<PAGE>
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
SIMON PROPERTY GROUP, L.P.
--------------------------
(Exact name of registrant as specified in its charter)
Delaware
--------
(State of incorporation or organization)
33-11491
--------
(Commission File No.)
34-1755769
----------
(I.R.S. Employer Identification No.)
National City Center
115 West Washington Street, Suite 15 East
Indianapolis, Indiana 46204
----------------------------
(Address of principal executive offices)
(317) 636-1600
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [_]
================================================================================
1
<PAGE>
SIMON PROPERTY GROUP, L.P.
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
Part I - Financial Information Page
<S> <C>
Item 1: Financial Statements
Consolidated Condensed Balance Sheets as of September 30, 1999 and
December 31, 1998 3
Consolidated Condensed Statements of Operations for the three-month and
nine-month periods ended September 30, 1999 and 1998 4
Consolidated Condensed Statements of Cash Flows for the nine-month
periods ended September 30, 1999 and 1998 5
Notes to Unaudited Consolidated Condensed Financial Statements 6
Item 2: Management's Discussion and Analysis of Financial Condition
and Results of Operations 16
Item 3: Qualitative and Quantitative Disclosure About Market Risk 24
Part II - Other Information
Items 1 through 6 25
Signature 26
</TABLE>
2
<PAGE>
SIMON PROPERTY GROUP, L.P.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited and dollars in thousands)
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------- ------------
<S> <C> <C>
ASSETS:
Investment properties, at cost $ 12,452,567 $ 11,662,860
Less--accumulated depreciation 992,936 709,114
------------ ------------
11,459,631 10,953,746
Goodwill, net 40,787 58,134
Cash and cash equivalents 94,120 124,466
Tenant receivables and accrued revenue, net 262,026 217,341
Notes and advances receivable from Management Company and affiliate 139,738 115,378
Note receivable from SRC Operating Partnership -- 20,565
Investment in partnerships and joint ventures, at equity 1,353,871 1,303,251
Investment in Management Company and affiliates 21,092 10,037
Other investment 44,542 50,176
Deferred costs and other assets 256,694 227,684
Minority interest 36,177 32,138
------------ ------------
Total assets $ 13,708,678 $ 13,112,916
============ ============
LIABILITIES:
Mortgages and other indebtedness $ 8,541,538 $ 7,972,381
Notes payable to SRC Operating Partnership (Interest at 8%, due 2008) 2,743 17,907
Accounts payable and accrued expenses 470,177 410,445
Cash distributions and losses in partnerships and joint ventures, at equity 31,494 29,139
Other liabilities 153,586 95,243
------------ ------------
Total liabilities 9,199,538 8,525,115
------------ ------------
COMMITMENTS AND CONTINGENCIES (Note 12)
PARTNERS' EQUITY:
Preferred units, 18,868,422 and 16,053,580 units outstanding, respectively 944,280 1,057,245
General Partners, 168,191,696 and 161,487,017 units outstanding, respectively 2,590,171 2,540,660
Limited Partners, 64,905,359 and 64,182,157 units outstanding, respectively 999,550 1,009,646
Unamortized restricted stock award (24,861) (19,750)
------------ ------------
Total partners' equity 4,509,140 4,587,801
------------ ------------
Total liabilities and partners' equity $ 13,708,678 $ 13,112,916
============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
SIMON PROPERTY GROUP, L.P.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited and dollars in thousands, except per unit amounts)
<TABLE>
<CAPTION>
For the Three Months Ended September 30, For the Nine Months Ended September 30,
---------------------------------------- ---------------------------------------
1999 1998 1999 1998
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
REVENUE:
Minimum rent $ 278,126 $ 194,360 $ 822,117 $ 565,294
Overage rent 12,238 2,283 40,161 22,766
Tenant reimbursements 155,336 101,834 429,817 283,805
Other income 21,213 23,510 69,431 60,754
---------- ----------- ---------- -----------
Total revenue 466,913 321,987 1,361,526 932,619
---------- ----------- ---------- -----------
EXPENSES:
Property operating 75,656 55,564 214,801 155,822
Depreciation and amortization 92,465 61,092 269,879 177,710
Real estate taxes 47,622 31,382 137,463 90,341
Repairs and maintenance 15,275 12,403 51,927 35,953
Advertising and promotion 15,746 11,270 44,979 27,992
Provision for (recovery of) credit losses 1,985 (1,856) 6,693 1,599
Other 5,286 4,806 19,709 16,983
---------- ----------- ---------- -----------
Total operating expenses 254,035 174,661 745,451 506,400
---------- ----------- ---------- -----------
OPERATING INCOME 212,878 147,326 616,075 426,219
INTEREST EXPENSE 144,091 97,328 428,149 281,748
---------- ----------- ---------- -----------
INCOME BEFORE MINORITY INTEREST 68,787 49,998 187,926 144,471
MINORITY INTEREST (2,236) (1,108) (7,739) (4,704)
LOSSES ON SALES OF ASSETS -- (64) (4,188) (7,283)
---------- ----------- ---------- -----------
INCOME BEFORE UNCONSOLIDATED ENTITIES 66,551 48,826 175,999 132,484
INCOME FROM UNCONSOLIDATED ENTITIES 17,613 3,809 42,538 8,789
---------- ----------- ---------- -----------
INCOME BEFORE UNUSUAL AND
EXTRAORDINARY ITEMS 84,164 52,635 218,537 141,273
UNUSUAL ITEM (Note 12) (12,000) -- (12,000) --
EXTRAORDINARY ITEMS (410) (22) (2,227) 7,002
---------- ----------- ---------- -----------
NET INCOME 71,754 52,613 204,310 148,275
PREFERRED UNIT REQUIREMENT (16,690) (8,074) (50,518) (22,742)
---------- ----------- ---------- -----------
NET INCOME AVAILABLE TO UNITHOLDERS $ 55,064 $ 44,539 $ 153,792 $ 125,533
========== =========== ========== ===========
NET INCOME AVAILABLE TO UNITHOLDERS
ATTRIBUTABLE TO:
Managing General Partner (SPG) $ 12,879 $ 1,369 $ 35,279 $ 1,369
General Partners (SPG Properties,
Inc. and SD Property Group, Inc.) 26,923 27,375 75,711 78,790
Limited Partners 15,262 15,795 42,802 45,374
---------- ----------- ---------- -----------
Net income $ 55,064 $ 44,539 $ 153,792 $ 125,533
========== =========== ========== ===========
BASIC EARNINGS PER UNIT:
Income before extraordinary
and unusual items $ 0.24 $ 0.25 $ 0.68 $ 0.67
Extraordinary items -- -- (0.01) 0.04
---------- ----------- ---------- -----------
Net income $ 0.24 $ 0.25 $ 0.67 $ 0.71
========== =========== ========== ===========
DILUTED EARNINGS PER UNIT:
Income before extraordinary items $ 0.24 $ 0.25 $ 0.68 $ 0.67
Extraordinary items -- -- (0.01) 0.04
---------- ----------- ---------- -----------
Net income $ 0.24 $ 0.25 $ 0.67 $ 0.71
========== =========== ========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
SIMON PROPERTY GROUP, L.P.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited and dollars in thousands)
<TABLE>
<CAPTION>
For the Nine Months Ended September 30,
---------------------------------------
1999 1998
---------------- ----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 204,310 $ 148,275
Adjustments to reconcile net income to net cash provided
by operating activities--
Depreciation and amortization 278,313 185,798
Extraordinary items 2,227 (7,002)
Unusual item 12,000 --
Losses on sales of assets 4,188 7,283
Straight-line rent (13,661) (5,892)
Minority interest 7,739 4,704
Equity in income of unconsolidated entities (42,538) (8,789)
Changes in assets and liabilities--
Tenant receivables and accrued revenue (24,612) (5,280)
Deferred costs and other assets (22,676) (10,516)
Accounts payable, accrued expenses and other liabilities 34,588 41,648
------------ ------------
Net cash provided by operating activities 439,878 350,229
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions (265,715) (1,881,183)
Capital expenditures (347,020) (233,200)
Change in restricted cash -- 6,868
Cash from acquisitions and consolidation of joint ventures, net 10,812 17,213
Net proceeds from sales of assets 42,000 46,087
Investments in unconsolidated entities (55,991) (28,726)
Note payment from the SRC Operating Partnership 20,565 --
Distributions from unconsolidated entities 191,442 164,914
Investments in and advances to Management Company and affiliates (24,360) (19,915)
------------ ------------
Net cash used in investing activities (428,267) (1,927,942)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Partnership contributions, net 1,407 92,629
Partnership distributions (401,803) (310,318)
Minority interest distributions, net (12,188) (10,991)
Note payment to the SRC Operating Partnership (15,164) --
Mortgage and other note proceeds, net of transaction costs 1,658,633 3,305,199
Mortgage and other note principal payments (1,272,842) (1,529,534)
------------ ------------
Net cash provided by (used in) financing activities (41,957) 1,546,985
------------ ------------
DECREASE IN CASH AND CASH EQUIVALENTS (30,346) (30,728)
CASH AND CASH EQUIVALENTS, beginning of period 124,466 109,699
------------ ------------
CASH AND CASH EQUIVALENTS, end of period $ 94,120 $ 78,971
============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
SIMON PROPERTY GROUP, L.P.
Notes to Unaudited Consolidated Condensed Financial Statements
(Dollars in thousands, except per Unit amounts and where indicated as in
billions)
Note 1 - Organization
Simon Property Group, L.P. (the "SPG Operating Partnership"), a Delaware
limited partnership, formerly known as Simon DeBartolo Group, L.P. ("SDG, LP"),
is a majority owned subsidiary of Simon Property Group Inc. ("SPG"), a Delaware
corporation. SPG is a self-administered and self-managed real estate investment
trust ("REIT") under the Internal Revenue Code of 1986, as amended (the "Code").
Each share of common stock of SPG is paired with a beneficial interest in
1/100th of a share of common stock of SPG Realty Consultants, Inc. ("SRC"), also
a Delaware corporation. Units of ownership interest ("Units") in the SPG
Operating Partnership are paired with a beneficial interest in 1/100th of a Unit
in SPG Realty Consultants, L.P. (the "SRC Operating Partnership"). The SRC
Operating Partnership is the primary subsidiary of SRC.
The SPG Operating Partnership, is engaged primarily in the ownership,
operation, management, leasing, acquisition, expansion and development of real
estate properties, primarily regional malls and community shopping centers. As
of September 30, 1999, the SPG Operating Partnership, together with its
affiliated Management Company, owned or held an interest in 252 income-producing
properties in the United States, which consisted of 162 regional malls, 77
community shopping centers, four specialty retail centers, five office and
mixed-use properties and four value-oriented super-regional malls in 36 states
(the "Properties"), and four assets in Europe. The SPG Operating Partnership and
its affiliated Management Company also owned interests in one value-oriented
super-regional mall, two community centers, one outlet center and one asset in
Europe under construction and twelve parcels of land held for future
development. In addition, the SPG Operating Partnership holds substantially all
of the economic interest in M.S. Management Associates, Inc. (the "Management
Company" --See Note 9). The SPG Operating Partnership holds substantially all of
the economic interest in, and the Management Company holds substantially all of
the voting stock of, DeBartolo Properties Management, Inc. ("DPMI"), which
provides architectural, design, construction and other services to substantially
all of the Properties, as well as certain other regional malls and community
shopping centers owned by third parties. SPG owned 72.2% and 71.6% of the SPG
Operating Partnership at September 30, 1999 and December 31, 1998, respectively.
Note 2 - Basis of Presentation
The accompanying consolidated condensed financial statements are unaudited;
however, they have been prepared in accordance with generally accepted
accounting principles for interim financial information and in conjunction with
the rules and regulations of the Securities and Exchange Commission.
Accordingly, they do not include all of the disclosures required by generally
accepted accounting principles for complete financial statements. In the opinion
of management, all adjustments (consisting solely of normal recurring matters)
necessary for a fair presentation of the consolidated condensed financial
statements for these interim periods have been included. The results for the
interim period ended September 30, 1999 are not necessarily indicative of the
results to be obtained for the full fiscal year. These unaudited consolidated
condensed financial statements should be read in conjunction with the SPG
Operating Partnership's December 31, 1998 audited financial statements and notes
thereto included in its Annual Report on Form 10-K.
The accompanying consolidated condensed financial statements of the SPG
Operating Partnership include all accounts of all entities owned or controlled
by the SPG Operating Partnership. All significant intercompany amounts have been
eliminated. The accompanying consolidated financial statements have been
prepared in accordance with generally accepted accounting principles, which
requires management to make estimates and assumptions that affect the reported
amounts of the SPG Operating Partnership's assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and
revenues and expenses during the reported periods. Actual results could differ
from these estimates.
Properties which are wholly-owned or owned less than 100% and are
controlled by the SPG Operating Partnership are accounted for using the
consolidated method of accounting. Control is demonstrated by the ability of the
general partner to manage day-to-day operations, refinance debt and sell the
assets of the partnership without the consent of the limited partner and the
inability of the limited partner to replace the general partner. Investments in
partnerships and joint ventures which represent noncontrolling ownership
interests and the investment in the Management Company are accounted for using
the equity method of accounting. These investments are recorded initially at
cost and subsequently adjusted for net equity in income (loss) and cash
contributions and distributions.
6
<PAGE>
Net operating results of the SPG Operating Partnership are allocated after
preferred distributions, based on its partners' weighted average ownership
interests during the period. SPG's weighted average direct and indirect
ownership interest in the SPG Operating Partnership for the three-month and
nine-month periods ended September 30, 1999 was 72.3% and 72.2%, respectively.
SPG's weighted average direct and indirect ownership interest in the SPG
Operating Partnership for the three-month and nine-month periods ended September
30, 1998 was 64.5% and 63.8%, respectively.
Note 3 - NED Acquisition
Effective August 27, 1999, a limited liability company ("Mayflower") formed
by the SPG Operating Partnership and three other investors acquired a portfolio
of ten regional malls from New England Development Company ("NED") for
approximately $1.3 billion (the "NED Acquisition"). The SPG Operating
Partnership assumed management responsibilities for the portfolio, which
includes approximately 7.3 million square feet of gross leasable area ("GLA").
The SPG Operating Partnership's 49.1% ownership interest in Mayflower is
accounted for using the equity method of accounting. All ten of the regional
malls are owned 100% by Mayflower, with the exception of Crystal Mall, in which
Mayflower owns a noncontrolling 50% interest and the SPG Operating Partnership
holds a direct noncontrolling 50% ownership interest. Mayflower's purchase price
includes the assumption of approximately $738,622 of mortgage indebtedness;
$441,815 in cash; and the issuance of 729,675 Paired Units valued at
approximately $20,795; 1,485,410 7% Convertible Preferred Units in the SPG
Operating Partnership valued at approximately $41,591; and 1,485,410 8%
Redeemable Preferred Units in the SPG Operating Partnership valued at
approximately $44,562. The SPG Operating Partnership's $162,700 share of the
cash portion of the purchase price was financed using the Credit Facility (See
Note 10). Please refer to Note 11 for additional information regarding the
preferred Units issued and refer to Note 14 for additional transactions
involving NED which occurred, and are anticipated to occur, after September 30,
1999.
Note 4 - CPI Merger
For financial reporting purposes, as of the close of business on September
24, 1998, the CPI Merger was consummated pursuant to the Agreement and Plan of
Merger dated February 18, 1998, among Simon DeBartolo Group, Inc. ("SDG"),
Corporate Property Investors, Inc. ("CPI"), and Corporate Realty Consultants,
Inc. ("CRC").
Pursuant to the terms of the CPI Merger, a subsidiary of CPI merged with
and into SDG with SDG continuing as the surviving company. SDG became a
majority-owned subsidiary of CPI. The outstanding shares of common stock of SDG
were exchanged for a like number of shares of CPI. Beneficial interests in CRC
were acquired for $14,000 in order to pair the common stock of CPI with 1/100th
of a share of common stock of CRC, the paired share affiliate.
Immediately prior to the consummation of the CPI Merger, the holders of CPI
common stock were paid a merger dividend consisting of (i) $90 in cash, (ii)
1.0818 additional shares of CPI common stock and (iii) 0.19 shares of 6.50%
Series B convertible preferred stock of CPI per share of CPI common stock.
Immediately prior to the CPI Merger, there were 25,496,476 shares of CPI common
stock outstanding. The aggregate value associated with the completion of the CPI
Merger was approximately $5.9 billion including transaction costs and
liabilities assumed.
To finance the cash portion of the CPI Merger consideration, $1.4 billion
was borrowed under a new senior unsecured medium term bridge loan (the "Merger
Facility"), which bears interest at a base rate of LIBOR plus 65 basis points
and matured in three mandatory amortization payments (on June 22, 1999, March
24, 2000 and September 24, 2000) (See Note 10). An additional $237,000 was also
borrowed under the SPG Operating Partnership's existing Credit Facility. In
connection with the CPI Merger, CPI was renamed "Simon Property Group, Inc." and
CPI's paired share affiliate, CRC was renamed "SPG Realty Consultants, Inc." In
addition, SDG and SDG, LP were renamed "SPG Properties, Inc.", and "Simon
Property Group, L.P.", respectively.
Upon completion of the CPI Merger, SPG transferred substantially all of the
CPI assets acquired, which consisted primarily of 23 regional malls, one
community center, two office buildings and one regional mall under construction
(other than one regional mall, Ocean County Mall, and certain net leased
properties valued at approximately $153,100) and liabilities assumed (except
that SPG remains a co-obligor with respect to the Merger Facility) of
approximately $2.3 billion to the SPG Operating Partnership or one or more
subsidiaries of the SPG Operating Partnership in exchange for 47,790,550 limited
partnership interests and 5,053,580 preferred partnership interests in the SPG
Operating Partnership. The preferred partnership interests carry the same rights
and equal the number of preferred shares issued and outstanding as a direct
result of the CPI Merger.
SPG accounted for the merger between SDG and the CPI merger subsidiary as a
reverse purchase in accordance with Accounting Principles Board Opinion No. 16.
Although paired shares of the former CPI and CRC were issued to SDG common
stockholders and SDG became a substantially wholly owned subsidiary of CPI
following the CPI Merger, CPI is considered the business acquired for accounting
purposes. SDG is considered the acquiring company because the SDG common
stockholders became majority holders of the common stock of SPG. The value of
the consideration paid by SDG has been allocated to the estimated fair value of
the CPI assets acquired and liabilities assumed which resulted in goodwill of
$41,987, as adjusted. Goodwill is being amortized
7
<PAGE>
over the estimated life of the Properties acquired, which is 35 years.
Accumulated amortization of goodwill as of September 30, 1999 and December 31,
1998 was $1,200 and $414, respectively.
SDG, LP contributed $14,000 cash to CRC and $8,000 cash to the SRC
Operating Partnership on behalf of the SDG common stockholders and the limited
partners of SDG, LP to obtain the beneficial interests in common stock of CRC,
which were paired with the shares of common stock issued by SPG ("Paired
Shares"), and to obtain Units in the SRC Operating Partnership so that the
limited partners of SDG, LP would hold the same proportionate interest in the
SRC Operating Partnership that they hold in SDG, LP. The cash contributed to CRC
and the SRC Operating Partnership on behalf of the partners of SDG, LP was
accounted for as a distribution to the partners.
Pro Forma
The following unaudited pro forma summary financial information excludes
any extraordinary items and reflects the consolidated results of operations of
the SPG Operating Partnership as if the CPI Merger had occurred as of January 1,
1998, and was carried forward through September 30, 1998. Preparation of the pro
forma summary information was based upon assumptions deemed appropriate by
management. The pro forma summary information is not necessarily indicative of
the results which actually would have occurred if the CPI Merger had been
consummated at January 1, 1998, nor does it purport to represent the results of
operations for future periods.
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1998
------------------
<S> <C>
Revenue $ 1,227,634
============
Net income (1) 168,260
============
Net income available to Unitholders 112,359
============
Net income per Unit (1) $ 0.50
============
Net income per Unit - assuming dilution $ 0.50
============
Weighted average number of Units outstanding 223,492,510
============
Weighted average number of Units outstanding - assuming dilution 223,977,176
============
</TABLE>
(1) Includes a net gain on the sales of assets of $37,973, or $0.17 on a basic
earnings per Unit basis.
Note 5 - Reclassifications
Certain reclassifications of prior period amounts have been made in
the financial statements to conform to the 1999 presentation. These
reclassifications have no impact on the net operating results previously
reported.
Note 6 - Per Unit Data
Basic earnings per Unit is based on the weighted average number of
Units outstanding during the period and diluted earnings per Unit is based on
the weighted average number of Units outstanding combined with the incremental
weighted average Units that would have been outstanding if all dilutive
potential Units would have been converted into Units at the earliest date
possible. The weighted average number of Units used in the computation for the
three-month periods ended September 30, 1999 and 1998 was 232,636,887 and
180,987,067, respectively. The weighted average number of Units used in the
computation for the nine-month periods ended September 30, 1999 and 1998 was
230,933,329 and 176,752,302, respectively. The diluted weighted average number
of Units used in the computation for the three-month periods ended September 30,
1999 and 1998 was 232,707,718 and 181,312,399, respectively. The diluted
weighted average number of Units used in the computation for the nine-month
periods ended September 30, 1999 and 1998 was 231,072,059 and 177,120,748,
respectively. None of the convertible preferred Units issued and outstanding
during the comparative periods had a dilutive effect on earnings per Unit. The
increase in weighted average Units outstanding under the diluted method over the
basic method in every period presented for the SPG Operating Partnership is due
entirely to the effect of outstanding stock options. Basic earnings and diluted
earnings were the same for all periods presented.
Note 7 - Cash Flow Information
Cash paid for interest, net of amounts capitalized, during the nine
months ended September 30, 1999 was $411,476 as compared to $256,611 for the
same period in 1998. Accrued and unpaid distributions were $3,428 at December
31, 1998, and represented distributions payable on the 6.5% Series A Convertible
Preferred Units. There were no accrued and unpaid distributions outstanding at
September 30, 1999. See Notes 2, 3, 8 and 11 for information about non-cash
transactions during the nine months ended September 30, 1999.
8
<PAGE>
Note 8 - Other Acquisitions, Disposals and Development
In addition to the NED Acquisition, during the first nine months of 1999
the SPG Operating Partnership acquired the remaining ownership interests in four
Properties for a total of approximately $147,500, including the assumption of
approximately $48,500 of mortgage indebtedness. These purchases were funded
primarily with borrowings from the Credit Facility. Each of the Properties
purchased were previously accounted for using the equity method of accounting
and are now accounted for using the consolidated method of accounting.
On April 15, 1999, the SPG Operating Partnership sold the land at Three Dag
Hammarskjold in New York, New York for $9,500, which was accounted for as an
adjustment to the purchase price. Also in the second quarter of 1999, one
community shopping center was sold for $4,200, resulting in a loss of $4,188. In
addition, on June 18, 1999, the SPG Operating Partnership sold a parcel of land,
which was accounted for as an adjustment to the purchase price. The net proceeds
of approximately $28,300 were used to reduce the outstanding borrowings on the
Credit Facility.
In January of 1999, The Shops at Sunset Place opened in South Miami,
Florida. The SPG Operating Partnership owns a noncontrolling 37.5% interest in
this 510,000 square-foot destination-oriented retail and entertainment project.
In August of 1999, the SPG Operating Partnership opened the approximately
$246,000 Mall of Georgia, an approximately 1.6 million square-foot regional
mall, and the adjacent 441,000 square-foot $38,000 community shopping center,
Mall of Georgia Crossing in Buford (Atlanta), Georgia. The SPG Operating
Partnership funded 85% of the capital requirements of these projects and has a
noncontrolling 50% ownership interest in each of these Properties after the
return of its equity and a 9% preferred return thereon. In September of 1999,
the approximately $216,000 Concord Mills opened in Concord (Charlotte), North
Carolina. The SPG Operating Partnership owns a noncontrolling 37.5% interest in
this 1.4 million square-foot value-oriented super regional mall.
9
<PAGE>
Note 9 - Investment in Unconsolidated Entities
Partnerships and Joint Ventures
Summary financial information of the SPG Operating Partnership's
investment in partnerships and joint ventures accounted for using the equity
method of accounting and a summary of the SPG Operating Partnership's investment
in and share of income from such partnerships and joint ventures follow:
<TABLE>
<CAPTION>
September 30, December 31,
BALANCE SHEETS 1999 1998
------------- ------------
<S> <C> <C>
Assets:
Investment properties at cost, net $5,524,337 $4,265,022
Cash and cash equivalents 153,294 171,553
Tenant receivables 128,510 140,579
Note receivable from affiliate (Interest at 9.0%, due 2005) 18,773 25,174
Other assets 124,715 100,938
---------- ----------
Total assets $5,949,629 $4,703,266
========== ==========
Liabilities and Partners' Equity:
Mortgages and other indebtedness $3,841,200 $2,861,589
Accounts payable, accrued expenses and other liabilities 242,340 223,631
---------- -----------
Total liabilities 4,083,540 3,085,220
Partners' equity 1,866,089 1,618,046
---------- ----------
Total liabilities and partners' equity $5,949,629 $4,703,266
========== ==========
SPG Operating Partnership's Share of:
Total assets $2,406,978 $1,905,459
========== ==========
Partners' equity $ 661,399 $ 565,496
Add: Excess Investment (See below) 660,978 708,616
---------- ----------
SPG Operating Partnership's Net Investment in Joint Ventures $1,322,377 $1,274,112
========== ==========
</TABLE>
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
-------------------------- -------------------------
September 30, September 30,
-------------------------- -------------------------
STATEMENTS OF OPERATIONS 1999 1998 1999 1998
---------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Revenue:
Minimum rent $133,510 $108,924 $386,002 $306,486
Overage rent 5,715 426 14,236 8,236
Tenant reimbursements 64,196 51,775 183,882 138,433
Other income 10,678 5,985 25,830 17,205
-------- -------- -------- --------
Total revenue 214,099 167,110 609,950 470,360
Operating Expenses:
Operating expenses and other 75,328 59,044 217,965 166,547
Depreciation and amortization 38,076 33,324 109,141 94,949
-------- -------- -------- --------
Total operating expenses 113,404 92,368 327,106 261,496
-------- -------- -------- --------
Operating Income 100,695 74,742 282,844 208,864
Interest Expense 58,557 45,569 155,773 130,747
Extraordinary Losses-Debt Extinguishment -- 2,060 -- 2,102
-------- -------- -------- --------
Net Income 42,138 27,113 127,071 76,015
Third Party Investors' Share of Net Income 25,499 21,820 77,938 55,849
-------- -------- -------- --------
SPG Operating Partnership's Share of Net Income 16,639 5,293 49,133 20,166
Amortization of Excess Investment (See below) (5,347) (3,636) (17,010) (9,038)
-------- -------- -------- --------
Income from Unconsolidated Entities $ 11,292 $ 1,657 $ 32,123 $ 11,128
======== ======== ======== ========
</TABLE>
As of September 30, 1999 and December 31, 1998, the unamortized excess
of the SPG Operating Partnership's investment over its share of the equity in
the underlying net assets of the partnerships and joint ventures ("Excess
Investment") was $660,978 and
10
<PAGE>
$708,616, respectively. This Excess Investment is being amortized generally over
the life of the related Properties. Amortization included in income from
unconsolidated entities for the three-month periods ended September 30, 1999 and
1998 was $5,347 and $3,636, respectively. Amortization included in income from
unconsolidated entities for the nine-month periods ended September 30, 1999 and
1998 was $17,010 and $9,038, respectively.
The net income or net loss for each partnership and joint venture is
allocated in accordance with the provisions of the applicable partnership or
joint venture agreement. The allocation provisions in these agreements are not
always consistent with the ownership interest held by each general or limited
partner or joint venturer, primarily due to partner preferences.
The Management Company
The Management Company, including its consolidated subsidiaries, provides
management, leasing, development, accounting, legal, marketing and management
information systems services to five wholly-owned Properties, 25 Properties held
as joint venture interests, Melvin Simon & Associates, Inc., and certain other
nonowned properties. Certain subsidiaries of the Management Company provide
architectural, design, construction, insurance and other services primarily to
certain of the Properties. The Management Company also invests in other
businesses to provide other synergistic services to the Properties. The SPG
Operating Partnership's share of consolidated net income (loss) of the
Management Company, after intercompany profit eliminations, was $6,321 and
$2,151 for the three-month periods ended September 30, 1999 and 1998, and was
$10,415 and ($2,339) for the nine-month periods ended September 30, 1999 and
1998, respectively.
European Investment
The SPG Operating Partnership and the Management Company have a 25%
ownership interest in European Retail Enterprises, B.V. ("ERE") and Groupe BEG,
S.A. ("BEG"), respectively, which are being accounted for using the equity
method of accounting. BEG and ERE are fully integrated European retail real
estate developers, lessors and managers. The combined investment in ERE and BEG
at September 30, 1999 was approximately $37,500, with commitments for an
additional $25,000, subject to certain performance and other criteria, including
the SPG Operating Partnership's approval of development projects. The agreements
with BEG and ERE are structured to allow the SPG Operating Partnership and the
Management Company to acquire an additional 25% ownership interest over time. As
of September 30, 1999, BEG and ERE had two Properties open in Poland and two in
France, and one additional Property opened in Poland in October of 1999.
Note 10 - Debt
At September 30, 1999, the SPG Operating Partnership had consolidated debt
of $8,541,538, of which $6,199,585 was fixed-rate debt and $2,341,953 was
variable-rate debt. The SPG Operating Partnership's pro rata share of
indebtedness of the unconsolidated joint venture Properties as of September 30,
1999 was $1,647,025. As of September 30, 1999, the SPG Operating Partnership had
interest-rate protection agreements related to $437,999 of its consolidated
indebtedness. The agreements are generally in effect until the related variable-
rate debt matures. The SPG Operating Partnership's hedging activity did not
materially impact interest expense in the comparative periods.
In January of 1999, the SPG Operating Partnership retired the $21,910
mortgage on North East Mall, which bore interest at 10% and had a stated
maturity of September 2000, using cash from working capital. The paydown
included a $1,774 prepayment charge, which was recorded as an extraordinary
loss. In June of 1999, a new $17,709 mortgage was placed on North East Mall
bearing interest at 6.74%, with a stated maturity of May 2002. The net proceeds
were added to working capital.
On February 4, 1999, the SPG Operating Partnership completed the sale of
$600,000 of senior unsecured notes. These notes included two $300,000 tranches.
The first tranche bears interest at 6.75% and matures on February 4, 2004 and
the second tranche bears interest at 7.125% and matures on February 4, 2009. The
SPG Operating Partnership used the net proceeds of approximately $594,000
primarily to retire the $450,000 initial tranche of the Merger Facility and to
pay $142,000 on the outstanding balance of the Credit Facility.
On July 1, 1999, the SPG Operating Partnership retired mortgage
indebtedness of approximately $165,000 on three Properties generating an
extraordinary loss of $304. This payoff was financed primarily with the Credit
Facility.
Effective August 25, 1999, the SPG Operating Partnership completed the
refinancing of its $1.25 billion unsecured revolving credit facility (the
"Credit Facility"). The terms of the Credit Facility are essentially unchanged,
with the exception that the maturity date was extended from September 27, 1999
to August 25, 2002, with an additional one-year extension available at the
option of the SPG Operating Partnership.
11
<PAGE>
Note 11 - Partners' Equity
The following table summarizes the changes in Partners' equity since
December 31, 1998.
<TABLE>
<CAPTION>
General Partners
------------------------
Managing Non-managing Unamortized Total
Preferred General General Limited Restricted Partners
Units Partner Partners Partners Stock Award Equity
---------- --------- ------------ ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1998 $1,057,245 $751,948 $1,788,712 $1,009,646 $(19,750) $4,587,801
Units issued in NED Acquisition
(729,675 Units) 20,795 20,795
Preferred Units issued in NED
Acquisition (See below) 86,154 86,154
Managing General Partner
Contributions (82,988 Units) 2,006 2,006
Conversion of 155,978 Series A
Preferred Units into 5,926,440
Units (2) (199,320) 198,787 (533)
Units issued as dividend
(153,890 Units) (2) 4,016 4,016
Stock incentive program (541,361
Units, net of forfeitures) 14,067 (389) (13,082) 596
Amortization of stock incentive 7,971 7,971
Units converted to cash (6,473
Units) (168) (168)
Accretion of Preferred Units 201 201
Adjustment to allocate net
equity of the SPG Operating
Partnership (86,872) 61,597 25,275 --
Distributions (50,518) (78,395) (172,232) (97,230) (398,375)
---------- -------- ---------- ---------- -------- ----------
Subtotal 893,762 805,557 1,677,688 958,318 (24,861) 4,310,464
Comprehensive Income:
- ---------------------
Unrealized gain (loss) on
investment (1) (1,317) (2,747) (1,570) (5,634)
Net income 50,518 35,279 75,711 42,802 204,310
---------- -------- ---------- ---------- -------- ----------
Total Comprehensive Income 50,518 33,962 72,964 41,232 -- 198,676
---------- -------- ---------- ---------- -------- ----------
Balance at September 30, 1999 $ 944,280 $839,519 $1,750,652 $ 999,550 $(24,861) $4,509,140
========== ======== ========== ========== ======== ==========
</TABLE>
(1) Amounts consist of the unrealized gain (loss) resulting from the change in
market value of 1,408,450 shares of common stock of Chelsea GCA Realty,
Inc. ("Chelsea"), a publicly traded REIT. The investment in Chelsea is
being reflected in the accompanying consolidated condensed balance sheets
as other investment.
(2) On February 26, 1999, 150,000 Series A Convertible Preferred Units were
converted into 5,699,304 Units. On March 1, 1999, another 152,346 Units
were issued to the holders of the converted Units in lieu of the cash
dividends allocable to these preferred Units. Additionally, on May 10,
1999 another 5,978 Units of Series A Convertible Preferred Units were
converted into 227,136 Units, with another 1,544 Units issued in lieu of
the cash dividends allocable to those preferred Units. At September 30,
1999, 53,271 Series A Convertible Preferred Units remained outstanding.
12
<PAGE>
Preferred Unit Issuances
As described in Note 3, in connection with the NED Acquisition, on August
27, 1999, the SPG Operating Partnership issued two new series of preferred Units
as a portion of the consideration for the Properties acquired. The SPG
Operating Partnership authorized 2,700,000, and issued 1,485,410, 7.00%
Cumulative Convertible Preferred Units (the "7.00% Preferred Units") having a
liquidation value of $28.00 per Unit. The 7.00% Preferred Units accrue
cumulative dividends at a rate of $1.96 annually, which is payable quarterly in
arrears. The 7.00% Preferred Units are convertible at the holders' option on or
after August 27, 2004, into either a like number of shares of 7.00% Cumulative
Convertible Preferred Stock of SPG with terms substantially identical to the
7.00% Preferred Units or Paired Units at a ratio of 0.75676 to one provided that
the closing stock price of SPG's Paired Shares exceeds $37.00 for any three
consecutive trading days prior to the conversion date. The SPG Operating
Partnership may redeem the 7.00% Preferred Units at their liquidation value plus
accrued and unpaid distributions on or after August 27, 2009, payable in Paired
Units. In the event of the death of a holder of the 7.00% Preferred Units, or
the occurrence of certain tax triggering events applicable to a holder, the SPG
Operating Partnership may be required to redeem the 7.00% Preferred Units at
liquidation value payable at the option of the SPG Operating Partnership in
either cash (the payment of which may be made in four equal annual installments)
or Paired Shares.
The SPG Operating Partnership also authorized 2,700,000, and issued
1,485,410, 8.00% Cumulative Redeemable Preferred Units (the "8.00% Preferred
Units") having a liquidation value of $30.00. The 8.00% Preferred Units accrue
cumulative dividends at a rate of $2.40 annually, which is payable quarterly in
arrears. The 8.00% Preferred Units are each paired with one 7.00% Preferred
Unit or with the Units into which the 7.00% Preferred Units may be converted.
The SPG Operating Partnership may redeem the 8.00% Preferred Units at their
liquidation value plus accrued and unpaid distributions on or after August 27,
2009, payable in either new preferred units of the SPG Operating Partnership
having the same terms as the 8.00% Preferred Units, except that the distribution
coupon rate would be reset to a then determined market rate, or in Paired Units.
The 8.00% Preferred Units are convertible at the holders' option on or after
August 27, 2004, into 8.00% Cumulative Redeemable Preferred Stock of SPG with
terms substantially identical to the 8.00% Preferred Units. In the event of the
death of a holder of the 8.00% Preferred Units, or the occurrence of certain tax
triggering events applicable to a holder, the SPG Operating Partnership may be
required to redeem the 8.00% Preferred Units owned by such holder at their
liquidation value payable at the option of the SPG Operating Partnership in
either cash (the payment of which may be made in four equal annual installments)
or Paired Shares.
The Simon Property Group 1998 Stock Incentive Plan
At the time of the CPI Merger, the SPG Operating Partnership adopted The
Simon Property Group 1998 Stock Incentive Plan (the "1998 Plan"). The 1998 Plan
provides for the grant of equity-based awards during the ten-year period
following its adoption, in the form of options to purchase Paired Shares
("Options"), stock appreciation rights ("SARs"), restricted stock grants and
performance unit awards (collectively, "Awards"). Options may be granted which
are qualified as "incentive stock options" within the meaning of Section 422 of
the Code and Options which are not so qualified. During 1999, 560,358 Paired
Shares of restricted stock were awarded to executives related to 1998
performance. As of September 30, 1999, 1,828,586 Paired Shares of restricted
stock, net of forfeitures, were deemed earned and awarded under the 1998 Plan.
Approximately $2,604 and $2,852 relating to these programs were amortized in the
three-month periods ended September 30, 1999 and 1998, respectively and
approximately $7,971 and $7,299 relating to these programs were amortized in the
nine-month periods ended September 30, 1999 and 1998, respectively. The cost of
restricted stock grants, which is based upon the stock's fair market value at
the time such stock is earned, awarded and issued, is charged to shareholders'
equity and subsequently amortized against earnings of the SPG Operating
Partnership over the vesting period.
Note 12 - Commitments and Contingencies
Litigation
Richard E. Jacobs, et al. v. Simon DeBartolo Group, L.P. On September 3,
1998, a complaint was filed in the Court of Common Pleas in Cuyahoga County,
Ohio, captioned Richard E. Jacobs, et al. v. Simon DeBartolo Group, L.P. The
plaintiffs were all principals or affiliates of The Richard E. Jacobs Group,
Inc. ("Jacobs"). The plaintiffs alleged in their complaint that the SPG
Operating Partnership engaged in malicious prosecution, abuse of process,
defamation, libel, injurious falsehood/unlawful disparagement, deceptive trade
practices under Ohio law, tortious interference and unfair competition in
connection with the SPG Operating Partnership's acquisition by tender offer of
shares in the Retail Property Trust, a Massachusetts business trust, and certain
litigation instituted in September, 1997, by the SPG Operating Partnership
against Jacobs in federal district court in New York. On September 17, 1999, the
parties mutually agreed to dismiss, with prejudice, the lawsuit brought by
Jacobs. No consideration was paid to Jacobs by the SPG Operating Partnership in
connection with this dismissal.
13
<PAGE>
Carlo Angostinelli et al. v. DeBartolo Realty Corp. et al. On October 16,
1996, a complaint was filed in the Court of Common Pleas of Mahoning County,
Ohio, captioned Carlo Angostinelli et al. v. DeBartolo Realty Corp. et al. The
named defendants are SD Property Group, Inc., an indirect 99%-owned subsidiary
of SPG, and DeBartolo Properties Management, Inc., a subsidiary of the
Management Company, and the plaintiffs are 27 former employees of the
defendants. In the complaint, the plaintiffs alleged that they were recipients
of deferred stock grants under the DeBartolo Realty Corporation ("DRC") Stock
Incentive Plan (the "DRC Plan") and that these grants immediately vested under
the DRC Plan's "change in control" provision as a result of the DRC Merger.
Plaintiffs asserted that the defendants' refusal to issue them approximately
542,000 shares of DRC common stock, which is equivalent to approximately 370,000
Paired Shares computed at the 0.68 exchange ratio used in the DRC Merger,
constituted a breach of contract and a breach of the implied covenant of good
faith and fair dealing under Ohio law. Plaintiffs sought damages equal to such
number of shares of DRC common stock, or cash in lieu thereof, equal to all
deferred stock ever granted to them under the DRC Plan, dividends on such stock
from the time of the grants, compensatory damages for breach of the implied
covenant of good faith and fair dealing, and punitive damages. The plaintiffs
and the defendants each filed motions for summary judgment. On October 31, 1997,
the Court of Common Pleas entered a judgment in favor of the defendants granting
their motion for summary judgment. The plaintiffs appealed this judgment to the
Seventh District Court of Appeals in Ohio. On August 18, 1999, the District
Court of Appeals reversed the summary judgement order in favor of the defendants
entered by the Common Pleas Court and granted plaintiffs' cross motion for
summary judgement, remanding the matter to the Common Pleas Court for the
determination of plaintiffs' damages. The defendants petitioned the Ohio Supreme
Court asking that they exercise their discretion to review and reverse the
Appellate Court decision. Briefs have been filed by both parties. The Ohio
Supreme Court has not yet determined whether it will take the matter up on
appeal. As a result of the Appellate Court's decision, the SPG Operating
Partnership recorded a $12.0 million loss related to this litigation in the
accompanying statements of operations as an unusual item.
Roel Vento et al v. Tom Taylor et al. An affiliate of the SPG Operating
Partnership is a defendant in litigation entitled Roel Vento et al v. Tom Taylor
et al., in the District Court of Cameron County, Texas, in which a judgment in
the amount of $7,800 was entered against all defendants. This judgment includes
approximately $6,500 of punitive damages and is based upon a jury's findings on
four separate theories of liability including fraud, intentional infliction of
emotional distress, tortious interference with contract and civil conspiracy
arising out of the sale of a business operating under a temporary license
agreement at Valle Vista Mall in Harlingen, Texas. The SPG Operating Partnership
appealed the verdict and on May 6, 1999, the Thirteenth Judicial District
(Corpus Christi) of the Texas Court of Appeals issued an opinion reducing the
trial court verdict to $3,384 plus interest. The SPG Operating Partnership filed
a petition for a writ of certiorari to the Texas Supreme Court requesting that
they review and reverse the determination of the Appellate Court. The Texas
Supreme Court has not yet determined whether it will take the matter up on
appeal. Management, based upon the advice of counsel, believes that the ultimate
outcome of this action will not have a material adverse effect on the SPG
Operating Partnership.
The SPG Operating Partnership currently is not subject to any other
material litigation other than routine litigation and administrative proceedings
arising in the ordinary course of business. On the basis of consultation with
counsel, management believes that such routine litigation and administrative
proceedings will not have a material adverse impact on the SPG Operating
Partnership's financial position or its results of operations.
Long-term Contract
On September 30, 1999, the SPG Operating Partnership entered into a 10-year
contract with Enron Energy Services, a subsidiary of Enron and a leading
provider of energy outsourcing services, for Enron to supply or manage all of
the energy commodity requirements throughout the SPG Operating Partnership's
portfolio. The contract includes electricity, natural gas and maintenance of
energy conversion assets and electrical systems including lighting. The SPG
Operating Partnership currently expends approximately $150 million annually in
overall energy consumption and related services.
Note 13 - New Accounting Pronouncements
On June 15, 1998, the FASB issued Statement of Financial Accounting
Standards No. 133, Accounting for Derivative Instruments and Hedging Activities
("SFAS 133"). SFAS 133 establishes accounting and reporting standards requiring
that every derivative instrument (including certain derivative instruments
embedded in other contracts) be recorded in the balance sheet as either an asset
or liability measured at its fair value. SFAS 133 requires that changes in the
derivative's fair value be recognized currently in earnings unless specific
hedge accounting criteria are met. Special accounting for qualifying hedges
allows a derivative's gains and losses to offset related results on the hedged
item in the income statement, and requires that a company formally document,
designate, and assess the effectiveness of transactions that receive hedge
accounting.
14
<PAGE>
SFAS 133 will be effective for the SPG Operating Partnership beginning with
the 2001 fiscal year and may not be applied retroactively. Management does not
expect the impact of SFAS 133 to be material to the financial statements.
However, SFAS 133 could increase volatility in earnings and other comprehensive
income.
On April 3, 1998, the Accounting Standards Executive Committee issued
Statement of Position 98-5, Reporting on the Costs of Start-Up Activities ("SOP
98-5"), which is effective for fiscal years beginning after December 15, 1998.
The Companies have assessed the impact of this pronouncement and determined the
impact to be immaterial to the financial statements.
Note 14 - Subsequent Events
Mall of America
Effective October 15, 1999, the SPG Operating Partnership and its
affiliated Management Company acquired a noncontrolling 27.5% ownership interest
in Mall of America in Minneapolis, Minnesota, and adjacent land, for
approximately $170,000, including the assumption of its $85,800 pro rata share
of a $312,000 mortgage; the issuance of 1,000,000 shares of 8% Redeemable
Preferred Stock in SPG with a face value of $25,000 and $60,258 in cash. The SPG
Operating Partnership, together with the Management Company, are entitled to 50%
of the economic benefits of Mall of America. The majority of the cash portion of
the purchase price was financed with the Credit Facility.
Additional NED Transactions
On October 26, 1999, Mayflower acquired an additional regional mall from
NED for approximately $222,850, which included the assumption of approximately
$158,508 of mortgage indebtedness; $34,996 in cash; and the issuance of 200,212
Paired Units valued at approximately $5,706; 407,574 7% Convertible Preferred
Units in the SPG Operating Partnership valued at approximately $11,412; and
407,574 8% Redeemable Preferred Units in the SPG Operating Partnership valued at
approximately $12,228. In conjunction with this transaction, the SPG Operating
Partnership acquired a regional mall from NED for approximately $66,312,
including the assumption of approximately $37,068 of mortgage indebtedness;
$1,214 in cash; and the issuance of 191,240 Paired Units valued at approximately
$5,450; 389,310 7% Convertible Preferred Units in the SPG Operating Partnership
valued at approximately $10,900; and 389,310 8% Redeemable Preferred Units in
the SPG Operating Partnership valued at approximately $11,680. It is anticipated
that Mayflower will acquire ownership interests in two additional regional malls
from NED by the end of 1999 for approximately $175,000.
15
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Certain statements made in this report may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of the SPG Operating Partnership to be materially different from
any future results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among others, the following:
general economic and business conditions, which will, among other things, affect
demand for retail space or retail goods, availability and creditworthiness of
prospective tenants, lease rents and the terms and availability of financing;
adverse changes in the real estate markets including, among other things,
competition with other companies and technology; risks of real estate
development and acquisition; governmental actions and initiatives; substantial
indebtedness; conflicts of interests; maintenance of REIT status; risks related
to the "year 2000 issue"; and environmental/safety requirements.
Overview
As described in Note 3 to the financial statements, effective August 27,
1999, Mayflower, a limited liability company in which the SPG Operating
Partnership has a noncontrolling 49.1% interest, acquired a portfolio of ten
regional malls from NED for approximately $1.3 billion. The SPG Operating
Partnership assumed management responsibilities for the portfolio, which
includes approximately 7.3 million square feet of GLA. The purchase price
includes the assumption of approximately $738.6 million of mortgage
indebtedness; $441.8 million in cash; and the issuance of 729,675 Paired Units
valued at approximately $20.8 million and 2,970,820 preferred Units in the SPG
Operating Partnership valued at approximately $86.2 million. The SPG Operating
Partnership's $162.7 million share of the cash portion of the purchase price was
financed using the Credit Facility.
