assignor pursuant to
Paragraph 5 of this Agreement, effective as of the "Assignment Date" (as defined
in Paragraph 6 below), Assignor hereby irrevocably sells, transfers and assigns
to Assignee, without recourse, [A PORTION OF] its Note (the "Note") in the
amount of $______________ representing a $__________ Commitment, a _____%
percent Commitment Percentage and a ______% interest in and to all of the other
rights and obligations under the Revolving Credit Agreement, the other Loan
Documents and the Intercreditor Agreement (as hereinafter defined) (the assigned
interests being hereinafter referred to as the "Assigned Interests"), including
Assignor's share of all outstanding Loans with respect to the Assigned Interests
and the right to receive interest and principal on and all other fees and
amounts with respect to the Assigned Interests, all from and after the
Assignment Date, all as if Assignee were an original Bank under and signatory to
the Revolving Credit Agreement and the Intercreditor Agreement having a
Commitment Percentage equal to such amount of the Assigned Interests.
(b) Assignee, subject to the terms and conditions hereof, hereby
assumes all obligations of Assignor with respect to the Assigned Interests from
and after the Assignment
Date as if Assignee were an original Bank under and signatory to the
Revolving Credit Agreement and the Intercreditor Agreement, which obligations
shall include, but shall not be limited to, the obligation to make Loans to
the Borrower or participate in Letters of Credit with respect to the Assigned
Interests and to indemnify the Agent as provided therein (such obligations,
together with all other obligations set forth in the Revolving Credit
Agreement, the other Loan Documents and the Intercreditor Agreement are
hereinafter collectively referred to as the "Assigned Obligations"). Assignor
shall have no further duties or obligations with respect to, and shall have
no further interest in, the Assigned Obligations or the Assigned Interests.
3. REPRESENTATIONS AND REQUESTS OF ASSIGNOR.
(a) Assignor represents and warrants to Assignee (i) that it is
legally authorized to, and has full power and authority to, enter into this
Agreement and perform its obligations under this Agreement; (ii) that as of the
date hereof, before giving effect to the assignment contemplated hereby and
other assignments to be made contemporaneously herewith, the principal face
amount of Assignor's Note is $__________ and the aggregate outstanding principal
balance of the Loans made by it equals $__________ and (iii) that it has
forwarded to the Agent the Note held by Assignor. Assignor makes no
representation or warranty, express or implied, and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with the Loan Documents or the execution, legality, validity,
enforceability, genuineness or sufficiency of any Loan Document or any other
instrument or document furnished pursuant thereto or in connection with the
Loan, the collectability of the Loans, the continued solvency of the Borrower or
the Guarantors or the continued existence, sufficiency or value of any assets of
the Borrower or the Guarantors which may be realized upon for the repayment of
the Loans, or the performance or observance by the Borrower or the Guarantors of
any of their respective obligations under the Loan Documents to which it is a
party or any other instrument or document delivered or executed pursuant thereto
or in connection with the Loan; other than that it is the legal and beneficial
owner of, or has the right to assign, the interest being assigned by it
hereunder and that such interest is free and clear of any adverse claim.
(b) Assignor requests that the Agent obtain replacement notes for
each of Assignor and Assignee as provided in the Revolving Credit Agreement.
4. REPRESENTATIONS OF ASSIGNEE. Assignee makes and confirms to the
Agent, Assignor and the other Banks all of the representations, warranties and
covenants of a Bank under Articles 14 and 18 of the Revolving Credit Agreement
and in the Intercreditor Agreement. Without limiting the foregoing, Assignee (a)
represents and warrants that it is legally authorized to, and has full power and
authority to, enter into this Agreement and perform its obligations under this
Agreement; (b) confirms that it has received a copy of the Loan Documents
together with copies of the most recent financial statements delivered pursuant
to the Revolving Credit Agreement and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Agreement; (c) agrees that it has and will, independently and without
reliance upon Assignor, any other Bank or the Agent and based upon such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in evaluating the Loans, the Loan Documents, the
creditworthiness of the
Borrower or the Guarantors and the value of the assets of the Borrower or the
Guarantors, and taking or not taking action under the Loan Documents and any
intercreditor agreement among the Banks and the Agent (the "Intercreditor
Agreement"); (d) appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers as are reasonably incidental
thereto pursuant to the terms of the Loan Documents and the Intercreditor
Agreement; (e) agrees that it will become a party to and will perform in
accordance with their terms all the obligations which by the terms of the
Loan Documents and the Intercreditor Agreement are required to be performed
by it as a Bank; (f) represents and warrants that Assignee does not control,
is not controlled by, is not under common control with and is otherwise free
from influence or control by, the Borrower or the Guarantors, (g) represents
and warrants that Assignee is subject to control, regulation or examination
by a state or federal regulatory agency (or if not, that Assignee shall take
such steps as it may deem necessary to avail itself of the protections
afforded under the Massachusetts Usury statute), and (h) agrees that if
Assignee is not incorporated under the laws of the United States of America
or any State, it has on or prior to the date hereof delivered to Borrower and
Agent certification as to its exemption from deduction or withholding of any
United States federal income taxes. Assignee represents and warrants that it
has a net worth as of the Assignment Date of not less than $500,000,000.00.