In addition, on October 26, 1999, Mayflower acquired an additional regional
mall from NED for approximately $222.8 million, which included the assumption of
approximately $158.5 million of mortgage indebtedness; $35.0 million in cash;
and the issuance of 200,212 Paired Units valued at approximately $5.7 million
and 815,148 preferred Units in the SPG Operating Partnership valued at
approximately $23.6 million. Concurrent with this transaction, the SPG Operating
Partnership acquired a regional mall from NED for approximately $66.3 million,
including the assumption of approximately $37.1 million of mortgage
indebtedness; $1.2 million in cash and the issuance of 191,240 Paired Units
valued at approximately $5.4 million and 778,620 preferred Units in the SPG
Operating Partnership valued at approximately $22.6 million. It is anticipated
that Mayflower will acquire two additional regional malls from NED by the end of
1999 for approximately $175 million.
On September 30, 1999, the SPG Operating Partnership entered into a 10-year
contract with Enron Energy Services, a subsidiary of Enron and a leading
provider of energy outsourcing services, for Enron to supply or manage all of
the energy commodity requirements throughout the SPG Operating Partnership's
portfolio. The contract includes electricity, natural gas and maintenance of
energy conversion assets and electrical systems including lighting. This
alliance is designed to reduce operating costs for the SPG Operating
Partnership's tenants, as well as deliver incremental profit to the SPG
Operating Partnership. The SPG Operating Partnership currently expends
approximately $150 million annually in overall energy consumption and related
services.
For financial reporting purposes, as of the close of business on September
24, 1998, the operating results include the CPI Merger described in Note 4 to
the financial statements. As a result, the 1999 consolidated results of
operations include an additional 16 regional malls, one office building and one
community center, with an additional six regional malls being accounted for
using the equity method of accounting.
The following Property acquisitions, sales and opening (the "Property
Transactions"), also impacted the SPG Operating Partnership's consolidated
results of operations in the comparative periods. On January 26, 1998, the SPG
Operating Partnership acquired 100% of Cordova Mall for approximately $87.3
million. In March of 1998, the SPG Operating Partnership opened the
approximately $13.3 million Muncie Plaza. On May 5, 1998, the SPG Operating
Partnership acquired the remaining 50.1% interest in Rolling Oaks Mall for
519,889 shares of SPG's common stock, valued at approximately $17.2 million.
Effective June 1, 1998, the SPG Operating Partnership sold The Promenade for
$33.5 million. Effective June 30, 1998, the SPG Operating Partnership sold
Southtown Mall for $3.3 million. On December 7, 1998, the SPG Operating
Partnership obtained a controlling 90% interest in The Arboretum community
center for approximately $40.5 million. On January 29, 1999, the SPG Operating
Partnership acquired the remaining 15% ownership interests in Lakeline Mall and
Lakeline Plaza for approximately $21.8 million. On March 1, 1999 the SPG
Operating Partnership acquired the remaining 50% ownership interests in Century
III Mall for approximately $57.0 million. On May 20, 1999, the SPG Operating
Partnership sold Cohoes Commons for $4.2 million. On June 28, 1999 the SPG
Operating Partnership purchased the remaining 50% interest in Haywood Mall for
approximately $68.8 million. (See Liquidity and Capital Resources for additional
information on 1999 acquisitions and dispositions.)
16
<PAGE>
Results of Operations
For the Three Months ended September 30, 1999 vs. the Three Months Ended
September 30, 1998
Total revenue increased $144.9 million or 45.0% for the three months ended
September 30, 1999, as compared to the same period in 1998. This increase is
primarily the result of the CPI Merger ($109.2 million) and the Property
Transactions ($16.1 million). Excluding these items, total revenues increased
$19.7 million or 6.1%, primarily due to a $7.0 million increase in minimum
rents, a $7.9 million increase in overage rent and a $9.2 million increase in
tenant reimbursements, partially offset by a $4.4 million decrease in
miscellaneous income, which includes a $2.5 million brokerage fee received in
1998 in connection with the sale of the General Motors Building. The 3.6%
comparable increase in minimum rent results from increased occupancy levels, the
replacement of expiring tenant leases with renewal leases at higher minimum base
rents, and increased rents from the SPG Operating Partnership's marketing
initiative, Simon Brand Ventures ("SBV"). The increase in overage rent is
primarily the result of the negative impact in 1998 ($4.2 million) of a
temporary change in the timing in which overage rents were recognized
promulgated by EITF 98-9, which was later rescinded, and an overall increase in
tenant sales.
Total operating expenses increased $79.4 million or 45.4% for the three
months ended September 30, 1999, as compared to the same period in 1998. This
increase is primarily the result of the CPI Merger ($66.8 million) and the
Property Transactions ($8.8 million). Excluding these transactions, total
operating expenses increased $3.8 million or 2.2%.
Interest expense increased $46.8 million, or 48.0% for the three months
ended September 30, 1999, as compared to the same period in 1998. This increase
is primarily a result of the CPI Merger ($39.1 million), the Property
Transactions ($5.8 million), and the NED Acquisition ($0.9 million). Excluding
these transactions, interest expense increased $1.0 million.
Please see Note 12 to the financial statements for a description of the
$12.0 million loss from litigation recorded as an unusual item during the
period.
Income from unconsolidated entities increased from $3.8 million in 1998 to
$17.6 million in 1999, resulting from a $9.6 million increase in income from
unconsolidated partnerships and joint ventures and a $4.2 million increase in
income from the Management Company.
Net income was $71.8 million for the three months ended September 30, 1999,
which reflects an increase of $19.1 million over the same period in 1998,
primarily for the reasons discussed above. Net income was allocated to the
partners of the SPG Operating Partnership based on their preferred Unit
preferences and weighted average ownership interests in the SPG Operating
Partnership during the period.
For the Nine Months ended September 30, 1999 vs. the Nine Months Ended September
30, 1998
Total revenue increased $428.9 million or 46.0% for the nine months ended
September 30, 1999, as compared to the same period in 1998. This increase is
primarily the result of the CPI Merger ($340.8 million) and the Property
Transactions ($33.4 million). Excluding these items, total revenues increased
$54.7 million or 5.9%, primarily due to a $28.6 million increase in minimum
rent, a $7.3 million increase in overage rents and a $22.2 million increase in
tenant reimbursements, partially offset by a $3.4 million decrease in
miscellaneous income, which includes a $2.5 million brokerage fee received in
1998 in connection with the sale of the General Motors Building. The 5.1%
comparable increase in minimum rent results from increased occupancy levels, the
replacement of expiring tenant leases with renewal leases at higher minimum base
rents and increased rents from the SPG Operating Partnership's marketing
initiative, Simon Brand Ventures ("SBV"). The $7.3 million increase in overage
rents is primarily the result of the $5.6 million negative impact in 1998 from
EITF 98-9 discussed above. The $22.0 million increase in tenant reimbursements
is partially offset by a $16.6 million increase in recoverable expenses.
Total operating expenses increased $239.1 million or 47.2% for the nine
months ended September 30, 1999, as compared to the same period in 1998. This
increase is primarily the result of the CPI Merger ($199.8 million) and the
Property Transactions ($20.1 million). Excluding these transactions, total
operating expenses increased $19.2 million or 3.8%, primarily due to a $16.6
million increase in recoverable expenses, which was offset by an increase in
tenant reimbursements, as described above.
Interest expense increased $146.4 million, or 52.0% for the nine months
ended September 30, 1999, as compared to the same period in 1998. This increase
is primarily a result of the CPI Merger ($123.7 million), the Property
Transactions ($12.5 million), the NED Acquisition ($0.9 million) and incremental
interest on borrowings under the Credit Facility to acquire a noncontrolling
joint venture interest in twelve regional malls and two community centers (the
"IBM Properties") in February 1998 ($2.2 million). Excluding these transactions,
interest expense increased $7.1 million.
17
<PAGE>
Income from unconsolidated entities increased $33.7 million for the nine
months ended September 30, 1999, as compared to the same period in 1998,
resulting from a $20.9 million increase in income from unconsolidated
partnerships and joint ventures and a $12.8 million increase in income from the
Management Company. The increase in income from unconsolidated partnerships and
joint ventures is primarily due to the CPI Merger ($7.4 million) and the IBM
Properties ($4.9 million).
Please see Note 12 to the financial statements for a description of the
$12.0 million loss from litigation recorded as an unusual item during the
period.
The $2.2 million extraordinary loss in 1999 is the result of refinancing
indebtedness. The $7.0 million extraordinary gain in 1998 is the result of a
gain on forgiveness of debt ($5.2 million) and the write-off of the premium on
such indebtedness ($1.8 million).
Net income was $204.3 million for the nine months ended September 30, 1999,
which reflects an increase of $56.0 million over the same period in 1998,
primarily for the reasons discussed above. Net income was allocated to the
partners of the SPG Operating Partnership based on their preferred Unit
preferences and weighted average ownership interests in the SPG Operating
Partnership during the period.
Liquidity and Capital Resources
As of September 30, 1999, the SPG Operating Partnership's balance of cash
and cash equivalents was approximately $94.1 million. In addition to its cash
balance, the SPG Operating Partnership had a borrowing capacity on the Credit
Facility of $570.5 million available after outstanding borrowings and letters of
credit at September 30, 1999. The SPG Operating Partnership also has access to
public equity and debt markets. The SPG Operating Partnership has a shelf
registration statement currently effective, under which $250 million in debt
securities may be issued.
Management anticipates that cash generated from operations will provide the
necessary funds on a short- and long-term basis for its operating expenses,
interest expense on outstanding indebtedness, recurring capital expenditures,
and distributions to shareholders in accordance with REIT requirements. Sources
of capital for nonrecurring capital expenditures, such as major building
renovations and expansions, as well as for scheduled principal payments,
including balloon payments, on outstanding indebtedness are expected to be
obtained from: (i) excess cash generated from operating performance; (ii)
working capital reserves; (iii) additional debt financing; and (iv) additional
equity raised in the public markets.
On February 26, 1999, 150,000 Series A Convertible Preferred Units were
converted into 5,699,304 Units. Additionally, on March 1, 1999, another 152,346
Units were issued in lieu of the cash dividends allocable to those preferred
Units. Additionally, on May 10, 1999 another 5,978 Series A Convertible
Preferred Units were converted into 227,136 Units, with another 1,544 Units
issued in lieu of the cash dividends allocable to those preferred Units. At June
30, 1999, 53,271 Series A Convertible Preferred Units remained outstanding.
Sensitivity Analysis
The SPG Operating Partnership's future earnings, cash flows and fair values
relating to financial instruments are dependent upon prevalent market rates of
interest, such as LIBOR. Based upon consolidated indebtedness and interest rates
at September 30, 1999, a 0.25% increase in the market rates of interest would
decrease earnings and cash flows over the next twelve months by approximately
$4.5 million and $5.2 million, respectively, and would decrease the fair value
of debt by approximately $160 million. A 0.25% decrease in the market rates of
interest would increase earnings and cash flows over the next twelve months by
approximately $4.5 million and $5.2 million, respectively, and would increase
the fair value of debt by approximately $175 million.
Financing and Debt
At September 30, 1999, the SPG Operating Partnership had consolidated debt
of $8,542 million, of which $6,200 million is fixed-rate debt bearing interest
at a weighted average rate of 7.3% and $2,342 million is variable-rate debt
bearing interest at a weighted average rate of 6.2%. As of September 30, 1999,
the SPG Operating Partnership had interest rate protection agreements related to
$438 million of consolidated variable-rate debt. The SPG Operating Partnership's
interest rate protection agreements did not materially impact interest expense
or weighted average borrowing rates for the nine months ended September 30, 1999
or 1998.
18
<PAGE>
Scheduled principal payments of the Companies' share of consolidated
indebtedness over the next five years is $5,058 million, with $3,313 million
thereafter. The SPG Operating Partnership, together with the SRC Operating
Partnership, had a combined ratio of consolidated debt-to-market capitalization
of 57.9% and 51.2% at September 30, 1999 and December 31, 1998, respectively.
Approximately 6.1% of this 6.7% increase is a result of the decrease in the
value of the Paired Units.
In January of 1999 the SPG Operating Partnership retired the $22 million
mortgage on North East Mall, which bore interest at 10% and had a stated
maturity of September 2000, using cash from working capital. The paydown
included a $1.8 million prepayment charge, which was recorded as an
extraordinary loss. In June of 1999, a new $17.7 million mortgage was placed on
North East Mall bearing interest at 6.74%, with a stated maturity of May 2002.
The net proceeds were added to working capital.
On February 4, 1999, the SPG Operating Partnership completed the sale of
$600 million of senior unsecured notes. These notes included two $300 million
tranches. The first tranche bears interest at 6.75% and matures on February 4,
2004 and the second tranche bears interest at 7.125% and matures on February 4,
2009. The SPG Operating Partnership used the net proceeds of approximately $594
million primarily to retire the $450 million initial tranche of the Merger
Facility and to pay $142 million on the outstanding balance of the Credit
Facility.
Effective August 25, 1999, the SPG Operating Partnership completed the
refinancing of its $1.25 billion unsecured revolving credit facility (the
"Credit Facility"). The terms of the Credit Facility are essentially unchanged,
with the exception that the maturity date was extended from September 27, 1999
to August 25, 2002, with an additional one-year extension available at the
option of the SPG Operating Partnership.
Acquisitions
In addition to the NED Acquisition described previously, during the first
nine months of 1999 the SPG Operating Partnership acquired the remaining
ownership interests in four Properties for a total of approximately $147.5
million, including the assumption of approximately $48.5 million of mortgage
indebtedness. These purchases were funded primarily with borrowings from the
Credit Facility. Each of the Properties purchased were previously accounted for
using the equity method of accounting and are now accounted for using the
consolidated method of accounting.
Additionally, on October 15, 1999, the SPG Operating Partnership and its
affiliated Management Company acquired a noncontrolling 27.5% ownership interest
in Mall of America in Minneapolis, Minnesota, and adjacent land, for
approximately $170 million. The purchase price includes the assumption of $85.8
million pro rata share of a $312.0 million mortgage; the issuance of 1,000,000
shares of 8% Redeemable Preferred Stock in SPG with a face value of $25 million
and $60.3 million in cash. The SPG Operating Partnership, together with the
Management Company, are entitled to 50% of the economic benefits of Mall of
America. The majority of the cash portion of the purchase price was financed
with the Credit Facility.
Management continues to review and evaluate a limited number of individual
property and portfolio acquisition opportunities. Management believes, however,
that due to the rapid consolidation of the regional mall business over the past
three years, coupled with the current status of the capital markets, that
acquisition activity in the near term will be a less significant component of
the Company's growth strategy. Management believes that funds on hand, and
amounts available under the Credit Facility, together with the net proceeds of
public and private offerings of debt and equity securities are sufficient to
finance likely acquisitions. No assurance can be given that the SPG Operating
Partnership will not be required to, or will not elect to, even if not required
to, obtain funds from outside sources, including through the sale of debt or
equity securities, to finance significant acquisitions, if any.
Dispositions
On April 15, 1999, the SPG Operating Partnership sold the land at Three Dag
Hammarskjold in New York, New York for $9.5 million, which was recorded as an
adjustment to the purchase price. Also in the second quarter of 1999, one
community shopping center was sold for $4.2 million, resulting in a loss of $4.2
million. In addition, the SPG Operating Partnership sold a parcel of land, which
was accounted for as an adjustment to the purchase price. The net proceeds of
approximately $28.3 million, were used to reduce the outstanding borrowings on
the Credit Facility.
Portfolio Restructuring. In addition to the Property sales described above,
the SPG Operating Partnership is continuing to evaluate the potential sale of
its remaining non-retail holdings, along with a number of retail assets that are
no longer aligned with the SPG Operating Partnership's strategic criteria. If
these assets are sold, management expects the sales prices will not differ
materially from the carrying values of the related assets.
19
<PAGE>
Development, Expansions and Renovations. The SPG Operating Partnership is
involved in several development, expansion and renovation efforts.
In January of 1999, The Shops at Sunset Place, a 510,000 square-foot
destination-oriented retail and entertainment project, opened in South Miami,
Florida. The SPG Operating Partnership owns 37.5% of this approximately $150
million specialty center. The approximately $246 million Mall of Georgia, an
approximately 1.6 million square foot regional mall project, opened on August
13, 1999. Adjacent to the regional mall, the approximately $38 million Mall of
Georgia Crossing is an approximately 441,000 square-foot community shopping
center project, which also opened in August of 1999. The SPG Operating
Partnership funded 85% of the capital requirements of these projects and has a
noncontrolling 50% ownership interest in each of them after the return of its
equity and a 9% return thereon. On September 17, 1999, the approximately $216
million Concord Mills, a 1.4 million square foot value-oriented super regional
mall, opened in Concord (Charlotte), North Carolina. The SPG Operating
Partnership owns 37.5% of this approximately $216 million Property.
Construction also continues on the following projects, which have an
aggregate construction cost of approximately $466 million, of which the SPG
Operating Partnership's share is approximately $265 million:
. Orlando Premium Outlets marks the SPG Operating Partnership's first
project to be constructed in the partnership with Chelsea GCA Realty.
This 433,000 square-foot upscale outlet center is scheduled for
completion in the summer of 2000 in Orlando, Florida.
. Arundel Mills is scheduled to open in the fall of 2000. The SPG
Operating Partnership has a 37.5% ownership interest in this
approximately 1.4 million square-foot value-oriented super-regional mall
project.
. The SPG Operating Partnership has two community center projects under
construction: The Shops at North East Mall and Waterford Lakes Town
Center at a combined 1,316,000 square feet of GLA, which are each
scheduled to open in November of 1999.
A key objective of the SPG Operating Partnership is to increase the
profitability and market share of its Properties through strategic renovations
and expansions. The SPG Operating Partnership's share of projected costs to fund
all renovation and expansion projects in 1999 is approximately $300 million,
which includes approximately $190 million incurred in the first nine months of
1999. It is anticipated that the cost of these projects will be financed
principally with the Credit Facility, project-specific indebtedness, access to
debt and equity markets, and cash flows from operations. The SPG Operating
Partnership currently has four major expansion and/or redevelopment projects
under construction with targeted 1999 completion dates. Included in investment
properties at September 30, 1999 is approximately $396.9 million of construction
in progress, with another $231.6 million in the unconsolidated joint venture
investment properties.
Distributions. The Companies declared a distribution of $0.505 per Paired
Unit in each of the first three quarters of 1999. The current annual
distribution rate is $2.02 per Paired Unit. Future distributions will be
determined based on actual results of operations and cash available for
distribution. Additionally, distributions of $0.23 and $0.19 were declared and
paid through September 30, 1999 on the 8% Preferred Units and the 7% Preferred
Units, respectively, which were issued in connection with the NED Acquisition.
Investing and Financing Activities
Cash used in investing activities for the nine months ended September 30,
1999 of $428.3 million is the result of acquisitions of $265.7 million, capital
expenditures of $347.0 million, investments in unconsolidated joint ventures of
$56.0 million, and $24.4 million of investments in and advances to the
Management Company, partially offset by distributions from unconsolidated
entities of $191.4 million; net proceeds from the sales of assets of $42.0
million; and cash of $10.8 million from the consolidations of Haywood Mall,
Century III Mall, Lakeline Mall and Lakeline Plaza. Capital expenditures
includes development costs of $71.4 million, renovation and expansion costs of
approximately $221.2 million and tenant costs and other operational capital
expenditures of approximately $54.4 million. Acquisitions, including transaction
costs, includes $166.5 million for the NED Acquisition and $69.0 million, $24.0
million and $6.3 million for the remaining interests in Haywood Mall, Century
III Mall and Lakeline Mall and Plaza, respectively. Investments in
unconsolidated joint ventures is primarily $15.7 million in Florida Mall, $11.2
million in Orlando Premium Outlots, $11.2 million in BEG and ERE and $6.3
million in Mall of Georgia. Distributions from unconsolidated entities includes
$46.5 million, $34.7 million, $28.0 million, $14.7 million and $12.5 million
from Gwinnett Place, Town Center at Cobb, Westchester Mall, Concord Mills and
the IBM Properties, respectively. Net proceeds from the sales of assets is made
up of $28.3 million, $9.5 million and $4.2 million from the sales of the Charles
Hotel land, the Three Dag Hammarskjold land and Cohoes Center, respectively.
Cash used in financing activities for the nine months ended September 30,
1999 was $42.0 million and primarily includes net distributions of $427.8
million, partially offset by net borrowings of $385.8 million.
20
<PAGE>
EBITDA--Earnings from Operating Results before Interest, Taxes,
Depreciation and Amortization
Management believes that there are several important factors that
contribute to the ability of the SPG Operating Partnership to increase rent and
improve profitability of its shopping centers, including aggregate tenant sales
volume, sales per square foot, occupancy levels and tenant costs. Each of these
factors has a significant effect on EBITDA. Management believes that EBITDA is
an effective measure of shopping center operating performance because: (i) it is
industry practice to evaluate real estate properties based on operating income
before interest, taxes, depreciation and amortization, which is generally
equivalent to EBITDA; and (ii) EBITDA is unaffected by the debt and equity
structure of the property owner. EBITDA: (i) does not represent cash flow from
operations as defined by generally accepted accounting principles; (ii) should
not be considered as an alternative to net income as a measure of operating
performance; (iii) is not indicative of cash flows from operating, investing and
financing activities; and (iv) is not an alternative to cash flows as a measure
of liquidity.
Total EBITDA for the Properties increased from $907.7 million for the nine
months ended September 30, 1998 to $1,277.9 million for the same period in 1999,
representing a 40.8% increase. This increase is primarily attributable to the
CPI Merger ($281.8 million), the IBM Properties ($14.4 million), the NED
Acquisition ($8.9 million) and the other Properties opened or acquired during
1998 and 1999 ($13.4 million), partially offset by a decrease from Properties
sold in the comparative periods ($2.4 million). Excluding these items, EBITDA
increased $54.0 million, or 5.9%, resulting from aggressive leasing of new and
existing space and increased operating efficiencies. During this period
operating profit margin increased from 64.7% to 64.8%.
FFO--Funds from Operations
FFO, as defined by the National Association of Real Estate Investment
Trusts, means the consolidated net income of the SPG Operating Partnership and
its subsidiaries without giving effect to depreciation and amortization, gains
or losses from extraordinary items, gains or losses on sales of real estate,
gains or losses on investments in marketable securities and any
provision/benefit for income taxes for such period, plus the allocable portion,
based on the SPG Operating Partnership's ownership interest, of funds from
operations of unconsolidated joint ventures, all determined on a consistent
basis in accordance with generally accepted accounting principles. Management
believes that FFO is an important and widely used measure of the operating
performance of REITs which provides a relevant basis for comparison among REITs.
FFO is presented to assist investors in analyzing performance. The SPG Operating
Partnership's method of calculating FFO may be different from the methods used
by other REITs. FFO: (i) does not represent cash flow from operations as defined
by generally accepted accounting principles; (ii) should not be considered as an
alternative to net income as a measure of operating performance or to cash flows
from operating, investing and financing activities; and (iii) is not an
alternative to cash flows as a measure of liquidity. Beginning January 1, 2000,
the revised NAREIT definition of FFO will not permit the exclusion of unusual
items.
21
<PAGE>
The following summarizes FFO of the SPG Operating Partnership and
reconciles income before unusual and extraordinary items to FFO for the periods
presented:
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
---------------------- ----------------------
1999 1998 1999 1998
-------- -------- -------- --------
(In thousands)
<S> <C> <C> <C> <C>
FFO of the SPG Operating Partnership $175,894 $123,353 $497,148 $348,217
======== ======== ======== ========
Reconciliation:
Income Before Unusual and Extraordinary Items $ 84,164 $ 52,635 $218,537 $141,273
Plus:
Depreciation and amortization from consolidated
Properties 92,267 60,862 269,547 177,023
The SPG Operating Partnership's share of
depreciation and amortization and extraordinary
items from unconsolidated affiliates 17,669 19,646 58,960 50,754
Loss on the sale of real estate -- 64 4,188 7,283
Less:
Minority interest portion of depreciation,
amortization and extraordinary items (1,516) (1,780) (3,566) (5,374)
Preferred distributions (16,690) (8,074) (50,518) (22,742)
-------- -------- -------- --------
FFO of the SPG Operating Partnership $175,894 $123,353 $497,148 $348,217
======== ======== ======== ========
</TABLE>
Portfolio Data
The following operating statistics give effect to the CPI Merger and the
NED Acquisition for 1999 only. Statistics include all other Properties except
Richmond Town Square, which is in the final stages of an extensive
redevelopment.
Aggregate Tenant Sales Volume. For the nine months ended September 30, 1999
compared to the same period in 1998, total reported retail sales at mall and
freestanding GLA owned by the SPG Operating Partnership ("Owned GLA") in the
regional malls increased $3,167 million or 49.0% from $6,457 million to $9,568
million, primarily as a result of the CPI Merger ($2,127 million), the NED
Acquisition ($473 million), increased productivity of our existing tenant base
and an overall increase in occupancy. Retail sales at Owned GLA affect revenue
and profitability levels because they determine the amount of minimum rent that
can be charged, the percentage rent realized, and the recoverable expenses
(common area maintenance, real estate taxes, etc.) the tenants can afford to
pay.
Occupancy Levels. Occupancy levels for Owned GLA at mall and freestanding
stores in the regional malls increased from 87.7% at September 30, 1998, to
88.5% at September 30, 1999. Owned GLA has increased 7.9 million square feet
from September 30, 1998, including the CPI Merger, to September 30, 1999,
primarily as a result of the NED Acquisition (4.2 million) and Property openings
(3.0 million).
Average Base Rents. Average base rents per square foot of mall and
freestanding Owned GLA at regional malls increased 15.3%, from $23.20 at
September 30, 1998 to $26.75 at September 30, 1999. Of this increase, $2.63 is a
result of the CPI Merger and NED Acquisition.
Inflation
Inflation has remained relatively low and has had a minimal impact on the
operating performance of the Properties. Nonetheless, substantially all of the
tenants' leases contain provisions designed to lessen the impact of inflation.
Such provisions include clauses enabling the SPG Operating Partnership to
receive percentage rentals based on tenants' gross sales, which generally
increase as prices rise, and/or escalation clauses, which generally increase
rental rates during the terms of the leases. In addition, many of the leases are
for terms of less than ten years, which may enable the SPG Operating Partnership
to replace existing leases with new leases at higher base and/or percentage
rentals if rents of the existing leases are below the then-existing market rate.
Substantially all of the leases, other than those for anchors, require the
tenants to pay a proportionate share of operating expenses, including common
area maintenance, real estate taxes and insurance, thereby reducing the SPG
Operating Partnership's exposure to increases in costs and operating expenses
resulting from inflation.
22
<PAGE>
However, inflation may have a negative impact on some of the SPG
Operating Partnership's other operating items. Interest and general and
administrative expenses may be adversely affected by inflation as these
specified costs could increase at a rate higher than rents. Also, for tenant
leases with stated rent increases, inflation may have a negative effect as the
stated rent increases in these leases could be lower than the increase in
inflation at any given time.
Year 2000 Costs
The SPG Operating Partnership has undertaken a project to identify and
correct problems arising from the inability of information technology hardware
and software systems to process dates after December 31, 1999. This Year 2000
project consists of two primary components. The first component focuses on the
SPG Operating Partnership's key information technology systems (the "IT
Component") and the second component focuses on the information systems of key
tenants and key third party service providers as well as imbedded systems within
common areas of substantially all of the Properties (the "Non-IT Component").
Key tenants include the 20 largest base rent contributors and anchor tenants
with over 25,000 square feet of GLA. Key third party service providers are those
providers whose Year 2000 problems, if not addressed, would be likely to have a
material adverse effect on the SPG Operating Partnership's operations.
The IT Component of the Year 2000 project is being managed by the
information services department of the SPG Operating Partnership who have
actively involved other disciplines within the SPG Operating Partnership which
are directly impacted by an IT Component of the project. The Non-IT Component is
being managed by a steering committee of 25 employees, including senior
executives of a number of the SPG Operating Partnership's departments. In
addition, outside consultants have been engaged to assist in the Non-IT
Component.
Status of Project Through October 31, 1999
IT Component. The SPG Operating Partnership's primary operating,
financial accounting and billing systems and the SPG Operating
Partnership's standard primary desktop software have been determined
to be Year 2000 ready. The SPG Operating Partnership's information
services department has also completed its assessment of other
"mission critical" applications within the SPG Operating Partnership
and has implemented solutions to those applications in order
for them to be Year 2000 ready. Vendor testing has occurred for
mission critical applications, but the SPG Operating Partnership
continues to perform its own tests on certain applications in an
effort to assure Year 2000 readiness.
Non-IT Component. The Non-IT Component includes the following
phases: (1) an inventory of Year 2000 items which are determined to be
material to the SPG Operating Partnership's operations; (2) assigning
priority to identified items; (3) assessing Year 2000 compliance
status as to all critical items; (4) developing replacement or
contingency plans based on the information collected in the preceding
phases; (5) implementing replacement and contingency plans; and (6)
testing and monitoring of plans, as applicable.
Excluding the Properties recently acquired from NED in each phase
of the project, Phase (1) and Phase (2) are complete and Phase (3) is
in process. The assessment of compliance status of key tenants is
approximately 91% complete, the assessment of compliance status of key
third party service providers is approximately 96% complete, the
assessment of compliance status of critical inventoried components at
the Properties is approximately 91% complete and the assessment of
compliance status of non-critical inventoried components at the
Properties is approximately 90% complete. Where Year 2000 issues have
been identified with Non-IT Components, plans have been implemented,
or will be implemented before year-end, which the SPG Operating
Partnership expects will address those Year 2000 issues.
Implementation of contingency and replacement plans (Phase (5)) is
ongoing and will continue throughout 1999 to the extent Year 2000
issues are identified. Testing (Phase (6)) has been completed. Testing
at 12 Properties recently acquired from NED is expected to be
completed by November 15, 1999. The SPG Operating Partnership believes
that mission critical Non-IT Components have been identified at those
12 Properties and plans have been implemented, or will be implemented
before year-end, which the SPG Operating Partnership expects will
address those mission critical issues.
Contingency Plans (Phase (4)). The development of contingency plans
(Phase (4)) is complete. Included within the SPG Operating
Partnership's contingency plans is a requirement that th SPG
Operating Parternership's home office and each
23
<PAGE>
Property be manned by on-site personnel beginning December 31, 1999 and
continuing through the first business day of January 2000 to recognize and
immediately address, to the extent possible, any Year 2000 issues arising out of
any IT Component at the SPG Operating Partnership's home office and any Non-It
Component at the Properties.
Costs. The SPG Operating Partnership estimates that it will spend
approximately $1.5 million in incrementak costs for its Year 2000 project. This
amount includes expenses incurred beginning January 1997 and continuing through
the beginning of 2000 for any repairs or replacements necessary to correct
noncompliant systems. Costs incurred through September 30, 1999 are estimate at
approximately $600 thousand, including approximately $100 thousand in the
nine-month period ended September 30, 1999. Such amounts are expensed as
incurred. These estimates do not include the costs expended by the SPG Operating
Partnership following the 1996 merger with DeBartolo Realty Corporation for
software, hardware and related costs necessary to upgrade its primary operating,
financial accounting and billing systems, which allowed those systems to, among
other things, become Year 2000 compliant.
Risks. The most reasonably likely worst case scenario for the SPG
Operating Partnership with respect to the Year 2000 problems would be
disruptions in operations at the Properties. This could lead to reduced sales at
the Properties and claims by tenants which would in turn adversely affect the
SPG Operating Partnership's results of operations.
The SPG Operating Partnership has not yet completed all phases of its
Year 2000 project and the SPG Operating Partnership is dependent upon key
tenants and key third party suppliers to make their information systems Year
2000 compliant. In addition, disruptions in the economy generally resulting from
Year 2000 problems could have an adverse effect on the SPG Operating
Partnership's operations.
Seasonality
The shopping center industry is seasonal in nature, particularly in
the fourth quarter during the holiday season, when tenant occupancy and retail
sales are typically at their highest levels. In addition, shopping malls achieve
most of their temporary tenant rents during the holiday season. As a result of
the above, earnings are generally highest in the fourth quarter of each year.
Item 3. Qualitative and Quantitative Disclosure About Market Risk
Reference is made to Item 2 of this Form 10-Q under the caption
"Liquidity and Capital Resources".
24
<PAGE>
Part II - Other Information
Item 1: Legal Proceedings
Please refer to Note 12 of the financial statements for a summary of
material litigation.
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibits
3.1 Certificate of Powers, Designations, Preferences and Rights of
the 7.00% Series C Cumulative Convertible Preferred Units,
$0.0001 Par Value
3.2 Certificate of Powers, Designations, Preferences and Rights of
the 8.00% Series D Cumulative Redeemable Preferred Units, $0.0001
Par Value
3.3 Certificate of Powers, Designations, Preferences and Rights of
the 8.00% Series E Cumulative Redeemable Preferred Units, $0.0001
Par Value
10.1 Third Amended and Restated Credit Agreement Dated as of August
25, 1999
(b) Reports on Form 8-K
None.
25
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SIMON PROPERTY GROUP, L.P.
By: Simon Property Group, Inc.
General Partner
/s/ John Dahl
-------------
John Dahl,
Senior Vice President and Chief
Accounting Officer
(Principal Accounting Officer)
Date: November 10, 1999
26
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> Simon Property Group, L.P.
This schedule contains summary financial information extracted from
Form 10-Q and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 94,120
<SECURITIES> 0
<RECEIVABLES> 262,026<F1>
<ALLOWANCES> 0<F1>
<INVENTORY> 0
<CURRENT-ASSETS> 0<F2>
<PP&E> 12,452,567
<DEPRECIATION> 992,936
<TOTAL-ASSETS> 13,708,678
<CURRENT-LIABILITIES> 0<F2>
<BONDS> 8,541,538
0
944,280
<COMMON> 0
<OTHER-SE> 3,564,860
<TOTAL-LIABILITY-AND-EQUITY> 13,708,678
<SALES> 0
<TOTAL-REVENUES> 1,361,526
<CGS> 0
<TOTAL-COSTS> 738,758
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 6,693
<INTEREST-EXPENSE> 428,149
<INCOME-PRETAX> 206,537
<INCOME-TAX> 0
<INCOME-CONTINUING> 206,537
<DISCONTINUED> 0
<EXTRAORDINARY> (2,227)
<CHANGES> 0
<NET-INCOME> 204,310
<EPS-BASIC> 0.67
<EPS-DILUTED> 0.67
<FN>
<F1> Receivables are stated net of allowances.
<F2> The Registrant does not report using a classified balance sheet.
</FN>
</TABLE>
============================================================================
Exhibit 3.1
CERTIFICATE OF DESIGNATION
OF
7.00% CUMULATIVE CONVERTIBLE PREFERRED UNITS
OF
SIMON PROPERTY GROUP, L.P.
WHEREAS, Simon Property Group, L.P. (the "Operating Partnership") has
agreed to designate a series of preferred units having the powers, preferences
and relative, participating, optional or other special rights set forth herein
and to issue the units so designated solely as partial consideration for the
NED Portfolio Properties as defined in certain contribution agreements with
respect to properties the sale of which was arranged by NED Management Limited
Partnership and WellsPark Management LLC and, under certain circumstances, as
partial consideration for Pheasant Lane Mall in Nashua New Hampshire and
Cambridgeside Galleria in Cambridge, Massachusetts pursuant to contribution
agreements with respect to those properties (the contribution agreements for
the NED Portfolio Properties. Pheasant Lane Mall and Cambridgeside Galleria are
referred to herein as the "Contribution Agreements"); and
WHEREAS, the designation of the preferred units of the Operating
Partnership hereby is permitted by the terms of the Seventh Amended and
Restated Limited Partnership Agreement of the Operating Partnership (the
"Partnership Agreement");
WHEREAS, Simon Property Group, Inc. (the "Corporation"), the managing
general partner of the Operating Partnership (in such capacity, the "Managing
General Partner"), has determined that it is in the best interest of the
Operating Partnership to designate a new series of preferred units of the
Operating Partnership;
NOW THEREFORE, the Managing General Partner hereby designates a
series of preferred units and fixes the designations, powers, preferences and
relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, of such preferred units,
as follows:
SECTION 1. Designation and Number. The units of such series
shall be designated "7.00% Cumulative Convertible Preferred Units" (the "7.00%
Cumulative Convertible Preferred Units"). The authorized number of 7.00%
Cumulative Convertible Preferred Units shall be 1,500,000 but such 7.00%
Cumulative Convertible Preferred Units shall only be issuable as consideration
pursuant to the Contribution Agreements. Subject to Sections 5 and 6 hereof,
each 7.00% Cumulative Convertible Preferred Unit shall be paired with one (1)
8.00% Cumulative Redeemable Preferred Unit of the Operating Partnership ("8.00%
Cumulative Redeemable Preferred Unit") or, if issued, with New Preferred Units
as permitted under Section 5 of the Certificate of Designation of 8.00%
Cumulative Redeemable Preferred Units (the "8.00% Certificate of Designation")
and such paired units shall be subject to the transfer restrictions set forth
in Section 9 hereof (as such, "Paired Units"); provided that in the event of
(i) the redemption by the Operating Partnership of 8.00% Cumulative Redeemable
Preferred Units for Common Units; (ii) the conversion of 8.00% Cumulative
Redeemable Preferred Units into 8.00% Cumulative Redeemable Preferred Stock (as
defined in the 8.00% Certificate of Designation) as permitted under Section 6
of such 8.00% Certificate of Designation or (iii) the repurchase of 8.00%
Cumulative Redeemable Preferred Units payable in Paired Shares as permitted
under Section 7 of such 8.00% Certificate of Designation, then in each such
case, the 7% Cumulative Convertible Preferred Units shall cease to be paired
with such Common Units issuable upon such redemption, such 8.00% Cumulative
Redeemable Preferred Stock issuable upon such conversion, or such Paired Shares
issuable upon repurchase, as the case may be, of the 8.00% Cumulative
Redeemable Preferred Units and the provisions of Section 9(b) hereof shall no
longer apply to the 7.00% Cumulative Convertible Preferred Units which had been
paired with the 8.00% Cumulative Redeemable Preferred Stock which were so
redeemed or converted.
SECTION 2. Ranking. The 7.00% Cumulative Convertible Preferred
Units shall, with respect to the payment of distributions pursuant to Section
6.2 of the Partnership Agreement or rights upon the dissolution, liquidation or
winding-up of the Operating Partnership, rank: (i) senior to the holders of
Partnership Units of the Operating Partnership (the "Common Units") and any
other equity securities of the Operating Partnership which by their terms rank
junior to the 7.00% Cumulative Convertible Preferred Units as to distributions
pursuant to Section 6.2 of the Partnership Agreement or rights upon the
dissolution, liquidation or winding-up of the Operating Partnership (such
Common Units and such other equity securities, collectively, the "Junior
Units"), (ii) pari passu with any other preferred units which are not by their
terms junior or, subject to Section 11 hereof, senior to the 7.00% Cumulative
Convertible Preferred Units as to distributions pursuant to Section 6.2 of the
Partnership Agreement or rights upon the dissolution, liquidation or winding-up
of the Operating Partnership, and in all respects shall rank pari passu with
the 6.50% Series A Convertible Preferred Units, Series B Convertible Preferred
Units, 8-3/4% Series B Cumulative Redeemable Preferred Units, 7.89% Series C
Cumulative Step-Up Premium Rate Preferred Units and 8.00% Cumulative Redeemable
Preferred Units, which are the only preferred units of the Operating
Partnership authorized as of the date hereof ("Parity Units") and (iii) subject
to Section 11 hereof, junior to any other preferred units which by their terms
are senior to the 7.00% Cumulative Convertible Preferred Units as to
distributions pursuant to Section 6.2 of the Partnership Agreement or rights
upon the dissolution, liquidation or winding-up of the Operating Partnership
("Senior Units").
SECTION 3. Distributions. (a) Distributions on the 7.00%
Cumulative Convertible Preferred Units are cumulative from the date of issuance
and are payable quarterly on or about the last day of March, June, September
and December of each year in an amount in cash equal to 7.00% of the
Liquidation Preference (as defined herein) per annum.
(b) Distributions on the 7.00% Cumulative Convertible Preferred
Units, without any additional return on unpaid distributions, will accrue,
whether or not the Operating Partnership has earnings, whether or not there are
funds legally available for the payment of such distribution and whether or not
such distributions are declared or paid when due. All such distributions
accumulate from the first date of issuance of any such 7.00% Cumulative
Convertible Preferred Units. Distributions on the 7.00% Cumulative Convertible
Preferred Units shall cease to accumulate on such units on the date of their
earlier conversion or redemption.
(c) In allocating items of income, gain, loss and deductions which
could have an effect upon the determination of the federal income tax liability
of any holder of a 7.00% Cumulative Convertible Preferred Unit, except as
otherwise required by Section 704(c) of the Internal Revenue Code of 1986, as
amended, or any other applicable provisions thereof, the Operating Partnership
shall allocate each such item proportionately, based on the distributive share
of profits or losses, as the case may be, of the Operating Partnership
allocated to holders of the 7.00% Cumulative Convertible Preferred Units as
compared to the total of the distributive shares of such profits and losses, as
the case may be, allocated to all partners of the Operating Partnership.
(d) If any 7.00% Cumulative Convertible Preferred Units are
outstanding, then, except as provided in the following sentence, no
distributions shall be declared or paid or set apart for payment on any Parity
Units or Junior Units for any period unless full cumulative distributions have
been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for such payments on the 7.00%
Cumulative Convertible Preferred Units for all past distribution periods and
the then current distribution period. When distributions are not paid in full
(or a sum sufficient for such full payment is not set apart) upon the 7.00%
Cumulative Convertible Preferred Units and any Parity Units, all distributions
declared upon the 7.00% Cumulative Convertible Preferred Units and any other
Parity Units shall be declared pro rata so that the amount of distributions
declared per 7.00% Cumulative Convertible Preferred Unit and such other Parity
Units shall in all cases bear to each other the same ratio that accrued
distributions per 7.00% Cumulative Convertible Preferred Unit and such other
series of Parity Units bear to each other.
(e) Except as provided in subparagraph (d) above, unless full
cumulative distributions on the 7.00% Cumulative Convertible Preferred Units
have been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for payment for all past
distribution periods and the then current distribution period, no distributions
(other than in Junior Units) shall be declared, set aside for payment or paid
and no other distribution shall be declared or made upon any Junior Units, nor
shall any Junior Units be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking fund
for the redemption of any such Junior Units) by the Operating Partnership
(except by conversion into or exchange for Junior Units).
SECTION 4. Liquidation Preference. (a) Each 7.00% Cumulative
Convertible Preferred Unit shall be entitled to a liquidation preference of
$28.00 per 7.00% Cumulative Convertible Preferred Unit ("Liquidation
Preference").
(b) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Operating Partnership pursuant to Article VIII
of the Partnership Agreement, the holders of 7.00% Cumulative Convertible
Preferred Units then outstanding shall be entitled to be paid out of the assets
of the Operating Partnership available for distribution, after and subject to
the payment in full of all amounts required to be distributed to the holders of
Senior Units, but before any payment shall be made to the holders of Junior
Units, an amount equal to the aggregate Liquidation Preference of the 7.00%
Cumulative Convertible Preferred Units held by such holder, plus an amount
equal to accrued and unpaid distributions thereon, if any. If upon any such
liquidation, dissolution or winding up of the Operating Partnership the
remaining assets of the Operating Partnership available for the distribution
after payment in full of amounts required to be paid or distributed to holders
of Senior Units shall be insufficient to pay the holders of the 7.00%
Cumulative Convertible Preferred Units the full amount to which they shall be
entitled, the holders of the 7.00% Cumulative Convertible Preferred Units and
the holders of any series of Parity Units shall share ratably with other
holders of Parity Units in any distribution of the remaining assets and funds
of the Operating Partnership in proportion to the respective amounts which
would otherwise be payable in respect to the Parity Units held by each of the
said holders upon such distribution if all amounts payable on or with respect
to said Parity Units were paid in full. After payment in full of the
Liquidation Preference and accumulated and unpaid distributions to which they
are entitled, the holders of 7.00% Cumulative Convertible Preferred Units shall
not be entitled to any further participation in any distribution of the assets
of the Operating Partnership.
SECTION 5. Redemption. (a) General. The 7.00% Cumulative
Convertible Preferred Units are not redeemable, except as permitted under
Sections 6 and 7 herein, prior to August 27, 2009.
(b) Optional Redemption. (i) On and after August 27, 2009, the
Operating Partnership may, at its option, at any time, redeem the 7.00%
Cumulative Convertible Preferred Units, in whole or in part, at the Liquidation
Preference, plus accrued and unpaid distributions thereon, if any, to and
including the date of redemption (the "Redemption Price"). The Redemption
Price (other than the portion thereof consisting of accrued and unpaid
distributions, which shall be payable in cash) is payable in Common Units at
the Deemed Partnership Unit Value, as of the Redemption Date (as defined
below), of the Common Units to be issued.
(ii) Provided that no later than the Redemption Date the Operating
Partnership shall have (A) set apart the funds necessary to pay the accrued and
unpaid distribution on all the 7.00% Cumulative Convertible Preferred Units
then called for redemption and (B) reserved for issuance a sufficient number of
authorized Common Units, the Operating Partnership may give the holders of the
7.00% Cumulative Convertible Preferred Units written notice ("Redemption
Notice") of a redemption pursuant to Section 5(b) (a "Redemption") not more
than 70 nor less than 40 calendar days prior to the date fixed for redemption
(the "Redemption Date") at the address of such holders on the books of the
Operating Partnership (provided that failure to give such notice or any defect
therein shall not affect the validity of the proceeding for a Redemption except
as to the holder to whom the Operating Partnership has failed to give such
notice or whose notice was defective). The 7.00% Cumulative Convertible
Preferred Units for which the Redemption Price has been paid shall no longer be
deemed outstanding from and after the date of payment and all rights with
respect to such units shall forthwith cease and terminate. In case fewer than
all of the outstanding 7.00% Cumulative Convertible Preferred Units are called
for redemption, such units shall be redeemed pro rata, as nearly as
practicable, among all holders of 7.00% Cumulative Convertible Preferred Units,
provided that, if within 20 business days of the Redemption Notice the
Contributor Representative (as such term is defined in the Tax Protection
Agreement entered into on or prior to the date hereof between Operating
Partnership and certain other parties (the "Tax Protection Agreement"))
notifies the Operating Partnership of an alternative allocation ("Allocation
Notice"), then the redemption of the 7.00% Cumulative Preferred Units shall be
allocated in accordance with such Allocation Notice. On or before the
Redemption Date, a holder of 7.00% Cumulative Convertible Preferred Units shall
have the conversion right set forth in Section 6 hereof notwithstanding
anything in this Section 5 to the contrary.
(c) In the event of the redemption of a 7.00% Cumulative Convertible
Preferred Unit pursuant to this Section 5 for Common Units (but not any Paired
Shares issued upon conversion thereof in exchange therefor), then such Common
Units issuable upon such conversion shall be paired with 8.00% Cumulative
Redeemable Preferred Units so that they are transferable, redeemable or
convertible as a paired unit consisting of the Common Units so issued and one
(1) 8.00% Cumulative Redeemable Preferred Unit and such paired units shall be
"Paired Units" for purposes hereof.
SECTION 6. Conversion. (a) Each 7.00% Cumulative Convertible
Preferred Unit shall be convertible at the option of the holder, at any time on
and after August 27, 2004, upon no less than 15 business days prior written
notice to the Corporation and the Operating Partnership, in whole or in part,
unless previously redeemed, pursuant to Section 6(b) below.
(b) Each 7.00% Cumulative Convertible Preferred Unit that the holder
elects to convert will be redeemed for the sum of (i) a share of 7.00%
Cumulative Convertible Preferred Stock of the Corporation having an aggregate
liquidation preference equal to the Liquidation Preference of the 7.00%
Cumulative Convertible Preferred Units that the holder elects to convert plus
(ii) a cash payment in an amount equal to accrued and unpaid distributions
thereon. The preferred stock of the Corporation so issued shall have the
rights and preferences set forth on Annex I hereto ("Corporation 7.00%
Cumulative Convertible Preferred Stock"); provided, however, if the Closing
Price of the Paired Shares on any three (3) consecutive trading days occurring
after the date hereof is greater than the then Threshold Value (defined
below), then each such 7.00% Cumulative Convertible Preferred Unit that the
holder so elects to convert will instead be converted into 0.75676 Common Units
(as adjusted from time to time pursuant to Section 6(c) hereof, the "Conversion
Factor"). Common Units or Corporation 7.00% Cumulative Convertible Preferred
Stock issuable upon the conversion of 7.00% Cumulative Convertible Preferred
Units shall be deemed "Conversion Units" hereunder. The "Threshold Value"
initially shall be $37.00 but shall be subject to adjustment pursuant to
Section 6(d) hereof.
(c) Adjustments to the Conversion Factor. (i) Adjustments for
Dividends and Distributions. In case the Operating Partnership shall at any
time or from time to time after the original issuance of the 7.00% Cumulative
Convertible Preferred Units declare a dividend, or make a distribution, on the
outstanding Common Units, in either case, in additional Common Units, or effect
a subdivision, combination, consolidation or reclassification of the
outstanding Common Units into a greater or lesser number of Common Units, then,
and in each such case, the Conversion Factor in effect immediately prior to
such event or the record date therefor, whichever is earlier, shall be adjusted
by multiplying such Conversion Factor by a fraction, (A) the numerator of which
is the number of Common Units that were outstanding immediately after such
event and (B) the denominator of which is the number of Common Units
outstanding immediately prior to such event. An adjustment made pursuant to
this Section 6(c) shall become effective in the case of any such dividend or
distribution, immediately after the close of business on the record date for
the determination of holders of Common Units entitled to receive such dividend
or distribution, or in the case of any such subdivision, reclassification,
consolidation or combination, at the close of business on the day upon which
such partnership action becomes effective.
(ii) Adjustment for Issuances. In case the Corporation shall issue
(other than upon the exercise of options, rights or convertible securities)
Paired Shares at a price per share less than 95% of the Current Per Share
Market Price, then, and in each such case, the Conversion Factor in effect
immediately prior to such issuance shall be adjusted so as to be equal to an
amount determined by multiplying the Conversion Factor in effect immediately
prior to such event by a fraction of which (A) the numerator shall be (x) the
number of Paired Shares outstanding at the close of business on the date
immediately preceding such issuance plus (y) the number of Paired Shares so
issued and (B) the denominator shall be (x) the number of Paired Shares
outstanding immediately preceding such issuance plus (y) the number of Paired
Shares which the aggregate consideration receivable by the Corporation in
connection with such issuance would purchase at such Current Per Share Market
Price. For purposes of this Section 6(c)(ii), the aggregate consideration
receivable by the Corporation in connection with the issuance for cash of
Paired Shares shall be deemed to be equal to the gross offering price (before
deduction of customary underwriting discounts or commissions and expenses
payable to third parties) of all such securities being issued.
(iii) Issuance of Options, Warrants or Other Rights. In case
the Corporation shall issue rights to subscribe for or purchase, or options or
warrants to purchase, any Paired Shares (or securities convertible into Paired
Shares) at a price per Paired Share (or having a conversion price per Paired
Share) less than 95% of the Current Per Share Market Price, the Conversion
Factor in effect immediately prior thereto shall be adjusted so that it shall
equal the price determined by multiplying the Conversion Factor in effect
immediately prior thereto by a fraction, of which (A) the numerator shall be
(x) the number of Paired Shares outstanding on the date immediately preceding
such issuance plus (y) the total number of additional Paired Shares offered for
subscription or issuable upon exercise of such options or warrants (or into
which the convertible securities so offered are convertible) and (B) the
denominator of which shall be (x) the number of Paired Shares outstanding at
the close of business on the date immediately preceding such issuance plus (y)
the number of Paired Shares which the aggregate offering price of the total
number of Paired Shares so offered for subscription or issuable upon exercise
of such options or warrants (or the aggregate conversion price of the
convertible securities so offered) would purchase at such the Current Per Share
Market Price. Such adjustment shall be made successively whenever any rights,
options or warrants are issued; provided, however, that in the event that all
Paired Shares offered for subscription or purchase are not delivered (or
securities convertible into Paired Shares are not delivered) upon the exercise
of such rights, options or warrants, upon the expiration of such rights,
options or warrants the Conversion Factor shall be readjusted to the Conversion
Factor which would have been in effect had the numerator and the denominator of
the foregoing fraction and the resulting adjustments made upon the issuance of
such rights, options or warrants been made based upon the number of Paired
Shares (or securities convertible into Paired Shares) actually delivered upon
the exercise of such rights, options or warrants rather than upon the number of
Paired Shares offered for subscription or purchase. In determining whether any
rights, options or warrants entitle the holders to subscribe for or purchase
Paired Shares at less than 95% of such Current Per Share Market Price, and in
determining the aggregate offering price of such rights, options or warrants
(or the aggregate conversion price of the convertible securities), there shall
be taken into account any consideration received by the Corporation for such
rights, options or warrants (or convertible securities) and receivable by the
Corporation upon the exercise or conversion thereof, the value of such
consideration, if other than cash, to be determined in good faith by the Board
of Directors. Notwithstanding the foregoing, this Section 6(c)(iii) shall not
apply to the issuance of a right, option or warrant to purchase Paired Shares
pursuant to any employee stock option or similar plan adopted by the Board of
Directors of the Corporation.
(iv) Adjustment for Consolidation, Merger, Reorganization or
Recapitalization, etc. In case of any consolidation, merger or reorganization
of the Corporation or the Operating Partnership with or into another Entity or
the sale of all or substantially all of the assets of the Corporation or the
Operating Partnership to another Entity (other than a consolidation, merger or
sale which is treated as a liquidation pursuant to Section 4 hereof or any
recapitalization of either the Corporation or the Operating Partnership), each
7.00% Cumulative Convertible Preferred Unit shall, in the case of such sale,
thereafter be convertible into the kind and amount of shares of stock or other
securities or property to which a holder of the number of shares of Corporation
7.00% Cumulative Convertible Preferred Stock of the Corporation or Common Units
of the Operating Partnership, as the case may be, deliverable upon conversion
of such 7.00% Cumulative Convertible Preferred Units would have been entitled
upon such sale and, in the case of such consolidation, merger or reorganization
or recapitalization, the holder of each 7.00% Cumulative Convertible Preferred
Unit will, insofar as practicable, receive a security or securities in the
surviving entity or the recapitalized entity, as the case may be, comparable to
the 7.00% Cumulative Convertible Preferred Unit which, among other comparable
provisions, insofar as may be practicable, shall be convertible into securities
comparable to the Common Units but shall, following such merger, consolidation
or reorganization, be immediately convertible following such merger,
consolidation or reorganization notwithstanding the requirements set forth in
Section 6(b) hereof; and, in such case, other appropriate adjustments (as
determined in good faith by the Board of Directors of the Corporation, in the
case of a consolidation, merger, reorganization, recapitalization or sale
involving the Corporation, or the Managing General Partner, in the case of a
consolidation, merger, reorganization, recapitalization or sale involving the
Operating Partnership) shall be made in the application of the provisions in
this Section 6 set forth with respect to the rights and interests thereafter of
the holders of the 7.00% Cumulative Convertible Preferred Units, to the end
that the provisions set forth in this Section 6 (including provisions with
respect to changes in and other adjustments of the Conversion Factor) shall
thereafter be applicable, as nearly as reasonably may be, in relation to any
shares of stock, partnership units or other property thereafter deliverable
upon the conversion of the 7.00% Cumulative Convertible Preferred Units.
(d) Adjustments to the Threshold Value. (i) In case the
Corporation shall at any time or from time to time after the original issuance
of the 7.00% Cumulative Convertible Preferred Units declare a dividend, or make
a distribution, on the outstanding Paired Shares, in either case, in additional
Paired Shares, or effect a subdivision, combination, consolidation or
reclassification of the outstanding Paired Shares into a greater or lesser
number of Paired Shares, then, and in each such case, the Threshold Value in
effect immediately prior to such event or the record date therefor, whichever
is earlier, shall be adjusted by multiplying such Threshold Value by a
fraction, (A) the numerator of which is the number of Paired Shares that were
outstanding immediately prior such event and (B) the denominator of which is
the number of Paired Shares outstanding immediately after to such event.
(ii) The Threshold Value shall also be equitably adjusted to reflect
the effect of an issuance which would result in an adjustment to the Conversion
Factor under Section 6(c)(iv).
(iii) An adjustment made pursuant to this Section 6(d) shall
become effective in the case of any such dividend or distribution, immediately
after the close of business on the record date for the determination of holders
of Paired Shares entitled to receive such dividend or distribution, or in the
case of any such subdivision, reclassification, recapitalization, consolidation
or combination, at the close of business on the day upon which such partnership
or corporate action becomes effective.
(e) No adjustment in the Conversion Factor or the Threshold Value
shall be required unless such adjustment would require an increase or decrease
of at least 0.25% of the Conversion Factor or the Threshold Value, as
applicable; provided, that any adjustments which by reason of this Section 6(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment.
(f) No fractional Conversion Units or scrip representing fractions
of Conversion Units shall be issued upon conversion of a 7.00% Cumulative
Convertible Preferred Unit. If a fractional Conversion Unit is otherwise
deliverable to a converting holder upon a conversion of 7.00% Cumulative
Convertible Preferred Units, the Operating Partnership shall in lieu thereof
pay to the person entitled thereto an amount in cash equal to the current value
of such fractional interest, calculated to the nearest 1/1000th of a unit, to
be computed using the current market price of a Paired Share on the date of
conversion, in the case of a conversion into Common Units.
(g) Whenever the Conversion Factor is adjusted pursuant to
Section 6(c) or the Threshold Value is adjusted pursuant to Section 6(d), the
Operating Partnership shall promptly mail to the holders of 7.00% Cumulative
Convertible Preferred Units at their addresses as shown on the books of the
Operating Partnership and to the Contributor Representative at its notice
address pursuant to the Tax Protection Agreement a notice stating that the
Conversion Factor and/or the Threshold Value, as the case may be, has been
adjusted, the effective date of such adjustment and the new Conversion Factor
or Threshold Value.
(h) In the event of the conversion of a 7.00% Cumulative Convertible
Preferred Unit pursuant to this Section 6 into Common Units, then such Common
Units issuable upon such conversion shall be paired with 8.00% Cumulative
Redeemable Preferred Units so that they are transferable, redeemable or
convertible as a paired unit consisting of 0.75676 Common Units (subject to
adjustment) and one (1) 8.00% Cumulative Redeemable Preferred Unit and such
paired units shall be "Paired Units" for purposes hereof; provided, however,
that 8.00% Cumulative Redeemable Preferred Units shall not be paired with
Paired Shares issued upon conversion or in exchange for Common Units. In the
event of the conversion of a 7.00% Cumulative Convertible Preferred Unit
pursuant to this Section 6 into 7.00% Cumulative Convertible Preferred Stock,
then the 8.00% Cumulative Redeemable Preferred Unit to which it is paired shall
simultaneously be converted into 8.00% Cumulative Convertible Preferred Stock
pursuant to Section 6 of the 8.00% Certificate of Designation.
SECTION 7. Put Right. (a) In the event of (i) the death of
an Actual Taxpayer (as defined in the Tax Protection Agreement) holding
directly or indirectly 7.00% Cumulative Convertible Preferred Units, (ii) in
the case of 7.00% Cumulative Convertible Preferred Units held directly or
indirectly by an Actual Taxpayer in trust, the death of the person designated
from time to time by the trustee(s) of such trust, or (iii) a Tax Triggering
Event with respect to an Actual Taxpayer holding directly or indirectly 7.00%
Cumulative Convertible Preferred Units, then in any such event such holder or
the subsequent holder or holders, as the case may be, of such 7.00% Cumulative
Convertible Preferred Units may require the Operating Partnership to repurchase
such 7.00% Cumulative Convertible Preferred Units, in accordance with Section
7(b) below, at a price of $28.00 per 7.00% Cumulative Convertible Preferred
Unit, plus distributions accrued and unpaid to the repurchase date (such sum,
the "Repurchase Price"). As used in this Section 7(a), "Tax Triggering Event"
means, with respect to any Actual Taxpayer holding directly or indirectly 7.00%
Cumulative Convertible Preferred Units, any transaction by the Operating
Partnership (x) involving the Contributed Property and (y) constituting a
Taxable Sale. The terms Contributed Property and Taxable Sale shall have the
meanings specified in the Tax Protection Agreement. The term "Repurchase Date"
shall mean the date on which the first payment (in cash or Paired Shares) is
made as described in Section 7(b) below.
(b) The aggregate Repurchase Price shall be paid within one year
after the exercise of the right described in Section 7(a) above, at the option
of the Operating Partnership, (i) in cash, or (ii) in fully registered Paired
Shares valued at the Current Per Share Market Price for such Paired Shares as
of the date such shares are to be issued hereunder, except that the portion of
the aggregate Repurchase Price consisting of accrued and unpaid distributions
shall be paid in full in cash when such distributions are paid with respect to
other 7.00% Cumulative Convertible Preferred Units, but in no event later than
the time of the first cash payment provided in this Section 7(b) or the
issuance of such Paired Shares, as the case may be. If the Operating
Partnership elects to pay for the 7.00% Cumulative Convertible Preferred Units
in cash, the aggregate Repurchase Price shall be paid, at the option of the
Operating Partnership, either (x) in full on or before such date which is one
year after the exercise of the right described in Section 7(a) above or (y) in
four (4) equal annual installments commencing not later than one year after the
exercise of the right described in Section 7(a) above, with interest accruing
on unpaid amounts from the date of exercise of the right described in Section
7(a) above at the rate of 7% per annum.
SECTION 8. No Right to Certain Distributions. Any holder of
7.00% Cumulative Convertible Preferred Units whose units are redeemed pursuant
to Section 5 hereto, converted pursuant to Section 6 hereto or caused to be
repurchased pursuant to Section 7 hereto, prior to being entitled to received
any cash or other securities upon the occurrence of any such event, will be
required to execute and deliver to the Operating Partnership and the
Corporation a Distribution Return Agreement substantially in the form of Annex
II hereto.
SECTION 9. Restrictions on Transfer; Stapled Security.
Restrictions on Transfer, Redemption, Conversion or Put; Stapled Security. (a)
The Paired Units shall be subject to the restrictions on transfer set forth in
Sections 9.3 and 9.5 of the Partnership Agreement as if such units were
"Partnership Units" thereunder. Any transfer or attempted transfer in
violation of the provisions of this Section 9(a) shall be null and void.
(b) Notwithstanding anything in this Certificate of Designation to
the contrary, Paired Units shall only be transferred to a transferee, caused to
be redeemed pursuant to Section 5, converted pursuant to Section 6 or caused to
be repurchased pursuant to Section 7 as a Paired Unit, if any such units are
otherwise required to be paired under this Certificate of Designation. Any
such transfer, redemption or repurchase or attempted transfer, redemption or
repurchase of 7.00% Cumulative Convertible Preferred Units in violation of the
provisions of this Section 9(b) shall be null and void.
SECTION 10. Status of Converted or Redeemed 7.00% Cumulative
Convertible Preferred Units. Upon any conversion or any redemption, repurchase
or other acquisition by the Operating Partnership of 7.00% Cumulative
Convertible Preferred Units, the 7.00% Cumulative Convertible Preferred Units
so converted, redeemed, repurchased or acquired shall be retired and canceled.
SECTION 11. Voting. (a) The Operating Partnership shall not, without
the affirmative consent or approval of the holders of at least a majority of
the 7.00% Cumulative Convertible Preferred Units then outstanding, voting
separately as a class, (i) authorize any Senior Units; (ii) amend, alter or
modify any of the provisions of this Certificate of Designation so as to
adversely affect the holders of 7.00% Cumulative Convertible Preferred Units;
or (iii) issue to any holder of Common Units any Parity Units by way of
exchange, distribution or similar transaction in respect of such Common Units,
unless such exchange, distribution or similar transaction is for fair value (as
determined in good faith by the Managing General Partner).
(b) The Corporation shall not, without the affirmative consent or
approval of the holders of at least a majority in Liquidation Preference of the
7.00% Cumulative Convertible Preferred Units and Corporation 7.00% Cumulative
Convertible Preferred Stock then outstanding, voting together as a single
class, (i) authorize any Senior Preferred Stock (as defined in Annex I hereto)
or (ii) amend, alter or modify any of the provisions of the Certificate of
Designation of the Corporation 7.00% Cumulative Convertible Preferred Stock so
as to adversely affect the holders thereof.
SECTION 12.Registration Rights for Corporation 7.00% Cumulative
Convertible Preferred Stock. The Corporation 7.00% Cumulative Convertible
Preferred Stock issued to any holder of 7.00% Cumulative Convertible Preferred
Units pursuant to Section 6 hereof shall be deemed "Registrable Securities" for
purposes of Section 9.6 of the Partnership Agreement, subject to the
limitations and qualifications contained in Section 9.6 of the Partnership
Agreement unless the holder of such 7.00% Cumulative Convertible Preferred
Units is party to a registration rights agreement pursuant to Section 5.06 of
the Portfolio Agreement, in which case such holder exclusively shall have the
rights set forth therein.
SECTION 13. Issuance of Paired SRC Limited Partnership Units. If
any Common Units are to be issued to a holder of a 7.00% Cumulative Convertible
Preferred Unit in connection with the redemption or conversion of such 7.00%
Cumulative Convertible Preferred Unit as provided herein, the Operating
Partnership shall distribute to the holder of such 7.00% Cumulative Convertible
Preferred Unit so converted, for no additional consideration, a number of SRC
Limited Partnership Units (as defined in the Partnership Agreement) equal to
the number of Common Units so issued; provided, however, that if the value of
such SRC Limited Partnership Units, as determined by the Operating Partnership
consistent with its prior valuation methodology used to value SRC Limited
Partnership Units, exceeds $.50 per Unit, then prior to the distribution of
such SRC Limited Partnership Units, the Operating Partnership shall notify the
Contributor Representative of its valuation of the SRC Limited Partnership
Units. If the Contributor Representative believes that the distribution of
such SRC Limited Partnership Units may be taxable to the converting holders
under Section 731(a) of the Code it may request that the Operating Partnership
offer to provide the converting Partners with the opportunity to enter into so-
called "bottom-up" guarantees under terms and conditions set forth in Section
2(z) of the Tax Protection Agreement, mutatis mutandis. Remedy for a failure
by the Operating Partnership to comply with such obligation to provide "bottom-
up" guarantees shall be as set forth in Section 3 of the Tax Protection
Agreement, mutatis mutandis. It shall be a condition to any distribution of
SRC Limited Partnership Units to a holder that such holder agree in writing to
become a limited partner under the SRC Partnership agreement.
SECTION 14. Definitions. Except as otherwise herein expressly
provided, the following terms and phrases shall have the meanings set forth
below:
"Closing Price" on any date shall mean the last sale price per share,
regular way, of the Paired Shares or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, of the
Paired Shares in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Paired Shares are not listed
or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Paired Shares
are listed or admitted to trading or, if the Paired Shares are not listed or
admitted to trading on any national securities exchange, the last quoted price,
or if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotations System for the Paired Shares or, if such
system is no longer in use, the principal other automated quotations system
that may then be in use or, if the Paired Shares are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Paired Shares selected from
time to time by the Board of Directors of the Managing General Partner.
"Current Per Share Market Price" on any date shall mean the average
of the Closing Prices for the five consecutive Trading Days ending on such
date.
"Deemed Partnership Unit Value" as of any date shall mean (i) the
Current Per Share Market Price as of the Trading Day immediately preceding such
date, minus (ii) the SPG Realty Deemed Partnership Unit Value; provided,
however, that in the event of a stock dividend, stock split, stock distribution
or the like, the Deemed Partnership Unit Value shall be adjusted by the
Managing General Partner to provide fair and equitable arrangements, to the
extent necessary, to fully adjust and avoid any dilution in the rights of the
holders of the 7.00% Cumulative Convertible Preferred Units.
"Entity" shall mean any general partnership, limited partnership,
limited liability company, limited liability partnership, corporation, joint
venture, trust, business trust, cooperative or association.
"Limited Partners" shall mean those Persons whose names are set forth
on Exhibit A to the Partnership Agreement as Limited Partners, their permitted
successors or assigns as limited partners hereof, and/or any Person who, at the
time of reference thereto, is a limited partner of the Operating Partnership.
"Managing General Partner" shall mean Simon Property Group, Inc., a
Delaware corporation.
"Non-Managing General Partners" shall mean, collectively, SD Property
Group, Inc. and SPG Properties, Inc.
"Paired Share" shall mean one Share and one Trust Interest.
"Partners" shall mean the Managing General Partner, the Non-Managing
General Partners and the Limited Partners, their duly admitted successors or
assigns or any Person who is a partner of the Operating Partnership at the time
of reference thereto.
"Partnership Units" shall mean the interest in the Operating
Partnership of any Partner which entitles a Partner to the allocations (and
each item thereof) specified in the Partnership Agreement and all distributions
from the Operating Partnership, and its rights of management, consent,
approval, or participation, if any, as provided in the Partnership Agreement.
Partnership Units do not include Preferred Units. Each Partner's percentage
ownership interest in the Operating Partnership shall be determined by dividing
the number of Partnership Units then owned by each Partner by the total number
of Partnership Units then outstanding.
"Person" shall mean any individual or Entity.
"Shares" shall mean the shares of common stock, par value $0.0001 per
share, of the Corporation.
"SPG Managing General Partner" shall mean SPG Realty Consultants,
Inc.
"SPG Realty" shall mean SPG Realty Consultants, Inc.
"SPG Realty Deemed Partnership Unit Value" with respect to a
particular Trust Interest as of any date shall mean the value of the SPG Shares
underlying such Trust Interest, which shall be an amount equal to the greater
of (i) the aggregate par value of the SPG Share underlying the Trust Interest
and (ii) the amount determined in good faith by the Board of Directors of the
SPG Managing General Partner to represent the fair market net asset value of
the SPG Share underlying the Trust Interest.
"SPG Shares" shall mean the Common Stock, par value $.01 per share of
the SPG Managing General Partner.
"Trading Day" shall mean a day on which the principal national
securities exchange on which the Paired Shares are listed or admitted to
trading is open for the transaction of business or, if the Paired Shares are
not listed or admitted to trading on any national securities exchange, shall
mean any day other than a Saturday, a Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by law or
executive order to close.
"Trust" shall mean the trust owning all of the outstanding shares of
Common Stock, par value $0.0001 per share, of SPG Realty subject to a trust
agreement among certain stockholders of the Corporation, a trustee and the SPG
Realty pursuant to which all holders of Shares are beneficiaries of such Trust.
"Trust Interest" shall mean a pro rata beneficial interest in the
Trust.
IN WITNESS WHEREOF, the Managing General Partner has caused this
Certificate to be signed by James M. Barkley its Secretary, this 27th day of
August, 1999.
By: /s/ James M. Barkley
Name: James M. Barkley
Title: Secretary
DISTRIBUTION RETURN AGREEMENT
Date: __________________
Simon Property Group, L.P.
National City Center
115 West Washington Street, Suite 15 East
Indianapolis, Indiana 46204
Dear Sirs:
The undersigned is a holder of 7.00% Cumulative Convertible Preferred
Units ("Preferred Units") of Simon Property Group, L.P., a Delaware limited
liability (the "Operating Partnership"). On the date hereof, the undersigned
has presented to the Operating Partnership _____________ (number) Preferred
Units (the "Tendered Units") for (a) redemption (the "Redemption"); (b)
conversion (the "Conversion") or (c) repurchase (the "Repurchase") pursuant to
their terms. This letter agreement is being given in satisfaction of a
condition to the Redemption, Conversion, or Repurchase, as applicable, of the
Tendered Units.
The undersigned hereby agrees with the Operating Partnership that, in the
event the undersigned receives any payment or distribution with respect to
Tendered Units after their Redemption, Conversion, or Repurchase, as
applicable, other than a payment or distribution required to be made in
connection therewith, the undersigned will promptly remit such payment or
distribution back to the Operating Partnership.
In furtherance of the foregoing, the undersigned further grants to the
Operating Partnership the right to set off against any unpaid amount due to the
Operating Partnership under this letter agreement any debt or other obligation
of the Operating Partnership owing to the undersigned, including, without
limitation, any dividend or other distribution payable to the undersigned by
reason of its ownership of Preferred Units or any other securities of the
Operating Partnership.
This letter agreement shall be construed in accordance with, and governed
by, the laws of the State of New York, without regard to conflicts of laws
principles.
Very truly yours,
(Name of Holder of Preferred Units)
By:
Name:
Title:
AGREED:
SIMON PROPERTY GROUP, L.P.
By:
Name:
Title:
============================================================================
Exhibit 3.2
CERTIFICATE OF DESIGNATION
OF
8.00% CUMULATIVE REDEEMABLE PREFERRED UNITS
OF
SIMON PROPERTY GROUP, L.P.
WHEREAS, Simon Property Group, L.P. (the "Operating Partnership") has
agreed to designate a series of preferred units having the powers, preferences
and relative, participating, optional or other special rights set forth herein
and to issue the units so designated solely as partial consideration for the
NED Portfolio Properties as defined in certain contribution agreements with
respect to properties the sale of which was arranged by NED Management Limited
Partnership and WellsPark Management LLC and, under certain circumstances, as
partial consideration for Pheasant Lane Mall in Nashua New Hampshire and
Cambridgeside Galleria in Cambridge, Massachusetts pursuant to contribution
agreements with respect to those properties (the contribution agreements for
the NED Portfolio Properties. Pheasant Lane Mall and Cambridgeside Galleria are
referred to herein as the "Contribution Agreements"); and
WHEREAS, the designation of the preferred units of the Operating
Partnership hereby is permitted by the terms of the Seventh Amended and
Restated Limited Partnership Agreement of the Operating Partnership (the
"Partnership Agreement");
WHEREAS, Simon Property Group, Inc. (the "Corporation"), the managing
general partner of the Operating Partnership (in such capacity, the "Managing
General Partner"), has determined that it is in the best interest of the
Operating Partnership to designate a new series of preferred units of the
Operating Partnership;
NOW THEREFORE, the Managing General Partner hereby designates a
series of preferred units and fixes the designations, powers, preferences and
relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, of such preferred units,
as follows:
SECTION 1. Designation and Number. The units of such series
shall be designated "8.00% Cumulative Redeemable Preferred Units" (the "8.00%
Cumulative Redeemable Preferred Units"). The authorized number of 8.00%
Cumulative Redeemable Preferred Units shall be 1,500,000 but such 8.00%
Cumulative Redeemable Preferred Units shall only be issuable as consideration
pursuant to the Contribution Agreements. Subject to Sections 5 and 6 hereof,
each 8.00% Cumulative Redeemable Preferred Unit shall be paired with one (1)
7.00% Cumulative Convertible Preferred Unit of the Operating Partnership
("7.00% Cumulative Convertible Preferred Unit") or one (1) Common Unit into
which such 7.00% Cumulative Convertible Preferred Unit is converted and such
paired units shall be subject to the transfer restrictions set forth in Section
9 hereof (as such, "Paired Units"); provided that in the event of (i) the
redemption by the Operating Partnership of the 8.00% Cumulative Redeemable
Preferred Units for Common Units; (ii) the conversion of 8.00% Cumulative
Redeemable Preferred Units into 8.00% Cumulative Redeemable Preferred Stock (as
defined below) as permitted under Section 6 herein or (iii) the repurchase of
8.00% Cumulative Redeemable Preferred Units payable in Paired Shares as
permitted under Section 7 herein, then in each such case, the 7.00% Cumulative
Convertible Preferred Units shall cease to be paired with such Common Units
issuable upon such redemption, such 8.00% Cumulative Redeemable Preferred Stock
issuable upon such conversion, or such Paired Shares issuable upon repurchase,
as the case may be, and the provisions of Section 9(b) hereof shall no longer
apply to 8.00% Cumulative Redeemable Preferred Units which had been paired with
the 8.00% Cumulative Redeemable Preferred Stock which were so redeemed or
converted.
SECTION 2. Ranking. The 8.00% Cumulative Redeemable Preferred
Units shall, with respect to the payment of distributions pursuant to Section
6.2 of the Partnership Agreement or rights upon the dissolution, liquidation or
winding-up of the Operating Partnership, rank: (i) senior to the holders of
Partnership Units of the Operating Partnership (the "Common Units") and any
other equity securities of the Operating Partnership which by their terms rank
junior to the 8.00% Cumulative Redeemable Preferred Units as to distributions
pursuant to Section 6.2 of the Partnership Agreement or rights upon the
dissolution, liquidation or winding-up of the Operating Partnership (such
Common Units and such other equity securities, collectively, the "Junior
Units"), (ii) pari passu with any other preferred units which are not by their
terms junior or, subject to Section 11 hereof, senior to the 8.00% Cumulative
Redeemable Preferred Units as to distributions pursuant to Section 6.2 of the
Partnership Agreement or rights upon the dissolution, liquidation or winding-up
of the Operating Partnership, and in all respects shall rank pari passu with
the 6.50% Series A Convertible Preferred Units, Series B Convertible Preferred
Units, 8-3/4% Series B Cumulative Redeemable Preferred Units, 7.89% Series C
Cumulative Step-Up Premium Rate Preferred Units and 7.00% Cumulative
Convertible Preferred Units, which are the only preferred units of the
Operating Partnership authorized as of the date hereof ("Parity Units") and
(iii) subject to Section 11 hereof, junior to any other preferred units which
by their terms are senior to the 8.00% Cumulative Redeemable Preferred Units as
to distributions pursuant to Section 6.2 of the Partnership Agreement or rights
upon the dissolution, liquidation or winding-up of the Operating Partnership
("Senior Units").
SECTION 3. Distributions. (a) Distributions on the 8.00%
Cumulative Redeemable Preferred Units are cumulative from the date of issuance
and are payable quarterly on or about the last day of March, June, September
and December of each year in an amount in cash equal to 7.00% of the
Liquidation Preference (as defined herein) per annum.
(b) Distributions on the 8.00% Cumulative Redeemable Preferred
Units, without any additional return on unpaid distributions, will accrue,
whether or not the Operating Partnership has earnings, whether or not there are
funds legally available for the payment of such distribution and whether or not
such distributions are declared or paid when due. All such distributions
accumulate from the first date of issuance of any such 8.00% Cumulative
Redeemable Preferred Units. Distributions on the 8.00% Cumulative Redeemable
Preferred Units shall cease to accumulate on such units on the date of their
earlier conversion or redemption.
(c) In allocating items of income, gain, loss and deductions which
could have an effect upon the determination of the federal income tax liability
of any holder of the 8.00% Cumulative Redeemable Preferred Unit, except as
otherwise required by Section 704(c) of the Internal Revenue Code of 1986, as
amended, or any other applicable provisions thereof, the Operating Partnership
shall allocate each such item proportionately, based on the distributive share
of profits or losses, as the case may be, of the Operating Partnership
allocated to holders of the 8.00% Cumulative Redeemable Preferred Units as
compared to the total of the distributive shares of such profits and losses, as
the case may be, allocated to all partners of the Operating Partnership.
(d) If any 8.00% Cumulative Redeemable Preferred Units are
outstanding, then, except as provided in the following sentence, no
distributions shall be declared or paid or set apart for payment on any Parity
Units or Junior Units for any period unless full cumulative distributions have
been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for such payments on the 8.00%
Cumulative Redeemable Preferred Units for all past distribution periods and the
then current distribution period. When distributions are not paid in full (or
a sum sufficient for such full payment is not set apart) upon the 8.00%
Cumulative Redeemable Preferred Units and any Parity Units, all distributions
declared upon the 8.00% Cumulative Redeemable Preferred Units and any other
Parity Units shall be declared pro rata so that the amount of distributions
declared the 8.00% Cumulative Redeemable Preferred Unit and such other Parity
Units shall in all cases bear to each other the same ratio that accrued
distributions per 8.00% Cumulative Redeemable Preferred Unit and such other
series of Parity Units bear to each other.
(e) Except as provided in subparagraph (d) above, unless full
cumulative distributions on the 8.00% Cumulative Redeemable Preferred Units
have been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for payment for all past
distribution periods and the then current distribution period, no distributions
(other than in Junior Units) shall be declared, set aside for payment or paid
and no other distribution shall be declared or made upon any Junior Units, nor
shall any Junior Units be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking fund
for the redemption of any such Junior Units) by the Operating Partnership
(except by conversion into or exchange for Junior Units).
SECTION 4. Liquidation Preference. (a) Each 8.00% Cumulative
Redeemable Preferred Unit shall be entitled to a liquidation preference of
$30.00 per 8.00% Cumulative Redeemable Preferred Unit ("Liquidation
Preference").
(b) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Operating Partnership pursuant to Article VIII
of the Partnership Agreement, the holders of 8.00% Cumulative Redeemable
Preferred Units then outstanding shall be entitled to be paid out of the assets
of the Operating Partnership available for distribution, after and subject to
the payment in full of all amounts required to be distributed to the holders of
Senior Units, but before any payment shall be made to the holders of Junior
Units, an amount equal to the aggregate Liquidation Preference of the 8.00%
Cumulative Redeemable Preferred Units held by such holder, plus an amount equal
to accrued and unpaid distributions thereon, if any. If upon any such
liquidation, dissolution or winding up of the Operating Partnership the
remaining assets of the Operating Partnership available for the distribution
after payment in full of amounts required to be paid or distributed to holders
of Senior Units shall be insufficient to pay the holders of the 8.00%
Cumulative Redeemable Preferred Units the full amount to which they shall be
entitled, the holders of the 8.00% Cumulative Redeemable Preferred Units, and
the holders of any series of Parity Units, shall share ratably with other
holders of Parity Units in any distribution of the remaining assets and funds
of the Operating Partnership in proportion to the respective amounts which
would otherwise be payable in respect to the Parity Units held by each of the
said holders upon such distribution if all amounts payable on or with respect
to said Parity Units were paid in full. After payment in full of the
Liquidation Preference and accumulated and unpaid distributions to which they
are entitled, the holders of 8.00% Cumulative Redeemable Preferred Units shall
not be entitled to any further participation in any distribution of the assets
of the Operating Partnership.
SECTION 5. Redemption. (a) General. The 8.00% Cumulative
Redeemable Preferred Units are not redeemable, except as permitted under
Sections 6 and 7 herein, prior to August 27, 2009.
(b) Optional Redemption. (i) On and after August 27, 2009, the
Operating Partnership may, at its option, at any time, redeem the 8.00%
Cumulative Redeemable Preferred Units, in whole or in part, at the Liquidation
Preference, plus accrued and unpaid distributions thereon, if any, to and
including the date of redemption (the "Redemption Price"). The Redemption
Price (other than the portion thereof consisting of accrued and unpaid
distributions, which shall be payable in cash) is payable, at the option of the
Operating Partnership, in any combination of (i) new preferred unit ("New
Preferred Units") of the Operating Partnership having substantially the same
terms as the 8.00% Cumulative Redeemable Preferred Units with a distribution
coupon to be reset based on the then market rates (such rate to be determined
in good faith by the Managing General Partner), or (ii) in Common Units at the
Deemed Partnership Unit Value as of the Redemption Date (as defined below), of
the Common Units to be issued.
(ii) Provided that no later than the Redemption Date the Operating
Partnership shall have (A) set apart the funds necessary to pay the accrued and
unpaid distribution on all the 8.00% Cumulative Redeemable Preferred Units then
called for redemption and (B) reserved for issuance a sufficient number of
authorized Common Units and/or New Preferred Units, the Operating Partnership
may give the holders of the 8.00% Cumulative Redeemable Preferred Units written
notice ("Redemption Notice") of a redemption pursuant to Section 5(b) (a
"Redemption") not more than 70 nor less than 40 calendar days prior to the date
fixed for redemption (the "Redemption Date") at the address of such holders on
the books of the Operating Partnership (provided that failure to give such
notice or any defect therein shall not affect the validity of the proceeding
for a Redemption except as to the holder to whom the Operating Partnership has
failed to give such notice or whose notice was defective). The 8.00%
Cumulative Redeemable Preferred Units for which the Redemption Price has been
paid shall no longer be deemed outstanding from and after the date of payment
and all rights with respect to such units shall forthwith cease and terminate.
In case fewer than all of the outstanding 8.00% Cumulative Redeemable Preferred
Units are called for redemption, such units shall be redeemed pro rata, as
nearly as practicable, among all holders of 8.00% Cumulative Redeemable
Preferred Units, provided that, if within 20 business days of the Redemption
Notice the Contributor Representative (as such term is defined in the Tax
Protection Agreement entered into on or prior to the date hereof between
Operating Partnership and certain other parties (the "Tax Protection
Agreement")) notifies the Operating Partnership of an alternative allocation
("Allocation Notice"), then the redemption of the 7.00% Cumulative Preferred
Units shall be allocated in accordance with such Allocation Notice. On or
before the Redemption Date, a holder of 8.00% Cumulative Redeemable Preferred
Units shall have the conversion right set forth in Section 6 hereof
notwithstanding anything in this Section 5 to the contrary.
SECTION 6. Conversion. (a) Each 8.00% Cumulative Redeemable
Preferred Unit shall be convertible at the option of the holder, at any time on
and after August 27, 2004, upon no less than 15 business days prior written
notice to the Corporation and the Operating Partnership, in whole or in part,
unless previously redeemed, pursuant to Section 6(b) below.
(b) Each 8.00% Cumulative Redeemable Preferred Unit that the holder
elects to convert will be redeemed for shares of 8.00% Cumulative Redeemable
Preferred Stock of the Corporation having an aggregate liquidation preference
equal to the Liquidation Preference of the 8.00% Cumulative Redeemable
Preferred Units that the holder elects to convert, such preferred stock of the
Corporation to have the rights and preferences set forth on Annex I hereto
("Corporation 8.00% Cumulative Redeemable Preferred Stock").
(c) No fractional Conversion Units or scrip representing fractions
of Conversion Units shall be issued upon conversion of a 8.00% Cumulative
Redeemable Preferred Unit. If a fractional Conversion Unit is otherwise
deliverable to a converting holder upon a conversion of 8.00% Cumulative
Redeemable Preferred Units, the Operating Partnership shall in lieu thereof pay
to the person entitled thereto an amount in cash equal to the current value of
such fractional interest, calculated to the nearest 1/1000th of a unit, to be
computed using the current market price of a Paired Share on the date of
conversion, in the case of a conversion into Common Units.
SECTION 7. Put Right. (a) In the event of (i) the death of an
Actual Taxpayer (as defined in the Tax Protection Agreement) holding directly
or indirectly 8.00% Cumulative Redeemable Preferred Units, (ii) in the case of
8.00% Cumulative Redeemable Preferred Units held directly or indirectly by an
Actual Taxpayer in trust, the death of the person designated from time to time
by the trustee(s) of such trust, or (iii) a Tax Triggering Event with respect
to an Actual Taxpayer holding directly or indirectly 8.00% Cumulative
Redeemable Preferred Units, then in any such event such holder or the
subsequent holder or holders, as the case may be, of such 8.00% Cumulative
Redeemable Preferred Units may require the Operating Partnership to repurchase
such 8.00% Cumulative Redeemable Preferred Units, in accordance with Section
7(b) below, at a price of $30.00 per 8.00% Cumulative Redeemable Preferred
Unit, plus distributions accrued and unpaid to the repurchase date (such sum,
the "Repurchase Price"). As used in this Section 7(a), "Tax Triggering Event"
means, with respect to any Actual Taxpayer holding directly or indirectly 8.00%
Cumulative Redeemable Preferred Units, any transaction by the Operating
Partnership (x) involving the Contributed Property and (y) constituting a
Taxable Sale. The terms Contributed Property and Taxable Sale shall have the
meanings specified in the Tax Protection Agreement. The term "Repurchase Date"
shall mean the date on which the first payment (in cash or Paired Shares) is
made as described in Section 7(b) below.
(b) The aggregate Repurchase Price shall be paid within one year
after the exercise of the right described in Section 7(a) above, at the option
of the Operating Partnership, (i) in cash, or (ii) in fully registered Paired
Shares valued at the Current Per Share Market Price for such Paired Shares as
of the date such shares are to be issued hereunder, except that the portion of
the aggregate Repurchase Price consisting of accrued and unpaid distributions
shall be paid in full in cash when such distributions are paid with respect to
other 8.00% Cumulative Redeemable Preferred Units, but in no event later than
the time of the first cash payment provided in this Section 7(b) or the
issuance of such Paired Shares, as the case may be. If the Operating
Partnership elects to pay for the 8.00% Cumulative Redeemable Preferred Units
in cash, the aggregate Repurchase Price shall be paid, at the option of the
Operating Partnership, either (x) in full on or before such date which is one
year after the exercise of the right described in Section 7(a) above or (y) in
four (4) equal annual installments commencing not later than one year after the
exercise of the right described in Section 7(a) above, with interest accruing
on unpaid amounts from the date of exercise of the right described in Section
7(a) above at the rate of 8% per annum.
SECTION 8. No Right to Certain Distributions. Any holder of
8.00% Cumulative Redeemable Preferred Units whose units are redeemed pursuant
to Section 5 hereto, converted pursuant to Section 6 hereto or caused to be
repurchased pursuant to Section 7 hereto, prior to being entitled to received
any cash or other securities upon the occurrence of any such event, will be
required to execute and deliver to the Operating Partnership and the
Corporation a Distribution Return Agreement substantially in the form of Annex
II hereto.
SECTION 9. Restrictions on Transfer, Redemption, Conversion or
Put; Stapled Security. (a) The Paired Units shall be subject to the
restrictions on transfer set forth in Sections 9.3 and 9.5 of the Partnership
Agreement as if such units were "Partnership Units" thereunder. Any transfer
or attempted transfer in violation of the provisions of this Section 9(a) shall
be null and void.
(b) Notwithstanding anything in this Certificate of Designation to
the contrary, Paired Units shall only be transferred to a transferee, caused to
be redeemed pursuant to Section 5, converted pursuant to Section 6 or caused to
be repurchased pursuant to Section 7 as a Paired Unit, if any such units are
otherwise required to be paired under this Certificate of Designation. Any
such transfer, redemption or repurchase or attempted transfer, redemption or
repurchase of 8.00% Cumulative Redeemable Preferred Units in violation of the
provisions of this Section 9(b) shall be null and void.
SECTION 10. Status of Converted or Redeemed 8.00% Cumulative
Redeemable Preferred Units. Upon any conversion or any redemption, repurchase
or other acquisition by the Operating Partnership of 8.00% Cumulative
Redeemable Preferred Units, the 8.00% Cumulative Redeemable Preferred Units so
converted, redeemed, repurchased or acquired shall be retired and canceled.
SECTION 11. Voting. (a) The Operating Partnership shall not, without
the affirmative consent or approval of the holders of at least a majority of
the 8.00% Cumulative Redeemable Preferred Units then outstanding, voting
separately as a class, (i) authorize any Senior Units; (ii) amend, alter or
modify any of the provisions of this Certificate of Designation so as to
adversely affect the holders of 8.00% Cumulative Redeemable Preferred Units; or
(iii) issue to any holder of Common Units any Parity Units by way of exchange,
distribution or similar transaction in respect of such Common Units, unless
such exchange, distribution or similar transaction is for fair value (as
determined in good faith by the Managing General Partner).
(b) The Corporation shall not, without the affirmative consent or
approval of the holders of at least a majority in Liquidation Preference of the
8.00% Cumulative Redeemable Preferred Units and Corporation 8.00% Cumulative
Redeemable Preferred Stock then outstanding, voting together as a single class,
(i) authorize any Senior Preferred Stock (as defined in Annex I hereto); or
(ii) amend, alter or modify any of the provisions of the Certificate of
Designation of the Corporation 8.00% Cumulative Redeemable Preferred Stock so
as to adversely affect the holders thereof.
SECTION 12. Registration Rights for Corporation 8.00% Cumulative
Redeemable Preferred Stock. The Corporation 8.00% Cumulative Redeemable
Preferred Stock issued to any holder of 8.00% Cumulative Redeemable Preferred
Units pursuant to Section 6 hereof shall be deemed "Registrable Securities" for
purposes of Section 9.6 of the Partnership Agreement, subject to the
limitations and qualifications contained in Section 9.6 of the Partnership
Agreement unless the holder of such 8.00% Cumulative Redeemable Preferred Units
is party to a registration rights agreement pursuant to Section 5.06 of the
Portfolio Agreement, in which case such holder exclusively shall have the
rights set forth therein.
SECTION 13. Issuance of Paired SRC Limited Partnership Units. If
any Common Units are to be issued to a holder of a 8.00% Cumulative Redeemable
Preferred Unit in connection with the redemption of such 8.00% Cumulative
Redeemable Preferred Unit as provided herein, the Operating Partnership shall
distribute to the holder of such 8.00% Cumulative Redeemable Preferred Unit so
converted, for no additional consideration, a number of SRC Limited Partnership
Units (as defined in the Partnership Agreement) equal to the number of Common
Units so issued; provided, however, that if the value of such SRC Limited
Partnership Units, as determined by the Operating Partnership consistent with
its prior valuation methodology used to value SRC Limited Partnership Units,
exceeds $.50 per Unit, then prior to the distribution of such SRC Limited
Partnership Units, the Operating Partnership shall notify the Contributor
Representative of its valuation of the SRC Limited Partnership Units. If the
Contributor Representative believes that the distribution of such SRC Limited
Partnership Units may be taxable to the converting holders under Section 731(a)
of the Code it may request that the Operating Partnership offer to provide the
converting Partners with the opportunity to enter into so-called "bottom-up"
guarantees under terms and conditions set forth in Section 2(z) of the Tax
Protection Agreement, mutatis mutandis. Remedy for a failure by the Operating
Partnership to comply with such obligation to provide "bottom-up" guarantees
shall be as set forth in Section 3 of the Tax Protection Agreement, mutatis
mutandis. It shall be a condition to any distribution of SRC Limited
Partnership Units to a holder that such holder agree in writing to become a
limited partner under the SRC Partnership agreement.
SECTION 14. Definitions. Except as otherwise herein expressly
provided, the following terms and phrases shall have the meanings set forth
below:
"Closing Price" on any date shall mean the last sale price per share,
regular way, of the Paired Shares or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, of the
Paired Shares in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Paired Shares are not listed
or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Paired Shares
are listed or admitted to trading or, if the Paired Shares are not listed or
admitted to trading on any national securities exchange, the last quoted price,
or if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotations System for the Paired Shares or, if such
system is no longer in use, the principal other automated quotations system
that may then be in use or, if the Paired Shares are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Paired Shares selected from
time to time by the Board of Directors of the Managing General Partner.
"Current Per Share Market Price" on any date shall mean the average
of the Closing Prices for the five consecutive Trading Days ending on such
date.
"Deemed Partnership Unit Value" as of any date shall mean (i) the
Current Per Share Market Price as of the Trading Day immediately preceding such
date, minus (ii) the SPG Realty Deemed Partnership Unit Value; provided,
however, that in the event of a stock dividend, stock split, stock distribution
or the like, the Deemed Partnership Unit Value shall be adjusted by the
Managing General Partner to provide fair and equitable arrangements, to the
extent necessary, to fully adjust and avoid any dilution in the rights of the
holders of the 7.00% Cumulative Convertible Preferred Units.
"Entity" shall mean any general partnership, limited partnership,
limited liability company, limited liability partnership, corporation, joint
venture, trust, business trust, cooperative or association.
"Limited Partners" shall mean those Persons whose names are set forth
on Exhibit A to the Partnership Agreement as Limited Partners, their permitted
successors or assigns as limited partners hereof, and/or any Person who, at the
time of reference thereto, is a limited partner of the Operating Partnership.
"Managing General Partner" shall mean Simon Property Group, Inc., a
Delaware corporation.
"Non-Managing General Partners" shall mean, collectively, SD Property
Group, Inc. and SPG Properties, Inc.
"Paired Share" shall mean one Share and one Trust Interest.