5. PAYMENTS TO ASSIGNOR. In consideration of the assignment made
pursuant to Paragraph 1 of this Agreement, Assignee agrees to pay to Assignor
on the Assignment Date, an amount equal to $________________ representing the
aggregate principal amount outstanding of the Loans under the Revolving Credit
Agreement and the other Loan Documents with respect to the Assigned Interests.
All outstanding LIBOR Rate Loans shall continue in effect for the remainder of
their applicable Interest Periods and Assignee shall accept the currently
effective interest rates on its Assigned Interest of each LIBOR Rate Loan.
6. PAYMENTS BY ASSIGNOR. Assignor agrees to pay the Agent on the
Assignment Date the registration fee of $3,500.00 required by Section 18.2 of
the Revolving Credit Agreement.
7. EFFECTIVENESS.
(a) The effective date for this Agreement shall be _________, 200__
(the "Assignment Date"). Following the execution of this Agreement, each party
hereto shall deliver its duly executed counterpart hereof to the Agent for
acceptance and recording in the Register by the Agent.
(b) Upon such acceptance and recording and from and after the
Assignment Date, (i) Assignee shall be a party to the Revolving Credit Agreement
and the Intercreditor Agreement and, to the extent of the Assigned Interests,
have the rights and obligations of a Bank thereunder, and (ii) Assignor shall,
with respect to the Assigned Interests, relinquish its rights and be released
from its obligations under the Revolving Credit Agreement and the Intercreditor
Agreement.
(c) Upon such acceptance and recording and from and after the
Assignment Date, the Agent shall make all payments in respect of the rights and
interests assigned hereby
accruing after the Assignment Date (including payments of principal,
interest, fees and other amounts) to Assignee.
8. NOTICES. Assignee specifies as its address for notices and its
Lending Office for all Loans, the offices set forth below:
Notice Address:
--------------------------------
--------------------------------
--------------------------------
--------------------------------
Telephone:
----------------------
Facsimile:
----------------------
Domestic Lending Office: Same as above
LIBOR Lending Office: Same as above
9. PAYMENT INSTRUCTIONS. All payments to Assignee under the
Revolving Credit Agreement shall be made as provided in the Revolving Credit
Agreement in accordance with the separate instructions provided to Agent by
Assignee.
10. LAW GOVERNING. THIS AGREEMENT IS INTENDED TO TAKE EFFECT AS A SEALED
INSTRUMENT FOR ALL PURPOSES AND TO BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (WITHOUT REFERENCE TO
CONFLICT OF LAWS).
11. COUNTERPARTS. This Agreement may be executed in any number of
counterparts which shall together constitute but one and the same agreement.
12. AMENDMENTS. This Agreement may not be amended, modified or
terminated except by an agreement in writing signed by Assignor and Assignee,
and consented to by Agent.
13. SUCCESSORS. This Agreement shall inure to the benefit of the
parties hereto and their respective successors and assigns as permitted by
the terms of Revolving Credit Agreement and the Intercreditor Agreement.
IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned
has caused this Agreement to be executed on its behalf by its officers thereunto
duly authorized, as of the date first above written.