"Partners" shall mean the Managing General Partner, the Non-Managing
General Partners and the Limited Partners, their duly admitted successors or
assigns or any Person who is a partner of the Operating Partnership at the time
of reference thereto.
"Partnership Units" shall mean the interest in the Operating
Partnership of any Partner which entitles a Partner to the allocations (and
each item thereof) specified in the Partnership Agreement and all distributions
from the Operating Partnership, and its rights of management, consent,
approval, or participation, if any, as provided in the Partnership Agreement.
Partnership Units do not include Preferred Units. Each Partner's percentage
ownership interest in the Operating Partnership shall be determined by dividing
the number of Partnership Units then owned by each Partner by the total number
of Partnership Units then outstanding.
"Person" shall mean any individual or Entity.
"Shares" shall mean the shares of common stock, par value $0.0001 per
share, of the Corporation.
"SPG Managing General Partner" shall mean SPG Realty Consultants,
Inc.
"SPG Realty" shall mean SPG Realty Consultants, Inc.
"SPG Realty Deemed Partnership Unit Value" with respect to a
particular Trust Interest as of any date shall mean the value of the SPG Shares
underlying such Trust Interest, which shall be an amount equal to the greater
of (i) the aggregate par value of the SPG Share underlying the Trust Interest
and (ii) the amount determined in good faith by the Board of Directors of the
SPG Managing General Partner to represent the fair market net asset value of
the SPG Share underlying the Trust Interest.
"SPG Shares" shall mean the Common Stock, par value $.01 per share of
the SPG Managing General Partner.
"Trading Day" shall mean a day on which the principal national
securities exchange on which the Paired Shares are listed or admitted to
trading is open for the transaction of business or, if the Paired Shares are
not listed or admitted to trading on any national securities exchange, shall
mean any day other than a Saturday, a Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by law or
executive order to close.
"Trust" shall mean the trust owning all of the outstanding shares of
Common Stock, par value $0.0001 per share, of SPG Realty subject to a trust
agreement among certain stockholders of the Corporation, a trustee and the SPG
Realty pursuant to which all holders of Shares are beneficiaries of such Trust.
"Trust Interest" shall mean a pro rata beneficial interest in the
Trust.
IN WITNESS WHEREOF, the Managing General Partner has caused this
Certificate to be signed by James M. Barkley, its Secretary, this 27th day of
August, 1999.
By: /s/ James M. Barkley
Name: James M. Barkley
Title: Secretary
DISTRIBUTION RETURN AGREEMENT
Date: __________________
Simon Property Group, L.P.
National City Center
115 West Washington Street, Suite 15 East
Indianapolis, Indiana 46204
Dear Sirs:
The undersigned is a holder of 8.00% Cumulative Redeemable Preferred Units
("Preferred Units") of Simon Property Group, L.P., a Delaware limited liability
(the "Operating Partnership"). On the date hereof, the undersigned has
presented to the Operating Partnership _____________ (number) Preferred Units
(the "Tendered Units") for (a) redemption (the "Redemption"); (b) conversion
(the "Conversion") or (c) repurchase (the "Repurchase") pursuant to their
terms. This letter agreement is being given in satisfaction of a condition to
the Redemption, Conversion, or Repurchase, as applicable, of the Tendered
Units.
The undersigned hereby agrees with the Operating Partnership that, in the
event the undersigned receives any payment or distribution with respect to
Tendered Units after their Redemption, Conversion, or Repurchase, as
applicable, other than a payment or distribution required to be made in
connection therewith, the undersigned will promptly remit such payment or
distribution back to the Operating Partnership.
In furtherance of the foregoing, the undersigned further grants to the
Operating Partnership the right to set off against any unpaid amount due to the
Operating Partnership under this letter agreement any debt or other obligation
of the Operating Partnership owing to the undersigned, including, without
limitation, any dividend or other distribution payable to the undersigned by
reason of its ownership of Preferred Units or any other securities of the
Operating Partnership.
This letter agreement shall be construed in accordance with, and governed
by, the laws of the State of New York, without regard to conflicts of laws
principles.
Very truly yours,
(Name of Holder of Preferred Units)
By:
Name:
Title:
AGREED:
SIMON PROPERTY GROUP, L.P.
By:
Name:
Title:
============================================================================
Exhibit 3.3
CERTIFICATE OF DESIGNATION
OF
8.00% SERIES E CUMULATIVE REDEEMABLE PREFERRED UNITS
OF
SIMON PROPERTY GROUP, L.P.
WHEREAS, Simon Property Group, Inc. (the "Corporation") has
issued 1,000,000 shares of 8.00% Series E Cumulative Redeemable Preferred
Stock (the "Series E Cumulative Redeemable Preferred Stock"); and
WHEREAS, in accordance with the terms of the Partnership
Agreement (the "Partnership Agreement") of Simon Property Group, L.P. (the
"Operating Partnership"), the Corporation has made a contribution of assets
to the Operating Partnership in exchange for preferred units having
substantially the same economic rights and terms of the Series E Cumulative
Redeemable Preferred Stock.
NOW THEREFORE, the managing general partner of the Operating
Partnership (in such capacity, the "Managing General Partner"), has
designated a series of preferred units and has fixed the designations,
powers, preferences and relative, participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof, of
such preferred units, as follows:
SECTION 1. Designation and Number. The units of such series
shall be designated "8.00% Series E Cumulative Redeemable Preferred Units"
(the "Series E Cumulative Redeemable Preferred Units"). The authorized
number of Series E Cumulative Redeemable Preferred Units shall be
1,000,000. Each share of Series E Cumulative Redeemable Preferred Stock,
as it relates to a single Series E Cumulative Redeemable Preferred Unit,
shall be deemed the "Related Issue" hereunder.
SECTION 2. Distributions. The holders of Series E Cumulative
Redeemable Preferred Units, in preference to the holders of Partnership
Units of the Operating Partnership (the "Common Units"), any other series
of Preferred Units ranking junior to the Series E Cumulative Redeemable
Preferred Units either as to distributions or upon liquidation, dissolution
or winding-up ("Junior Preferred Units") or any other class or series of
units of the Operating Partnership ranking junior to the Series E
Cumulative Redeemable Preferred Units either as to distributions or upon
liquidation, dissolution or winding-up ("Other Junior Units"), shall be
entitled to receive an amount equal to the aggregate dividends payable on
the Related Issue at the times such dividends are paid. For this purpose,
the aggregate dividends payable on the Related Issue shall be determined by
assuming that adequate cash and earnings are available to the Corporation
for the payment of any dividends required to be paid with respect to the
Related Issue. The Series E Cumulative Redeemable Preferred Units shall,
with respect to allocations and distributions pursuant to Article VI of the
Partnership Agreement, rank (A) junior to any other series of Preferred
Units hereafter duly established, the terms of which shall specifically
provide that such series shall rank prior to the Series E Cumulative
Redeemable Preferred Units as to distributions and redemption rights, (B)
pari passu with any series of Preferred Units hereafter duly established,
the terms of which shall specifically provide that such series shall rank
pari passu with the Series E Cumulative Redeemable Preferred Units as to
distributions and redemption rights and (C) prior to the Common Units,
Junior Preferred Units and any Other Junior Units.
SECTION 3. Status of Redeemed Series E Cumulative Redeemable
Preferred Units. Upon any redemption, repurchase or other acquisition by
the Operating Partnership of Series E Cumulative Redeemable Preferred
Units, the Series E Cumulative Redeemable Preferred Units so converted,
redeemed, repurchased or acquired shall be retired and canceled.
SECTION 4. Redemption. Upon the redemption of any shares of the
Related Issue, the Operating Partnership shall redeem an equal number of
Series E Cumulative Redeemable Preferred Units for a redemption price per
unit equal to the redemption price per share of the Related Issue,
exclusive of any accrued unpaid dividends.
============================================================================
Exhibit 10.1
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of August 25, 1999
among
SIMON PROPERTY GROUP, L.P.
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS LENDERS
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS CO-AGENTS
and
UBS AG, STAMFORD BRANCH, AS PAYMENT AND DISBURSEMENT AGENT
and
CHASE SECURITIES INC.
AS JOINT ARRANGER AND JOINT BOOK MANAGER AND SYNDICATION AGENT
and
WARBURG DILLON READ LLC
AS JOINT ARRANGER AND JOINT BOOK MANAGER
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
AS DOCUMENTATION AGENT AND ARRANGER
and
BANK OF AMERICA, NATIONAL ASSOCIATION
AS DOCUMENTATION AGENT AND ARRANGER
========================================================================
<PAGE>
TABLE OF CONTENTS
ARTICLE IDEFINITIONS
1.1. Certain Defined Terms 2
1.2. Computation of Time Periods 35
1.3. Accounting Terms 36
1.4. Other Terms 36
ARTICLE IIAMOUNTS AND TERMS OF LOANS
2.1. Committed Loans 36
2.2. Money Market Loans 39
2.3. Use of Proceeds of Loans and Letters
of Credit 44
2.4. Revolving Credit Termination Date;
Maturity of Money Market Loans 45
2.5. Extension Option 45
2.6. Maximum Credit Facility 46
2.7. Authorized Agents 46
ARTICLE IIILETTERS OF CREDIT
3.1. Letters of Credit 47
3.2. Obligations Several 55
ARTICLE IVPAYMENTS AND PREPAYMENTS
4.1. Prepayments; Reductions in Revolving
Credit Commitments 55
4.2. Payments 57
4.3. Promise to Repay; Evidence of
Indebtedness 62
ARTICLE VINTEREST AND FEES
5.1. Interest on the Loans and other
Obligations 64
5.2. Special Provisions Governing
Eurodollar Rate Loans, IBOR Rate
Loans, and Money Market Loans 68
5.3. Fees 75
ARTICLE VICONDITIONS TO LOANS AND LETTERS OF CREDIT
6.1. Conditions Precedent to the Initial
Loans and Letters of Credit 77
6.2. Conditions Precedent to All
Subsequent Loans and Letters of Credit 79
ARTICLE VIIREPRESENTATIONS AND WARRANTIES
7.1. Representations and Warranties
of the Borrower 80
ARTICLE VIIIREPORTING COVENANTS
8.1. Borrower Accounting Practices 93
8.2. Financial Reports 93
8.3. Events of Default 98
8.4. Lawsuits 98
8.5. Insurance 99
8.6. ERISA Notices 99
8.7. Environmental Notices 101
8.8. Labor Matters 103
8.9. Notices of Asset Sales and/or
Acquisitions 103
8.10. Tenant Notifications 103
8.11. Other Reports 103
8.12. Other Information 104
ARTICLE IXAFFIRMATIVE COVENANTS
9.1. Existence, Etc. 104
9.2. Powers; Conduct of Business 104
9.3. Compliance with Laws, Etc. 104
9.4. Payment of Taxes and Claims 105
9.5. Insurance 105
9.6. Inspection of Property; Books and
Records; Discussions 105
9.7. ERISA Compliance 106
9.8. Maintenance of Property 106
9.9. Hedging Requirements 107
9.10. Company Status 107
9.11. Ownership of Projects, Minority
Holdings and Property 107
ARTICLE XNEGATIVE COVENANTS
10.1. Indebtedness 107
10.2. Sales of Assets 108
10.3. Liens 108
10.4. Investments 108
10.5. Conduct of Business 109
10.6. Transactions with Partners and
Affiliates 109
10.7. Restriction on Fundamental Changes 110
10.8. Margin Regulations; Securities Laws 110
10.9. ERISA 110
10.10. Organizational Documents 111
10.11. Fiscal Year 112
10.12. Other Financial Covenants 112
10.13. Pro Forma Adjustments 113
ARTICLE XIEVENTS OF DEFAULT; RIGHTS AND REMEDIES
11.1. Events of Default 114
11.2. Rights and Remedies 119
ARTICLE XIITHE AGENTS
12.1. Appointment 121
12.2. Nature of Duties 122
12.3. Right to Request Instructions 122
12.4. Reliance 123
12.5. Indemnification 123
12.6. Agents Individually 124
12.7. Successor Agents 124
12.8. Relations Among the Lenders 125
ARTICLE XIIIYIELD PROTECTION
13.1. Taxes 126
13.2. Increased Capital 129
13.3. Changes; Legal Restrictions 129
13.4. Replacement of Certain Lenders 130
ARTICLE XIVINTENTIONALLY OMITTED
ARTICLE XVMISCELLANEOUS
15.1. Assignments and Participations 131
15.2. Expenses 137
15.3. Indemnity 138
15.4. Change in Accounting Principles 139
15.5. Setoff 140
15.6. Ratable Sharing 140
15.7. Amendments and Waivers 141
15.8. Notices 144
15.9. Survival of Warranties and
Agreements 144
15.10. Failure or Indulgence Not Waiver;
Remedies Cumulative 145
15.11. Marshalling; Payments Set Aside 145
15.12. Severability 145
15.13. Headings 145
15.14. Governing Law 146
15.15. Limitation of Liability 146
15.16. Successors and Assigns 146
15.17. Certain Consents and Waivers
of the Borrower 146
15.18. Counterparts; Effectiveness;
Inconsistencies 148
15.19. Limitation on Agreements 148
15.20. Confidentiality 149
15.21. Disclaimers 149
15.22. No Bankruptcy Proceedings. 150
15.23. Retained Properties 150
15.24. Entire Agreement 150
========================================================================
<PAGE>
LIST OF EXHIBITS AND SCHEDULES
Exhibit A-- Form of Assignment and Acceptance
Exhibit B-- Form of Note
Exhibit B-1-- Form of Designated Bank Note
Exhibit C-- Form of Notice of Borrowing
Exhibit D-- Form of Notice of Conversion/Continuation
Exhibit E-- List of Closing Documents
Exhibit F-- Form of Officer's Certificate
Exhibit G-- Sample Calculations of Financial Covenants
Exhibit H-- Form of Money Market Quote Request
Exhibit I-- Form of Invitation for Money Market Quote
Exhibit J-- Form of Money Market Quote
Exhibit K-- Form of Designation Agreement
Schedule 1.1.4 -- Permitted Securities Options
Schedule 1.1.5 - Unsecured Bond Offerings
Schedule 7.1-A -- Organizational Documents
Schedule 7.1-C -- Corporate Structure; Outstanding Capital Stock and
Partnership Interests; Partnership Agreement
Schedule 7.1-H -- Indebtedness for Borrowed Money; Contingent
Obligations
Schedule 7.1-I -- Pending Actions
Schedule 7.1-P -- Environmental Matters
Schedule 7.1-Q -- ERISA Matters
Schedule 7.1-T -- Insurance Policies
Schedule 15.23 -- Retained Properties
========================================================================
<PAGE>
THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
This Third Amended and Restated Credit Agreement, dated as of
August 25, 1999 (as amended, supplemented or modified from time to time,
the "Agreement") is entered into among SIMON PROPERTY GROUP, L.P., the
institutions from time to time a party hereto as Lenders, whether by
execution of this Agreement or an Assignment and Acceptance, the
institutions from time to time a party hereto as Co-Agents, whether by
execution of this Agreement or an Assignment and Acceptance, and UBS AG,
STAMFORD BRANCH, as Payment and Disbursement Agent, CHASE SECURITIES
INC., as joint arranger, joint book manager and Syndication Agent,
WARBURG DILLON READ LLC, as joint arranger and joint book manager,
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Documentation Agent and
arranger, and BANK OF AMERICA, NATIONAL ASSOCIATION, as Documentation
Agent and arranger.
R E C I T A L S
WHEREAS, the Borrower, the Arrangers, the Co-Agents and
certain of the other Lenders entered into that certain Credit Agreement,
dated as of September 27, 1996, as amended by First Amendment to Credit
Agreement, dated as of April 14, 1997, and as amended and restated in
its entirety pursuant to that certain First Amended and Restated Credit
Agreement, dated as of June 20, 1997, and as further amended and
restated in its entirety pursuant to that certain Second Amended and
Restated Credit Agreement, dated as of December 22, 1997 (as so amended
and restated, the "Existing Credit Agreement"); and
WHEREAS, the parties hereto have agreed to amend and restate
the terms and conditions contained in the Existing Credit Agreement in
their entirety as hereinafter set forth.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
I. The Existing Credit Agreement is hereby modified so that
all of the terms and conditions of the aforesaid Existing Credit
Agreement shall be restated in their entirety as set forth herein, and
the Borrower agrees to comply with and be subject to all of the terms,
covenants and conditions of this Agreement.
II. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors and
assigns, and shall be deemed to be effective as of the date hereof.
III. Any reference in the Notes, any other Loan Document or
any other document executed in connection with this Agreement to the
Existing Credit Agreement shall be deemed to refer to this Agreement.
ARTICLE 1.
DEFINITIONS
1.1. Certain Defined Terms. The following terms
used in this Agreement shall have the following
meanings, applicable both to the singular and the plural
forms of the terms defined:
"Affiliate", as applied to any Person, means any other Person
that directly or indirectly controls, is controlled by, or is 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 the possession, directly or indirectly, of
the power to vote fifteen percent (15.0%) or more of the equity
Securities 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
equity Securities or by contract or otherwise.
"Agent" means UBS in its capacity as Payment and Disbursement
Agent, each Arranger, each Co-Arranger, each Senior Managing Agent,
each Managing Agent, each Co-Agent, and each successor agent appointed
pursuant to the terms of Article XII of this Agreement.
"Agreement" is defined in the preamble hereto.
"Annual EBITDA" means, with respect to any Project or Minority
Holding, as of the first day of each fiscal quarter for the immediately
preceding consecutive four fiscal quarters, an amount equal to (i) total
revenues relating to such Project or Minority Holding for such period,
less (ii) total operating expenses relating to such Project or Minority
Holding for such period (it being understood that the foregoing
calculation shall exclude non-cash charges as determined in accordance
with GAAP). Each of the foregoing amounts shall be determined by
reference to the Borrower's Statement of Operations for the applicable
periods. An example of the foregoing calculation is set forth on
Exhibit G hereto.
"Applicable Lending Office" means, with respect to a
particular Lender, (i) its Eurodollar Lending Office in respect of
provisions relating to Eurodollar Rate Loans, (ii) its Domestic Lending
Office in respect of provisions relating to Base Rate Loans and (iii)
its Money Market Lending Office in respect of provisions relating to
Money Market Loans.
"Applicable Margin" means, with respect to each Loan, the
respective percentages per annum determined, at any time, based on the
range into which Borrower's Credit Rating then falls, in accordance with
the following tables. Any change in the Applicable Margin shall be
effective immediately as of the date on which any of the rating agencies
announces a change in the Borrower's Credit Rating or the date on which
the Borrower has no Credit Rating, whichever is applicable.
The Applicable Margin, from time to time, depending on Borrower's Credit
Rating shall be as follows:
Range of Applicable Applicable
Borrower's Margin for Margin for
Credit Rating Eurodollar Rate Loans Base Rate
S&P/Moody's and IBOR Rate Loans Loans
Ratings) (% per annum) (% per annum)
- ------------ ------------------- -------------
below BBB-/Baa3 1.350% 0.00%
BBB-/Baa3 0.900% 0.00%
BBB/Baa2 0.750% 0.00%
BBB+/Baa1 0.650% 0.00%
A-/A3 0.500% 0.00%
If at any time the Borrower has a Credit Rating by both Moody's and
S&P which Credit Ratings are split, then: 1.1.0.0.0.1. if the
difference between such Credit Ratings is one ratings category
(e.g. Baa2 by Moody's and BBB- by S&P), the Applicable Margin shall
be the rate per annum that would be applicable if the higher of the
Credit Ratings were used; and 1.1.0.0.0.1. if the difference
between such Credit Ratings is two ratings category (e.g. Baa1 by
Moody's and BBB- by S&P), the Applicable Margin shall be the rate
per annum that would be applicable if the median of the applicable
Credit Ratings is used.
"Arrangers" means MGT and BofA, and each successor Arranger
appointed pursuant to the terms of Article XII of this Agreement.
"Assignment and Acceptance" means an Assignment and Acceptance
in substantially the form of Exhibit A attached hereto and made a part
hereof (with blanks appropriately completed) delivered to the Payment
and Disbursement Agent in connection with an assignment of a Lender's
interest under this Agreement in accordance with the provisions of
Section 15.1.
"Authorized Financial Officer" means a chief executive
officer, chief financial officer, treasurer or other qualified senior
officer acceptable to the Payment and Disbursement Agent.
"Base Eurodollar Rate" means, with respect to any Eurodollar
Interest Period applicable to a Borrowing of Eurodollar Rate Loans, an
interest rate per annum determined by the Payment and Disbursement Agent
to be the rate per annum at which deposits in Dollars are offered by the
principal office of the Reference Bank in London, England to major banks
in the London interbank market at approximately 11:00 a.m. (London time)
on the Eurodollar Interest Rate Determination Date for such Eurodollar
Interest Period for a period equal to such Eurodollar Interest Period
and in an amount substantially equal to the amount of the Eurodollar
Rate Loan.
"Base Rate" means, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time, which rate per annum
shall at all times be equal to the higher of:
1.1.0.0.1. the rate of interest announced publicly by UBS
in Stamford, Connecticut from time to time, as UBS's prime rate;
and
1.1.0.0.2. the sum of (A) one-half of one percent (0.50%) per
annum plus (B) the Federal Funds Rate in effect from time to time
during such period.
"Base Rate Loan" means (i) a Committed Loan which bears
interest at a rate determined by reference to the Base Rate and the
Applicable Margin as provided in Section 5.1(a) or (ii) an overdue
amount which was a Base Rate Loan immediately before it became due.
"BofA" means Bank of America, National Association.
"Borrower" means SIMON PROPERTY GROUP, L.P., a Delaware
limited partnership.
"Borrower Partnership Agreement" means the Sixth Amended and
Restated Limited Partnership Agreement of the Borrower, as such
agreement may be amended, restated, modified or supplemented from time
to time with the consent of the Payment and Disbursement Agent or as
permitted under Section 10.10; provided that the Borrower may enter into
the Seventh Amended and Restated Limited Partnership Agreement
substantially in the form previously provided to the Payment and
Disbursement Agent.
"Borrowing" means a borrowing consisting of Loans of the same
type made, continued or converted on the same day.
"Business Activity Report" means (i) an Indiana Business
Activity Report from the Indiana Department of Revenue, Compliance
Division, or (ii) a Notice of Business Activities Report from the State
of New Jersey Division of Taxation, (iii) a Minnesota Business Activity
Report from the Minnesota Department of Revenue, or (iv) a similar
report to those referred to in clauses (i) through (iii) hereof with
respect to any jurisdiction where the failure to file such report would
have a Material Adverse Effect.
"Business Day" means a day, in the applicable local time,
which is not a Saturday or Sunday or a legal holiday and on which banks
are not required or permitted by law or other governmental action to
close (i) in New York, New York and (ii) in the case of Eurodollar Rate
Loans, in London, England and/or New York, New York and (iii) in the
case of Letter of Credit transactions for a particular Lender, in the
place where its office for issuance or administration of the pertinent
Letter of Credit is located and/or New York, New York.
"Capital Expenditures" means, for any period, the aggregate of
all expenditures (whether payable in cash or other Property or accrued
as a liability (but without duplication)) during such period that, in
conformity with GAAP, are required to be included in or reflected by the
Company's, the Borrower's or any of their Subsidiaries' fixed asset
accounts as reflected in any of their respective balance sheets;
provided, however, (i) Capital Expenditures shall include, whether or
not such a designation would be in conformity with GAAP, (a) that
portion of Capital Leases which is capitalized on the consolidated
balance sheet of the Company, the Borrower and their Subsidiaries and
(b) expenditures for Equipment which is purchased simultaneously with
the trade-in of existing Equipment owned by either General Partner, the
Borrower or any of their Subsidiaries, to the extent the gross purchase
price of the purchased Equipment exceeds the book value of the Equipment
being traded in at such time; and (ii) Capital Expenditures shall
exclude, whether or not such a designation would be in conformity with
GAAP, expenditures made in connection with the restoration of Property,
to the extent reimbursed or financed from insurance or condemnation
proceeds.
"Capitalization Value" means the sum of (i) Combined EBITDA
capitalized at an annual interest rate equal to 8.25%, and (ii) Cash and
Cash Equivalents, and (iii) Construction Asset Cost.
"Capital Lease" means any lease of any property (whether real,
personal or mixed) by a Person as lessee which, in conformity with GAAP,
is accounted for as a capital lease on the balance sheet of that Person.
"Capital Stock" means, with respect to any Person, any capital
stock of such Person, regardless of class or designation, and all
warrants, options, purchase rights, conversion or exchange rights,
voting rights, calls or claims of any character with respect thereto.
"Cash and Cash Equivalents" means (i) cash, (ii) marketable
direct obligations issued or unconditionally guaranteed by the United
States government and backed by the full faith and credit of the United
States government; and (iii) domestic and Eurodollar certificates of
deposit and time deposits, bankers' acceptances and floating rate
certificates of deposit issued by any commercial bank organized under
the laws of the United States, any state thereof, the District of
Columbia, any foreign bank, or its branches or agencies (fully protected
against currency fluctuations), which, at the time of acquisition, are
rated A-1 (or better) by S&P or P-1 (or better) by Moody's; provided
that the maturities of such Cash and Cash Equivalents shall not exceed
one year.
"Cash Interest Expense" means, for any period, total interest
expense, whether paid or accrued, but without duplication, (including
the interest component of Capital Leases) of the Borrower, which is
payable in cash, all as determined in conformity with GAAP.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. 9601 et seq., any
amendments thereto, any successor statutes, and any regulations or
guidance promulgated thereunder.
"Chase" means The Chase Manhattan Bank.
"Claim" means any claim or demand, by any Person, of
whatsoever kind or nature for any alleged Liabilities and Costs, whether
based in contract, tort, implied or express warranty, strict liability,
criminal or civil statute, Permit, ordinance or regulation, common law
or otherwise.
"Closing Date" means August , 1999.
"Co-Agents" means the Lead Arrangers, the other Arrangers, the
Co-Arrangers, the Senior Managing Agents, the Managing Agents, and Bank
of Montreal and Landesbank Hessen-Thuringen Girozentrale, New York
Branch.
"Co-Arrangers" means Dresdner Bank AG, New York and Grand
Cayman Branches, The First National Bank of Chicago, and each successor
Arranger appointed pursuant to the terms of Article XII of this
Agreement.
"Combined Debt Service" means, for any period, the sum of (i)
regularly scheduled payments of principal and interest of the
Consolidated Businesses paid during such period and (ii) the portion of
the regularly scheduled payments of principal and interest of Minority
Holdings allocable to the Borrower in accordance with GAAP, paid during
such period, in each case including participating interest expense and
excluding balloon payments of principal and extraordinary interest
payments and net of amortization of deferred costs associated with new
financings or refinancings of existing Indebtedness.
"Combined EBITDA" means the sum of (i) 100% of the Annual
EBITDA from the Consolidated Businesses; and (ii) the portion of the
Annual EBITDA of the Minority Holdings allocable to the Borrower in
accordance with GAAP; and (iii) for so long as the Borrower owns a
majority economic interest in the Management Company, 100% of the
Borrower's share of the actual Annual EBITDA of the Management Company;
provided, however that the Borrower's share of the Annual EBITDA of the
Management Company shall in no event constitute in excess of five
percent (5%) of Combined EBITDA. For purposes of newly opened Projects
which are no longer capitalized, the Annual EBITDA shall be based upon
twelve-month projections of contractual rental revenues multiplied by
the EBITDA profit margin of the Borrower property type (i.e. regional
mall or community center) as such profit margin is reported in the most
recently published annual report or 10-K for the Company, until such
time as actual performance data for a twelve-month period is available.
"Combined Equity Value" means Capitalization Value minus Total
Adjusted Outstanding Indebtedness.
"Combined Interest Expense" means, for any period, the sum of
(i) interest expense of the Consolidated Businesses paid during such
period and (ii) interest expense of the Consolidated Businesses accrued
for such period and (iii) the portion of the interest expense of
Minority Holdings allocable to the Borrower in accordance with GAAP and
paid during such period and (iv) the portion of the interest expense of
Minority Holdings allocable to the Borrower in accordance with GAAP and
accrued for such period, in each case including participating interest
expense but excluding extraordinary interest expense, and net of
amortization of deferred costs associated with new financings or
refinancings of existing Indebtedness.
"Commercial Letter of Credit" means any documentary letter of
credit issued by an Issuing Bank pursuant to Section 3.1 for the account
of the Borrower, which is drawable upon presentation of documents
evidencing the sale or shipment of goods purchased by the Borrower in
the ordinary course of its business.
"Commission" means the Securities and Exchange Commission and
any Person succeeding to the functions thereof.
"Committed Loan" means a Loan made by a Lender pursuant to
Section 2.1; provided that, if any such Loan or Loans (or portions
thereof) are combined or subdivided pursuant to a Notice of
Conversion/Continuation, the term "Committed Loan" shall refer to the
combined principal amount resulting from such combination or to each of
the separate principal amounts resulting from such subdivision, as the
case may be.
"Company" means Simon Property Group, Inc., a Delaware
corporation.
"Compliance Certificate" is defined in Section 8.2(b).
"Consolidated" means consolidated, in accordance with GAAP.
"Consolidated Businesses" means the General Partners, the
Borrower and their wholly-owned Subsidiaries.
"Construction Asset Cost" means, with respect to Property on
which construction of Improvements has commenced (such commencement
evidenced by foundation excavation) but has not yet been completed (as
such completion shall be evidenced by such Property being opened for
business to the general public), the aggregate sums expended on the
construction of such Improvements (including land acquisition costs).
"Contaminant" means any waste, pollutant, hazardous substance,
toxic substance, hazardous waste, special waste, petroleum or petroleum-
derived substance or waste, radioactive materials, asbestos (in any form
or condition), polychlorinated biphenyls (PCBs), or any constituent of
any such substance or waste, and includes, but is not limited to, these
terms as defined in federal, state or local laws or regulations.
"Contingent Obligation" as to any Person means, without
duplication, (i) any contingent obligation of such Person required to be
shown on such Person's balance sheet in accordance with GAAP, and (ii)
any obligation required to be disclosed in the footnotes to such
Person's financial statements in accordance with GAAP, guaranteeing
partially or in whole any non-recourse Indebtedness, lease, dividend or
other obligation, exclusive of contractual indemnities (including,
without limitation, any indemnity or price-adjustment provision relating
to the purchase or sale of securities or other assets) and guarantees of
non-monetary obligations (other than guarantees of completion) which
have not yet been called on or quantified, of such Person or of any
other Person. The amount of any Contingent Obligation described in
clause (ii) shall be deemed to be (a) with respect to a guaranty of
interest or interest and principal, or operating income guaranty, the
sum of all payments required to be made thereunder (which in the case of
an operating income guaranty shall be deemed to be equal to the debt
service for the note secured thereby), calculated at the interest rate
applicable to such Indebtedness, through (i) in the case of an interest
or interest and principal guaranty, the stated date of maturity of the
obligation (and commencing on the date interest could first be payable
thereunder), or (ii) in the case of an operating income guaranty, the
date through which such guaranty will remain in effect, and (b) with
respect to all guarantees not covered by the preceding clause (a) an
amount equal to the stated or determinable amount of the primary
obligation in respect of which such guaranty is made or, if not stated
or determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder) as
recorded on the balance sheet and on the footnotes to the most recent
financial statements of the applicable Borrower required to be delivered
pursuant hereto. Notwithstanding anything contained herein to the
contrary, guarantees of completion shall not be deemed to be Contingent
Obligations unless and until a claim for payment has been made
thereunder, at which time any such guaranty of completion shall be
deemed to be a Contingent Obligation in an amount equal to any such
claim. Subject to the preceding sentence, (i) in the case of a joint
and several guaranty given by such Person and another Person (but only
to the extent such guaranty is recourse, directly or indirectly to the
applicable Borrower), the amount of the guaranty shall be deemed to be
100% thereof unless and only to the extent that (X) such other Person
has delivered Cash or Cash Equivalents to secure all or any part of such
Person's guaranteed obligations or (Y) such other Person holds an
Investment Grade Credit Rating from either Moody's or S&P, and (ii) in
the case of a guaranty, (whether or not joint and several) of an
obligation otherwise constituting Debt of such Person, the amount of
such guaranty shall be deemed to be only that amount in excess of the
amount of the obligation constituting Indebtedness of such Person.
Notwithstanding anything contained herein to the contrary, "Contingent
Obligations" shall not be deemed to include guarantees of loan
commitments or of construction loans to the extent the same have not
been drawn.
"Contractual Obligation", as applied to any Person, means any
provision of any Securities issued by that Person or any indenture,
mortgage, deed of trust, security agreement, pledge agreement, guaranty,
contract, undertaking, agreement or instrument to which that Person is a
party or by which it or any of its properties is bound, or to which it
or any of its properties is subject.
"Credit Rating" means the publicly announced rating of a
Person given by Moody's or S&P.
"Cure Loans" is defined in Section 4.2(b)(v)(C).
"Customary Permitted Liens" means
1.1.0.0.3. Liens (other than Environmental Liens and
Liens in favor of the PBGC) with respect to the payment of
taxes, assessments or governmental charges in all cases which
are not yet due or which are being contested in good faith by
appropriate proceedings in accordance with Section 9.4 and
with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with GAAP;
1.1.0.0.4. statutory Liens of landlords against any Property
of the Borrower or any of its Subsidiaries and Liens against any
Property of the Borrower or any of its Subsidiaries in favor of
suppliers, mechanics, carriers, materialmen, warehousemen or
workmen and other Liens against any Property of the Borrower or any
of its Subsidiaries imposed by law created in the ordinary course
of business for amounts which, if not resolved in favor of the
Borrower or such Subsidiary, could not result in a Material Adverse
Effect;
1.1.0.0.5. Liens (other than any Lien in favor of the
PBGC) incurred or deposits made in the ordinary course of
business in connection with worker's compensation,
unemployment insurance or other types of social security
benefits or to secure the performance of bids, tenders, sales,
contracts (other than for the repayment of borrowed money),
surety, appeal and performance bonds; provided that (A) all
such Liens do not in the aggregate materially detract from the
value of the Borrower's or such Subsidiary's assets or
Property or materially impair the use thereof in the operation
of their respective businesses, and (B) all Liens of
attachment or judgment and Liens securing bonds to stay
judgments or in connection with appeals do not secure at any
time an aggregate amount of recourse Indebtedness exceeding
$10,000,000; and
1.1.0.0.6. Liens against any Property of the Borrower or
any Subsidiary of the Borrower arising with respect to zoning
restrictions, easements, licenses, reservations, covenants,
rights-of-way, utility easements, building restrictions and
other similar charges or encumbrances on the use of Real
Property which do not interfere with the ordinary conduct of
the business of the Borrower or any of its Subsidiaries to the
extent it could not result in a Material Adverse Effect.
"Debt Yield" is defined in Section 10.12(d).
"Designated Bank" means a special purpose corporation that (i)
shall have become a party to this Agreement pursuant to Section 15.1(f),
and (ii) is not otherwise a Lender.
"Designated Bank Notes" means promissory notes of the
Borrower, substantially in the form of Exhibit B-1 hereto, evidencing
the obligation of the Borrower to repay Money Market Loans made by
Designated Banks, as the same may be amended, supplemented, modified or
restated from time to time, and "Designated Bank Note" means any one of
such promissory notes issued under Section 15.1(f) hereof.
"Designating Lender" shall have the meaning set forth in
Section 15.1(f) hereof.
"Designation Agreement" means a designation agreement in
substantially the form of Exhibit K attached hereto, entered into by a
Lender and a Designated Bank and accepted by the Payment and
Disbursement Agent.
"Designee Lender" is defined in Section 13.4.
"DOL" means the United States Department of Labor and any
Person succeeding to the functions thereof.
"Dollars" and "$" mean the lawful money of the United States.
"Domestic Lending Office" means, with respect to any Lender,
such Lender's office, located in the United States, specified as the
"Domestic Lending Office" under its name on the signature pages hereof
or on the Assignment and Acceptance by which it became a Lender or such
other United States office of such Lender as it may from time to time
specify by written notice to the Borrower and the Payment and
Disbursement Agent.
"Eligible Assignee" means (i) a Lender or any Affiliate
thereof; (ii) a commercial bank having total assets in excess of
$2,500,000,000; (iii) the central bank of any country which is a member
of the Organization for Economic Cooperation and Development; or (iv) a
finance company or other financial institution reasonably acceptable to
the Payment and Disbursement Agent, which is regularly engaged in
making, purchasing or investing in loans and having total assets in
excess of $300,000,000 or is otherwise reasonably acceptable to the
Payment and Disbursement Agent.
"Environmental, Health or Safety Requirements of Law" means
all Requirements of Law derived from or relating to any federal, state
or local law, ordinance, rule, regulation, Permit, license or other
binding determination of any Governmental Authority relating to,
imposing liability or standards concerning, or otherwise addressing the
environment, health and/or safety, including, but not limited to the
Clean Air Act, the Clean Water Act, CERCLA, RCRA, any so-called
"Superfund" or "Superlien" law, the Toxic Substances Control Act and
OSHA, and public health codes, each as from time to time in effect.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for any (i) liabilities under any Environmental, Health or
Safety Requirement of Law, or (ii) damages arising from, or costs
incurred by such Governmental Authority in response to, a Release or
threatened Release of a Contaminant into the environment.
"Environmental Property Transfer Act" means any applicable
Requirement of Law that conditions, restricts, prohibits or requires any
notification or disclosure triggered by the transfer, sale, lease or
closure of any Property or deed or title for any Property for
environmental reasons, including, but not limited to, any so-called
"Environmental Cleanup Responsibility Act" or "Responsible Property
Transfer Act".
"Equipment" means equipment used in connection with the
maintenance of Projects and Properties.
"ERISA" means the Employee Retirement Income Security Act of
1974, 29 U.S.C. 1000 et seq., any amendments thereto, any successor
statutes, and any regulations or guidance promulgated thereunder.
"ERISA Affiliate" means (i) any corporation which is a member
of the same controlled group of corporations (within the meaning of
Section 414(b) of the Internal Revenue Code) as the Borrower; (ii) a
partnership or other trade or business (whether or not incorporated)
which is under common control (within the meaning of Section 414(c) of
the Internal Revenue Code) with the Borrower; and (iii) a member of the
same affiliated service group (within the meaning of Section 414(m) of
the Internal Revenue Code) as the Borrower, any corporation described in
clause (i) above or any partnership or trade or business described in
clause (ii) above.
"ERISA Termination Event" means (i) a Reportable Event with
respect to any Plan; (ii) the withdrawal of the Borrower or any ERISA
Affiliate from a Plan during a plan year in which the Borrower or such
ERISA Affiliate was a "substantial employer" as defined in Section
4001(a)(2) of ERISA or the cessation of operations which results in the
termination of employment of 20% of Plan participants who are employees
of the Borrower or any ERISA Affiliate; (iii) the imposition of an
obligation on the Borrower or any ERISA Affiliate under Section 4041 of
ERISA to provide affected parties written notice of intent to terminate
a Plan in a distress termination described in Section 4041(c) of ERISA;
(iv) the institution by the PBGC of proceedings to terminate a Plan; (v)
any event or condition which might constitute grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; or (vi) the partial or complete withdrawal of the
Borrower or any ERISA Affiliate from a Multiemployer Plan.
"Eurodollar Affiliate" means, with respect to each Lender, the
Affiliate of such Lender (if any) set forth below such Lender's name
under the heading "Eurodollar Affiliate" on the signature pages hereof
or on the Assignment and Acceptance by which it became a Lender or such
Affiliate of a Lender as it may from time to time specify by written
notice to the Borrower and the Payment and Disbursement Agent.
"Eurodollar Interest Period" is defined in Section 5.2(b)(i).
"Eurodollar Interest Rate Determination Date" is defined in
Section 5.2(c)(i).
"Eurodollar Lending Office" means, with respect to any Lender,
such Lender's office (if any) specified as the "Eurodollar Lending
Office" under its name on the signature pages hereof or on the
Assignment and Acceptance by which it became a Lender or such other
office or offices of such Lender as it may from time to time specify by
written notice to the Borrower and the Payment and Disbursement Agent.
"Eurodollar Money Market Loan" means a Loan to be made by a
Lender pursuant to a LIBOR Auction (including such a Loan bearing
interest at the Base Rate pursuant to Section 5.2).
"Eurodollar Rate" means, with respect to any Eurodollar
Interest Period applicable to a Eurodollar Rate Loan or a Money Market
Loan, an interest rate per annum obtained by dividing (i) the Base
Eurodollar Rate applicable to that Eurodollar Interest Period by (ii) a
percentage equal to 100% minus the Eurodollar Reserve Percentage in
effect on the relevant Eurodollar Interest Rate Determination Date.
"Eurodollar Rate Loan" means (i) a Committed Loan which bears
interest at a rate determined by reference to the Eurodollar Rate and
the Applicable Margin for Eurodollar Rate Loans, as provided in Section
5.1(a) or (ii) an overdue amount which was a Eurodollar Rate Loan
immediately before it became due.
"Eurodollar Reserve Percentage" means, for any day, that
percentage which is in effect on such day, as prescribed by the Federal
Reserve Board for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for a member bank of the Federal Reserve
System in New York, New York with deposits exceeding five billion
Dollars in respect of "Eurocurrency Liabilities" (or in respect of any
other category of liabilities which includes deposits by reference to
which the interest rate on Eurodollar Rate Loans is determined or any
category of extensions of credit or other assets which includes loans by
a non-United States office of any bank to United States residents).
"Event of Default" means any of the occurrences set forth in
Section 11.1 after the expiration of any applicable grace period and the
giving of any applicable notice, in each case as expressly provided in
Section 11.1.
"Existing Credit Agreement" is defined in the Recitals.
"Extension Fee" means an amount equal to twenty-five (25)
basis points on the Maximum Revolving Credit Amount.
"Extension Notice" is defined in Section 2.5.
"Extension Option" is defined in Section 2.5.
"Facility Fee" is defined in Section 5.3(a).
"Facility Fee Percentage" means the applicable percentage per
annum determined, at any time, based on the range into which Borrower's
Credit Rating (if any) then falls, in accordance with the following
tables. Any change in the Facility Fee Percentage shall be effective
immediately as of the date on which any of the rating agencies announces
a change in the Borrower's Credit Rating or the date on which the
Borrower has no Credit Rating, whichever is applicable. The Facility
Fee shall not be payable during the time, from time to time, that the
Borrower does not maintain an Investment Grade Credit Rating.
The Facility Fee Percentage during the time, from time to
time, that the Borrower maintains an Investment Grade Credit Rating by
either Moody's or S&P shall be as follows:
Range of
Borrower's Percentage of
Credit Rating Maximum Revolving
S&P/Moody's Ratings Credit Commitments
BBB-/Baa3 0.20%
BBB/Baa2 0.20%
BBB+/Baa1 0.15%
A-/A3 0.15%
If at any time the Borrower has a Credit Rating by both
Moody's and S&P which Credit Ratings are split, then: 1.1.0.0.6.1.
if the difference between such Credit Ratings is one ratings
category (e.g. Baa2 by Moody's and BBB- by S&P), the Facility Fee
Percentage shall be the rate per annum that would be applicable if
the higher of the Credit Ratings were used; and 1.1.0.0.6.1. if the
difference between such Credit Ratings is two ratings category
(e.g. Baa1 by Moody's and BBB- by S&P), the Facility Fee Percentage
shall be the rate per annum that would be applicable if the median
of the applicable Credit Ratings is used.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period 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 in New York, New York, for the next preceding Business Day) in New
York, New York by the Federal Reserve Bank of New York, or if such rate
is not so published for any day which is a Business Day in New York, New
York, the average of the quotations for such day on transactions by the
Reference Bank, as determined by the Payment and Disbursement Agent.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any Governmental Authority succeeding to its
functions.
"Financial Statements" means (i) quarterly and annual
consolidated statements of income and retained earnings, statements of
cash flow, and balance sheets, (ii) such other financial statements as
any General Partner shall routinely and regularly prepare on a quarterly
or annual basis, and (iii) such other financial statements of the
Consolidated Businesses or Minority Holdings as the Arrangers or the
Requisite Lenders may from time to time reasonably specify; provided,
however, that the Financial Statements referenced in clauses (i) and
(ii) above shall be prepared in form satisfactory to the Payment and
Disbursement Agent.
"Fiscal Year" means the fiscal year of the Company and the
Borrower for accounting and tax purposes, which shall be the 12-month
period ending on December 31 of each calendar year.
"Funding Date" means, with respect to any Loan, the date of
funding of such Loan.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the American Institute of
Certified Public Accountants' Accounting Principles Board and Financial
Accounting Standards Board or in such other statements by such other
entity as may be in general use by significant segments of the
accounting profession as in effect on the Closing Date (unless otherwise
specified herein as in effect on another date or dates).
"General Partner" or "General Partners" means SPG, SD, the
Company and any successor general partner(s) of the Borrower.
"Governmental Approval" means all right, title and interest
in any existing or future certificates, licenses, permits, variances,
authorizations and approvals issued by any Governmental Authority having
jurisdiction with respect to any Project.
"Governmental Authority" means any nation or government, any
federal, state, local or other political subdivision thereof and any
entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Holder" means any Person entitled to enforce any of the
Obligations, whether or not such Person holds any evidence of
Indebtedness, including, without limitation, the Payment and
Disbursement Agent, each Arranger, and each other Lender.
"IBOR Auction" means a solicitation of Money Market Quotes
setting forth Money Market Margins based on the IBOR Rate pursuant to
Section 2.2.; provided, however, that no IBOR Auction shall occur during
any IBOR Black-Out Period.
"IBOR Black-Out Period" means the calendar days during each
calendar year commencing on March 15 through and including March 31 and
commencing on December 15 through and including December 31.
"IBOR Interest Period" is defined in Section 5.2 (b)(v).
"IBOR Interest Rate Determination Date" is defined in Section
5.2 (c)(ii).
"IBOR Money Market Loan" means a Loan to be made by a Lender
pursuant to an IBOR Auction (including such a Loan bearing interest at
the Base Rate pursuant to Section 5.2).
"IBOR Rate" means, for each IBOR Interest Period, a rate of
interest per annum equal to the arithmetic average (rounded to the
nearest 0.01%) of the rates at which deposits in Dollars in the
approximate amount of the relevant Loan and having a maturity nearest to
the applicable IBOR Interest Period are offered by the IBOR Reference
Banks to major banks in Dollars, as determined on the applicable IBOR
Interest Rate Determination Date.
"IBOR Rate Loan" means (i) a Committed Loan which bears
interest at a rate determined by reference to the IBOR Rate and the
Applicable Margin for IBOR Rate Loans, as provided in Section 5.1(a) or
(ii) an overdue amount which was an IBOR Rate Loan immediately before it
became due.
"IBOR Reference Banks" means, as of the Closing Date, each of
the Arrangers, MGT, Dresdner Bank AG, The Sumitomo Bank, Limited, and
thereafter any Lender designated by the Payment and Disbursement Agent.
"Improvements" means all buildings, fixtures, structures,
parking areas, landscaping and all other improvements whether existing
now or hereafter constructed, together with all machinery and
mechanical, electrical, HVAC and plumbing systems presently located
thereon and used in the operation thereof, excluding (a) any such items
owned by utility service providers, (b) any such items owned by tenants
or other third-parties unaffiliated with the Borrower and (c) any items
of personal property.
"Indebtedness", as applied to any Person, means, at any time,
without duplication, (a) all indebtedness, obligations or other
liabilities of such Person (whether consolidated or representing the
proportionate interest in any other Person) (i) for borrowed money
(including construction loans) or evidenced by debt securities,
debentures, acceptances, notes or other similar instruments, and any
accrued interest, fees and charges relating thereto, (ii) under profit
payment agreements or in respect of obligations to redeem, repurchase or
exchange any Securities of such Person or to pay dividends in respect of
any stock, (iii) with respect to letters of credit issued for such
Person's account, (iv) to pay the deferred purchase price of property or
services, except accounts payable and accrued expenses arising in the
ordinary course of business, (v) in respect of Capital Leases, (vi)
which are Contingent Obligations or (vii) under warranties and
indemnities; (b) all indebtedness, obligations or other liabilities of
such Person or others secured by a Lien on any property of such Person,
whether or not such indebtedness, obligations or liabilities are assumed
by such Person, all as of such time; (c) all indebtedness, obligations
or other liabilities of such Person in respect of interest rate
contracts and foreign exchange contracts, net of liabilities owed to
such Person by the counterparties thereon; (d) all preferred stock
subject (upon the occurrence of any contingency or otherwise) to
mandatory redemption; and (e) all contingent Contractual Obligations
with respect to any of the foregoing.
"Indemnified Matters" is defined in Section 15.3.
"Indemnitees" is defined in Section 15.3.
"Initial Funding Date" means the date on or after August 25,
1999, on which all of the conditions described in Section 6.1 have been
satisfied (or waived) in a manner satisfactory to the Payment and
Disbursement Agent and the Lenders and on which the initial Loans under
this Agreement are made by the Lenders to the Borrower.
"Interest Period" is defined in Section 5.2(b).
"Interest Rate Hedges" is defined in Section 9.9.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter, any
successor statute and any regulations or guidance promulgated
thereunder.
"Investment" means, with respect to any Person, (i) any
purchase or other acquisition by that Person of Securities, or of a
beneficial interest in Securities, issued by any other Person, (ii) any
purchase by that Person of all or substantially all of the assets of a
business conducted by another Person, and (iii) any loan, advance (other
than deposits with financial institutions available for withdrawal on
demand, prepaid expenses, accounts receivable, advances to employees and
similar items made or incurred in the ordinary course of business) or
capital contribution by that Person to any other Person, including,
without limitation, all Indebtedness to such Person arising from a sale
of property by such Person other than in the ordinary course of its
business. The amount of any Investment shall be the original cost of
such Investment, plus the cost of all additions thereto less the amount
of any return of capital or principal to the extent such return is in
cash with respect to such Investment without any adjustments for
increases or decreases in value or write-ups, write-downs or write-offs
with respect to such Investment.
"Investment Grade" means (i) with respect to Moody's a Credit
Rating of Baa3 or higher and (ii) with respect to S&P, a Credit Rating
of BBB- or higher.
"Investment Grade Credit Rating" means (i) a Credit Rating of
Baa3 or higher given by Moody's or (ii) a Credit Rating of BBB- or
higher given by S&P.
"IRS" means the Internal Revenue Service and any Person
succeeding to the functions thereof.
"Issuing Bank" is defined in Section 3.1.
"knowledge" with reference to any General Partner, the
Borrower or any Subsidiary of the Borrower, means the actual knowledge
of such Person after reasonable inquiry (which reasonable inquiry shall
include, without limitation, interviewing and questioning such other
Persons as such General Partner, the Borrower or such Subsidiary of the
Borrower, as applicable, deems reasonably necessary).
"Lead Arrangers" means UBS and Chase, and each successor
Arranger appointed pursuant to the terms of Article XII of this
Agreement.
"Lease" means a lease, license, concession agreement or other
agreement providing for the use or occupancy of any portion of any
Project, including all amendments, supplements, modifications and
assignments thereof and all side letters or side agreements relating
thereto.
"Lender" means (i) each of the Arrangers, the Co-Agents, and
each financial institution a signatory hereto as a Lender as of the
Closing Date and, at any other given time, each financial institution
which is a party hereto as a Arranger, Co-Agent or Lender, whether as a
signatory hereto or pursuant to an Assignment and Acceptance, and
regardless of the capacity in which such entity is acting (i.e. whether
as Payment and Disbursement Agent, Arranger, Co-Agent or Lender) and
(ii) each Designated Bank; provided, however, that the term "Lender"
shall exclude each Designated Bank when used in reference to a Committed
Loan, the Commitments or terms relating to the Committed Loans and the
Commitments and shall further exclude each Designated Bank for all other
purposes hereunder (including, without limitation, for purposes of
Section 13.4 hereof) except that any Designated Bank which funds a Money
Market Loan shall, subject to Section 15.1(f), have the rights
(including, without limitation, the rights given to a Lender contained
in Section 15.2 and otherwise in Article XV) and obligations of a Lender
associated with holding such Money Market Loan.
"Letter of Credit" means any Commercial Letter of Credit or
Standby Letter of Credit.
"Letter of Credit Obligations" means, at any particular time,
the sum of (i) all outstanding Reimbursement Obligations, and (ii) the
aggregate undrawn face amount of all outstanding Letters of Credit, and
(iii) the aggregate face amount of all Letters of Credit requested by
the Borrower but not yet issued.
"Letter of Credit Reimbursement Agreement" means, with respect
to a Letter of Credit, such form of application therefor and form of
reimbursement agreement therefor (whether in a single or several
documents, taken together) as an Issuing Bank may employ in the ordinary
course of business for its own account, with such modifications thereto
as may be agreed upon by such Issuing Bank and the Borrower and as are
not materially adverse (in the judgment of such Issuing Bank and the
Payment and Disbursement Agent) to the interests of the Lenders;
provided, however, in the event of any conflict between the terms of any
Letter of Credit Reimbursement Agreement and this Agreement, the terms
of this Agreement shall control.
"Liabilities and Costs" means all liabilities, obligations,
responsibilities, losses, damages, personal injury, death, punitive
damages, economic damages, consequential damages, treble damages,
intentional, willful or wanton injury, damage or threat to the
environment, natural resources or public health or welfare, costs and
expenses (including, without limitation, attorney, expert and consulting
fees and costs of investigation, feasibility or Remedial Action
studies), fines, penalties and monetary sanctions, interest, direct or
indirect, known or unknown, absolute or contingent, past, present or
future.
"LIBOR Auction" means a solicitation of Money Market Quotes
setting forth Money Market Margins based on the Eurodollar Rate pursuant
to Section 2.2.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, conditional sale agreement, deposit
arrangement, security interest, encumbrance, lien (statutory or other
and including, without limitation, any Environmental Lien), preference,
priority or other security agreement or preferential arrangement of any
kind or nature whatsoever in respect of any property of a Person,
whether granted voluntarily or imposed by law, and includes the interest
of a lessor under a Capital Lease or under any financing lease having
substantially the same economic effect as any of the foregoing and the
filing of any financing statement or similar notice (other than a
financing statement filed by a "true" lessor pursuant to 9-408 of the
Uniform Commercial Code), naming the owner of such property as debtor,
under the Uniform Commercial Code or other comparable law of any
jurisdiction.
"Limited Minority Holdings" means Minority Holdings in which
(i) Borrower has a less than fifty percent (50%) ownership interest and
(ii) neither the Borrower nor the Company directly or indirectly
controls the management of such Minority Holdings, whether as the
general partner or managing member of such Minority Holding, or
otherwise. As used in this definition only, the term "control" shall
mean the authority to make major management decisions or the management
of day-to-day operations of such entity and shall include instances in
which the Management Company manages the day-to-day leasing, management,
control or development of the Properties of such Minority Interest
pursuant to the terms of a management agreement.
"Limited Partners" means those Persons who from time to time
are limited partners of the Borrower; and "Limited Partner" means each
of the Limited Partners, individually.
"Loan Account" is defined in Section 4.3(b).
"Loan Documents" means this Agreement, the Notes and all other
instruments, agreements and written Contractual Obligations between the
Borrower and any of the Lenders pursuant to or in connection with the
transactions contemplated hereby.
"Loans" means Committed Loans and Money Market Loans.
"Management Company" means, collectively, (i) M.S. Management
Associates, Inc., a Delaware corporation and its wholly-owned or
controlled Subsidiaries and (ii) such other property management
companies controlled (directly or indirectly) by the Company for which
the Borrower has previously provided the Payment and Disbursement Agent
with: (1) notice of such property management company, and (2) evidence
reasonably satisfactory to the Payment and Disbursement Agent that such
property management company is controlled (directly or indirectly) by
the Company.
"Managing Agents" means PNC Bank, National Association,
National City Bank of Indiana, Key Bank, National Association, U.S. Bank
National Association, Guaranty Federal Bank, F.S.B., KBC Bank N.V. and
Bayerische Landesbank, Cayman Islands Branch.
"Margin Stock" means "margin stock" as such term is defined in
Regulation U.
"Material Adverse Effect" means a material adverse effect upon
(i) the financial condition or assets of the Borrower and its
Subsidiaries taken as a whole, (ii) the ability of the Borrower to
perform its obligations under the Loan Documents, or (iii) the ability
of the Lenders or the Payment and Disbursement Agent to enforce any of
the Loan Documents.
"Maximum Revolving Credit Amount" means, at any particular
time, the Revolving Credit Commitments at such time.
"MGT" means Morgan Guaranty Trust Company of New York.
"MIS" means a computerized management information system for
recording and maintenance of information regarding purchases, sales,
aging, categorization, and locations of Properties, creation and aging
of receivables, and accounts payable (including agings thereof).
"Minority Holdings" means partnerships, joint ventures and
corporations held or owned by the Borrower or a General Partner which
are not wholly-owned by the Borrower or a General Partner.
"Money Market Lender" means, as to each Money Market Loan, the
Lender funding such Money Market Loan.
"Money Market Lending Office" means, as to each Lender, its
Domestic Lending Office or such other office, branch or affiliate of
such Lender as it may hereafter designate as its Money Market Lending
Office by notice to the Borrower and the Payment and Disbursement Agent.
"Money Market Loan" means a loan to be made by a Lender
pursuant to a LIBOR Auction or an IBOR Auction (including such a loan
bearing interest at the Base Rate pursuant to Section 5.2).
"Money Market Margin" has the meaning set forth in Section
2.2.
"Money Market Quote" means an offer by a Lender to make a
Money Market Loan in accordance with Section 2.2.
"Money Market Rate" has the meaning set forth in Section 2.2.
"Moody's" means Moody's Investor Services, Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA which is, or within the immediately
preceding six (6) years was, contributed to by either the Borrower or
any ERISA Affiliate or in respect of which the Borrower or any ERISA
Affiliate has assumed any liability.
"Non Pro Rata Loan" is defined in Section 4.2 (b)(v).
"Note" means a promissory note in the form attached hereto as
Exhibit B payable to a Lender, evidencing certain of the Obligations of
the Borrower to such Lender and executed by the Borrower as required by
Section 4.3(a), as the same may be amended, supplemented, modified or
restated from time to time, together with the Designated Bank Notes;
"Notes" means, collectively, all of such Notes outstanding at any given
time.
"Notice of Borrowing" means a Notice of Committed Borrowing or
a Notice of Money Market Borrowing.
"Notice of Committed Borrowing" means a notice substantially
in the form of Exhibit C attached hereto and made a part hereof.
"Notice of Conversion/Continuation" means a notice
substantially in the form of Exhibit D attached hereto and made a part
hereof with respect to a proposed conversion or continuation of a Loan
pursuant to Section 5.1(c).
"Notice of Money Market Borrowing" has the meaning set forth
in Section 2.2.
"Obligations" means all Loans, advances, debts, liabilities,
obligations, covenants and duties owing by the Borrower to the Payment
and Disbursement Agent, any Arranger, any Co-Agent, any other Lender,
any Affiliate of the Payment and Disbursement Agent, the Arrangers, the
Co-Agents, any other Lender, or any Person entitled to indemnification
pursuant to Section 15.3 of this Agreement, of any kind or nature,
arising under this Agreement, the Notes or any other Loan Document. The
term includes, without limitation, all interest, charges, expenses,
fees, reasonable attorneys' fees and disbursements and any other sum
chargeable to the Borrower under this Agreement or any other Loan
Document.
"Officer's Certificate" means, as to a corporation, a
certificate executed on behalf of such corporation by the chairman of
its board of directors (if an officer of such corporation) or its chief
executive officer, president, any of its vice-presidents, its chief
financial officer, or its treasurer and, as to a partnership, a
certificate executed on behalf of such partnership by the chairman of
the board of directors (if an officer of such corporation) or chief
executive officer, president, any vice-president, or treasurer of the
general partner of such partnership.
"Operating Lease" means, as applied to any Person, any lease
of any property (whether real, personal or mixed) by that Person as
lessee which is not a Capital Lease.
"Organizational Documents" means, with respect to any
corporation, limited liability company, or partnership (i) the
articles/certificate of incorporation (or the equivalent organizational
documents) of such corporation or limited liability company, (ii) the
partnership agreement executed by the partners in the partnership, (iii)
the by-laws (or the equivalent governing documents) of the corporation,
limited liability company or partnership, and (iv) any document setting
forth the designation, amount and/or relative rights, limitations and
preferences of any class or series of such corporation's Capital Stock
or such limited liability company's or partnership's equity or ownership
interests.
"OSHA" means the Occupational Safety and Health Act of 1970,
29 U.S.C. 651 et seq., any amendments thereto, any successor statutes
and any regulations or guidance promulgated thereunder.
"Payment and Disbursement Agent" is UBS, and each successor
payment and disbursement agent appointed pursuant to the terms of
Article XII of this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation and any
Person succeeding to the functions thereof.
"Permits" means any permit, consent, approval, authorization,
license, variance, or permission required from any Person, including any
Governmental Approvals.
"Permitted Securities Options" means the subscriptions,
options, warrants, rights, convertible Securities and other agreements
or commitments relating to the issuance of the Borrower's Securities or
the Company's Capital Stock identified as such on Schedule 1.1.4.
"Person" means any natural person, corporation, limited
liability company, limited partnership, general partnership, joint stock
company, joint venture, association, company, trust, bank, trust
company, land trust, business trust or other organization, whether or
not a legal entity, and any Governmental Authority.
"Plan" means an employee benefit plan defined in Section 3(3)
of ERISA in respect of which the Borrower or any ERISA Affiliate is, or
within the immediately preceding six (6) years was, an "employer" as
defined in Section 3(5) of ERISA or the Borrower or any ERISA Affiliate
has assumed any liability.
"Potential Event of Default" means an event that has occurred
with respect to the Borrower which, with the giving of notice or the
lapse of time, or both, would constitute an Event of Default.
"Prepayment Date" is defined in Section 4.1(d).
"Process Agent" is defined in Section 15.17(a).
"Project" means any shopping center, retail property and mixed-
use property owned, directly or indirectly, by any of the Consolidated
Businesses or Minority Holdings.
"Property" means any Real Property or personal property,
plant, building, facility, structure, underground storage tank or unit,
equipment, general intangible, receivable, or other asset owned, leased
or operated by any Consolidated Business or any Minority Holding
(including any surface water thereon or adjacent thereto, and soil and
groundwater thereunder).
"Pro Rata Share" means, with respect to any Lender, the
percentage obtained by dividing (i) the sum of such Lender's Revolving
Credit Commitment (in each case, as adjusted from time to time in
accordance with the provisions of this Agreement or any Assignment and
Acceptance to which such Lender is a party) by (ii) the aggregate amount
of all of the Revolving Credit Commitments.
"RCRA" means the Resource Conservation and Recovery Act of
1976, 42 U.S.C. 6901 et seq., any amendments thereto, any successor
statutes, and any regulations or guidance promulgated thereunder.
"Real Property" means all of the Borrower's present and future
right, title and interest (including, without limitation, any leasehold
estate) in (i) any plots, pieces or parcels of land, (ii) any
Improvements of every nature whatsoever (the rights and interests
described in clauses (i) and (ii) above being the "Premises"), (iii) all
easements, rights of way, gores of land or any lands occupied by
streets, ways, alleys, passages, sewer rights, water courses, water
rights and powers, and public places adjoining such land, and any other
interests in property constituting appurtenances to the Premises, or
which hereafter shall in any way belong, relate or be appurtenant
thereto, (iv) all hereditaments, gas, oil, minerals (with the right to
extract, sever and remove such gas, oil and minerals), and easements, of
every nature whatsoever, located in, on or benefitting the Premises and
(v) all other rights and privileges thereunto belonging or appertaining
and all extensions, additions, improvements, betterments, renewals,
substitutions and replacements to or of any of the rights and interests
described in clauses (iii) and (iv) above.
"Reference Bank" means UBS.
"Register" is defined in Section 15.1(c).
"Regulation A" means Regulation A of the Federal Reserve Board
as in effect from time to time.
"Regulation T" means Regulation T of the Federal Reserve Board
as in effect from time to time.
"Regulation U" means Regulation U of the Federal Reserve Board
as in effect from time to time.
"Regulation X" means Regulation X of the Federal Reserve Board
as in effect from time to time.
"Reimbursement Date" is defined in Section 3.1(d)(i)(A).
"Reimbursement Obligations" means the aggregate non-contingent
reimbursement or repayment obligations of the Borrower with respect to
amounts drawn under Letters of Credit.
"REIT" means a domestic trust or corporation that qualifies as
a real estate investment trust under the provisions of Sections 856, et
seq. of the Internal Revenue Code.
"Release" means any release, spill, emission, leaking,
pumping, pouring, dumping, injection, deposit, disposal, abandonment, or
discarding of barrels, containers or other receptacles, discharge,
emptying, escape, dispersal, leaching or migration into the indoor or
outdoor environment or into or out of any Property, including the
movement of Contaminants through or in the air, soil, surface water,
groundwater or Property.
"Remedial Action" means actions required to (i) clean up,
remove, treat or in any other way address Contaminants in the indoor or
outdoor environment; (ii) prevent the Release or threat of Release or
minimize the further Release of Contaminants; or (iii) investigate and
determine if a remedial response is needed and to design such a response
and post-remedial investigation, monitoring, operation and maintenance
and care.
"Reportable Event" means any of the events described in
Section 4043(b) of ERISA and the regulations promulgated thereunder as
in effect from time to time but not including any such event as to which
the thirty (30) day notice requirement has been waived by applicable
PBGC regulations.
"Requirements of Law" means, as to any Person, the charter and
by-laws or other organizational or governing documents of such Person,
and any law, rule or regulation, or determination of an arbitrator or a
court or other Governmental Authority, in each case applicable to or
binding upon such Person or any of its property or to which such Person
or any of its property is subject including, without limitation, the
Securities Act, the Securities Exchange Act, Regulations T, U and X,
ERISA, the Fair Labor Standards Act, the Worker Adjustment and
Retraining Notification Act, Americans with Disabilities Act of 1990,
and any certificate of occupancy, zoning ordinance, building,
environmental or land use requirement or Permit and Environmental,
Health or Safety Requirement of Law.
"Requisite Lenders" means Lenders whose Pro Rata Shares, in
the aggregate, are greater than sixty-six and two-thirds percent
(66.67%); provided, however, that, in the event any of the Lenders shall
have failed to fund its Pro Rata Share of any Loan requested by the
Borrower which such Lenders are obligated to fund under the terms of
this Agreement and any such failure has not been cured as provided in
Section 4.2(b)(v)(B), then for so long as such failure continues,
"Requisite Lenders" means Lenders (excluding all Lenders whose failure
to fund their respective Pro Rata Shares of such Loans have not been so
cured) whose Pro Rata Shares represent more than sixty-six and two-
thirds percent (66.67%) of the aggregate Pro Rata Shares of such
Lenders; provided, further, however, that, in the event that the
Revolving Credit Commitments have been terminated pursuant to the terms
of this Agreement, "Requisite Lenders" means Lenders (without regard to
such Lenders' performance of their respective obligations hereunder)
whose aggregate ratable shares (stated as a percentage) of the aggregate
outstanding principal balance of all Loans are greater than sixty-six
and two-thirds percent (66.67%).
"Retained Properties" shall mean those real properties more
particularly described on Schedule 15.23 hereto.
"Revolving Credit Availability" means, at any particular time,
the amount by which the Maximum Revolving Credit Amount at such time
exceeds the Revolving Credit Obligations at such time.
"Revolving Credit Commitment" means, with respect to any
Lender, the obligation of such Lender to make Committed Loans and to
participate in Letters of Credit pursuant to the terms and conditions of
this Agreement, and which shall not exceed the principal amount set
forth opposite such Lender's name under the heading "Revolving Credit
Commitment" on the signature pages hereof or the signature page of the
Assignment and Acceptance by which it became a Lender, as modified from
time to time pursuant to the terms of this Agreement or to give effect
to any applicable Assignment and Acceptance, and "Revolving Credit
Commitments" means the aggregate principal amount of the Revolving
Credit Commitments of all the Lenders, the maximum amount of which shall
be $1,250,000,000, as reduced from time to time pursuant to Section 4.1.
"Revolving Credit Obligations" means, at any particular time,
the sum of (i) the outstanding principal amount of the Committed Loans
at such time, plus (ii) the Letter of Credit Obligations at such time,
plus (iii) the outstanding principal amount of the Money Market Loans at
such time.
"Revolving Credit Period" means the period from the Initial
Funding Date to the Business Day next preceding the Revolving Credit
Termination Date.
"Revolving Credit Termination Date" means the earlier to occur
of (i) August 25, 2002 (or, if not a Business Day, the next preceding
Business Day), provided, however, that the Revolving Credit Termination
Date may be extended until August 25, 2003 (or, if not a Business Day,
the next preceding Business Day) in accordance with the provisions of
Section 2.5 hereof; and (ii) the date of termination of the Revolving
Credit Commitments pursuant to the terms of this Agreement.
"S&P" means Standard & Poor's Ratings Service.
"SD" means SD Property Group, Inc., an Ohio corporation
(formerly known as DeBartolo Realty Corporation).
"Secured Indebtedness" means any Indebtedness secured by a
Lien.
"Securities" means any stock, shares, voting trust
certificates, partnership interests, bonds, debentures, notes or other
evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known
as "securities", including, without limitation, any "security" as such
term is defined in Section 8-102 of the Uniform Commercial Code, or any
certificates of interest, shares, or participations in temporary or
interim certificates for the purchase or acquisition of, or any right to
subscribe to, purchase or acquire any of the foregoing, but shall not
include the Notes or any other evidence of the Obligations.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, and any successor statute.
"Senior Managing Agents" means Citicorp Real Estate, Inc.,
Fleet National Bank, Bayerische Hypo- Und Vereinsbank AG, acting through
its New York Branch, and Commerzbank AG, New York Branch.
"Solvent", when used with respect to any Person, means that at
the time of determination:
1.1.0.0.7. the fair saleable value of its assets is in
excess of the total amount of its liabilities (including,
without limitation, contingent liabilities); and
1.1.0.0.8. the present fair saleable value of its assets
is greater than its probable liability on its existing debts
as such debts become absolute and matured; and
1.1.0.0.9. it is then able and expects to be able to pay its
debts (including, without limitation, contingent debts and other
commitments) as they mature; and
1.1.0.0.10. it has capital sufficient to carry on its business
as conducted and as proposed to be conducted.
"SPG" means SPG Properties, Inc., a Maryland corporation.
"Standby Letter of Credit" means any letter of credit issued
by an Issuing Bank pursuant to Section 3.1 for the account of the
Borrower, which is not a Commercial Letter of Credit.
"Subsidiary" of a Person means any corporation, limited
liability company, general or limited partnership, or other entity of
which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons
performing similar functions are at the time directly or indirectly
owned or controlled by such Person, one or more of the other
subsidiaries of such Person or any combination thereof.
"Taxes" is defined in Section 13.1(a).
"Tenant Allowance" means a cash allowance paid to a tenant by
the landlord pursuant to a Lease.
"TI Work" means any construction or other "build-out" of
tenant leasehold improvements to the space demised to such tenant under
Leases (excluding such tenant's furniture, fixtures and equipment)
performed pursuant to the terms of such Leases, whether or not such
tenant improvement work is performed by or on behalf of the landlord or
as part of a Tenant Allowance.
"Total Adjusted Outstanding Indebtedness" means, for any
period, the sum of (i) the amount of Indebtedness of the Consolidated
Businesses set forth on the then most recent quarterly financial
statements of the Borrower and (ii) the outstanding amount of Minority
Holding Indebtedness allocable in accordance with GAAP to any of the
Consolidated Businesses as of the time of determination and (iii) the
Contingent Obligations of the Consolidated Businesses and, to the extent
allocable to the Consolidated Businesses in accordance with GAAP, of the
Minority Holdings.
"Total Unsecured Outstanding Indebtedness" means that portion
of Total Adjusted Outstanding Indebtedness that is not secured by a
Lien.
"UBS" means UBS AG, Stamford Branch.
"Unencumbered Combined EBITDA" means that portion of Combined
EBITDA which represents revenues earned from the Management Company (up
to 5% of Combined EBITDA) or from Real Property that is not subject to
or encumbered by Secured Indebtedness and is not subject to any
agreements (other than those agreements more particularly described on
Schedule 1.1.5), the effect of which would be to restrict, directly or
indirectly, the ability of the owner of such Property from granting
Liens thereon, calculated on the first day of each fiscal quarter for
the four immediately preceding consecutive fiscal quarters.
"Uniform Commercial Code" means the Uniform Commercial Code as
enacted in the State of New York, as it may be amended from time to
time.
"Unsecured Debt Yield" is defined in Section 10.12(e).
"Unsecured Interest Expense" means the interest expense
incurred on the Total Unsecured Outstanding Indebtedness.
"Unused Commitment Fee" is defined in Section 5.3 (b).
"Unused Commitment Fee Percentage" shall be 0.25%. The Unused
Commitment Fee shall not be payable during the time, from time to time,
that the Borrower maintains an Investment Grade Credit Rating.
"Unused Facility" shall mean the amount, calculated daily, by
which the Revolving Credit Commitments exceed the sum of (i) the
outstanding principal amount of the Committed Loans, plus (ii) the
outstanding Reimbursement Obligations, plus (iii) the aggregate undrawn
face amount of all outstanding Letters of Credit.
1.2. Computation of Time Periods. In this
Agreement, in the computation of periods of time
from a specified date to a later specified date, the
word "from" means "from and including" and the words
"to" and "until" each mean "to but excluding".
Periods of days referred to in this Agreement shall
be counted in calendar days unless Business Days are
expressly prescribed. Any period determined
hereunder by reference to a month or months or year
or years shall end on the day in the relevant
calendar month in the relevant year, if applicable,
immediately preceding the date numerically
corresponding to the first day of such period,
provided that if such period commences on the last
day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar
month during which such period is to end), such
period shall, unless otherwise expressly required by
the other provisions of this Agreement, end on the
last day of the calendar month.
1.3. Accounting Terms. Subject to Section 15.4,
for purposes of this Agreement, all accounting terms
not otherwise defined herein shall have the meanings
assigned to them in conformity with GAAP.
1.4. Other Terms. All other terms contained in
this Agreement shall, unless the context indicates
otherwise, have the meanings assigned to such terms
by the Uniform Commercial Code to the extent the
same are defined therein.
ARTICLE 2.
AMOUNTS AND TERMS OF LOANS
2.1. Committed Loans.
2.1.1.Availability. Subject to the terms and
conditions set forth in this Agreement, each Lender
hereby severally and not jointly agrees to make
revolving loans, in Dollars (each individually, a
"Committed Loan" and, collectively, the "Committed
Loans") to the Borrower from time to time during the
Revolving Credit Period, in an amount not to exceed
such Lender's Pro Rata Share of the Revolving Credit
Availability at such time. All Committed Loans
comprising the same Borrowing under this Agreement
shall be made by the Lenders simultaneously and
proportionately to their then respective Pro Rata
Shares, it being understood that no Lender shall be
responsible for any failure by any other Lender to
perform its obligation to make a Committed Loan
hereunder nor shall the Revolving Credit Commitment
of any Lender be increased or decreased as a result
of any such failure. Subject to the provisions of
this Agreement, the Borrower may repay any
outstanding Committed Loan on any day which is a
Business Day and any amounts so repaid may be
reborrowed, up to the amount available under this
Section 2.1(a) at the time of such Borrowing, until
the Business Day next preceding the Revolving Credit
Termination Date. Each requested Borrowing of
Committed Loans funded on any Funding Date shall be
in a principal amount of at least $1,500,000;
provided, however, that if the Revolving Credit
Availability at the time of such requested Borrowing
is less than $1,500,000, then the requested
Borrowing shall be for the total amount of the
Revolving Credit Availability.
2.1.2.Notice of Committed Borrowing. When the
Borrower desires to borrow under this Section 2.1,
it shall deliver to the Payment and Disbursement
Agent a Notice of Committed Borrowing, signed by it
(i) no later than 12:00 noon (New York time) on the
Business Day immediately preceding the proposed
Funding Date, in the case of a Borrowing of Base
Rate Loans, (ii) no later than 10:00 a.m. (New York
time) on the Business Day immediately preceding the
proposed Funding Date, in the case of a Borrowing of
IBOR Rate Loans and (iii) no later than 11:00 a.m.
(New York time) at least three (3) Business Days in
advance of the proposed Funding Date, in the case of
a Borrowing of Eurodollar Rate Loans; provided,
however, that, except in connection with the
funding(s) of the acquisition of the assets of New
England Development, no Borrowing may be made within
less than two (2) Business Days after any given
Borrowing. Such Notice of Committed Borrowing shall
specify (i) the proposed Funding Date (which shall
be a Business Day), (ii) the amount of the proposed
Borrowing, (iii) the Revolving Credit Availability
as of the date of such Notice of Borrowing, (iv)
whether the proposed Borrowing will be of Base Rate
Loans, Eurodollar Rate Loans or IBOR Rate Loans, (v)
in the case of Eurodollar Rate Loans or IBOR Rate
Loans, the requested Eurodollar Interest Period or
IBOR Interest Period, as applicable, and (vi)
instructions for the disbursement of the proceeds of
the proposed Borrowing. In lieu of delivering such
a Notice of Committed Borrowing (except with respect
to a Borrowing of Committed Loans on the Initial
Funding Date), the Borrower may give the Payment and
Disbursement Agent telephonic notice of any proposed
Borrowing by the time required under this Section
2.1(b), if the Borrower confirms such notice by
delivery of the Notice of Borrowing to the Payment
and Disbursement Agent by facsimile transmission
promptly, but in no event later than 3:00 p.m. (New
York time) on the same day. Any Notice of Borrowing
(or telephonic notice in lieu thereof) given
pursuant to this Section 2.1(b) shall be
irrevocable.
2.1.2.0.1. Making of Loans. 2.1.2.0.1. Promptly
after receipt of a Notice of Committed Borrowing under Section
2.1(b) (or telephonic notice in lieu thereof), the Payment and
Disbursement Agent shall notify each Lender by facsimile
transmission, or other similar form of transmission, of the
proposed Borrowing (which notice to the Lenders, in the case of a
Borrowing of Eurodollar Rate Loans, shall be at least three (3)
Business Days in advance of the proposed Funding Date for such
Loans). Each Lender shall deposit an amount equal to its Pro Rata
Share of the Borrowing requested by the Borrower with the Payment
and Disbursement Agent at its office in New York, New York, in
immediately available funds, not later than 12:00 noon (New York
time) on the respective Funding Date therefor. Subject to the
fulfillment of the conditions precedent set forth in Section 6.1 or
Section 6.2, as applicable, the Payment and Disbursement Agent
shall make the proceeds of such amounts received by it available to
the Borrower at the Payment and Disbursement Agent's office in New
York, New York on such Funding Date (or on the date received if
later than such Funding Date) and shall disburse such proceeds in
accordance with the Borrower's disbursement instructions set forth
in the applicable Notice of Borrowing. The failure of any Lender
to deposit the amount described above with the Payment and
Disbursement Agent on the applicable Funding Date shall not relieve
any other Lender of its obligations hereunder to make its Committed
Loan on such Funding Date. In the event the conditions precedent
set forth in Section 6.1 or 6.2 are not fulfilled as of the
proposed Funding Date for any Borrowing, the Payment and
Disbursement Agent shall promptly return, by wire transfer of
immediately available funds, the amount deposited by each Lender to
such Lender.
2.1.2.0.2. Unless the Payment and Disbursement Agent
shall have been notified by any Lender on the Business Day
immediately preceding the applicable Funding Date in respect of any
Borrowing that such Lender does not intend to fund its Committed
Loan requested to be made on such Funding Date, the Payment and
Disbursement Agent may assume that such Lender has funded its
Committed Loan and is depositing the proceeds thereof with the
Payment and Disbursement Agent on the Funding Date therefor, and
the Payment and Disbursement Agent in its sole discretion may, but
shall not be obligated to, disburse a corresponding amount to the
Borrower on the applicable Funding Date. If the Loan proceeds
corresponding to that amount are advanced to the Borrower by the
Payment and Disbursement Agent but are not in fact deposited with
the Payment and Disbursement Agent by such Lender on or prior to
the applicable Funding Date, such Lender agrees to pay, and in
addition the Borrower agrees to repay, to the Payment and
Disbursement Agent forthwith on demand such corresponding amount,
together with interest thereon, for each day from the date such
amount is disbursed to or for the benefit of the Borrower until the
date such amount is paid or repaid to the Payment and Disbursement
Agent, at the interest rate applicable to such Borrowing. If such
Lender shall pay to the Payment and Disbursement Agent the
corresponding amount, the amount so paid shall constitute such
Lender's Committed Loan, and if both such Lender and the Borrower
shall pay and repay such corresponding amount, the Payment and
Disbursement Agent shall promptly pay to the Borrower such
corresponding amount. This Section 2.1(c)(ii) does not relieve any
Lender of its obligation to make its Committed Loan on any
applicable Funding Date.
2.2. Money Market Loans.
2.2.1. The Money Market Option. From time to time
during the Revolving Credit Period, and provided
that at such time the Borrower maintains an
Investment Grade Credit Rating, the Borrower may, as
set forth in this Section 2.2, request the Lenders
during the Revolving Credit Period to make offers to
make Money Market Loans to the Borrower, provided
that the aggregate outstanding amount of such Money
Market Loans shall not exceed, at any time, the
lesser of (i) fifty percent (50%) of the Maximum
Revolving Credit Amount and (ii) the Revolving
Credit Availability. Subject to the provisions of
this Agreement, the Borrower may repay any
outstanding Money Market Loan on any day which is a
Business Day and any amounts so repaid may be
reborrowed, up to the amount available under this
Section 2.2(a) at the time of such Borrowing, until
the Business Day next preceding the Revolving Credit
Termination Date. The Lenders may, but shall have
no obligation to, make such offers and the Borrower
may, but shall have no obligation to, accept any
such offers in the manner set forth in this Section
2.2.
2.2.2. Money Market Quote Request. When the
Borrower wishes to request offers to make Money
Market Loans under this Section, it shall transmit
to the Payment and Disbursement Agent by telex or
facsimile transmission a Money Market Quote Request
substantially in the form of Exhibit H hereto so as
to be received not later than 10:30 A.M. (New York
City time) on the fifth (5th) Business Day prior to
the date of Borrowing proposed therein (or such
other time or date as the Borrower and the Payment
and Disbursement Agent shall have mutually agreed
and shall have notified to the Lenders not later
than the date of the Money Market Quote Request for
the first LIBOR Auction or IBOR Auction (as
applicable) for which such change is to be
effective) specifying:
2.2.2.0.1. whether the proposed Borrowing is to be of
Eurodollar Money Market Loans or IBOR Money Market Loans,
2.2.2.0.2. the proposed date of Borrowing, which shall be a
Business Day,
2.2.2.0.3. the aggregate amount of such Borrowing, which
shall be $25,000,000 or a larger multiple of $1,000,000,
2.2.2.0.4. the duration of the Eurodollar Interest
Period applicable thereto, or the IBOR Interest Period applicable
thereto (as applicable), subject, in each case, to the provisions
of Section 5.2(b), and
(iv) the amount of all Money Market Loans then outstanding
(which, together with the requested Borrowing shall not exceed, in the
aggregate, the lesser of (A) fifty percent (50%) of the Maximum
Revolving Credit Amount and (B) the Revolving Credit Availability).
The Borrower may request offers to make Money Market Loans for more than
one Eurodollar Interest Period or IBOR Interest Period in a single Money
Market Quote Request. Borrower may not make more than three (3) Money
Market Quote Requests in any thirty-day Eurodollar Interest Period.
2.2.3. Invitation for Money Market Quotes.
Promptly upon receipt of a Money Market Quote
Request, the Payment and Disbursement Agent shall
send to the Lenders by telex or facsimile
transmission an Invitation for Money Market
Quotes substantially in the form of Exhibit I
hereto, which shall constitute an invitation by
the Borrower to each Lender to submit Money
Market Quotes offering to make the Money Market
Loans to which such Money Market Quote Request
relates in accordance with this Section.
2.2.3.0.1. Submission and Contents of Money Market
Quotes. 2.2.3.0.1. Each Lender may submit a Money Market Quote
containing an offer or offers to make Money Market Loans in
response to any Invitation for Money Market Quotes. Each Money
Market Quote must comply with the requirements of this subsection
(d) and must be submitted to the Payment and Disbursement Agent by
telex or facsimile transmission not later than 2:00 P.M. (New York
City time) on the fourth (4th) Business Day prior to the proposed
date of Borrowing, in the case of a LIBOR Auction or an IBOR
Auction (or such other time or date as the Borrower and the Payment
and Disbursement Agent shall have mutually agreed and shall have
notified to the Lenders not later than the date of the Money Market
Quote Request for the first LIBOR Auction or IBOR Auction (as
applicable) for which such change is to be effective); provided
that Money Market Quotes submitted by the Payment and Disbursement
Agent (or any affiliate of the Payment and Disbursement Agent) in
the capacity of a Lender may be submitted, and may only be
submitted, if the Payment and Disbursement Agent or such affiliate
notifies the Borrower of the terms of the offer or offers contained
therein not later than one hour prior to the deadline for the other
Lenders. Any Money Market Quote so made shall be irrevocable
except with the written consent of the Payment and Disbursement
Agent given on the instructions of the Borrower. All or any
portion of Money Market Loans to be funded pursuant to a Money
Market Quote may, as provided in Section 15.1(f), be funded by a
Lender's Designated Bank. A Lender making a Money Market Quote
may, but shall not be required to, specify in its Money Market
Quote whether all or any portion of the related Money Market Loans
are intended to be funded by such Lender's Designated Bank, as
provided in Section 15.1(f).
2.2.3.0.2. Each Money Market Quote shall be in
substantially the form of Exhibit J hereto and shall in any case
specify:
2.2.3.0.2.1. the proposed date of Borrowing,
2.2.3.0.2.2. the principal amount of the Money Market Loan
for which each such offer is being made, which principal amount (w)
may be greater than or less than the Revolving Credit Commitment of
the quoting Lender, (x) must be $5,000,000 or a larger multiple of
$1,000,000, (y) may not exceed the principal amount of Money Market
Loans for which offers were requested and (z) may be subject to an
aggregate limitation as to the principal amount of Money Market
Loans for which offers being made by such quoting Lender may be
accepted,
2.2.3.0.2.3. either (1) the margin above or below the
applicable Eurodollar Rate or IBOR Rate (each, a "Money Market
Margin") offered for each such Money Market Loan, expressed as a
percentage (specified to the nearest 1/10,000th of 1%) to be added
to or subtracted from such base rate, or (2) a flat rate of
interest (each, a "Money Market Rate") offered for each Money
Market Loan, and
2.2.3.0.2.4. the identity of the quoting Lender.
A Money Market Quote may set forth up to five separate offers by the
quoting Lender with respect to each Eurodollar Interest Period or IBOR
Interest Period specified in the related Invitation for Money Market
Quotes.
2.2.3.0.3. Any Money Market Quote shall be disregarded
if it:
2.2.3.0.3.1. is not substantially in conformity with Exhibit
J hereto or does not specify all of the information required by
subsection (d)(ii) above;
2.2.3.0.3.2. proposes terms other than or in addition to
those set forth in the applicable Invitation for Money Market
Quotes; or
2.2.3.0.3.3. arrives after the time set forth in subsection
(d)(i).
2.2.4. Notice to Borrower. The Payment
and Disbursement Agent shall promptly notify the
Borrower of the terms (x) of any Money Market
Quote submitted by a Lender that is in accordance
with subsection (d) and (y) of any Money Market
Quote that amends, modifies or is otherwise
inconsistent with a previous Money Market Quote
submitted by such Lender with respect to the same
Money Market Quote Request. Any such subsequent
Money Market Quote shall be disregarded by the
Payment and Disbursement Agent unless such
subsequent Money Market Quote is submitted solely
to correct a manifest error in such former Money
Market Quote. The Payment and Disbursement
Agent's notice to the Borrower shall specify (A)
the aggregate principal amount of Money Market
Loans for which offers have been received for each
Interest Period specified in the related Money
Market Quote Request, (B) the principal amounts
and Money Market Margin or Money Market Rate, as
the case may be, so offered and (C) if applicable,
limitations on the aggregate principal amount of
Money Market Loans for which offers in any single
Money Market Quote may be accepted.
2.2.5. Acceptance and Notice by Borrower.
Not later than 6:00 P.M. (New York City time) on
the fourth Business Day prior to the proposed date
of Borrowing (or such other time or date as the
Borrower and the Payment and Disbursement Agent
shall have mutually agreed and shall have notified
to the Lenders not later than the date of the
Money Market Quote Request for the first LIBOR
Auction or IBOR Auction (as applicable) for which
such change is to be effective), the Borrower
shall telephonically notify the Payment and
Disbursement Agent of its acceptance or
non-acceptance of the offers so notified to it
pursuant to subsection (e), and the Borrower shall
confirm such telephonic notification in writing
not later than the third Business Day prior to the
proposed date of Borrowing. In the case of
acceptance, such notice (a "Notice of Money Market
Borrowing"), whether telephonic or in writing,
shall specify the aggregate principal amount of
offers for each Eurodollar Interest Period and/or
each IBOR Interest Period that are accepted. The
Borrower may accept any Money Market Quote in
whole or in part; provided that:
2.2.5.0.1. the aggregate principal amount of each Money
Market Borrowing may not exceed the applicable amount set forth in
the related Money Market Quote Request;
2.2.5.0.2. the principal amount of each Money Market Borrowing
must be $5,000,000 or a larger multiple of $1,000,000;
2.2.5.0.3. acceptance of offers may only be made on the basis
of ascending Money Market Quotes; and
2.2.5.0.4. the Borrower may not accept any offer that is
described in subsection (d)(iii) or that otherwise fails to comply
with the requirements of this Agreement.
2.2.6. Allocation by Payment and Disbursement
Agent. If offers are made by two or more Lenders with the
same Money Market Margins and/or Money Market Rates, for a
greater aggregate principal amount than the amount in
respect of which such offers are accepted for the related
Eurodollar Interest Period and/or IBOR Interest Period, as
applicable, the principal amount of Money Market Loans in
respect of which such offers are accepted shall be
allocated by the Payment and Disbursement Agent among such
Lenders as nearly as possible (in multiples of $1,000,000,
as the Payment and Disbursement Agent may deem appropriate)
in proportion to the aggregate principal amounts of such
offers. Determinations by the Payment and Disbursement
Agent of the amounts of Money Market Loans shall be
conclusive in the absence of manifest error.
2.2.7. Notification by Payment and Disbursement
Agent. Upon receipt of the Borrower's Notice of Money
Market Borrowing in accordance with Section 2.2(f) hereof,
the Payment and Disbursement Agent shall, on the date such
Notice of Money Market Borrowing is received by the Payment
and Disbursement Agent, notify each Lender of the principal
amount of the Money Market Borrowing accepted by the
Borrower and of such Lender's share (if any) of such Money
Market Borrowing and such Notice of Money Market Borrowing
shall not thereafter be revocable by the Borrower. A Lender
who is notified that it has been selected to make a Money
Market Loan may designate its Designated Bank (if any) to
fund such Money Market Loan on its behalf, as described in
Section 15.1(f). Any Designated Bank which funds a Money
Market Loan shall on and after the time of such funding
become the obligee under such Money Market Loan and be
entitled to receive payment thereof when due. No Lender
shall be relieved of its obligation to fund a Money Market
Loan, and no Designated Bank shall assume such obligation,
prior to the time the applicable Money Market Loan is
funded.
2.3. Use of Proceeds of Loans and Letters of Credit. The
proceeds of the Loans and the Letters of Credit issued for
the account of the Borrower hereunder may be used for the
purposes of:
2.3.1. acquisition of Projects, portfolios of
Projects, or interests in Projects, similar to and
consistent with the types of Projects owned and/or operated
by the Borrower on the Closing Date;
2.3.2. acquisition of Persons or interests in
Persons that own or have direct or indirect interests in
Projects or portfolios of Projects similar to and
consistent with the types of Projects owned and/or operated
by the Borrower on the Closing Date;
2.3.3. renovation of Properties owned and operated
by the Borrower;
2.3.4. funding of TI Work and Tenant Allowances;
2.3.5. financing construction related to
Properties owned and operated by the Borrower; and
2.3.6. other general corporate, partnership and
working capital needs of the Borrower, inclusive of
repayment of Indebtedness for borrowed money;
each of which purposes described in clauses (a) through (f) above shall
be lawful general corporate, partnership and working
capital purposes of the Borrower.
2.3.7. Revolving Credit Termination Date; Maturity of
Money Market Loans. 2.3.7. The Revolving Credit
Commitments shall terminate, and all outstanding Revolving
Credit Obligations shall be paid in full (or, in the case
of unmatured Letter of Credit Obligations, provision for
payment in cash shall be made to the satisfaction of the
Lenders actually issuing Letters of Credit and the
Requisite Lenders), on the Revolving Credit Termination
Date. Each Lender's obligation to make Loans shall
terminate on the Business Day next preceding the Revolving
Credit Termination Date.
2.3.8. Each Money Market Loan included in any
Money Market Borrowing shall mature, and the principal
amount thereof shall be due and payable, together with the
accrued interest thereon, on the last day of the Eurodollar
Interest Period or, as applicable, IBOR Interest Period,
applicable to such Borrowing.
2.4. Extension Option.
2.4.1. The Borrower shall have one option
(the "Extension Option") to extend the maturity of
the Revolving Credit Commitments for a period of one
(1) year. Subject to the conditions set forth in
clause (b) below, Borrower may exercise the
Extension Option by delivering written notice (the
"Extension Notice"), together with the payment of
the Extension Fee for the account of the Lenders
(based on their respective Pro Rata Shares), to the
Payment and Disbursement Agent on or before July 11,
2002, stating that Borrower will extend the
Revolving Credit Termination Date for one (1) year.
Borrower's delivery of the Extension Notice shall be
irrevocable. In no event shall the Revolving Credit
Termination Date occur later than August , 2003.
2.4.2. The Borrower's right to exercise the
Extension Option shall be subject to the following
terms and conditions: (i) no Potential Event of
Default or Event of Default shall have occurred and
be continuing either on the date Borrower delivers
the Extension Notice to the Payment and Disbursement
Agent or on the date that this Agreement would
otherwise have terminated, (ii) the Borrower shall
be in full compliance with all covenants and
conditions set forth in this Agreement as of the
date Borrower delivers the Extension Notice to the
Agent and on the date that this Agreement would
otherwise have terminated, and (iii) the Borrower
shall have paid the Extension Fee to the Payment and
Disbursement Agent for the account of the Lenders
(based on their respective Pro Rata Shares).
2.5. Maximum Credit Facility. Notwithstanding
anything in this Agreement to the contrary, in no
event shall the aggregate principal Revolving
Credit Obligations exceed the Maximum Revolving
Credit Amount.
2.6. Authorized Agents. On the Closing Date
and from time to time thereafter, the Borrower
shall deliver to the Payment and Disbursement
Agent an Officer's Certificate setting forth the
names of the employees and agents authorized to
request Loans and Letters of Credit and to
request a conversion/continuation of any Loan and
containing a specimen signature of each such
employee or agent. The employees and agents so
authorized shall also be authorized to act for
the Borrower in respect of all other matters
relating to the Loan Documents. The Payment and
Disbursement Agent, the Arrangers, the Co-Agents,
the Lenders and any Issuing Bank shall be
entitled to rely conclusively on such employee's
or agent's authority to request such Loan or
Letter of Credit or such conversion/continuation
until the Payment and Disbursement Agent and the
Arrangers receive written notice to the contrary.