ASSIGNOR:
------------------------------------
By:
---------------------------------
Title:
------------------------------
ASSIGNEE:
------------------------------------
By:
---------------------------------
Title:
------------------------------
RECEIPT ACKNOWLEDGED AND
ASSIGNMENT CONSENTED TO BY:
FLEET NATIONAL BANK, as Agent
By:
-------------------------------
Title:
----------------------
SCHEDULE 1
BANKS AND COMMITMENTS
NAME AND ADDRESS COMMITMENT COMMITMENT PERCENTAGE
---------------- -------------- ---------------------
Fleet National Bank $40,000,000.00 40%
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Real Estate Division
LIBOR Lending Office
Same as above
▇▇▇▇▇ Fargo Bank, N.A. $25,000,000.00 25%
▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
LIBOR Lending Office
Same as above
U. S. Bank National Association $25,000,000.00 25%
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
LIBOR Lending Office
Same as above
Comerica Bank $10,000,000.00 10%
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
LIBOR Lending Office
Same as above
--------------- ------
$100,000,000.00 100.00%
Percentages may not equal 100% due to rounding.
SCHEDULE 1.1
INITIAL UNENCUMBERED BORROWING BASE PROPERTIES
PROPERTY LOCATION GLA SF
-------- -------- -------
Pentagon Arlington, VA 336,796
San Diego/Morena San Diego, CA 322,238
Seekonk Seekonk, MA 213,994
▇▇▇▇ Burnie Glen Burnie, MD 154,661
Rancho San Diego San Diego, CA 98,363
San ▇▇▇▇ Capistrano San Juan Capistrano, CA 56,436
Redwood City Redwood City, CA 49,429
Hampton Hampton, VA 45,605
Tucson Marana, AZ 40,087
Carmel Mountain San Diego, CA 35,000
Northridge Northridge, CA 22,000
Rancho Del Rey Chula Vista, CA 3,200
OFFICE Sacramento/▇▇▇▇▇▇▇▇ Sacramento, CA 156,005
SELF STORAGE Solana Beach Solana Beach, CA 316,000
SELF STORAGE San Diego/Morena San Diego, CA 120,962
SELF STORAGE Azusa Azusa, CA 121,385
SCHEDULE 1.2
CALCULATION OF ECONOMIC INTEREST IN JOINT VENTURES
SCHEDULE 2
EXAMPLE OF DEBT SERVICE COVERAGE AMOUNT CALCULATION
SCHEDULE 6.1(a)
GUARANTORS
NAME TYPE OF ENTITY JURISDICTION OF ORGANIZATION
---- -------------- ----------------------------
Excel Legacy Corporation Corporation Delaware
Excel Legacy Holdings, Inc. Corporation Delaware
SCHEDULE 6.7
------------
LITIGATION
SCHEDULE 6.17
-------------
ENVIRONMENTAL MATTERS
SCHEDULE 6.18
-------------
SUBSIDIARIES OF THE BORROWER AND THE GUARANTORS
SCHEDULE 6.20
-------------
EMINENT DOMAIN PROCEEDINGS
SCHEDULE 6.22
-------------
MATERIAL AGREEMENTS
SCHEDULE 8.1(h)
---------------
EXISTING INDEBTEDNESS
SCHEDULE 8.14
-------------
APPROVED BANKRUPTCY REMOTE SUBSIDIARIES
EXHIBITS AND SCHEDULES
----------------------
Exhibit A - FORM OF REVOLVING CREDIT NOTE
Exhibit B - FORM OF SWING LOAN NOTE
Exhibit C - FORM OF REQUEST FOR LOAN
Exhibit D - LETTER OF CREDIT REQUEST
Exhibit E - FORM OF COMPLIANCE CERTIFICATE
Exhibit F - FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
Schedule 1 - BANKS AND COMMITMENTS
Schedule 1.1 - INITIAL UNENCUMBERED BORROWING BASE PROPERTIES
Schedule 1.2 - CALCULATION OF ECONOMIC INTEREST IN JOINT VENTURES
Schedule 2 - EXAMPLE OF DEBT SERVICE COVERAGE AMOUNT CALCULATION
Schedule 6.1(a) - GUARANTORS
Schedule 6.7 - LITIGATION
Schedule 6.17 - ENVIRONMENTAL MATTERS
Schedule 6.18 - SUBSIDIARIES OF THE BORROWER AND THE GUARANTORS
Schedule 6.20 -EMINENT DOMAIN PROCEEDINGS
Schedule 6.22 - MATERIAL AGREEMENTS
Schedule 8.1(h) - EXISTING INDEBTEDNESS
Schedule 8.14 - APPROVED BANKRUPTCY REMOTE SUBSIDIARIES