None of the Payment and Disbursement Agent or the
Arrangers shall have any duty to verify the
authenticity of the signature appearing on any
written Notice of Borrowing or Notice of
Conversion/Continuation or any other document,
and, with respect to an oral request for such a
Loan or Letter of Credit or such
conversion/continuation, the Payment and
Disbursement Agent and the Arrangers shall have
no duty to verify the identity of any person
representing himself or herself as one of the
employees or agents authorized to make such
request or otherwise to act on behalf of the
Borrower. None of the Payment and Disbursement
Agent, the Arrangers or the Lenders shall incur
any liability to the Borrower or any other Person
in acting upon any telephonic or facsimile notice
referred to above which the Payment and
Disbursement Agent or the Arrangers believes to
have been given by a person duly authorized to
act on behalf of the Borrower and the Borrower
hereby indemnifies and holds harmless the Payment
and Disbursement Agent, each Arranger and each
other Lender from any loss or expense the Payment
and Disbursement Agent, the Arrangers or the
Lenders might incur in acting in good faith as
provided in this Section 2.7.
ARTICLE 3.
LETTERS OF CREDIT
3.1. Letters of Credit. Subject to the terms
and conditions set forth in this Agreement,
including, without limitation, Section
3.1(c)(ii), each Arranger hereby severally agrees
to issue for the account of the Borrower one or
more Letters of Credit (any Arranger actually
issuing a Letter of Credit, an "Issuing Bank"),
subject to the following provisions:
3.1.1. Types and Amounts. An
Issuing Bank shall not have any obligation
to issue, amend or extend, and shall not
issue, amend or extend, any Letter of
Credit at any time:
3.1.1.0.1. if the aggregate Letter of Credit Obligations
with respect to such Issuing Bank, after giving effect to the
issuance, amendment or extension of the Letter of Credit requested
hereunder, shall exceed any limit imposed by law or regulation upon
such Issuing Bank;
3.1.1.0.2. if, immediately after giving effect to the
issuance, amendment or extension of such Letter of Credit, (1) the
Letter of Credit Obligations at such time would exceed $100,000,000
or (2) the Revolving Credit Obligations at such time would exceed
the Maximum Revolving Credit Amount at such time, or (3) one or
more of the conditions precedent contained in Sections 6.1 or 6.2,
as applicable, would not on such date be satisfied, unless such
conditions are thereafter satisfied and written notice of such
satisfaction is given to such Issuing Bank by the Payment and
Disbursement Agent (and such Issuing Bank shall not otherwise be
required to determine that, or take notice whether, the conditions
precedent set forth in Sections 6.1 or 6.2, as applicable, have
been satisfied);
3.1.1.0.3. which has an expiration date later than the
earlier of (A) the date one (1) year after the date of issuance
(without regard to any automatic renewal provisions thereof) or (B)
the Business Day next preceding the scheduled Revolving Credit
Termination Date; or
3.1.1.0.4. which is in a currency other than Dollars.
3.1.2. Conditions. In addition to
being subject to the satisfaction of the
conditions precedent contained in Sections
6.1 and 6.2, as applicable, the obligation
of an Issuing Bank to issue, amend or
extend any Letter of Credit is subject to
the satisfaction in full of the following
conditions:
3.1.2.0.1. if the Issuing Bank so requests, the Borrower
shall have executed and delivered to such Issuing Bank and the
Payment and Disbursement Agent a Letter of Credit Reimbursement
Agreement and such other documents and materials as may be required
pursuant to the terms thereof; and
3.1.2.0.2. the terms of the proposed Letter of Credit shall
be satisfactory to the Issuing Bank in its sole discretion.
3.1.2.0.3. Issuance of Letters of
Credit. 3.1.2.0.3. The Borrower shall give the Payment and
Disbursement Agent written notice that it requires the issuance of
a Letter of Credit not later than 11:00 a.m. (New York time) on the
third (3rd) Business Day preceding the requested date for issuance
thereof under this Agreement. Such notice shall be irrevocable
unless and until such request is denied by the applicable Arranger
and shall specify (A) that the requested Letter of Credit is either
a Commercial Letter of Credit or a Standby Letter of Credit, (B)
that such Letter of Credit is solely for the account of the
Borrower, (C) the stated amount of the Letter of Credit requested,
(D) the effective date (which shall be a Business Day) of issuance
of such Letter of Credit, (E) the date on which such Letter of
Credit is to expire (which shall be a Business Day and no later
than the Business Day immediately preceding the scheduled Revolving
Credit Termination Date), (F) the Person for whose benefit such
Letter of Credit is to be issued, (G) other relevant terms of such
Letter of Credit, (H) the Revolving Credit Availability at such
time, and (I) the amount of the then outstanding Letter of Credit
Obligations.
(ii) The Arrangers shall jointly select one Arranger to act as
Issuing Bank with respect to such Letter of Credit, which selection
shall be in the sole discretion of the Arrangers. If such Arranger
declines to issue the Letter of Credit, the Arrangers shall jointly
select an alternative Lender to issue such Letter of Credit.
(iii) The selected Arranger (if not the Payment and
Disbursement Agent) shall give the Payment and Disbursement Agent
written notice, or telephonic notice confirmed promptly thereafter in
writing, of the issuance, amendment or extension of a Letter of Credit
(which notice the Payment and Disbursement Agent shall promptly transmit
by telegram, facsimile transmission, or similar transmission to each
Lender).
3.1.3. Reimbursement Obligations;
Duties of Issuing Banks and other Lenders.
3.1.3.0.1. Notwithstanding any provisions to the
contrary in any Letter of Credit Reimbursement Agreement:
3.1.3.0.1.1. the Borrower shall reimburse the Issuing Bank
for amounts drawn under its Letter of Credit, in Dollars, no later
than the date (the "Reimbursement Date") which is the earlier of
(I) the time specified in the applicable Letter of Credit
Reimbursement Agreement and (II) three (3) Business Days after the
Borrower receives written notice from the Issuing Bank that payment
has been made under such Letter of Credit by the Issuing Bank; and
3.1.3.0.1.2. all Reimbursement Obligations with respect to
any Letter of Credit shall bear interest at the rate applicable to
Base Rate Loans in accordance with Section 5.1(a) from the date of
the relevant drawing under such Letter of Credit until the
Reimbursement Date and thereafter at the rate applicable to Base
Rate Loans in accordance with Section 5.1(d).
3.1.3.0.2. The Issuing Bank shall give the Payment and
Disbursement Agent written notice, or telephonic notice confirmed
promptly thereafter in writing, of all drawings under a Letter of
Credit and the payment (or the failure to pay when due) by the
Borrower on account of a Reimbursement Obligation (which notice the
Payment and Disbursement Agent shall promptly transmit by telegram,
facsimile transmission or similar transmission to each Lender).
3.1.3.0.3. No action taken or omitted in good faith by an
Issuing Bank under or in connection with any Letter of Credit shall
put such Issuing Bank under any resulting liability to any Lender,
the Borrower or, so long as it is not issued in violation of
Section 3.1(a), relieve any Lender of its obligations hereunder to
such Issuing Bank. Solely as between the Issuing Banks and the
other Lenders, in determining whether to pay under any Letter of
Credit, the Issuing Bank shall have no obligation to the other
Lenders other than to confirm that any documents required to be
delivered under a respective Letter of Credit appear to have been
delivered and that they appear on their face to comply with the
requirements of such Letter of Credit.
3.1.3.0.4. Participations. 3.1.3.0.4. Immediately
upon issuance by an Issuing Bank of any Letter of Credit in
accordance with the procedures set forth in this Section 3.1, each
Lender shall be deemed to have irrevocably and unconditionally
purchased and received from that Issuing Bank, without recourse or
warranty, an undivided interest and participation in such Letter of
Credit to the extent of such Lender's Pro Rata Share, including,
without limitation, all obligations of the Borrower with respect
thereto (other than amounts owing to the Issuing Bank under Section
3.1(g)) and any security therefor and guaranty pertaining thereto.
3.1.3.0.5. If any Issuing Bank makes any payment under
any Letter of Credit and the Borrower does not repay such amount to
the Issuing Bank on the Reimbursement Date, the Issuing Bank shall
promptly notify the Payment and Disbursement Agent, which shall
promptly notify each other Lender, and each Lender shall promptly
and unconditionally pay to the Payment and Disbursement Agent for
the account of such Issuing Bank, in immediately available funds,
the amount of such Lender's Pro Rata Share of such payment (net of
that portion of such payment, if any, made by such Issuing Bank in
its capacity as an issuer of a Letter of Credit), and the Payment
and Disbursement Agent shall promptly pay to such Issuing Bank such
amounts received by it, and any other amounts received by the
Payment and Disbursement Agent for such Issuing Bank's account,
pursuant to this Section 3.1(e). If a Lender does not make its Pro
Rata Share of the amount of such payment available to the Payment
and Disbursement Agent, such Lender agrees to pay to the Payment
and Disbursement Agent for the account of the Issuing Bank,
forthwith on demand, such amount together with interest thereon at
the interest rate then applicable to Base Rate Loans in accordance
with Section 5.1(a). The failure of any Lender to make available to
the Payment and Disbursement Agent for the account of an Issuing
Bank its Pro Rata Share of any such payment shall neither relieve
any other Lender of its obligation hereunder to make available to
the Payment and Disbursement Agent for the account of such Issuing
Bank such other Lender's Pro Rata Share of any payment on the date
such payment is to be made nor increase the obligation of any other
Lender to make such payment to the Payment and Disbursement Agent.
3.1.3.0.6. Whenever an Issuing Bank receives a payment
on account of a Reimbursement Obligation, including any interest
thereon, as to which the Payment and Disbursement Agent has
previously received payments from any other Lender for the account
of such Issuing Bank pursuant to this Section 3.1(e), such Issuing
Bank shall promptly pay to the Payment and Disbursement Agent and
the Payment and Disbursement Agent shall promptly pay to each other
Lender an amount equal to such other Lender's Pro Rata Share
thereof. Each such payment shall be made by such reimbursed
Issuing Bank or the Payment and Disbursement Agent, as the case may
be, on the Business Day on which such Person receives the funds
paid to such Person pursuant to the preceding sentence, if received
prior to 11:00 a.m. (New York time) on such Business Day, and
otherwise on the next succeeding Business Day.
3.1.3.0.7. Upon the written request of any Lender, the
Issuing Banks shall furnish such requesting Lender copies of any
Letter of Credit, Letter of Credit Reimbursement Agreement, and
related amendment to which such Issuing Bank is party and such
other documentation as reasonably may be requested by the
requesting Lender.
3.1.3.0.8. The obligations of a Lender to make payments
to the Payment and Disbursement Agent for the account of any
Issuing Bank with respect to a Letter of Credit shall be
irrevocable, shall not be subject to any qualification or exception
whatsoever except willful misconduct or gross negligence of such
Issuing Bank, and shall be honored in accordance with this
Article III (irrespective of the satisfaction of the conditions
described in Sections 6.1 and 6.2, as applicable) under all
circumstances, including, without limitation, any of the following
circumstances:
3.1.3.0.8.1. any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
3.1.3.0.8.2. the existence of any claim, setoff, defense or
other right which the Borrower may have at any time against a
beneficiary named in a Letter of Credit or any transferee of a
beneficiary named in a Letter of Credit (or any Person for whom any
such transferee may be acting), any Lender, or any other Person,
whether in connection with this Agreement, any Letter of Credit,
the transactions contemplated herein or any unrelated transactions
(including any underlying transactions between the account party
and beneficiary named in any Letter of Credit);
3.1.3.0.8.3. any draft, certificate or any other document
presented under the Letter of Credit having been determined to be
forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
3.1.3.0.8.4. the surrender or impairment of any security for
the performance or observance of any of the terms of any of the
Loan Documents;
3.1.3.0.8.5. any failure by that Issuing Bank to make any
reports required pursuant to Section 3.1(h) or the inaccuracy of
any such report; or
3.1.3.0.8.6. the occurrence of any Event of Default or
Potential Event of Default.
3.1.3.0.9. Payment of Reimbursement
Obligations. 3.1.3.0.9. The Borrower unconditionally agrees to
pay to each Issuing Bank, in Dollars, the amount of all
Reimbursement Obligations, interest and other amounts payable to
such Issuing Bank under or in connection with the Letters of Credit
when such amounts are due and payable, irrespective of any claim,
setoff, defense or other right which the Borrower may have at any
time against any Issuing Bank or any other Person.
3.1.3.0.10. In the event any payment by the Borrower
received by an Issuing Bank with respect to a Letter of Credit and
distributed by the Payment and Disbursement Agent to the Lenders on
account of their participations is thereafter set aside, avoided or
recovered from such Issuing Bank in connection with any
receivership, liquidation or bankruptcy proceeding, each Lender
which received such distribution shall, upon demand by such Issuing
Bank, contribute such Lender's Pro Rata Share of the amount set
aside, avoided or recovered together with interest at the rate
required to be paid by such Issuing Bank upon the amount required
to be repaid by it.
3.1.4. Letter of Credit Fee
Charges. In connection with each Letter
of Credit, Borrower hereby covenants to
pay to the Payment and Disbursement Agent
the following fees each payable quarterly
in arrears (on the first Business Day of
each calendar quarter following the
issuance of each Letter of Credit): (1) a
fee for the account of the Lenders,
computed daily on the amount of the Letter
of Credit issued and outstanding at a rate
per annum equal to the "Banks' L/C Fee
Rate" (as hereinafter defined) and (2) a
fee, for the Issuing Bank's own account,
computed daily on the amount of the Letter
of Credit issued and outstanding at a rate
per annum equal to 0.125%. For purposes
of this Agreement, the "Banks' L/C Fee
Rate" shall mean, at any time, a rate per
annum equal to the Applicable Margin for
Eurodollar Rate Loans less 0.125% per
annum. It is understood and agreed that
the last installment of the fees provided
for in this paragraph (g) with respect to
any particular Letter of Credit shall be
due and payable on the first day of the
fiscal quarter following the return,
undrawn, or cancellation of such Letter of
Credit. In addition, the Borrower shall
pay to each Issuing Bank, solely for its
own account, the standard charges assessed
by such Issuing Bank in connection with
the issuance, administration, amendment
and payment or cancellation of Letters of
Credit and such compensation in respect of
such Letters of Credit for the Borrower's
account as may be agreed upon by the
Borrower and such Issuing Bank from time
to time.
3.1.5. Letter of Credit Reporting
Requirements. Each Issuing Bank shall, no
later than the tenth (10th) Business Day
following the last day of each calendar
month, provide to the Payment and
Disbursement Agent, the Borrower, and each
other Lender separate schedules for
Commercial Letters of Credit and Standby
Letters of Credit issued as Letters of
Credit, in form and substance reasonably
satisfactory to the Payment and
Disbursement Agent, setting forth the
aggregate Letter of Credit Obligations
outstanding to it at the end of each month
and, to the extent not otherwise provided
in accordance with the provisions of
Section 3.1(c)(ii), any information
requested by the Payment and Disbursement
Agent or the Borrower relating to the date
of issue, account party, amount,
expiration date and reference number of
each Letter of Credit issued by it.
3.1.5.0.1. Indemnification; Exoneration. 3.1.5.0.1.
In addition to all other amounts payable to an Issuing Bank, the
Borrower hereby agrees to defend, indemnify, and save the Payment
and Disbursement Agent, each Issuing Bank, and each other Lender
harmless from and against any and all claims, demands, liabilities,
penalties, damages, losses (other than loss of profits), costs,
charges and expenses (including reasonable attorneys' fees but
excluding taxes) which the Payment and Disbursement Agent, the
Issuing Banks, or such other Lender may incur or be subject to as a
consequence, direct or indirect, of (A) the issuance of any Letter
of Credit other than as a result of the gross negligence or willful
misconduct of the Issuing Bank, as determined by a court of
competent jurisdiction, or (B) the failure of the Issuing Bank to
honor a drawing under such Letter of Credit as a result of any act
or omission, whether rightful or wrongful, of any present or future
de jure or de facto government or Governmental Authority.
3.1.5.0.2. As between the Borrower on the one hand and the
Lenders on the other hand, the Borrower assumes all risks of the
acts and omissions of, or misuse of Letters of Credit by, the
respective beneficiaries of the Letters of Credit. In furtherance
and not in limitation of the foregoing, subject to the provisions
of the Letter of Credit Reimbursement Agreements, the Payment and
Disbursement Agent, the Issuing Banks and the other Lenders shall
not be responsible for: (A) the form, validity, legality,
sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and
issuance of the Letters of Credit, even if it should in fact prove
to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (B) the validity, legality or sufficiency of
any instrument transferring or assigning or purporting to transfer
or assign a 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; (C) failure of the
beneficiary of a Letter of Credit to duly comply with conditions
required in order to draw upon such Letter of Credit; (D) errors,
omissions, interruptions or delays in transmission or delivery of
any messages, by mail, cable, telegraph, telex or otherwise,
whether or not they be in cipher; (E) errors in interpretation of
technical terms; (F) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under
any Letter of Credit or of the proceeds thereof; (G) the
misapplication by the beneficiary of a Letter of Credit of the
proceeds of any drawing under such Letter of Credit; and (H) any
consequences arising from causes beyond the control of the Payment
and Disbursement Agent, the Issuing Banks or the other Lenders.
3.2. Obligations Several. The obligations of
the Payment and Disbursement Agent, each Issuing
Bank, and each other Lender under this Article
III are several and not joint, and no Issuing
Bank or other Lender shall be responsible for the
obligation to issue Letters of Credit or
participation obligation hereunder, respectively,
of any other Issuing Bank or other Lender.
ARTICLE 4.
PAYMENTS AND PREPAYMENTS
4.1. Prepayments; Reductions in Revolving
Credit Commitments.
4.1.1. Voluntary Prepayments. The
Borrower may, at any time and from time to
time, prepay the Loans in part or in their
entirety, subject to the following
limitations. The Borrower shall give at
least five (5) Business Days' prior
written notice to the Payment and
Disbursement Agent (which the Payment and
Disbursement Agent shall promptly transmit
to each Lender) of any prepayment in the
entirety to be made prior to the
occurrence of an Event of Default, which
notice of prepayment shall specify the
date (which shall be a Business Day) of
prepayment. When notice of prepayment is
delivered as provided herein, the
outstanding principal amount of the Loans
on the prepayment date specified in the
notice shall become due and payable on
such prepayment date. Each voluntary
partial prepayment of the Loans shall be
in a minimum amount of $1,000,000 and in
integral multiples of $1,000,000 in excess
of that amount. Eurodollar Rate Loans,
IBOR Rate Loans, and Money Market Loans
may be prepaid in part or in their
entirety only upon payment of the amounts
described in Section 5.2(f).
4.1.2. Voluntary Reductions In
Revolving Credit Commitments. The
Borrower may, upon at least fifteen (15)
days' prior written notice to the Payment
and Disbursement Agent (which the Payment
and Disbursement Agent shall promptly
transmit to each Lender), at any time and
from time to time, terminate in whole or
permanently reduce in part the Revolving
Credit Commitments, provided that the
Borrower shall have made whatever payment
may be required to reduce the Revolving
Credit Obligations to an amount less than
or equal to the Revolving Credit
Commitments as reduced or terminated,
which amount shall become due and payable
on the date specified in such notice. Any
partial reduction of the Revolving Credit
Commitments shall be in an aggregate
minimum amount of $1,000,000 and integral
multiples of $1,000,000 in excess of that
amount, and shall reduce the Revolving
Credit Commitment of each Lender
proportionately in accordance with its Pro
Rata Share. Any notice of termination or
reduction given to the Payment and
Disbursement Agent under this
Section 4.1(b) shall specify the date
(which shall be a Business Day) of such
termination or reduction and, with respect
to a partial reduction, the aggregate
principal amount thereof.
4.1.3. No Penalty. The
prepayments and payments in respect of
reductions and terminations described in
clauses (a) and (b) of this Section 4.1
may be made without premium or penalty
(except as provided in Section 5.2(f)).
4.1.4. Mandatory Prepayment. If
at any time from and after the Closing
Date: (i) the Borrower merges or
consolidates with another Person and the
Borrower is not the surviving entity, or
(ii) the Borrower or any Consolidated
Business sells, transfers, assigns or
conveys assets, the book value of which
(computed in accordance with GAAP but
without deduction for depreciation), in
the aggregate of all such sales,
transfers, assignments, foreclosures, or
conveyances exceeds 30% of the
Capitalization Value, or (iii) the portion
of Capitalization Value attributable to
the aggregate Limited Minority Holdings
(but excluding the Borrower's interest in
Pentagon Fashion Center) of the Borrower
and its Consolidated Businesses exceed 20%
of Capitalization Value, or (iv) the
Borrower or the Management Company ceases
to provide directly or through their
Affiliates property management and leasing
services to at least 33% of the total
number of shopping centers in which the
Borrower has an ownership interest (the
date any such event shall occur being the
"Prepayment Date"), the Revolving Credit
Commitment shall be terminated and the
Borrower shall be required to prepay the
Loans in their entirety as if the
Prepayment Date were the Revolving Credit
Termination Date. The Borrower shall
immediately make such prepayment together
with interest accrued to the date of the
prepayment on the principal amount prepaid
and shall return or cause to be returned
all Letters of Credit to the applicable
Lender. In connection with the prepayment
of any Loan prior to the maturity thereof,
the Borrower shall also pay any applicable
expenses pursuant to Section 5.2(f). Each
such prepayment shall be applied to prepay
ratably the Loans of the Lenders. Amounts
prepaid pursuant to this Section 4.1(d)
may not be reborrowed. As used in this
Section 4.1(d) only, the phrase "sells,
transfers, assigns or conveys" shall not
include (i) sales or conveyances among
Borrower and any Consolidated Businesses,
or (ii) mortgages secured by Real
Property.
4.2. Payments.
4.2.1. Manner and Time of
Payment. All payments of principal of and
interest on the Loans and Reimbursement
Obligations and other Obligations
(including, without limitation, fees and
expenses) which are payable to the Payment
and Disbursement Agent, the Arrangers or
any other Lender shall be made without
condition or reservation of right, in
immediately available funds, delivered to
the Payment and Disbursement Agent (or, in
the case of Reimbursement Obligations, to
the pertinent Arranger) not later than
12:00 noon (New York time) on the date and
at the place due, to such account of the
Payment and Disbursement Agent (or such
Arranger) as it may designate, for the
account of the Payment and Disbursement
Agent, an Arranger, or such other Lender,
as the case may be; and funds received by
the Payment and Disbursement Agent (or
such Arranger), including, without
limitation, funds in respect of any Loans
to be made on that date, not later than
12:00 noon (New York time) on any given
Business Day shall be credited against
payment to be made that day and funds
received by the Payment and Disbursement
Agent (or such Arranger) after that time
shall be deemed to have been paid on the
next succeeding Business Day. Payments
actually received by the Payment and
Disbursement Agent for the account of the
Lenders, or any of them, shall be paid to
them by the Payment and Disbursement Agent
promptly after receipt thereof, in
immediately available funds.
4.2.1.0.1. Apportionment of Payments. 4.2.1.0.1.
Subject to the provisions of Section 4.2(b)(v), all payments of
principal and interest in respect of outstanding Loans, all
payments in respect of Reimbursement Obligations, all payments of
fees and all other payments in respect of any other Obligations,
shall be allocated among such of the Lenders as are entitled
thereto, in proportion to their respective Pro Rata Shares or
otherwise as provided herein. Subject to the provisions of
Section 4.2(b)(ii), all such payments and any other amounts
received by the Payment and Disbursement Agent from or for the
benefit of the Borrower shall be applied in the following order:
4.2.1.0.1.1. to pay principal of and interest on any portion
of the Loans which the Payment and Disbursement Agent may have
advanced on behalf of any Lender other than itself for which the
Payment and Disbursement Agent has not then been reimbursed by such
Lender or the Borrower,
4.2.1.0.1.2. to pay all other Obligations then due and payable
and
4.2.1.0.1.3. as the Borrower so designates.
Unless otherwise designated by the Borrower, all principal payments in
respect of Committed Loans shall be applied first, to repay outstanding
Base Rate Loans, and then to repay outstanding Eurodollar Rate Loans and
IBOR Rate Loans, with those Eurodollar Rate Loans and IBOR Rate Loans
which have earlier expiring Interest Periods being repaid prior to those
which have later expiring Interest Periods.
4.2.1.0.2. After the occurrence of an Event of Default
and while the same is continuing, the Payment and Disbursement
Agent shall apply all payments in respect of any Obligations in the
following order:
4.2.1.0.2.1. first, to pay principal of and interest on any
portion of the Loans which the Payment and Disbursement Agent may
have advanced on behalf of any Lender other than itself for which
the Payment and Disbursement Agent has not then been reimbursed by
such Lender or the Borrower;
4.2.1.0.2.2. second, to pay Obligations in respect of any
fees, expense reimbursements or indemnities then due to the Payment
and Disbursement Agent;
4.2.1.0.2.3. third, to pay principal of and interest on
Letter of Credit Obligations (or, to the extent such Obligations
are contingent, deposited with the Payment and Disbursement Agent
to provide cash collateral in respect of such Obligations);
4.2.1.0.2.4. fourth, to pay Obligations in respect of any
fees, expense reimbursements or indemnities then due to the Lenders
and the Co-Agents;
4.2.1.0.2.5. fifth, to pay interest due in respect of Loans;
4.2.1.0.2.6. sixth, to the ratable payment or prepayment of
principal outstanding on Loans; and
4.2.1.0.2.7. seventh, to the ratable payment of all other
Obligations.
The order of priority set forth in this Section 4.2(b)(ii) and the
related provisions of this Agreement are set forth solely to determine
the rights and priorities of the Payment and Disbursement Agent, the
Arrangers, the other Lenders and other Holders as among themselves. The
order of priority set forth in clauses (C) through (G) of this Section
4.2(b)(ii) may at any time and from time to time be changed by the
Requisite Lenders without necessity of notice to or consent of or
approval by the Borrower, any Holder which is not a Lender, or any other
Person. The order of priority set forth in clauses (A) and (B) of this
Section 4.2(b)(ii) may be changed only with the prior written consent of
the Payment and Disbursement Agent.
4.2.1.0.3. The Payment and Disbursement Agent, in its
sole discretion subject only to the terms of this
Section 4.2(b)(iii), may pay from the proceeds of Loans made to the
Borrower hereunder, whether made following a request by the
Borrower pursuant to Sections 2.1 or 2.2 or a deemed request as
provided in this Section 4.2(b)(iii), all amounts payable by the
Borrower hereunder, including, without limitation, amounts payable
with respect to payments of principal, interest, Reimbursement
Obligations and fees and all reimbursements for expenses pursuant
to Section 15.2. The Borrower hereby irrevocably authorizes the
Lenders to make Loans, which Loans shall be Base Rate Loans, in
each case, upon notice from the Payment and Disbursement Agent as
described in the following sentence for the purpose of paying
principal, interest, Reimbursement Obligations and fees due from
the Borrower, reimbursing expenses pursuant to Section 15.2 and
paying any and all other amounts due and payable by the Borrower
hereunder or under the Notes, and agrees that all such Loans so
made shall be deemed to have been requested by it pursuant to
Section 2.1 as of the date of the aforementioned notice. The
Payment and Disbursement Agent shall request Loans on behalf of the
Borrower as described in the preceding sentence by notifying the
Lenders by facsimile transmission or other similar form of
transmission (which notice the Payment and Disbursement Agent shall
thereafter promptly transmit to the Borrower), of the amount and
Funding Date of the proposed Borrowing and that such Borrowing is
being requested on the Borrower's behalf pursuant to this Section
4.2(b)(iii). On the proposed Funding Date, the Lenders shall make
the requested Loans in accordance with the procedures and subject
to the conditions specified in Section 2.1.
4.2.1.0.4. Subject to Section 4.2(b)(v), the Payment and
Disbursement Agent shall promptly distribute to each Arranger and
each other Lender at its primary address set forth on the
appropriate signature page hereof or the signature page to the
Assignment and Acceptance by which it became a Lender, or at such
other address as a Lender or other Holder may request in writing,
such funds as such Person may be entitled to receive, subject to
the provisions of Article XII; provided that the Payment and
Disbursement Agent shall under no circumstances be bound to inquire
into or determine the validity, scope or priority of any interest
or entitlement of any Holder and may suspend all payments or seek
appropriate relief (including, without limitation, instructions
from the Requisite Lenders or an action in the nature of
interpleader) in the event of any doubt or dispute as to any
apportionment or distribution contemplated hereby.
4.2.1.0.5. In the event that any Lender fails to fund
its Pro Rata Share of any Loan requested by the Borrower which such
Lender is obligated to fund under the terms of this Agreement (the
funded portion of such Loan being hereinafter referred to as a "Non
Pro Rata Loan"), until the earlier of such Lender's cure of such
failure and the termination of the Revolving Credit Commitments,
the proceeds of all amounts thereafter repaid to the Payment and
Disbursement Agent by the Borrower and otherwise required to be
applied to such Lender's share of all other Obligations pursuant to
the terms of this Agreement shall be advanced to the Borrower by
the Payment and Disbursement Agent on behalf of such Lender to
cure, in full or in part, such failure by such Lender, but shall
nevertheless be deemed to have been paid to such Lender in
satisfaction of such other Obligations. Notwithstanding anything
in this Agreement to the contrary:
4.2.1.0.5.1. the foregoing provisions of this Section
4.2(b)(v) shall apply only with respect to the proceeds of payments
of Obligations and shall not affect the conversion or continuation
of Loans pursuant to Section 5.1(c);
4.2.1.0.5.2. a Lender shall be deemed to have cured its
failure to fund its Pro Rata Share of any Loan at such time as an
amount equal to such Lender's original Pro Rata Share of the
requested principal portion of such Loan is fully funded to the
Borrower, whether made by such Lender itself or by operation of the
terms of this Section 4.2(b)(v), and whether or not the Non Pro
Rata Loan with respect thereto has been repaid, converted or
continued;
4.2.1.0.5.3. amounts advanced to the Borrower to cure, in
full or in part, any such Lender's failure to fund its Pro Rata
Share of any Loan ("Cure Loans") shall bear interest at the Base
Rate in effect from time to time, and for all other purposes of
this Agreement shall be treated as if they were Base Rate Loans;
and
4.2.1.0.5.4. regardless of whether or not an Event of Default
has occurred or is continuing, and notwithstanding the instructions
of the Borrower as to its desired application, all repayments of
principal which, in accordance with the other terms of this Section
4.2, would be applied to the outstanding Base Rate Loans shall be
applied first, ratably to all Base Rate Loans constituting Non Pro
Rata Loans, second, ratably to Base Rate Loans other than those
constituting Non Pro Rata Loans or Cure Loans and, third, ratably
to Base Rate Loans constituting Cure Loans.
4.2.2. Payments on Non-Business
Days. Whenever any payment to be made by
the Borrower hereunder or under the Notes
is stated to be due on a day which is not
a Business Day, the payment shall instead
be due on the next succeeding Business Day
(or, as set forth in Section 5.2(b)(iii),
the next preceding Business Day).
4.3. Promise to Repay; Evidence of
Indebtedness.
4.3.1. Promise to Repay. The
Borrower hereby agrees to pay when due the
principal amount of each Loan which is
made to it, and further agrees to pay all
unpaid interest accrued thereon, in
accordance with the terms of this
Agreement and the Notes. The Borrower
shall execute and deliver to each Lender
on the Closing Date, a promissory note, in
form and substance acceptable to the
Payment and Disbursement Agent and such
Lender, evidencing the Loans and
thereafter shall execute and deliver such
other promissory notes as are necessary to
evidence the Loans owing to the Lenders
after giving effect to any assignment
thereof pursuant to Section 15.1, all in
form and substance acceptable to the
Payment and Disbursement Agent and the
parties to such assignment (all such
promissory notes and all amendments
thereto, replacements thereof and
substitutions therefor being collectively
referred to as the "Notes"; and "Note"
means any one of the Notes).
4.3.2. Loan Account. Each Lender
shall maintain in accordance with its
usual practice an account or accounts (a
"Loan Account") evidencing the
Indebtedness of the Borrower to such
Lender resulting from each Loan owing to
such Lender from time to time, including
the amount of principal and interest
payable and paid to such Lender from time
to time hereunder and under the Notes.
Notwithstanding the foregoing, the failure
by any Lender to maintain a Loan Account
shall in no way affect the Borrower's
obligations hereunder, including, without
limitation, the obligation to repay the
Obligations.
4.3.3. Control Account. The
Register maintained by the Payment and
Disbursement Agent pursuant to Section
15.1(c) shall include a control account,
and a subsidiary account for each Lender,
in which accounts (taken together) shall
be recorded (i) the date and amount of
each Borrowing made hereunder, the type of
Loan comprising such Borrowing and any
Eurodollar Interest Period or IBOR
Interest Period applicable thereto, (ii)
the effective date and amount of each
Assignment and Acceptance delivered to and
accepted by it and the parties thereto,
(iii) the amount of any principal or
interest due and payable or to become due
and payable from the Borrower to each
Lender hereunder or under the Notes and
(iv) the amount of any sum received by the
Payment and Disbursement Agent from the
Borrower hereunder and each Lender's share
thereof.
4.3.4. Entries Binding. The
entries made in the Register and each Loan
Account shall be conclusive and binding
for all purposes, absent manifest error.
4.3.5. No Recourse to Limited
Partners or General Partners.
Notwithstanding anything contained in this
Agreement to the contrary, it is expressly
understood and agreed that nothing herein
or in the Notes shall be construed as
creating any liability on any Limited
Partner, any General Partner, or any
partner, officer, shareholder or director
of any Limited Partner or any General
Partner, to pay any of the Obligations
other than liability arising from or in
connection with (i) fraud or (ii) the
misappropriation or misapplication of
proceeds of the Loans; but nothing
contained in this Section 4.3(e) shall be
construed to prevent the exercise of any
remedy allowed to the Payment and
Disbursement Agent, the Arrangers, the Co-
Agents or the Lenders by law or by the
terms of this Agreement or the other Loan
Documents which does not relate to or
result in such an obligation by any
Limited Partner or any General Partner (or
any partner, officer, shareholder or
director of any Limited Partner or any
General Partner) to pay money.
ARTICLE 5.
INTEREST AND FEES
5.1. Interest on the Loans and other
Obligations.
5.1.1. Rate of Interest. All
Loans and the outstanding principal
balance of all other Obligations shall
bear interest on the unpaid principal
amount thereof from the date such Loans
are made and such other Obligations are
due and payable until paid in full, except
as otherwise provided in Section 5.1(d),
as follows:
5.1.1.0.1. If a Base Rate Loan or such other Obligation,
at a rate per annum equal to the sum of (A) the Base Rate, as in
effect from time to time as interest accrues, plus (B) the then
Applicable Margin for Base Rate Loans; and
5.1.1.0.2. If a Eurodollar Rate Loan, at a rate per annum
equal to the sum of (A) the Eurodollar Rate determined for the
applicable Eurodollar Interest Period, plus (B) the then Applicable
Margin for Eurodollar Rate Loans;
5.1.1.0.3. If an IBOR Rate Loan, at a rate per annum equal to
the sum of (A) the IBOR Rate determined for the applicable IBOR
Interest Period, plus (B) the then Applicable Margin for IBOR Rate
Loans;
5.1.1.0.4. If a Eurodollar Money Market Loan, at a rate per
annum equal to either (A) the sum of (1) the Eurodollar Rate
determined for the applicable Eurodollar Interest Period
(determined as if the related Money Market Borrowing were a
Committed Eurodollar Rate Borrowing) plus (or minus) (2) the Money
Market Margin quoted by the Lender making such Money Market Loan in
accordance with Section 2.2. or (B) the Money Market Rate, as
applicable; and
5.1.1.0.5. If an IBOR Money Market Loan, at a rate per annum
equal to either (A) the sum of (1) the IBOR Rate determined for the
applicable IBOR Interest Period (determined as if the related Money
Market Borrowing were a Committed IBOR Rate Borrowing) plus (or
minus) (2) the Money Market Margin quoted by the Lender making such
Money Market Loan in accordance with Section 2.2. or (B) the Money
Market Rate, as applicable.
The applicable basis for determining the rate of interest on the Loans
shall be selected by the Borrower at the time a Notice of Borrowing or a
Notice of Conversion/Continuation is delivered by the Borrower to the
Payment and Disbursement Agent; provided, however, the Borrower may not
select the Eurodollar Rate or the IBOR Rate as the applicable basis for
determining the rate of interest on such a Loan if at the time of such
selection an Event of Default or a Potential Event of Default would
occur or has occurred and is continuing and further provided that, from
and after the occurrence of an Event of Default or a Potential Event of
Default, each Eurodollar Rate Loan and IBOR Rate Loan then outstanding
may, at the Payment and Disbursement Agent's option, convert to a Base
Rate Loan. If on any day any Loan is outstanding with respect to which
notice has not been timely delivered to the Payment and Disbursement
Agent in accordance with the terms of this Agreement specifying the
basis for determining the rate of interest on that day, then for that
day interest on that Loan shall be determined by reference to the Base
Rate.
5.1.1.0.6. Interest Payments. 5.1.1.0.6. Interest
accrued on each Committed Loan shall be calculated on the last day
of each calendar month and shall be payable in arrears (A) on the
first day of each calendar month, commencing on the first such day
following the making of such Committed Loan, and (B) if not
theretofore paid in full, at maturity (whether by acceleration or
otherwise) of such Committed Loan.
5.1.1.0.7. Interest accrued on each Money Market Loan
shall be calculated on the last day of each calendar month during
the Interest Period applicable thereto (or, if such Interest Period
is for a period one month or less, on the last day of such Interest
Period) and shall be payable in arrears (A) if such Money Market
Loan has an Interest Period longer than one month (1) on the first
day of each calendar month, commencing on the first such day
following the making of such Money Market Loan, and (2) if not
theretofore paid in full, at maturity (whether by acceleration or
otherwise) of such Money Market Loan; and (B) if such Money Market
Loan has an Interest Period of one month or less, at maturity
(whether by acceleration or otherwise) of such Money Market Loan.
5.1.1.0.8. Interest accrued on the principal balance of
all other Obligations shall be calculated on the last day of each
calendar month and shall be payable in arrears (A) on the first day
of each calendar month, commencing on the first such day following
the incurrence of such Obligation, (B) upon repayment thereof in
full or in part, and (C) if not theretofore paid in full, at the
time such other Obligation becomes due and payable (whether by
acceleration or otherwise).
5.1.1.0.9. Conversion or Continuation. 5.1.1.0.9.
The Borrower shall have the option (A) to convert at any time all
or any part of outstanding Base Rate Loans to Eurodollar Rate Loans
or IBOR Rate Loans; (B) to convert all or any part of outstanding
Eurodollar Rate Loans having Eurodollar Interest Periods which
expire on the same date to Base Rate Loans or IBOR Rate Loans on
such expiration date; (C) to convert all or any part of outstanding
IBOR Rate Loans having IBOR Interest Periods which expire on the
same date to Base Rate Loans or Eurodollar Rate Loans on such
expiration date; (D) to continue all or any part of outstanding
Eurodollar Rate Loans having Eurodollar Interest Periods which
expire on the same date as Eurodollar Rate Loans, and the
succeeding Eurodollar Interest Period of such continued Loans shall
commence on such expiration date; (E) to continue all or any part
of outstanding IBOR Rate Loans having IBOR Interest Periods which
expire on the same date as IBOR Rate Loans, and the succeeding IBOR
Interest Period of such continued Loans shall commence on such
expiration date; provided, however, no such outstanding Loan may be
continued as, or be converted into, a Eurodollar Rate Loan or an
IBOR Rate Loan (i) if the continuation of, or the conversion into,
would violate any of the provisions of Section 5.2 or (ii) if an
Event of Default or a Potential Event of Default would occur or has
occurred and is continuing. Any conversion into or continuation of
Eurodollar Rate Loans or IBOR Rate Loans under this Section 5.1(c)
shall be in a minimum amount of $1,000,000 and in integral
multiples of $100,000 in excess of that amount, except in the case
of a conversion into or a continuation of an entire Borrowing of
Non Pro Rata Loans.
5.1.1.0.10. To convert or continue a Loan under Section
5.1(c)(i), the Borrower shall deliver a Notice of
Conversion/Continuation to the Payment and Disbursement Agent no
later than 11:00 a.m. (New York time) at least three (3) Business
Days in advance of the proposed conversion/continuation date. A
Notice of Conversion/Continuation shall specify (A) the proposed
conversion/continuation date (which shall be a Business Day), (B)
the principal amount of the Loan to be converted/continued, (C)
whether such Loan shall be converted and/or continued, (D) in the
case of a conversion to, or continuation of, a Eurodollar Rate
Loan, the requested Eurodollar Interest Period, and (E) in the case
of a conversion to, or continuation of, an IBOR Rate Loan, the
requested IBOR Interest Period. In lieu of delivering a Notice of
Conversion/Continuation, the Borrower may give the Payment and
Disbursement Agent telephonic notice of any proposed
conversion/continuation by the time required under this
Section 5.1(c)(ii), if the Borrower confirms such notice by
delivery of the Notice of Conversion/Continuation to the Payment
and Disbursement Agent by facsimile transmission promptly, but in
no event later than 3:00 p.m. (New York time) on the same day.
Promptly after receipt of a Notice of Conversion/Continuation under
this Section 5.1(c)(ii) (or telephonic notice in lieu thereof), the
Payment and Disbursement Agent shall notify each Lender by
facsimile transmission, or other similar form of transmission, of
the proposed conversion/continuation. Any Notice of
Conversion/Continuation for conversion to, or continuation of, a
Loan (or telephonic notice in lieu thereof) given pursuant to this
Section 5.1(c)(ii) shall be irrevocable, and the Borrower shall be
bound to convert or continue in accordance therewith. In the event
no Notice of Conversion/Continuation is delivered as and when
specified in this Section 5.1(c)(ii) with respect to outstanding
Eurodollar Rate Loans or IBOR Rate Loans, upon the expiration of
the Interest Period applicable thereto, such Loans shall
automatically be continued as Eurodollar Rate Loans with a
Eurodollar Interest Period of thirty (30) days; provided, however,
no such outstanding Loan may be continued as, or be converted into,
a Eurodollar Rate Loan or an IBOR Rate Loan (i) if the continuation
of, or the conversion into, would violate any of the provisions of
Section 5.2 or (ii) if an Event of Default or a Potential Event of
Default would occur or has occurred and is continuing.
5.1.2. Default Interest.
Notwithstanding the rates of interest
specified in Section 5.1(a) or elsewhere
in this Agreement, effective immediately
upon the occurrence of an Event of
Default, and for as long thereafter as
such Event of Default shall be continuing,
the principal balance of all Loans and
other Obligations shall bear interest at a
rate equal to the sum of (A) the Base
Rate, as in effect from time to time as
interest accrues, plus (B) four percent
(4.0%) per annum.
5.1.3. Computation of
Interest. Interest on all Obligations
shall be computed on the basis of the
actual number of days elapsed in the
period during which interest accrues and a
year of 360 days. In computing interest
on any Loan, the date of the making of the
Loan or the first day of a Eurodollar
Interest Period, as the case may be, shall
be included and the date of payment or the
expiration date of a Eurodollar Interest
Period, as the case may be, shall be
excluded; provided, however, if a Loan is
repaid on the same day on which it is
made, one (1) day's interest shall be paid
on such Loan.
5.1.4. Eurodollar Rate
Information. Upon the reasonable request
of the Borrower from time to time, the
Payment and Disbursement Agent shall
promptly provide to the Borrower such
information with respect to the applicable
Eurodollar Rate as may be so requested.
5.1.5. IBOR Rate Information.
Upon the reasonable request of the
Borrower from time to time, the Payment
and Disbursement Agent shall promptly
provide to the Borrower such information
with respect to the applicable IBOR Rate
as may be so requested.
5.2. Special Provisions Governing Eurodollar
Rate Loans, IBOR Rate Loans, and Money Market
Loans.
5.2.1. Amount of Eurodollar Rate
Loans and IBOR Rate Loans. Each
Eurodollar Rate Loan shall be in a minimum
principal amount of $1,500,000 and in
integral multiples of $100,000 in excess
of that amount. Each IBOR Rate Loan shall
be in a minimum principal amount of
$1,500,000 and in integral multiples of
$100,000 in excess of that amount. IBOR
Rate Loans shall not, in the aggregate
outstanding at any time, exceed the lesser
of (i) $150,000,000 and (ii) the Revolving
Credit Availability.
5.2.2. Determination of Eurodollar
Interest Period. By giving notice as set
forth in Section 2.1(b) (with respect to a
Borrowing of Eurodollar Rate Loans or IBOR
Rate Loans), Section 2.2 (with respect to
a Borrowing of Money Market Loans), or
Section 5.1(c) (with respect to a
conversion into or continuation of
Eurodollar Rate Loans), the Borrower shall
have the option, subject to the other
provisions of this Section 5.2, to select
an interest period (each, an "Interest
Period") to apply to the Loans described
in such notice, subject to the following
provisions:
5.2.2.0.1. The Borrower may only select, as to a particular
Borrowing of Eurodollar Rate Loans, an Interest Period (each, a
"Eurodollar Interest Period") of one, two, three or six months in
duration or, with the prior written consent of the Arrangers, a
shorter or a longer duration;
5.2.2.0.2. The Borrower may only select, as to a particular
Borrowing of Eurodollar Money Market Loans, a Eurodollar Interest
Period of one, two, or three months in duration;
5.2.2.0.3. In the case of immediately successive Eurodollar
Interest Periods applicable to a Borrowing of Eurodollar Rate
Loans, each successive Eurodollar Interest Period shall commence on
the day on which the next preceding Eurodollar Interest Period
expires;
5.2.2.0.4. If any Eurodollar Interest Period would otherwise
expire on a day which is not a Business Day, such Eurodollar
Interest Period shall be extended to expire on the next succeeding
Business Day if the next succeeding Business Day occurs in the same
calendar month, and if there will be no succeeding Business Day in
such calendar month, the Eurodollar Interest Period shall expire on
the immediately preceding Business Day;
5.2.2.0.5. The Borrower may only select, as to a particular
Borrowing of IBOR Rate Loans, an Interest Period (each, an "IBOR
Interest Period") of fourteen (14) days in duration, provided that
no IBOR Interest Period shall exist during any IBOR Black-Out
Period;
5.2.2.0.6. The Borrower may only select, as to a particular
Borrowing of IBOR Money Market Loans, an IBOR Interest Period of
fourteen (14) days in duration, provided that no IBOR Interest
Period shall exist during any IBOR Black-Out Period;
5.2.2.0.7. In the case of immediately successive IBOR Interest
Periods applicable to a Borrowing of IBOR Rate Loans, each
successive IBOR Interest Period shall commence on the day on which
the next preceding IBOR Interest Period expires;
5.2.2.0.8. If any IBOR Interest Period would otherwise expire
on a day which is not a Business Day, such IBOR Interest Period
shall be extended to expire on the next succeeding Business Day if
the next succeeding Business Day occurs in the same calendar month,
and if there will be no succeeding Business Day in such calendar
month, the IBOR Interest Period shall expire on the immediately
preceding Business Day;
5.2.2.0.9. The Borrower may not select an IBOR Interest
Period as to any IBOR Rate Loan or IBOR Money Market Loan if such
IBOR Interest Period terminates during any IBOR Black-Out Period;
5.2.2.0.10. The Borrower may not select an Interest Period as
to any Loan if such Interest Period terminates later than the
Revolving Credit Termination Date;
5.2.2.0.11. The Borrower may not select an Interest Period
with respect to any portion of principal of a Loan which extends
beyond a date on which the Borrower is required to make a scheduled
payment of such portion of principal; and
5.2.2.0.12. There shall be no more than twelve (12) Interest
Periods in effect at any one time with respect to Eurodollar Rate
Loans or IBOR Rate Loans.
5.2.3. Determination of Eurodollar
Interest Rate and IBOR Rate.
(i) As soon as practicable on the second Business Day prior to
the first day of each Eurodollar Interest Period (the "Eurodollar
Interest Rate Determination Date"), the Payment and Disbursement
Agent shall determine (pursuant to the procedures set forth in the
definition of "Eurodollar Rate") the interest rate which shall
apply to the Eurodollar Rate Loans or Eurodollar Money Market Loans
for which an interest rate is then being determined for the
applicable Eurodollar Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to
the Borrower and to each Lender. The Payment and Disbursement
Agent's determination shall be presumed to be correct, absent
manifest error, and shall be binding upon the Borrower.
(ii) As soon as practicable on (A) the Business Day prior to
the first day of each IBOR Interest Period, with respect to an IBOR
Rate Loan and (B) the second Business Day prior to the first day of
each IBOR Interest Period with respect to an IBOR Money Market Loan
(each, an "IBOR Interest Rate Determination Date"), the Payment and
Disbursement Agent shall determine (pursuant to the procedures set
forth in the definition of "IBOR Rate") the interest rate which
shall apply to the IBOR Rate Loans or IBOR Money Market Loans for
which an interest rate is then being determined for the applicable
IBOR Interest Period and shall promptly give notice thereof (in
writing or by telephone confirmed in writing) to the Borrower and
to each Lender. The Payment and Disbursement Agent's determination
shall be presumed to be correct, absent manifest error, and shall
be binding upon the Borrower and each Lender.
5.2.4. Interest Rate
Unascertainable, Inadequate or Unfair. In
the event that at least one (1) Business
Day before a Eurodollar Interest Rate
Determination Date or an IBOR Interest
Rate Determination Date:
5.2.4.0.1. the Payment and Disbursement Agent is advised
(A) by the Reference Bank that deposits in Dollars (in the
applicable amounts) are not being offered by the Reference Bank in
the London interbank market for such Eurodollar Interest Period, or
(B) by the IBOR Reference Banks that deposits in Dollars (in the
applicable amounts) are not being offered by the Reference Banks in
the interbank market for such IBOR Interest Period; or
5.2.4.0.2. the Payment and Disbursement Agent determines
that adequate and fair means do not exist for ascertaining the
applicable interest rates by reference to which the Eurodollar Rate
or the IBOR Rate (as applicable)then being determined is to be
fixed; or
5.2.4.0.3. the Requisite Lenders advise the Payment and
Disbursement Agent that (A) the Eurodollar Rate for Eurodollar Rate
Loans comprising such Borrowing will not adequately reflect the
cost to such Requisite Lenders of obtaining funds in Dollars in the
London interbank market in the amount substantially equal to such
Lenders' Eurodollar Rate Loans in Dollars and for a period equal to
such Eurodollar Interest Period, or (B) the IBOR Rate for IBOR Rate
Loans comprising such Borrowing will not adequately reflect the
cost to such Requisite Lenders of obtaining funds in Dollars in the
interbank market in the amount substantially equal to such Lenders'
IBOR Rate Loans in Dollars and for a period equal to such IBOR
Interest Period; or
5.2.4.0.4. (A) the applicable Lender(s) advise the Payment
and Disbursement Agent that the Eurodollar Rate for Eurodollar
Money Market Loans comprising such Borrowing will not adequately
reflect the cost to such Lender(s) of obtaining funds in Dollars in
the London Interbank market in the amount substantially equal to
such Lender(s)' Money Market Loans in Dollars and for a period
equal to such Eurodollar Interest Period, or (B) the applicable
Lender(s) advise the Payment and Disbursement Agent that the IBOR
Rate for IBOR Money Market Loans comprising such Borrowing will not
adequately reflect the cost to such Lender(s) of obtaining funds in
Dollars in the interbank market in the amount substantially equal
to such Lender(s)' IBOR Money Market Loans in Dollars and for a
period equal to such IBOR Interest Period;
then the Payment and Disbursement Agent shall forthwith give notice
thereof to the Borrower, whereupon (until the Payment and Disbursement
Agent notifies the Borrower that the circumstances giving rise to such
suspension no longer exist) the right of the Borrower to elect to have
Loans bear interest based upon the Eurodollar Rate or the IBOR Rate, as
applicable, shall be suspended and each outstanding Eurodollar Rate Loan
and Eurodollar Money Market Loan or IBOR Rate Loan and IBOR Money Market
Loan, as applicable, shall be converted into a Base Rate Loan on the
last day of the then current Interest Period therefor, notwithstanding
any prior election by the Borrower to the contrary.
5.2.4.0.5. Illegality. 5.2.4.0.5. If at any time
any Lender determines (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties) that
the making or continuation of any Eurodollar Rate Loan, IBOR Rate
Loan or Money Market Loan has become unlawful or impermissible by
compliance by that Lender with any law, governmental rule,
regulation or order of any Governmental Authority (whether or not
having the force of law and whether or not failure to comply
therewith would be unlawful or would result in costs or penalties),
then, and in any such event, such Lender may give notice of that
determination, in writing, to the Borrower and the Payment and
Disbursement Agent, and the Payment and Disbursement Agent shall
promptly transmit the notice to each other Lender.
5.2.4.0.6. When notice is given by a Lender under Section
5.2(e)(i), (A) the Borrower's right to request from such Lender and
such Lender's obligation, if any, to make Eurodollar Rate Loans or
IBOR Rate Loans, as applicable, shall be immediately suspended, and
such Lender shall make a Base Rate Loan as part of any requested
Borrowing of Eurodollar Rate Loans or IBOR Rate Loans (as
applicable) and (B) if the affected Eurodollar Rate Loans, IBOR
Rate Loans, Eurodollar Money Market Loans, or IBOR Money Market
Loans are then outstanding, the Borrower shall immediately, or if
permitted by applicable law, no later than the date permitted
thereby, upon at least one (1) Business Day's prior written notice
to the Payment and Disbursement Agent and the affected Lender,
convert each such Loan into a Base Rate Loan.
5.2.4.0.7. If at any time after a Lender gives notice
under Section 5.2(e)(i) such Lender determines that it may lawfully
make Eurodollar Rate Loans and/or IBOR Rate Loans (as applicable),
such Lender shall promptly give notice of that determination, in
writing, to the Borrower and the Payment and Disbursement Agent,
and the Payment and Disbursement Agent shall promptly transmit the
notice to each other Lender. The Borrower's right to request, and
such Lender's obligation, if any, to make Eurodollar Rate Loans
and/or IBOR Rate Loans(as applicable) shall thereupon be restored.
5.2.5. Compensation. In addition
to all amounts required to be paid by the
Borrower pursuant to Section 5.1 and
Article XIII, the Borrower shall
compensate each Lender, upon demand, for
all losses, expenses and liabilities
(including, without limitation, any loss
or expense incurred by reason of the
liquidation or reemployment of deposits or
other funds acquired by such Lender to
fund or maintain such Lender's Eurodollar
Rate Loans, IBOR Rate Loans and/or Money
Market Loans to the Borrower but excluding
any loss of Applicable Margin on the
relevant Loans) which that Lender may
sustain (i) if for any reason a Borrowing,
conversion into or continuation of
Eurodollar Rate Loans and/or Eurodollar
Money Market Loans or IBOR Rate Loans
and/or IBOR Rate Money Market Loans does
not occur on a date specified therefor in
a Notice of Borrowing or a Notice of
Conversion/Continuation given by the
Borrower or in a telephonic request by it
for borrowing or conversion/ continuation
or a successive Eurodollar Interest Period
or IBOR Interest Period does not commence
after notice therefor is given pursuant to
Section 5.1(c), including, without
limitation, pursuant to Section 5.2(d),
(ii) if for any reason any Eurodollar Rate
Loan, IBOR Rate Loan or Money Market Loan
is prepaid (including, without limitation,
mandatorily pursuant to Section 4.1(d)) on
a date which is not the last day of the
applicable Interest Period, (iii) as a
consequence of a required conversion of a
Eurodollar Rate Loan, IBOR Rate Loan or
Money Market Loan to a Base Rate Loan as a
result of any of the events indicated in
Section 5.2(d), or (iv) as a consequence
of any failure by the Borrower to repay a
Eurodollar Rate Loan, IBOR Rate Loan or
Money Market Loan when required by the
terms of this Agreement. The Lender
making demand for such compensation shall
deliver to the Borrower concurrently with
such demand a written statement in
reasonable detail as to such losses,
expenses and liabilities, and this
statement shall be conclusive as to the
amount of compensation due to that Lender,
absent manifest error.
5.2.6. Booking of Eurodollar Rate
Loans, IBOR Rate Loans and Money Market
Loans. Any Lender may make, carry or
transfer Eurodollar Rate Loans, IBOR Rate
Loans and Money Market Loans at, to, or
for the account of, its Eurodollar Lending
Office or Eurodollar Affiliate or its
other offices or Affiliates. No Lender
shall be entitled, however, to receive any
greater amount under Sections 4.2 or
5.2(f) or Article XIII as a result of the
transfer of any such Eurodollar Rate Loan,
IBOR Rate Loan or Money Market Loan to any
office (other than such Eurodollar Lending
Office) or any Affiliate (other than such
Eurodollar Affiliate) than such Lender
would have been entitled to receive
immediately prior thereto, unless (i) the
transfer occurred at a time when
circumstances giving rise to the claim for
such greater amount did not exist and (ii)
such claim would have arisen even if such
transfer had not occurred.
5.2.7. Affiliates Not
Obligated. No Eurodollar Affiliate or
other Affiliate of any Lender shall be
deemed a party to this Agreement or shall
have any liability or obligation under
this Agreement.
5.2.8. Adjusted Eurodollar Rate.
Any failure by any Lender to take into
account the Eurodollar Reserve Percentage
when calculating interest due on
Eurodollar Rate Loans or Money Market
Loans shall not constitute, whether by
course of dealing or otherwise, a waiver
by such Lender of its right to collect
such amount for any future period.
5.3. Fees.
5.3.1. Facility Fee. During the
time, from time to time, that the Borrower
maintains an Investment Grade Credit
Rating, the Borrower shall pay to the
Payment and Disbursement Agent, for the
account of the Lenders based on their
respective Pro Rata Shares, a fee (the
"Facility Fee"), accruing at a per annum
rate equal to the then applicable Facility
Fee Percentage on the Maximum Revolving
Credit Amount, such fee being payable
quarterly, in arrears, commencing on the
first day of the fiscal quarter next
succeeding the Closing Date and on the
first day of each fiscal quarter
thereafter for so long as the Borrower
maintains an Investment Grade Credit
Rating; provided, however, that in the
event that the Borrower loses its
Investment Grade Credit Rating during any
fiscal quarter, the Facility Fee shall be
payable only for the portion of such
fiscal quarter during which Borrower
maintained an Investment Grade Credit
Rating. Notwithstanding the foregoing, in
the event that any Lender fails to fund
its Pro Rata Share of any Loan requested
by the Borrower which such Lender is
obligated to fund under the terms of this
Agreement, (A) such Lender shall not be
entitled to any portion of the Facility
Fee with respect to its Revolving Credit
Commitment until such failure has been
cured in accordance with Section
4.2(b)(v)(B) and (B) until such time, the
Facility Fee shall accrue in favor of the
Lenders which have funded their respective
Pro Rata Shares of such requested Loan,
shall be allocated among such performing
Lenders ratably based upon their relative
Revolving Credit Commitments, and shall be
calculated based upon the average amount
by which the aggregate Revolving Credit
Commitments of such performing Lenders
exceeds the sum of (I) the outstanding
principal amount of the Loans owing to
such performing Lenders, and (II) the
outstanding Reimbursement Obligations
owing to such performing Lenders, and
(III) the aggregate participation
interests of such performing Lenders
arising pursuant to Section 3.1(e) with
respect to undrawn and outstanding Letters
of Credit.
5.3.2. Unused Commitment Fee.
During the time, from time to time, that
the Borrower fails to maintain an
Investment Grade Credit Rating, the
Borrower shall pay to the Payment and
Disbursement Agent, for the account of the
Lenders based on their respective Pro Rata
Shares, a fee (the "Unused Commitment
Fee"), accruing at a per annum rate equal
to the then applicable Unused Commitment
Fee Percentage on the Unused Facility,
such fee being payable quarterly, in
arrears, commencing on the first day of
the fiscal quarter next succeeding the
date that the Borrower fails to maintain
an Investment Grade Credit Rating and on
the first day of each fiscal quarter
thereafter, until the Borrower regains an
Investment Grade Credit Rating; provided,
however, that in the event that the
Borrower regains an Investment Grade
Credit Rating during any fiscal quarter,
the Unused Commitment Fee shall be payable
only for the portion of such fiscal
quarter during which Borrower failed to
maintain an Investment Grade Credit
Rating. Notwithstanding the foregoing, in
the event that any Lender fails to fund
its Pro Rata Share of any Loan requested
by the Borrower which such Lender is
obligated to fund under the terms of this
Agreement, (A) such Lender shall not be
entitled to any portion of the Unused
Commitment Fee with respect to its
Revolving Credit Commitment until such
failure has been cured in accordance with
Section 4.2(b)(v)(B) and (B) until such
time, the Unused Commitment Fee shall
accrue in favor of the Lenders which have
funded their respective Pro Rata Shares of
such requested Loan, shall be allocated
among such performing Lenders ratably
based upon their relative Revolving Credit
Commitments, and shall be calculated based
upon the average amount by which the
aggregate Revolving Credit Commitments of
such performing Lenders exceeds the sum of
(I) the outstanding principal amount of
the Loans owing to such performing
Lenders, and (II) the outstanding
Reimbursement Obligations owing to such
performing Lenders, and (III) the
aggregate participation interests of such
performing Lenders arising pursuant to
Section 3.1(e) with respect to undrawn and
outstanding Letters of Credit.
5.3.3. Calculation and Payment of
Fees. All fees shall be calculated on the
basis of the actual number of days elapsed
in a 360-day year. All fees shall be
payable in addition to, and not in lieu
of, interest, compensation, expense
reimbursements, indemnification and other
Obligations. Fees shall be payable to the
Payment and Disbursement Agent at its
office in New York, New York in
immediately available funds. All fees
shall be fully earned and nonrefundable
when paid. All fees due to any Arranger
or any other Lender, including, without
limitation, those referred to in this
Section 5.3, shall bear interest, if not
paid when due, at the interest rate
specified in Section 5.1(d) and shall
constitute Obligations.
ARTICLE 6.
CONDITIONS TO LOANS AND LETTERS OF CREDIT
6.1. Conditions Precedent to the Initial Loans
and Letters of Credit. The obligation of each
Lender on the Initial Funding Date to make any
Loan requested to be made by it, and to issue
Letters of Credit, shall be subject to the
satisfaction of all of the following conditions
precedent:
6.1.1. Documents. The Payment and
Disbursement Agent shall have received on
or before the Initial Funding Date all of
the following:
6.1.1.0.1. this Agreement, the Notes, and, to the extent
not otherwise specifically referenced in this Section 6.1(a), all
other Loan Documents and agreements, documents and instruments
described in the List of Closing Documents attached hereto as
Exhibit E and made a part hereof, each duly executed and in
recordable form, where appropriate, and in form and substance
satisfactory to the Payment and Disbursement Agent; without
limiting the foregoing, the Borrower hereby directs its legal
counsel to prepare and deliver to the Agents, the Lenders, and
Skadden, Arps, Slate, Meagher & Flom LLP the legal opinions
referred to in such List of Closing Documents; and
6.1.1.0.2. such additional documentation as the Payment and
Disbursement Agent may reasonably request.
6.1.2. No Legal Impediments. No
law, regulation, order, judgment or decree
of any Governmental Authority shall, and
the Payment and Disbursement Agent shall
not have received any notice that
litigation is pending or threatened which
is likely to (i) enjoin, prohibit or
restrain the making of the Loans and/or
the issuance of Letters of Credit on the
Initial Funding Date or (ii) impose or
result in the imposition of a Material
Adverse Effect.
6.1.3. No Change in Condition. No
change in the business, assets,
management, operations, financial
condition or prospects of the Borrower or
any of its Properties shall have occurred
since March 31, 1999, which change, in the
judgment of the Payment and Disbursement
Agent, will have or is reasonably likely
to have a Material Adverse Effect.
6.1.4. Interim Liabilities and
Equity. Except as disclosed to the
Arrangers and the Lenders, since March 31,
1999, neither the Borrower nor the Company
shall have (i) entered into any material
(as determined in good faith by the
Payment and Disbursement Agent) commitment
or transaction, including, without
limitation, transactions for borrowings
and capital expenditures, which are not in
the ordinary course of the Borrower's
business, (ii) declared or paid any
dividends or other distributions other
than in the ordinary course of business,
(iii) established compensation or employee
benefit plans, or (iv) redeemed or issued
any equity Securities.
6.1.5. No Loss of Material
Agreements and Licenses. Since March 31,
1999, no agreement or license relating to
the business, operations or employee
relations of the Borrower or any of its
Properties shall have been terminated,
modified, revoked, breached or declared to
be in default, the termination,
modification, revocation, breach or
default under which, in the reasonable
judgment of the Payment and Disbursement
Agent, would result in a Material Adverse
Effect.
6.1.6. No Market Changes. Since
March 31, 1999, no material adverse change
shall have occurred in the conditions in
the capital markets or the market for loan
syndications generally.
6.1.7. No Default. No Event of
Default or Potential Event of Default
shall have occurred and be continuing or
would result from the making of the Loans
or the issuance of any Letter of Credit.
6.1.8. Representations and
Warranties. All of the representations
and warranties contained in Section 7.1
and in any of the other Loan Documents
shall be true and correct in all material
respects on and as of the Initial Funding
Date.
6.1.9. Fees and Expenses Paid.
There shall have been paid to the Payment
and Disbursement Agent, for the accounts
of the Agents and the other Lenders, as
applicable, all fees due and payable on or
before the Initial Funding Date and all
expenses due and payable on or before the
Initial Funding Date, including, without
limitation, reasonable attorneys' fees and
expenses, and other costs and expenses
incurred in connection with the Loan
Documents.
6.2. Conditions Precedent to All Subsequent
Loans and Letters of Credit. The obligation of
each Lender to make any Loan requested to be made
by it on any date after the Initial Funding Date
and the agreement of each Lender to issue any
Letter of Credit or participate therein on any
date after the Initial Funding Date is subject to
the following conditions precedent as of each
such date:
6.2.1. Representations and
Warranties. As of such date, both before
and after giving effect to the Loans to be
made or the Letter of Credit to be issued
on such date, all of the representations
and warranties of the Borrower contained
in Section 7.1 and in any other Loan
Document (other than representations and
warranties which expressly speak as of a
different date) shall be true and correct
in all material respects.
6.2.2. No Defaults. No Event of
Default or Potential Event of Default
shall have occurred and be continuing or
would result from the making of the
requested Loan or issuance of the
requested Letter of Credit.
6.2.3. No Legal Impediments. No
law, regulation, order, judgment or decree
of any Governmental Authority shall, and
the Payment and Disbursement Agent shall
not have received from such Lender notice
that, in the judgment of such Lender,
litigation is pending or threatened which
is likely to, enjoin, prohibit or
restrain, or impose or result in the
imposition of any material adverse
condition upon, such Lender's making of
the requested Loan or participation in or
issuance of the requested Letter of
Credit.
6.2.4. No Material Adverse Effect.
The Borrower has not received written
notice from the Requisite Lenders that an
event has occurred since the date of this
Agreement which has had and continues to
have, or is reasonably likely to have, a
Material Adverse Effect.
Each submission by the Borrower to the Payment and Disbursement Agent of
a Notice of Borrowing with respect to a Loan or a Notice of
Conversion/Continuation with respect to any Loan, each acceptance by the
Borrower of the proceeds of each Loan made, converted or continued
hereunder, each submission by the Borrower to a Lender of a request for
issuance of a Letter of Credit and the issuance of such Letter of
Credit, shall constitute a representation and warranty by the Borrower
as of the Funding Date in respect of such Loan, the date of conversion
or continuation and the date of issuance of such Letter of Credit, that
all the conditions contained in this Section 6.2 have been satisfied or
waived in accordance with Section 15.7.
ARTICLE 7.
REPRESENTATIONS AND WARRANTIES
7.1. Representations and Warranties of the
Borrower. In order to induce the Lenders to
enter into this Agreement and to make the Loans
and the other financial accommodations to the
Borrower and to issue the Letters of Credit
described herein, the Borrower hereby represents
and warrants to each Lender that the following
statements are true, correct and complete:
7.1.0.0.1. Organization; Powers. 7.1.0.0.1. The
Borrower (A) is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of
Delaware, (B) is duly qualified to do business and is in good
standing under the laws of each jurisdiction in which failure to be
so qualified and in good standing will have or is reasonably likely
to have a Material Adverse Effect, (C) has filed and maintained
effective (unless exempt from the requirements for filing) a
current Business Activity Report with the appropriate Governmental
Authority in each state in which failure to do so would have a
Material Adverse Effect, (D) has all requisite power and authority
to own, operate and encumber its Property and to conduct its
business as presently conducted and as proposed to be conducted in
connection with and following the consummation of the transactions
contemplated by this Agreement and (E) is a partnership for federal
income tax purposes.
7.1.0.0.2. The Company (A) is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Delaware, (B) is duly authorized and qualified to do
business and is in good standing under the laws of each
jurisdiction in which failure to be so qualified and in good
standing will have or is reasonably likely to have a Material
Adverse Effect, and (C) has all requisite corporate power and
authority to own, operate and encumber its Property and to conduct
its business as presently conducted.
7.1.0.0.3. SD (A) is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Ohio, (B) is duly authorized and qualified to do business and is
in good standing under the laws of each jurisdiction in which
failure to be so qualified and in good standing will have or is
reasonably likely to have a Material Adverse Effect, and (C) has
all requisite corporate power and authority to own, operate and
encumber its Property and to conduct its business as presently
conducted.
7.1.0.0.4. SPG (A) is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Maryland, (B) is duly authorized and qualified to do business
and is in good standing under the laws of each jurisdiction in
which failure to be so qualified and in good standing will have or
is reasonably likely to have a Material Adverse Effect, and (C) has
all requisite corporate power and authority to own, operate and
encumber its Property and to conduct its business as presently
conducted.
7.1.0.0.5. True, correct and complete copies of the
Organizational Documents identified on Schedule 7.1-A have been
delivered to the Payment and Disbursement Agent, each of which is
in full force and effect, has not been modified or amended except
to the extent set forth indicated therein and, to the best of the
Borrower's knowledge, there are no defaults under such
Organizational Documents and no events which, with the passage of
time or giving of notice or both, would constitute a default under
such Organizational Documents.
7.1.0.0.6. Neither the Borrower, the Company nor any of
their Affiliates are "foreign persons" within the meaning of
Section 1445 of the Internal Revenue Code.
7.1.0.0.7. Authority. 7.1.0.0.7. Each General
Partner has the requisite power and authority to execute, deliver
and perform this Agreement on behalf of the Borrower and each of
the other Loan Documents which are required to be executed on
behalf of the Borrower as required by this Agreement. Each General
Partner is the Person who has executed this Agreement and such
other Loan Documents on behalf of the Borrower and are the sole
general partners of the Borrower.
7.1.0.0.8. The execution, delivery and performance of
each of the Loan Documents which must be executed in connection
with this Agreement by the Borrower and to which the Borrower is a
party and the consummation of the transactions contemplated thereby
are within the Borrower's partnership powers, have been duly
authorized by all necessary partnership action (and, in the case of
the General Partners acting on behalf of the Borrower in connection
therewith, all necessary corporate action of such General Partner)
and such authorization has not been rescinded. No other
partnership or corporate action or proceedings on the part of the
Borrower or any General Partner is necessary to consummate such
transactions.
7.1.0.0.9. Each of the Loan Documents to which the
Borrower is a party has been duly executed and delivered on behalf
of the Borrower and constitutes the Borrower's legal, valid and
binding obligation, enforceable against the Borrower in accordance
with its terms, is in full force and effect and all the terms,
provisions, agreements and conditions set forth therein and
required to be performed or complied with by the Company, the
Borrower and the Borrower's Subsidiaries on or before the Initial
Funding Date have been performed or complied with, and no Potential
Event of Default, Event of Default or breach of any covenant by any
of the Company, the Borrower or any Subsidiary of the Borrower
exists thereunder.
7.1.0.0.10. Subsidiaries; Ownership of Capital Stock
and Partnership Interests. 7.1.0.0.10. Schedule 7.1-C
(A) contains a diagram indicating the corporate structure of the
Company, the Borrower, and any other Person in which the Company or
the Borrower holds a direct or indirect partnership, joint venture
or other equity interest indicating the nature of such interest
with respect to each Person included in such diagram; and
(B) accurately sets forth (1) the correct legal name of such
Person, the jurisdiction of its incorporation or organization and
the jurisdictions in which it is qualified to transact business as
a foreign corporation, or otherwise, and (2) the authorized, issued
and outstanding shares or interests of each class of Securities of
the Company, the Borrower and the Subsidiaries of the Borrower and
the owners of such shares or interests. None of such issued and
outstanding Securities is subject to any vesting, redemption, or
repurchase agreement, and there are no warrants or options (other
than Permitted Securities Options) outstanding with respect to such
Securities, except as noted on Schedule 7.1-C. The outstanding
Capital Stock of the Company is duly authorized, validly issued,
fully paid and nonassessable and the outstanding Securities of the
Borrower and its Subsidiaries are duly authorized and validly
issued. Attached hereto as part of Schedule 7.1-C is a true,
accurate and complete copy of the Borrower Partnership Agreement as
in effect on the Closing Date and such Partnership Agreement has
not been amended, supplemented, replaced, restated or otherwise
modified in any respect since the Closing Date.
7.1.0.0.11. Except where failure may not have a Material
Adverse Effect, each Subsidiary: (A) is a corporation or
partnership, as indicated on Schedule 7.1-C, duly organized,
validly existing and, if applicable, in good standing under the
laws of the jurisdiction of its organization, (B) is duly qualified
to do business and, if applicable, is in good standing under the
laws of each jurisdiction in which failure to be so qualified and
in good standing would limit its ability to use the courts of such
jurisdiction to enforce Contractual Obligations to which it is a
party, and (C) has all requisite power and authority to own,
operate and encumber its Property and to conduct its business as
presently conducted and as proposed to be conducted hereafter.
7.1.1. No Conflict. The
execution, delivery and performance of
each of the Loan Documents to which the
Borrower is a party do not and will not
(i) conflict with the Organizational
Documents of the Borrower or any
Subsidiary of the Borrower,
(ii) constitute a tortious interference
with any Contractual Obligation of any
Person or conflict with, result in a
breach of or constitute (with or without
notice or lapse of time or both) a default
under any Requirement of Law or
Contractual Obligation of the Borrower,
the General Partners, any Limited Partner,
any Subsidiary of the Borrower, or any
general or limited partner of any
Subsidiary of the Borrower, or require
termination of any such Contractual
Obligation which may subject the Payment
and Disbursement Agent or any of the other
Lenders to any liability, (iii) result in
or require the creation or imposition of
any Lien whatsoever upon any of the
Property or assets of the Borrower, any
General Partner, any Limited Partner, any
Subsidiary of the Borrower, or any general
partner or limited partner of any
Subsidiary of the Borrower, or
(iv) require any approval of shareholders
of the Company or any general partner (or
equity holder of any general partner) of
any Subsidiary of the Borrower.
7.1.2. Governmental Consents. The
execution, delivery and performance of
each of the Loan Documents to which the
Borrower is a party do not and will not
require any registration with, consent or
approval of, or notice to, or other action
to, with or by any Governmental Authority,
except filings, consents or notices which
have been made, obtained or given.
7.1.3. Governmental Regulation.
Neither the Borrower nor any General
Partner is subject to regulation under the
Public Utility Holding Company Act of
1935, the Federal Power Act, the
Interstate Commerce Act, or the Investment
Company Act of 1940, or any other federal
or state statute or regulation which
limits its ability to incur indebtedness
or its ability to consummate the
transactions contemplated by this
Agreement.
7.1.4. Financial Position.
Complete and accurate copies of the
following financial statements and
materials have been delivered to the
Payment and Disbursement Agent:
(i) annual audited financial statements of
the Borrower and its Subsidiaries for the
fiscal year ended December 31, 1998, and
(ii) quarterly financial statements for
the Borrower and its Subsidiaries for the
fiscal quarter ending March 31, 1999. All
financial statements included in such
materials were prepared in all material
respects in conformity with GAAP, except
as otherwise noted therein, and fairly
present in all material respects the
respective consolidated financial
positions, and the consolidated results of
operations and cash flows for each of the
periods covered thereby of the Borrower
and its Subsidiaries as at the respective
dates thereof. Neither the Borrower nor
any of its Subsidiaries has any Contingent
Obligation, contingent liability or
liability for any taxes, long-term leases
or commitments, not reflected in its
audited financial statements delivered to
the Payment and Disbursement Agent on or
prior to the Closing Date or otherwise
disclosed to the Payment and Disbursement
Agent and the Lenders in writing, which
will have or is reasonably likely to have
a Material Adverse Effect.
7.1.5. Indebtedness. Schedule 7.1-
H sets forth, as of June 30, 1999, all
Indebtedness for borrowed money of each of
the Borrower, the General Partners and
their respective Subsidiaries and, except
as set forth on Schedule 7.1-H, there are
no defaults in the payment of principal or
interest on any such Indebtedness and no
payments thereunder have been deferred or
extended beyond their stated maturity and
there has been no material change in the
type or amount of such Indebtedness
(except for the repayment of certain
Indebtedness) since June 30, 1999.
7.1.6. Litigation; Adverse
Effects. Except as set forth in
Schedule 7.1-I, as of the Closing Date,
there is no action, suit, proceeding,
Claim, investigation or arbitration before
or by any Governmental Authority or
private arbitrator pending or, to the
knowledge of the Borrower, threatened
against the Company, the Borrower, or any
of their respective Subsidiaries, or any
Property of any of them (i) challenging
the validity or the enforceability of any
of the Loan Documents, (ii) which will or
is reasonably likely to result in any
Material Adverse Effect, or (iii) under
the Racketeering Influenced and Corrupt
Organizations Act or any similar federal
or state statute where such Person is a
defendant in a criminal indictment that
provides for the forfeiture of assets to
any Governmental Authority as a potential
criminal penalty. There is no material
loss contingency within the meaning of
GAAP which has not been reflected in the
consolidated financial statements of the
Company and the Borrower. None of the
Company, the Borrower or any Subsidiary of
the Borrower is (A) in violation of any
applicable Requirements of Law which
violation will have or is reasonably
likely to have a Material Adverse Effect,
or (B) subject to or in default with
respect to any final judgment, writ,
injunction, restraining order or order of
any nature, decree, rule or regulation of
any court or Governmental Authority which
will have or is reasonably likely to have
a Material Adverse Effect.
7.1.7. No Material Adverse Effect.
Since March 31, 1999, there has occurred
no event which has had or is reasonably
likely to have a Material Adverse Effect.
7.1.8. Tax Examinations. The IRS
has examined (or is foreclosed from
examining by applicable statutes) the
federal income tax returns of any of the
Company's, the Borrower's or its
Subsidiaries' predecessors in interest
with respect to the Projects for all tax
periods prior to and including the taxable
year ending December 31, 1997 and the
appropriate state Governmental Authority
in each state in which the Company's, the
Borrower's or its Subsidiaries'
predecessors in interest with respect to
the Projects were required to file state
income tax returns has examined (or is
foreclosed from examining by applicable
statutes) the state income tax returns of
any of such Persons with respect to the
Projects for all tax periods prior to and
including the taxable year ending December
31, 1997. All deficiencies which have been
asserted against such Persons as a result
of any federal, state, local or foreign
tax examination for each taxable year in
respect of which an examination has been
conducted have been fully paid or finally
settled or are being contested in good
faith, and no issue has been raised in any
such examination which, by application of
similar principles, reasonably can be
expected to result in assertion of a
material deficiency for any other year not
so examined which has not been reserved
for in the financial statements of such
Persons to the extent, if any, required by
GAAP. No such Person has taken any
reporting positions for which it does not
have a reasonable basis nor anticipates
any further material tax liability with
respect to the years which have not been
closed pursuant to applicable law.
7.1.9. Payment of Taxes. All tax
returns, reports and similar statements or
filings of each of the Persons described
in Section 7.1(k), the Company, the
Borrower and its Subsidiaries required to
be filed have been timely filed, and,
except for Customary Permitted Liens, all
taxes, assessments, fees and other charges
of Governmental Authorities thereupon and
upon or relating to their respective
Properties, assets, receipts, sales, use,
payroll, employment, income, licenses and
franchises which are shown in such returns
or reports to be due and payable have been
paid, except to the extent (i) such taxes,
assessments, fees and other charges of
Governmental Authorities are being
contested in good faith by an appropriate
proceeding diligently pursued as permitted
by the terms of Section 9.4 and (ii) such
taxes, assessments, fees and other charges
of Governmental Authorities pertain to
Property of the Borrower or any of its
Subsidiaries and the non-payment of the
amounts thereof would not, individually or
in the aggregate, result in a Material
Adverse Effect. All other taxes
(including, without limitation, real
estate taxes), assessments, fees and other
governmental charges upon or relating to
the respective Properties of the Borrower
and its Subsidiaries which are due and
payable have been paid, except for
Customary Permitted Liens and except to
the extent described in clauses (i) and
(ii) hereinabove. The Borrower has no
knowledge of any proposed tax assessment
against the Borrower, any of its
Subsidiaries, or any of the Projects that
will have or is reasonably likely to have
a Material Adverse Effect.
7.1.10. Performance. Neither the
Company, the Borrower nor any of their
Affiliates has received any notice,
citation or allegation, nor has actual
knowledge, that (i) it is in default in
the performance, observance or fulfillment
of any of the obligations, covenants or
conditions contained in any Contractual
Obligation applicable to it, (ii) any of
its Properties is in violation of any
Requirements of Law or (iii) any condition
exists which, with the giving of notice or
the lapse of time or both, would
constitute a default with respect to any
such Contractual Obligation, in each case,
except where such default or defaults, if
any, will not have or is not reasonably
likely to have a Material Adverse Effect.
7.1.11. Disclosure. The
representations and warranties of the
Borrower contained in the Loan Documents,
and all certificates and other documents
delivered to the Payment and Disbursement
Agent pursuant to the terms thereof, do
not contain any untrue statement of a
material fact or omit to state a material
fact necessary in order to make the
statements contained herein or therein, in
light of the circumstances under which
they were made, not misleading. The
Borrower has not intentionally withheld
any fact from the Payment and Disbursement
Agent, the Arrangers, the Co-Agents or the
other Lenders in regard to any matter
which will have or is reasonably likely to
have a Material Adverse Effect.
Notwithstanding the foregoing, the Lenders
acknowledge that the Borrower shall not
have liability under this clause (o) with
respect to its projections of future
events.
7.1.12. Requirements of Law. The
Borrower and each of its Subsidiaries is
in compliance with all Requirements of Law
applicable to it and its respective
businesses and Properties, in each case
where the failure to so comply
individually or in the aggregate will have
or is reasonably likely to have a Material
Adverse Effect.
7.1.13. Environmental Matters.
7.1.13.0.1. Except as disclosed on Schedule 7.1-P:
7.1.13.0.1.1. the operations of the Borrower,
each of its Subsidiaries, and their respective Properties comply
with all applicable Environmental, Health or Safety Requirements of
Law;
7.1.13.0.1.2. the Borrower and each of its
Subsidiaries have obtained all material environmental, health and
safety Permits necessary for their respective operations, and all
such Permits are in good standing and the holder of each such
Permit is currently in compliance with all terms and conditions of
such Permits;
7.1.13.0.1.3. none of the Borrower or any of
its Subsidiaries or any of their respective present or past
Property or operations are subject to or are the subject of any
investigation, judicial or administrative proceeding, order,
judgment, decree, dispute, negotiations, agreement or settlement
respecting (I) any Environmental, Health or Safety Requirements of
Law, (II) any Remedial Action, (III) any Claims or Liabilities and
Costs arising from the Release or threatened Release of a
Contaminant into the environment, or (IV) any violation of or
liability under any Environmental, Health or Safety Requirement of
Law;
7.1.13.0.1.4. none of Borrower or any of its
Subsidiaries has filed any notice under any applicable Requirement
of Law (I) reporting a Release of a Contaminant; (II) indicating
past or present treatment, storage or disposal of a hazardous
waste, as that term is defined under 40 C.F.R. Part 261 or any
state equivalent; or (III) reporting a violation of any applicable
Environmental, Health or Safety Requirement of Law;
7.1.13.0.1.5. none of the Borrower's or any of
its Subsidiaries' present or past Property is listed or proposed
for listing on the National Priorities List ("NPL") pursuant to
CERCLA or on the Comprehensive Environmental Response Compensation
Liability Information System List ("CERCLIS") or any similar state
list of sites requiring Remedial Action;
7.1.13.0.1.6. neither the Borrower nor any of
its Subsidiaries has sent or directly arranged for the transport of
any waste to any site listed or proposed for listing on the NPL,
CERCLIS or any similar state list;
7.1.13.0.1.7. to the best of Borrower's
knowledge, there is not now, and to Borrower's knowledge there has
never been on or in any Project (I) any treatment, recycling,
storage or disposal of any hazardous waste, as that term is defined
under 40 C.F.R. Part 261 or any state equivalent; (II) any
landfill, waste pile, or surface impoundment; (III) any underground
storage tanks the presence or use of which is or, to Borrower's
knowledge, has been in violation of applicable Environmental,
Health or Safety Requirements of Law, (IV) any asbestos-containing
material which such Person has any reason to believe could subject
such Person or its Property to Liabilities and Costs arising out of
or relating to environmental, health or safety matters that would
result in a Material Adverse Effect; or (V) any polychlorinated
biphenyls (PCB) used in hydraulic oils, electrical transformers or
other Equipment which such Person has any reason to believe could
subject such Person or its Property to Liabilities and Costs
arising out of or relating to environmental, health or safety
matters that would result in a Material Adverse Effect;
7.1.13.0.1.8. neither the Borrower nor any of
its Subsidiaries has received any notice or Claim to the effect
that any of such Persons is or may be liable to any Person as a
result of the Release or threatened Release of a Contaminant into
the environment;
7.1.13.0.1.9. neither the Borrower nor any of
its Subsidiaries has any contingent liability in connection with
any Release or threatened Release of any Contaminants into the
environment;
7.1.13.0.1.10. no Environmental Lien has
attached to any Property of the Borrower or any Subsidiary of the
Borrower;
7.1.13.0.1.11. no Property of the Borrower or
any Subsidiary of the Borrower is subject to any Environmental
Property Transfer Act, or to the extent such acts are applicable to
any such Property, the Borrower and/or such Subsidiary whose
Property is subject thereto has fully complied with the
requirements of such acts; and
7.1.13.0.1.12. neither the Borrower nor any of
its Subsidiaries owns or operates, or, to Borrower's knowledge has
ever owned or operated, any underground storage tank, the presence
or use of which is or has been in violation of applicable
Environmental, Health or Safety Requirements of Law, at any
Project.
7.1.13.0.2. the Borrower and each of its
Subsidiaries are conducting and will continue to conduct their
respective businesses and operations and maintain each Project in
compliance with Environmental, Health or Safety Requirements of Law
and no such Person has been, and no such Person has any reason to
believe that it or any Project will be, subject to Liabilities and
Costs arising out of or relating to environmental, health or safety
matters that would result in a Material Adverse Effect.
7.1.14. ERISA. Neither the Borrower
nor any ERISA Affiliate maintains or
contributes to any Plan or Multiemployer
Plan other than those listed on Schedule
7.1-Q hereto. Each such Plan which is
intended to be qualified under Section
401(a) of the Internal Revenue Code as
currently in effect has been determined by
the IRS to be so qualified, and each trust
related to any such Plan has been
determined to be exempt from federal
income tax under Section 501(a) of the
Internal Revenue Code as currently in
effect. Except as disclosed in Schedule
7.1-Q, neither the Borrower nor any of its
ERISA Affilates maintains or contributes
to any employee welfare benefit plan
within the meaning of Section 3(1) of
ERISA which provides benefits to employees
after termination of employment other than
as required by Section 601 of ERISA. The
Borrower and each of its ERISA Affiliates
is in compliance in all material respects
with the responsibilities, obligations and
duties imposed on it by ERISA, the
Internal Revenue Code and regulations
promulgated thereunder with respect to all
Plans. No Plan has incurred any
accumulated funding deficiency (as defined
in Sections 302(a)(2) of ERISA and 412(a)
of the Internal Revenue Code) whether or
not waived. Neither the Borrower nor any
ERISA Affiliate nor any fiduciary of any
Plan which is not a Multiemployer Plan (i)
has engaged in a nonexempt prohibited
transaction described in Sections 406 of
ERISA or 4975 of the Internal Revenue Code
or (ii) has taken or failed to take any
action which would constitute or result in
a Termination Event. Neither the Borrower
nor any ERISA Affiliate is subject to any
liability under Sections 4063, 4064, 4069,
4204 or 4212(c) of ERISA. Neither the
Borrower nor any ERISA Affiliate has
incurred any liability to the PBGC which
remains outstanding other than the payment
of premiums, and there are no premium
payments which have become due which are
unpaid. Schedule B to the most recent
annual report filed with the IRS with
respect to each Plan and furnished to the
Payment and Disbursement Agent is complete
and accurate in all material respects.
Since the date of each such Schedule B,
there has been no material adverse change
in the funding status or financial
condition of the Plan relating to such
Schedule B. Neither the Borrower nor any
ERISA Affiliate has (i) failed to make a
required contribution or payment to a
Multiemployer Plan or (ii) made a complete
or partial withdrawal under Sections 4203
or 4205 of ERISA from a Multiemployer
Plan. Neither the Borrower nor any ERISA
Affiliate has failed to make a required
installment or any other required payment
under Section 412 of the Internal Revenue
Code on or before the due date for such
installment or other payment. Neither the
Borrower nor any ERISA Affiliate is
required to provide security to a Plan
under Section 401(a)(29) of the Internal
Revenue Code due to a Plan amendment that
results in an increase in current
liability for the plan year. Except as
disclosed on Schedule 7.1-Q, neither the
Borrower nor any of its ERISA Affiliates
has, by reason of the transactions
contemplated hereby, any obligation to
make any payment to any employee pursuant
to any Plan or existing contract or
arrangement.
7.1.15. Securities Activities. The
Borrower is not engaged in the business of
extending credit for the purpose of
purchasing or carrying Margin Stock.
7.1.16. Solvency. After giving
effect to the Loans to be made on the
Initial Funding Date or such other date as
Loans requested hereunder are made, and
the disbursement of the proceeds of such
Loans pursuant to the Borrower's
instructions, the Borrower is Solvent.
7.1.17. Insurance. Schedule 7.1-T
accurately sets forth as of the Closing
Date all insurance policies and programs
currently in effect with respect to the
respective Property and assets and
business of the Borrower and its
Subsidiaries, specifying for each such
policy and program, (i) the amount
thereof, (ii) the risks insured against
thereby, (iii) the name of the insurer and
each insured party thereunder, (iv) the
policy or other identification number
thereof, and (v) the expiration date
thereof. The Borrower has delivered to the
Payment and Disbursement Agent copies of
all insurance policies set forth on
Schedule 7.1-T. Such insurance policies
and programs are currently in full force
and effect, in compliance with the
requirements of Section 9.5 hereof and,
together with payment by the insured of
scheduled deductible payments, are in
amounts sufficient to cover the
replacement value of the respective
Property and assets of the Borrower and/or
its Subsidiaries.
7.1.18. REIT Status. The Company
qualifies as a REIT under the Internal
Revenue Code.
7.1.19. Ownership of Projects,
Minority Holdings and Property. Ownership
of substantially all wholly-owned
Projects, Minority Holdings and other
Property of the Consolidated Businesses is
held by the Borrower and its Subsidiaries
and is not held directly by any General
Partner.
7.1.20. Year 2000 Compliance. The
Borrower has commenced a comprehensive
review and assessment of the Borrower's
computer applications and commenced
inquiry of the Borrower's key suppliers,
vendors, and customers with respect to the
"year 2000 problem" (that is, the risk
that computer applications may not be able
to properly perform date sensitive
functions after December 31, 1999) and,
based on that review and inquiry, the
Borrower does not believe that the year
2000 problem will result in a Material
Adverse Effect. The Borrower anticipates
that it will complete such review,
assessment and inquiry on or before
September 30, 1999.
ARTICLE 8.
REPORTING COVENANTS
The Borrower covenants and agrees that so long as any
Revolving Credit Commitments are outstanding and thereafter until
payment in full of all of the Obligations (other than indemnities
pursuant to Section 15.3 not yet due), unless the Requisite Lenders
shall otherwise give prior written consent thereto:
8.1. Borrower Accounting Practices. The
Borrower shall maintain, and cause each of its
Subsidiaries to maintain, a system of accounting
established and administered in accordance with
sound business practices to permit preparation of
consolidated and consolidating financial
statements in conformity with GAAP, and each of
the financial statements and reports described
below shall be prepared from such system and
records and in form satisfactory to the Payment
and Disbursement Agent.
8.2. Financial Reports. The Borrower shall
deliver or cause to be delivered to the Payment
and Disbursement Agent and the Lenders:
8.2.1. Quarterly Reports.
8.2.1.0.1. Borrower Quarterly Financial Reports. As soon
as practicable, and in any event within fifty (50) days after the
end of each fiscal quarter in each Fiscal Year (other than the last
fiscal quarter in each Fiscal Year), a consolidated balance sheet
of the Borrower and the related consolidated statements of income
and cash flow of the Borrower (to be prepared and delivered
quarterly in conjunction with the other reports delivered hereunder
at the end of each fiscal quarter) for each such fiscal quarter, in
each case in form and substance satisfactory to the Payment and
Disbursement Agent and, in comparative form, the corresponding
figures for the corresponding periods of the previous Fiscal Year,
certified by an Authorized Financial Officer of the Borrower as
fairly presenting the consolidated and consolidating financial
position of the Borrower as of the dates indicated and the results
of their operations and cash flow for the months indicated in
accordance with GAAP, subject to normal quarterly adjustments.
8.2.1.0.2. Company Quarterly Financial Reports. As soon
as practicable, and in any event within fifty (50) days after the
end of each fiscal quarter in each Fiscal Year (other than the last
fiscal quarter in each Fiscal Year), the Financial Statements of
the Company, the Borrower and its Subsidiaries on Form 10-Q as at
the end of such period and a report setting forth in comparative
form the corresponding figures for the corresponding period of the
previous Fiscal Year, certified by an Authorized Financial Officer
of the Company as fairly presenting the consolidated and
consolidating financial position of the Company, the Borrower and
its Subsidiaries as at the date indicated and the results of their
operations and cash flow for the period indicated in accordance
with GAAP, subject to normal adjustments.
8.2.1.0.3. Quarterly Compliance Certificates. Together
with each delivery of any quarterly report pursuant to paragraph
(a)(i) of this Section 8.2, the Borrower shall deliver Officer's
Certificates of the Borrower and the Company (the "Quarterly
Compliance Certificates"), signed by the Borrower's and the
Company's respective Authorized Financial Officers representing and
certifying (1) that the Authorized Financial Officer signatory
thereto has reviewed the terms of the Loan Documents, and has made,
or caused to be made under his/her supervision, a review in
reasonable detail of the transactions and consolidated and
consolidating financial condition of the Company, the Borrower and
its Subsidiaries, during the fiscal quarter covered by such
reports, that such review has not disclosed the existence during or
at the end of such fiscal quarter, and that such officer does not
have knowledge of the existence as at the date of such Officer's
Certificate, of any condition or event which constitutes an Event
of Default or Potential Event of Default or mandatory prepayment
event, or, if any such condition or event existed or exists, and
specifying the nature and period of existence thereof and what
action the General Partners and/or the Borrower or any of its
Subsidiaries has taken, is taking and proposes to take with respect
thereto, (2) the calculations (with such specificity as the Payment
and Disbursement Agent may reasonably request) for the period then
ended which demonstrate compliance with the covenants and financial
ratios set forth in Articles IX and X and, when applicable, that no
Event of Default described in Section 11.1 exists, (3) a schedule
of the Borrower's outstanding Indebtedness, including the amount,
maturity, interest rate and amortization requirements, as well as
such other information regarding such Indebtedness as may be
reasonably requested by the Payment and Disbursement Agent, (4) a
schedule of Combined EBITDA, (5) a schedule of Unencumbered
Combined EBITDA, (6) calculations, in the form of Exhibit G
attached hereto, evidencing compliance with each of the financial
covenants set forth in Article X hereof, and (7) a schedule of the
estimated taxable income of the Borrower for such fiscal quarter.
8.2.1.0.4. Hedging Status Report. The Borrower shall
deliver, within fifty (50) days after the end of each fiscal
quarter of each Fiscal Year, a written report which sets forth the
details of the "Interest Rate Hedges" required under Section 9.9.
8.2.2. Annual Reports.
8.2.2.0.1. Borrower Financial Statements. As soon as
practicable, and in any event within ninety-five (95) days after
the end of each Fiscal Year, (i) the Financial Statements of the
Borrower and its Subsidiaries as at the end of such Fiscal Year,
(ii) a report with respect thereto of Arthur Andersen & Co. or
other independent certified public accountants acceptable to the
Payment and Disbursement Agent, which report shall be unqualified
and shall state that such financial statements fairly present the
consolidated and consolidating financial position of each of the
Borrower and its Subsidiaries as at the dates indicated and the
results of their operations and cash flow for the periods indicated
in conformity with GAAP applied on a basis consistent with prior
years (except for changes with which Arthur Andersen & Co. or any
such other independent certified public accountants, if applicable,
shall concur and which shall have been disclosed in the notes to
the financial statements), and (iii) in the event that the report
referred to in clause (ii) above is qualified, a copy of the
management letter or any similar report delivered to the General
Partners or to any officer or employee thereof by such independent
certified public accountants in connection with such financial
statements (which letter or report shall be subject to the
confidentiality limitations set forth herein). The Payment and
Disbursement Agent and each Lender (through the Payment and
Disbursement Agent) may, with the consent of the Borrower (which
consent shall not be unreasonably withheld), communicate directly
with such accountants, with any such communication to occur
together with a representative of the Borrower, at the expense of
the Payment and Disbursement Agent (or the Lender requesting such
communication), upon reasonable notice and at reasonable times
during normal business hours.
8.2.2.0.2. Company Financial Statements. As soon as
practicable, and in any event within ninety-five (95) days after
the end of each Fiscal Year, (i) the Financial Statements of the
Company and its Subsidiaries on Form 10-K as at the end of such
Fiscal Year and a report setting forth in comparative form the
corresponding figures from the consolidated Financial Statements of
the Company and its Subsidiaries for the prior Fiscal Year; (ii) a
report with respect thereto of Arthur Andersen & Co. or other
independent certified public accountants acceptable to the Payment
and Disbursement Agent, which report shall be unqualified and shall
state that such financial statements fairly present the
consolidated and consolidating financial position of each of the
Company and its Subsidiaries as at the dates indicated and the
results of their operations and cash flow for the periods indicated
in conformity with GAAP applied on a basis consistent with prior
years (except for changes with which Arthur Andersen & Co. or any
such other independent certified public accountants, if applicable,
shall concur and which shall have been disclosed in the notes to
the financial statements)(which report shall be subject to the
confidentiality limitations set forth herein); and (iii) in the
event that the report referred to in clause (ii) above is
qualified, a copy of the management letter or any similar report
delivered to the Company or to any officer or employee thereof by
such independent certified public accountants in connection with
such financial statements. The Payment and Disbursement Agent and
each Lender (through the Payment and Disbursement Agent) may, with
the consent of the Company (which consent shall not be unreasonably
withheld), communicate directly with such accountants, with any
such communication to occur together with a representative of the
Company, at the expense of the Payment and Disbursement Agent (or
the Lender requesting such communication), upon reasonable notice
and at reasonable times during normal business hours.
8.2.2.0.3. Annual Compliance Certificates. Together
with each delivery of any annual report pursuant to clauses (i) and
(ii) of this Section 8.2(b), the Borrower shall deliver Officer's
Certificates of the Borrower and the Company (the "Annual
Compliance Certificates" and, collectively with the Quarterly
Compliance Certificates, the "Compliance Certificates"), signed by
the Borrower's and the Company's respective Authorized Financial
Officers, representing and certifying that (1) the officer
signatory thereto has reviewed the terms of the Loan Documents, and
has made, or caused to be made under his/her supervision, a review
in reasonable detail of the transactions and consolidated and
consolidating financial condition of the General Partners, the
Borrower and its Subsidiaries, during the accounting period covered
by such reports, that such review has not disclosed the existence
during or at the end of such accounting period, and that such
officer does not have knowledge of the existence as at the date of
such Officer's Certificate, of any condition or event which
constitutes an Event of Default or Potential Event of Default or
mandatory prepayment event, or, if any such condition or event
existed or exists, and specifying the nature and period of
existence thereof and what action the General Partners and/or the
Borrower or any of its Subsidiaries has taken, is taking and
proposes to take with respect thereto, (2) the calculations (with
such specificity as the Payment and Disbursement Agent may
reasonably request) for the period then ended which demonstrate
compliance with the covenants and financial ratios set forth in
Articles IX and X and, when applicable, that no Event of Default
described in Section 11.1 exists, (3) a schedule of the Borrower's
outstanding Indebtedness including the amount, maturity, interest
rate and amortization requirements, as well as such other
information regarding such Indebtedness as may be reasonably
requested by the Payment and Disbursement Agent, (4) a schedule of
Combined EBITDA, (5) a schedule of Unencumbered Combined EBITDA,
(6) calculations, in the form of Exhibit G attached hereto,
evidencing compliance with each of the financial covenants set
forth in Article X hereof, and (7) a schedule of the estimated
taxable income of the Borrower for such fiscal year.
8.2.2.0.4. Tenant Bankruptcy Reports. As soon as
practicable, and in any event within ninety-five (95) days after
the end of each Fiscal Year, the Borrower shall deliver a written
report, in form reasonably satisfactory to the Payment and
Disbursement Agent, of all bankruptcy proceedings filed by or
against any tenant of any of the Projects, which tenant occupies 3%
or more of the gross leasable area in the Projects in the
aggregate. The Borrower shall deliver to the Payment and
Disbursement Agent and the Lenders, immediately upon the Borrower's
learning thereof, of any bankruptcy proceedings filed by or
against, or the cessation of business or operations of, any tenant
of any of the Projects which tenant occupies 3% or more of the
gross leasable area in the Projects in the aggregate.
8.2.2.0.5. Property Reports. When reasonably requested
by the Payment and Disbursement Agent or any other Arranger or Co-
Agent, a rent roll, tenant sales report and income statement with
respect to any Project.
8.3. Events of Default. Promptly upon the
Borrower obtaining knowledge (a) of any condition
or event which constitutes an Event of Default or
Potential Event of Default, or becoming aware
that any Lender or the Payment and Disbursement
Agent has given any notice to the Borrower with
respect to a claimed Event of Default or
Potential Event of Default under this Agreement;
(b) that any Person has given any notice to the
Borrower or any Subsidiary of the Borrower or
taken any other action with respect to a claimed
default or event or condition of the type
referred to in Section 11.1(e); or (c) of any
condition or event which has or is reasonably
likely to have a Material Adverse Effect, the
Borrower shall deliver to the Payment and
Disbursement Agent and the Lenders an Officer's
Certificate specifying (i) the nature and period
of existence of any such claimed default, Event
of Default, Potential Event of Default, condition
or event, (ii) the notice given or action taken
by such Person in connection therewith, and
(iii) what action the Borrower has taken, is
taking and proposes to take with respect thereto.
8.3.0.0.1. Lawsuits. 8.3.0.0.1. Promptly upon the
Borrower's obtaining knowledge of the institution of, or written
threat of, any action, suit, proceeding, governmental investigation
or arbitration against or affecting the Borrower or any of its
Subsidiaries not previously disclosed pursuant to Section 7.1(i),
which action, suit, proceeding, governmental investigation or
arbitration exposes, or in the case of multiple actions, suits,
proceedings, governmental investigations or arbitrations arising
out of the same general allegations or circumstances which expose,
in the Borrower's reasonable judgment, the Borrower or any of its
Subsidiaries to liability in an amount aggregating $1,000,000 or
more and is not covered by Borrower's insurance, the Borrower shall
give written notice thereof to the Payment and Disbursement Agent
and the Lenders and provide such other information as may be
reasonably available to enable each Lender and the Payment and
Disbursement Agent and its counsel to evaluate such matters; (ii)
as soon as practicable and in any event within fifty (50) days
after the end of each fiscal quarter of the Borrower, the Borrower
shall provide a written quarterly report to the Payment and
Disbursement Agent and the Lenders covering the institution of, or
written threat of, any action, suit, proceeding, governmental
investigation or arbitration (not previously reported) against or
affecting the Borrower or any of its Subsidiaries or any Property
of the Borrower or any of its Subsidiaries not previously disclosed
by the Borrower to the Payment and Disbursement Agent and the
Lenders, and shall provide such other information at such time as
may be reasonably available to enable each Lender and the Payment
and Disbursement Agent and its counsel to evaluate such matters;
and (iii) in addition to the requirements set forth in clauses (i)
and (ii) of this Section 8.4, the Borrower upon request of the
Payment and Disbursement Agent or the Requisite Lenders shall
promptly give written notice of the status of any action, suit,
proceeding, governmental investigation or arbitration covered by a
report delivered pursuant to clause (i) or (ii) above and provide
such other information as may be reasonably available to it to
enable each Lender and the Payment and Disbursement Agent and its
counsel to evaluate such matters.
8.4. Insurance. As soon as practicable and in
any event by January 1st of each calendar year,
the Borrower shall deliver to the Payment and
Disbursement Agent and the Lenders (i) a report
in form and substance reasonably satisfactory to
the Payment and Disbursement Agent and the
Lenders outlining all insurance coverage
maintained as of the date of such report by the
Borrower and its Subsidiaries and the duration of
such coverage and (ii) evidence that all premiums
with respect to such coverage have been paid when
due.
8.5. ERISA Notices. The Borrower shall
deliver or cause to be delivered to the Payment
and Disbursement Agent and the Lenders, at the
Borrower's expense, the following information and
notices as soon as reasonably possible, and in
any event:
8.5.1. within fifteen (15) Business Days after
the Borrower or
any ERISA Affiliate knows or has reason to know that an ERISA
Termination Event has occurred, a written statement of the chief
financial officer of the Borrower describing such ERISA Termination
Event and the action, if any, which the Borrower or any ERISA
Affiliate has taken, is taking or proposes to take with respect
thereto, and when known, any action taken or threatened by the IRS,
DOL or PBGC with respect thereto;
8.5.2. within fifteen (15) Business Days after
the Borrower
knows or has reason to know that a prohibited transaction (defined
in Sections 406 of ERISA and Section 4975 of the Internal Revenue
Code) has occurred, a statement of the chief financial officer of
the Borrower describing such transaction and the action which the
Borrower or any ERISA Affiliate has taken, is taking or proposes to
take with respect thereto;
8.5.3. within fifteen (15) Business Days after
the filing of the
same with the DOL, IRS or PBGC, copies of each annual report (form
5500 series), including Schedule B thereto, filed with respect to
each Plan;
8.5.4. within fifteen (15) Business Days after
receipt by the
Borrower or any ERISA Affiliate of each actuarial report for any
Plan or Multiemployer Plan and each annual report for any
Multiemployer Plan, copies of each such report;
8.5.5. within fifteen (15) Business Days after
the filing of the
same with the IRS, a copy of each funding waiver request filed with
respect to any Plan and all communications received by the Borrower
or any ERISA Affiliate with respect to such request;
8.5.6. within fifteen (15) Business Days after
the occurrence of
any material increase in the benefits of any existing Plan or
Multiemployer Plan or the establishment of any new Plan or the
commencement of contributions to any Plan or Multiemployer Plan to
which the Borrower or any ERISA Affiliate was not previously
contributing, notification of such increase, establishment or
commencement;
8.5.7. within fifteen (15) Business Days after
the Borrower or
any ERISA Affiliate receives notice of the PBGC's intention to
terminate a Plan or to have a trustee appointed to administer a
Plan, copies of each such notice;
8.5.8. within fifteen (15) Business Days after
the Borrower or
any of its Subsidiaries receives notice of any unfavorable
determination letter from the IRS regarding the qualification of a
Plan under Section 401(a) of the Internal Revenue Code, copies of
each such letter;
8.5.9. within fifteen (15) Business Days after
the Borrower or
any ERISA Affiliate receives notice from a Multiemployer Plan
regarding the imposition of withdrawal liability, copies of each
such notice;
8.5.10. within fifteen (15) Business Days after
the Borrower or
any ERISA Affiliate fails to make a required installment or any
other required payment under Section 412 of the Internal Revenue
Code on or before the due date for such installment or payment, a
notification of such failure; and
8.5.11. within fifteen (15) Business Days after
the Borrower or
any ERISA Affiliate knows or has reason to know (i) a Multiemployer
Plan has been terminated, (ii) the administrator or plan sponsor of
a Multiemployer Plan intends to terminate a Multiemployer Plan, or
(iii) the PBGC has instituted or will institute proceedings under
Section 4042 of ERISA to terminate a Multiemployer Plan,
notification of such termination, intention to terminate, or
institution of proceedings.
For purposes of this Section 8.6, the Borrower and any ERISA Affiliate
shall be deemed to know all facts known by the "Administrator" of any
Plan of which the Borrower or any ERISA Affiliate is the plan sponsor.
8.6. Environmental Notices. The Borrower
shall notify the Payment and Disbursement Agent
and the Lenders in writing, promptly upon any
representative of the Borrower or other employee
of the Borrower responsible for the environmental
matters at any Property of the Borrower learning
thereof, of any of the following (together with
any material documents and correspondence
received or sent in connection therewith):
8.6.1. notice or claim to the effect that the
Borrower or any of
its Subsidiaries is or may be liable to any Person as a result of
the Release or threatened Release of any Contaminant into the
environment, if such liability would result in a Material Adverse
Effect;
8.6.2. notice that the Borrower or any of its
Subsidiaries is
subject to investigation by any Governmental Authority evaluating
whether any Remedial Action is needed to respond to the Release or
threatened Release of any Contaminant into the environment;
8.6.3. notice that any Property of the
Borrower or any of its
Subsidiaries is subject to an Environmental Lien if the claim to
which such Environmental Lien relates would result in a Material
Adverse Effect;
8.6.4. notice of violation by the Borrower
or any of its
Subsidiaries of any Environmental, Health or Safety Requirement of
Law;
8.6.5. any condition which might reasonably
result in a
violation by the Borrower or any Subsidiary of the Borrower of any
Environmental, Health or Safety Requirement of Law, which violation
would result in a Material Adverse Effect;
8.6.6. commencement or threat of any judicial
or administrative
proceeding alleging a violation by the Borrower or any of its
Subsidiaries of any Environmental, Health or Safety Requirement of
Law, which would result in a Material Adverse Effect;
8.6.7. new or proposed changes to any existing
Environmental,
Health or Safety Requirement of Law that could result in a Material
Adverse Effect; or
8.6.8. any proposed acquisition of stock,
assets, real estate,
or leasing of Property, or any other action by the Borrower or any
of its Subsidiaries that could subject the Borrower or any of its
Subsidiaries to environmental, health or safety Liabilities and
Costs which could result in a Material Adverse Effect.
8.7. Labor Matters. The Borrower shall notify
the Payment and Disbursement Agent and the
Lenders in writing, promptly upon the Borrower's
learning thereof, of any labor dispute to which
the Borrower or any of its Subsidiaries may
become a party (including, without limitation,
any strikes, lockouts or other disputes relating
to any Property of such Persons' and other
facilities) which could result in a Material
Adverse Effect.
8.8. Notices of Asset Sales and/or
Acquisitions. The Borrower shall deliver to the
Payment and Disbursement Agent and the Lenders
written notice of each of the following upon the
occurrence thereof: (a) a sale, transfer or other
disposition of assets, in a single transaction or
series of related transactions, for consideration
in excess of $50,000,000, (b) an acquisition of
assets, in a single transaction or series of
related transactions, for consideration in excess
of $50,000,000, and (c) the grant of a Lien with
respect to assets, in a single transaction or
series of related transactions, in connection
with Indebtedness aggregating an amount in excess
of $50,000,000.
8.9. Tenant Notifications. The Borrower shall
promptly notify the Payment and Disbursement
Agent upon obtaining knowledge of the bankruptcy
or cessation of operations of any tenant to which
greater than 3% of the Borrower's share of
consolidated minimum rent is attributable.
8.10. Other Reports. The Borrower shall
deliver or cause to be delivered to the Payment
and Disbursement Agent and the other Lenders
copies of all financial statements, reports,
notices and other materials, if any, sent or made
available generally by any General Partner and/or
the Borrower to its respective Securities holders
or filed with the Commission, all press releases
made available generally by any General Partner
and/or the Borrower or any of its Subsidiaries to
the public concerning material developments in
the business of any General Partner, the Borrower
or any such Subsidiary and all notifications
received by the General Partners, the Borrower or
its Subsidiaries pursuant to the Securities
Exchange Act and the rules promulgated
thereunder.
8.11. Other Information. Promptly upon
receiving a request therefor from the Payment and
Disbursement Agent or any Arranger or Co-Agent,
the Borrower shall prepare and deliver to the
Payment and Disbursement Agent and the other
Lenders such other information with respect to
any General Partner, the Borrower, or any of its
Subsidiaries, as from time to time may be
reasonably requested by the Payment and
Disbursement Agent or any Arranger.
ARTICLE 9.
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that so long as any Revolving
Credit Commitments are outstanding and thereafter until payment in full
of all of the Obligations (other than indemnities pursuant to Section
15.3 not yet due), unless the Requisite Lenders shall otherwise give
prior written consent:
9.1. Existence, Etc. The Borrower shall, and
shall cause each of its Subsidiaries to, at all
times maintain its corporate existence or
existence as a limited partnership or joint
venture, as applicable, and preserve and keep, or
cause to be preserved and kept, in full force and
effect its rights and franchises material to its
businesses, except where the loss or termination
of such rights and franchises is not likely to
have a Material Adverse Effect.
9.2. Powers; Conduct of Business. The
Borrower shall remain qualified, and shall cause
each of its Subsidiaries to qualify and remain
qualified, to do business and maintain its good
standing in each jurisdiction in which the nature
of its business and the ownership of its Property
requires it to be so qualified and in good
standing.
9.3. Compliance with Laws, Etc. The Borrower
shall, and shall cause each of its Subsidiaries
to, (a) comply with all Requirements of Law and
all restrictive covenants affecting such Person
or the business, Property, assets or operations
of such Person, and (b) obtain and maintain as
needed all Permits necessary for its operations
(including, without limitation, the operation of
the Projects) and maintain such Permits in good
standing, except where noncompliance with either
clause (a) or (b) above is not reasonably likely
to have a Material Adverse Effect; provided,
however, that the Borrower shall, and shall cause
each of its Subsidiaries to, comply with all
Environmental, Health or Safety Requirements of
Law affecting such Person or the business,
Property, assets or operations of such Person.
9.3.1. Payment of Taxes and Claims.
9.3.1. The Borrower shall pay, and shall
cause each of its Subsidiaries to pay, (i)
all taxes, assessments and other
governmental charges imposed upon it or on
any of its Property or assets or in
respect of any of its franchises,
licenses, receipts, sales, use, payroll,
employment, business, income or Property
before any penalty or interest accrues
thereon, and (ii) all Claims (including,
without limitation, claims for labor,
services, materials and supplies) for sums
which have become due and payable and
which by law have or may become a Lien
(other than a Lien permitted by Section
10.3 or a Customary Permitted Lien for
property taxes and assessments not yet due
upon any of the Borrower's or any of the
Borrower's Subsidiaries' Property or
assets, prior to the time when any penalty
or fine shall be incurred with respect
thereto; provided, however, that no such
taxes, assessments, fees and governmental
charges referred to in clause (i) above or
Claims referred to in clause (ii) above
need be paid if being contested in good
faith by appropriate proceedings
diligently instituted and conducted and if
such reserve or other appropriate
provision, if any, as shall be required in
conformity with GAAP shall have been made
therefor.
9.4. Insurance. The Borrower shall maintain
for itself and its Subsidiaries, or shall cause
each of its Subsidiaries to maintain in full
force and effect the insurance policies and
programs listed on Schedule 7.1-U or
substantially similar policies and programs or
other policies and programs as are reasonably
acceptable to the Payment and Disbursement Agent.
All such policies and programs shall be
maintained with insurers reasonably acceptable to
the Payment and Disbursement Agent.
9.5. Inspection of Property; Books and
Records; Discussions. The Borrower shall permit,
and cause each of its Subsidiaries to permit, any
authorized representative(s) designated by either
the Payment and Disbursement Agent or any
Arranger, Co-Agent or other Lender to visit and
inspect any of the Projects or inspect the MIS of
the Borrower or any of its Subsidiaries which
relates to the Projects, to examine, audit, check
and make copies of their respective financial and
accounting records, books, journals, orders,
receipts and any correspondence and other data
relating to their respective businesses or the
transactions contemplated hereby (including,
without limitation, in connection with
environmental compliance, hazard or liability),
and to discuss their affairs, finances and
accounts with their officers and independent
certified public accountants, all with a
representative of the Borrower present, upon
reasonable notice and at such reasonable times
during normal business hours, as often as may be
reasonably requested. Each such visitation and
inspection shall be at such visitor's expense.
The Borrower shall keep and maintain, and cause
its Subsidiaries to keep and maintain, in all
material respects on its MIS and otherwise proper
books of record and account in which entries in
conformity with GAAP shall be made of all
dealings and transactions in relation to their
respective businesses and activities.
9.6. ERISA Compliance. The Borrower shall,
and shall cause each of its Subsidiaries and
ERISA Affiliates to, establish, maintain and
operate all Plans to comply in all material
respects with the provisions of ERISA, the
Internal Revenue Code, all other applicable laws,
and the regulations and interpretations
thereunder and the respective requirements of the
governing documents for such Plans.
9.7. Maintenance of Property. The Borrower
shall, and shall cause each of its Subsidiaries
to, maintain in all material respects all of
their respective owned and leased Property in
good, safe and insurable condition and repair and
in a businesslike manner, and not permit, commit
or suffer any waste or abandonment of any such
Property and from time to time shall make or
cause to be made all material repairs, renewal
and replacements thereof, including, without
limitation, any capital improvements which may be
required to maintain the same in a businesslike
manner; provided, however, that such Property may
be altered or renovated in the ordinary course of
business of the Borrower or such applicable
Subsidiary. Without any limitation on the
foregoing, the Borrower shall maintain the
Projects in a manner such that each Project can
be used in the manner and substantially for the
purposes such Project is used on the Closing
Date, including, without limitation, maintaining
all utilities, access rights, zoning and
necessary Permits for such Project.
9.8. Hedging Requirements. The Borrower shall
maintain "Interest Rate Hedges" (as defined
below) on a notional amount of Indebtedness of
the Borrower and its Subsidiaries which, when
added to the aggregate principal amount of
Indebtedness of the Borrower and its Subsidiaries
which bears interest at a fixed rate, equals or
exceeds 75% of the aggregate principal amount of
all Indebtedness of the Borrower and its
Subsidiaries. "Interest Rate Hedges" shall mean
interest rate exchange, collar, cap, swap,
adjustable strike cap, adjustable strike corridor
or similar agreements having terms, conditions
and tenors reasonably acceptable to the Payment
and Disbursement Agent entered into by the
Borrower and/or its Subsidiaries in order to
provide protection to, or minimize the impact
upon, the Borrower and/or such Subsidiaries of
increasing floating rates of interest applicable
to Indebtedness.
9.9. Company Status. The Company shall at all
times (1) remain a publicly traded company listed
on the New York Stock Exchange or other national
stock exchange; (2) maintain its status as a REIT
under the Internal Revenue Code, (3) retain
direct or indirect management and control of the
Borrower, and (4) own, directly or indirectly, no
less than ninety-nine percent (99%) of the equity
Securities of SD (or any other General Partner of
the Borrower).
9.10. Ownership of Projects, Minority
Holdings and Property. The ownership of
substantially all wholly-owned Projects, Minority
Holdings and other Property of the Consolidated
Businesses shall be held by the Borrower and its
Subsidiaries and shall not be held directly by
any General Partner.
ARTICLE 10.
NEGATIVE COVENANTS
Borrower covenants and agrees that it shall comply with the
following covenants so long as any Revolving Credit Commitments are
outstanding and thereafter until payment in full of all of the
Obligations (other than indemnities pursuant to Section 15.3 not yet
due), unless the Requisite Lenders shall otherwise give prior written
consent:
10.1. Indebtedness. Neither the Borrower nor
any of its Subsidiaries shall directly or
indirectly create, incur, assume or otherwise
become or remain directly or indirectly liable
with respect to any Indebtedness, except
Indebtedness which, when aggregated with
Indebtedness of the General Partners, the
Borrower or any of their respective Subsidiaries
and Minority Holdings Indebtedness allocable in
accordance with GAAP to the Borrower or any
Subsidiary of the Borrower as of the time of
determination, would not exceed (i) sixty percent
(60%) of Capitalization Value as of the date of
incurrence, or (ii) in the case of Secured
Indebtedness of the Consolidated Businesses and
the Borrower's proportionate share of Secured
Indebtedness of its Minority Holdings, fifty-five
percent (55%) of the Capitalization Value. In
addition, neither the Borrower nor any of its
Subsidiaries shall incur, directly or indirectly,
Indebtedness for borrowed money from any of the
General Partners, unless such Indebtedness is
unsecured and expressly subordinated to the
payment of the Obligations.
10.2. Sales of Assets. Neither the Borrower
nor any of its Subsidiaries shall sell, assign,
transfer, lease, convey or otherwise dispose of
any Property, whether now owned or hereafter
acquired, or any income or profits therefrom, or
enter into any agreement to do so which would
result in a Material Adverse Effect.
10.3. Liens. Neither the Borrower nor any of
its Subsidiaries shall directly or indirectly
create, incur, assume or permit to exist any Lien
on or with respect to any Property, except:
10.3.1. Liens with respect to Capital Leases of
Equipment entered
into in the ordinary course of business of the Borrower pursuant to
which the aggregate Indebtedness under such Capital Leases does not
exceed $100,000 for any Project;
10.3.2. Liens securing permitted Secured
Indebtedness; and
10.3.3. Customary Permitted Liens.
10.4. Investments. Neither the Borrower nor
any of its Subsidiaries shall directly or
indirectly make or own any Investment except:
10.4.1. Investments in Cash
Equivalents;
10.4.2. Subject to the limitations of clause
(e) below,
Investments in the Borrower's Subsidiaries, the Borrower's
Affiliates and the Management Company;
10.4.3. Investments in the form of advances to
employees in the
ordinary course of business; provided that the aggregate principal
amount of all such advances at any time outstanding shall not
exceed $1,000,000;
10.4.4. Investments received in connection with
the bankruptcy or
reorganization of suppliers and lessees and in settlement of
delinquent obligations of, and other disputes with, lessees and
suppliers arising in the ordinary course of business;
10.4.5. Investments (i) in any individual Project
(other than
Mall of America), which when combined with like Investments of the
General Partners in such Project, do not exceed ten percent (10%)
of the Capitalization Value after giving effect to such Investments
of the Borrower or (ii) in a single Person owning a Project or
Property, or a portfolio of Projects or Properties, which when
combined with like Investments of the General Partners in such
Person, do not exceed thirty-three percent (33%) of the
Capitalization Value after giving effect to such Investments of the
Borrower, it being understood that no Investment in any individual
Person will be permitted if the Borrower's allocable share of the
Investment of such Person in any individual Project would exceed
the limitation described in clause (i) hereinabove.
10.5. Conduct of Business. Neither the
Borrower nor any of its Subsidiaries shall engage
in any business, enterprise or activity other
than (a) the businesses of acquiring, developing,
re-developing and managing predominantly retail
and mixed use Projects and portfolios of like
Projects and (b) any business or activities which
are substantially similar, related or incidental
thereto.
10.6. Transactions with Partners and
Affiliates. Neither the Borrower nor any of its
Subsidiaries shall directly or indirectly enter
into or permit to exist any transaction
(including, without limitation, the purchase,
sale, lease or exchange of any property or the
rendering of any service) with any holder or
holders of more than five percent (5%) of any
class of equity Securities of the Borrower, or
with any Affiliate of the Borrower which is not
its Subsidiary, on terms that are determined by
the respective Boards of Directors of the General
Partners to be less favorable to the Borrower or
any of its Subsidiaries, as applicable, than
those that might be obtained in an arm's length
transaction at the time from Persons who are not
such a holder or Affiliate. Nothing contained in
this Section 10.6 shall prohibit (a) increases in
compensation and benefits for officers and
employees of the Borrower or any of its
Subsidiaries which are customary in the industry
or consistent with the past business practice of
the Borrower or such Subsidiary, provided that no
Event of Default or Potential Event of Default
has occurred and is continuing; (b) payment of
customary partners' indemnities; or (c)
performance of any obligations arising under the
Loan Documents.
10.7. Restriction on Fundamental Changes.
Neither the Borrower nor any of its Subsidiaries
shall enter into any merger or consolidation, or
liquidate, wind-up or dissolve (or suffer any
liquidation or dissolution), or convey, lease,
sell, transfer or otherwise dispose of, in one
transaction or series of transactions, all or
substantially all of the Borrower's or any such
Subsidiary's business or Property, whether now or
hereafter acquired, except in connection with
issuance, transfer, conversion or repurchase of
limited partnership interests in Borrower.
Notwithstanding the foregoing, the Borrower shall
be permitted to merge with another Person so long
as the Borrower is the surviving Person following
such merger.
10.8. Margin Regulations; Securities Laws.
Neither the Borrower nor any of its Subsidiaries
shall use all or any portion of the proceeds of
any credit extended under this Agreement to
purchase or carry Margin Stock.
10.9. ERISA. The Borrower shall not and shall
not permit any of its Subsidiaries or ERISA
Affiliates to:
10.9.1. engage in any prohibited transaction
described in
Sections 406 of ERISA or 4975 of the Internal Revenue Code for
which a statutory or class exemption is not available or a private
exemption has not been previously obtained from the DOL;
10.9.2. permit to exist any accumulated funding
deficiency (as
defined in Sections 302 of ERISA and 412 of the Internal Revenue
Code), with respect to any Plan, whether or not waived;
10.9.3. fail to pay timely required
contributions or annual
installments due with respect to any waived funding deficiency to
any Plan;
10.9.4. terminate any Plan which would result
in any liability of
Borrower or any ERISA Affiliate under Title IV of ERISA;
10.9.5. fail to make any contribution or
payment to any
Multiemployer Plan which Borrower or any ERISA Affiliate may be
required to make under any agreement relating to such Multiemployer
Plan, or any law pertaining thereto;
10.9.6. fail to pay any required installment
or any other payment
required under Section 412 of the Internal Revenue Code on or
before the due date for such installment or other payment; or
10.9.7. amend a Plan resulting in an increase
in current
liability for the plan year such that the Borrower or any ERISA
Affiliate is required to provide security to such Plan under
Section 401(a)(29) of the Internal Revenue Code.
10.10. Organizational Documents. Neither the
General Partners, the Borrower nor any of its
Subsidiaries shall amend, modify or otherwise
change any of the terms or provisions in any of
their respective Organizational Documents as in
effect on the Closing Date, except amendments to
effect (a) a change of name of the Borrower or
any such Subsidiary, provided that the Borrower
shall have provided the Payment and Disbursement
Agent with sixty (60) days prior written notice
of any such name change, or (b) changes that
would not affect such Organizational Documents in
any material manner not otherwise permitted under
this Agreement.
10.11. Fiscal Year. Neither the Company, the
Borrower nor any of its Consolidated Businesses
shall change its Fiscal Year for accounting or
tax purposes from a period consisting of the 12-
month period ending on December 31 of each
calendar year.
10.12. Other Financial Covenants.
10.12.1. Minimum Combined Equity
Value. The Combined Equity Value shall at
no time be less than $4,500,000,000.
10.12.2. Consolidated Interest
Coverage Ratio. As of the first day of
each fiscal quarter for the immediately
preceding consecutive four fiscal
quarters, the ratio of (i) Combined EBITDA
to (ii) Combined Interest Expense shall
not be less than 1.8 to 1.0.
10.12.3. Minimum Debt Service
Coverage Ratio. As of the first day of
each fiscal quarter for the immediately
preceding consecutive four fiscal
quarters, the ratio of Combined EBITDA to
Combined Debt Service shall not be less
than 1.60 to 1.00.
10.12.4. Minimum Debt Yield. As of
the first day of each fiscal quarter for
the immediately preceding consecutive four
fiscal quarters, the ratio (expressed as a
percentage) (the "Debt Yield") of (1)
Combined EBITDA to (2) Total Adjusted
Outstanding Indebtedness (less
unrestricted Cash and Cash Equivalents of
the Borrower) shall not be less than
13.5%.
10.12.5. Unencumbered Combined
EBITDA to Total Unsecured Outstanding
Indebtedness. As of the first day of each
fiscal quarter for the immediately
preceding consecutive four fiscal
quarters, the ratio (expressed as a
percentage) (the "Unsecured Debt Yield")
of (i) the Unencumbered Combined EBITDA to
(ii) Total Unsecured Outstanding
Indebtedness (less unrestricted Cash and
Cash Equivalents of the Borrower) shall
not be less than 11%.
10.12.6. Unencumbered Combined
EBITDA to Unsecured Interest Expense. As
of the first day of each fiscal quarter
for the immediately preceding consecutive
four fiscal quarters, the ratio of (i) the
Unencumbered Combined EBITDA to (ii)
Unsecured Interest Expense shall not be
less than 1.5 to 1.0.
10.13. Pro Forma Adjustments. In connection
with an acquisition of a Project, a Property, or
a portfolio of Projects or Properties, by any of
the Consolidated Businesses or any Minority
Holding (whether such acquisition is direct or
through the acquisition of a Person which owns
such Property), the financial covenants contained
in this Agreement shall be calculated as follows
on a pro forma basis (with respect to the pro
rata share of the Borrower in the case of an
acquisition by a Minority Holding), which pro
forma calculation shall be effective until the
last day of the fourth fiscal quarter following
such acquisition (or such earlier test period, as
applicable), at which time actual performance
shall be utilized for such calculations.
10.13.1. Annual EBITDA. Annual
EBITDA for the acquired Property shall be
deemed to be an amount equal to (i) the
net purchase price of the acquired
Property (or the Borrower's pro rata share
of such net purchase price in the event of
an acquisition by a Minority Holding) for
the first fiscal quarter following such
acquisition, multiplied by 8.25% and (ii)
for the succeeding three fiscal quarters,
Annual EBITDA shall be deemed the greater
of (A) the net purchase price multiplied
by 8.25%, or (B) the actual EBITDA from
such acquired Property during the period
following Borrower's (direct or indirect)
acquisition, computed on an annualized
basis, provided that such annualized
EBITDA shall in no event exceed the final
product obtained after multiplying (1) the
net purchase price by (2) 1.1, and then by
(3) 8.25%.
10.13.2. Combined EBITDA. The pro
forma calculation of Annual EBITDA for the
acquired Property shall be added to the
calculation of Combined EBITDA.
10.13.3. Unencumbered Combined
EBITDA. If, after giving effect to the
acquisition, the acquired Property will
not be encumbered by Secured Indebtedness,
then the pro forma Annual EBITDA for the
acquired Property shall be added to the
calculation of Unencumbered Combined
EBITDA.
10.13.4. Secured Indebtedness. Any
Indebtedness secured by a Lien incurred
and/or assumed in connection with such
acquisition of a Property shall be added
to the calculation of Secured
Indebtedness.
10.13.5. Total Adjusted Outstanding
Indebtedness. Any Indebtedness incurred
and/or assumed in connection with such
acquisition shall be added to the
calculation of Total Adjusted Outstanding
Indebtedness.
10.13.6. Combined Interest Expense.
If any Indebtedness is incurred or assumed
in connection with such acquisition, then
the amount of interest expense to be
incurred on such Indebtedness during the
period following such acquisition,
computed on an annualized basis during the
applicable period, shall be added to the
calculation of Combined Interest Expense.
10.13.7. Total Unsecured Outstanding
Indebtedness. Any Indebtedness which is
not secured by a Lien and which is
incurred and/or assumed in connection with
such acquisition shall be added to the
calculation of Total Unsecured Outstanding
Indebtedness.
10.13.8. Unsecured Interest Expense.
If any unsecured Indebtedness is incurred
or assumed in connection with such
acquisition, then the amount of interest
expense to be incurred on such
Indebtedness during the period following
such acquisition, computed on an
annualized basis during the applicable
period, shall be added to the calculation
of Unsecured Interest Expense.
10.13.9. Debt Yield and Unencumbered
Debt Yield. For purposes of calculating
Debt Yield and Unencumbered Debt Yield
only, non-recourse Indebtedness and
completion guarantees incurred for the
construction of new Projects shall, until
such time as the interest expense
associated with such financing need no
longer be capitalized in accordance with
GAAP, be excluded from the calculation of
Total Adjusted Outstanding Indebtedness
(provided that recourse Indebtedness and
repayment guarantees shall be included in
such calculation).
ARTICLE 11.
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
11.1. Events of Default. Each of the
following occurrences shall constitute an Event
of Default under this Agreement:
11.1.1. Failure to Make Payments
When Due. The Borrower shall fail to pay
(i) when due any principal payment on the
Obligations which is due on the Revolving
Credit Termination Date or pursuant to the
terms of Section 2.1(a), Section 2.2,
Section 2.4, or Section 4.1(d) or (ii)
within five Business Days after the date
on which due, any interest payment on the
Obligations or any principal payment
pursuant to the terms of Section 4.1(a) or
(iii) when due, any principal payment on
the Obligations not referenced in clauses
(i) or (ii) hereinabove.
11.1.2. Breach of Certain
Covenants. The Borrower shall fail duly
and punctually to perform or observe any
agreement, covenant or obligation binding
on such Person under Sections 8.3, 9.1,
9.2, 9.3, 9.4, 9.5, 9.6, or Article X.
11.1.3. Breach of Representation or
Warranty. Any representation or warranty
made by the Borrower to the Payment and
Disbursement Agent, any Arranger or any
other Lender herein or by the Borrower or
any of its Subsidiaries in any of the
other Loan Documents or in any statement
or certificate at any time given by any
such Person pursuant to any of the Loan
Documents shall be false or misleading in
any material respect on the date as of
which made.
11.1.4. Other Defaults. Except as
set forth in the next sentence, the
Borrower shall default in the performance
of or compliance with any term contained
in this Agreement (other than as
identified in paragraphs (a), (b) or (c)
of this Section 11.1), or any default or
event of default shall occur under any of
the other Loan Documents, and such default
or event of default shall continue for
twenty (20) days after receipt of written
notice from the Payment and Disbursement
Agent thereof. With respect to any
failure in the performance of or
compliance with the terms of Section 9.9,
such failure or noncompliance shall not
constitute an Event of Default so long as
the Borrower cures such failure or
noncompliance within one hundred eighty
(180) days after the receipt of written
notice from the Payment and Disbursement
Agent thereof.
11.1.5. Acceleration of Other
Indebtedness. Any breach, default or
event of default shall occur, or any other
condition shall exist under any
instrument, agreement or indenture
pertaining to any recourse Indebtedness
(other than the Obligations) of the
Borrower or its Subsidiaries aggregating
$30,000,000 or more, and the effect
thereof is to cause an acceleration,
mandatory redemption or other required
repurchase of such Indebtedness, or permit
the holder(s) of such Indebtedness to
accelerate the maturity of any such
Indebtedness or require a redemption or
other repurchase of such Indebtedness; or
any such Indebtedness shall be otherwise
declared to be due and payable (by
acceleration or otherwise) or required to
be prepaid, redeemed or otherwise
repurchased by the Borrower or any of its
Subsidiaries (other than by a regularly
scheduled required prepayment) prior to
the stated maturity thereof.
11.1.6. Involuntary Bankruptcy;
Appointment of Receiver, Etc.
11.1.6.0.1. An involuntary case shall be commenced
against any General Partner, the Borrower, or any of its
Subsidiaries to which $150,000,000 or more of the Combined Equity
Value is attributable, and the petition shall not be dismissed,
stayed, bonded or discharged within sixty (60) days after
commencement of the case; or a court having jurisdiction in the
premises shall enter a decree or order for relief in respect of any
General Partner, the Borrower or any of its Subsidiaries in an
involuntary case, under any applicable bankruptcy, insolvency or
other similar law now or hereinafter in effect; or any other
similar relief shall be granted under any applicable federal,
state, local or foreign law; or the respective board of directors
of any General Partner or Limited Partners of the Borrower or the
board of directors or partners of any of the Borrower's
Subsidiaries (or any committee thereof) adopts any resolution or
otherwise authorizes any action to approve any of the foregoing.
11.1.6.0.2. A decree or order of a court having
jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer
having similar powers over any of the General Partners, the
Borrower, or any of its Subsidiaries to which $150,000,000 or more
of the Combined Equity Value is attributable, or over all or a
substantial part of the Property of any of the General Partners,
the Borrower or any of such Subsidiaries shall be entered; or an
interim receiver, trustee or other custodian of any of the General
Partners, the Borrower or any of such Subsidiaries or of all or a
substantial part of the Property of any of the General Partners,
the Borrower or any of such Subsidiaries shall be appointed or a
warrant of attachment, execution or similar process against any
substantial part of the Property of any of the General Partners,
the Borrower or any of such Subsidiaries shall be issued and any
such event shall not be stayed, dismissed, bonded or discharged
within sixty (60) days after entry, appointment or issuance; or the
respective board of directors of any of the General Partners or
Limited Partners of the Borrower or the board of directors or
partners of any of Borrower's Subsidiaries (or any committee
thereof) adopts any resolution or otherwise authorizes any action
to approve any of the foregoing.
11.1.7. Voluntary Bankruptcy;
Appointment of Receiver, Etc. Any of the
General Partners, the Borrower, or any of
its Subsidiaries to which $150,000,000 or
more of the Combined Equity Value is
attributable, shall commence a voluntary
case under any applicable bankruptcy,
insolvency or other similar law now or
hereafter in effect, or shall consent to
the entry of an order for relief in an
involuntary case, or to the conversion of
an involuntary case to a voluntary case,
under any such law, or shall consent to
the appointment of or taking possession by
a receiver, trustee or other custodian for
all or a substantial part of its Property;
or any of the General Partners, the
Borrower or any of such Subsidiaries shall
make any assignment for the benefit of
creditors or shall be unable or fail, or
admit in writing its inability, to pay its
debts as such debts become due.
11.1.8. Judgments and Unpermitted
Liens.
11.1.8.0.1. Any money judgment (other than a money
judgment covered by insurance as to which the insurance company has
acknowledged coverage), writ or warrant of attachment, or similar
process against the Borrower or any of its Subsidiaries or any of
their respective assets involving in any case an amount in excess
of $15,000,000 (other than with respect to Claims arising out of
non-recourse Indebtedness) is entered and shall remain
undischarged, unvacated, unbonded or unstayed for a period of sixty
(60) days or in any event later than five (5) days prior to the
date of any proposed sale thereunder; provided, however, if any
such judgment, writ or warrant of attachment or similar process is
in excess of $30,000,000 (other than with respect to Claims arising
out of non-recourse Indebtedness), the entry thereof shall
immediately constitute an Event of Default hereunder.
11.1.8.0.2. A federal, state, local or foreign tax
Lien is filed against the Borrower which is not discharged of
record, bonded over or otherwise secured to the satisfaction of the
Payment and Disbursement Agent within fifty (50) days after the
filing thereof or the date upon which the Payment and Disbursement
Agent receives actual knowledge of the filing thereof for an amount
which, either separately or when aggregated with the amount of any
judgments described in clause (i) above and/or the amount of the
Environmental Lien Claims described in clause (iii) below, equals
or exceeds $15,000,000.
11.1.8.0.3. An Environmental Lien is filed against
any Project with respect to Claims in an amount which, either
separately or when aggregated with the amount of any judgments
described in clause (i) above and/or the amount of the tax Liens
described in clause (ii) above, equals or exceeds $15,000,000.
11.1.9. Dissolution. Any order,
judgment or decree shall be entered
against the Borrower decreeing its
involuntary dissolution or split up; or
the Borrower shall otherwise dissolve or
cease to exist except as specifically
permitted by this Agreement.
11.1.10. Loan Documents. At any
time, for any reason, any Loan Document
ceases to be in full force and effect or
the Borrower seeks to repudiate its
obligations thereunder.
11.1.11. ERISA Termination Event.
Any ERISA Termination Event occurs which
the Payment and Disbursement Agent
believes could subject either the Borrower
or any ERISA Affiliate to liability in
excess of $500,000.
11.1.12. Waiver Application. The
plan administrator of any Plan applies
under Section 412(d) of the Code for a
waiver of the minimum funding standards of
Section 412(a) of the Internal Revenue
Code and the Payment and Disbursement
Agent believes that the substantial
business hardship upon which the
application for the waiver is based could
subject either the Borrower or any ERISA
Affiliate to liability in excess of
$500,000.
11.1.13. Intentionally Omitted.
11.1.14. Certain Defaults Pertaining
to the General Partners. The Company
shall fail to (i) maintain its status as a
REIT for federal income tax purposes, (ii)
continue as a general partner of the
Borrower, (iii) maintain ownership of no
less than 99% of the equity Securities of
SD (or any other General Partner of the
Borrower), (iv) comply with all
Requirements of Law applicable to it and
its businesses and Properties, in each
case where the failure to so comply
individually or in the aggregate will have
or is reasonably likely to have a Material
Adverse Effect, (v) remain listed on the
New York Stock Exchange or other national
stock exchange, or (vi) file all tax
returns and reports required to be filed
by it with any Governmental Authority as
and when required to be filed or to pay
any taxes, assessments, fees or other
governmental charges upon it or its
Property, assets, receipts, sales, use,
payroll, employment, licenses, income, or
franchises which are shown in such
returns, reports or similar statements to
be due and payable as and when due and
payable, except for taxes, assessments,
fees and other governmental charges (A)
that are being contested by the Company in
good faith by an appropriate proceeding
diligently pursued, (B) for which adequate
reserves have been made on its books and
records, and (C) the amounts the non-
payment of which would not, individually
or in the aggregate, result in a Material
Adverse Effect.
11.1.15. Merger or Liquidation of
the General Partners or the Borrower. Any
General Partner shall merge or liquidate
with or into any other Person and, as a
result thereof and after giving effect
thereto, (i) such General Partner is not
the surviving Person or (ii) such merger
or liquidation would effect an acquisition
of or Investment in any Person not
otherwise permitted under the terms of
this Agreement. The Borrower shall merge
or liquidate with or into any other Person
and, as a result thereof and after giving
effect thereto, (i) the Borrower is not
the surviving Person or (ii) such merger
or liquidation would effect an acquisition
of or Investment in any Person not
otherwise permitted under the terms of
this Agreement.
An Event of Default shall be deemed "continuing" until cured or waived
in writing in accordance with Section 15.7.
11.2. Rights and Remedies.
11.2.1. Acceleration and
Termination. Upon the occurrence of any
Event of Default described in Sections
11.1(f) or 11.1(g), the Revolving Credit
Commitments shall automatically and
immediately terminate and the unpaid
principal amount of, and any and all
accrued interest on, the Obligations and
all accrued fees shall automatically
become immediately due and payable,
without presentment, demand, or protest or
other requirements of any kind (including,
without limitation, valuation and
appraisement, diligence, presentment,
notice of intent to demand or accelerate
and of acceleration), all of which are
hereby expressly waived by the Borrower;
and upon the occurrence and during the
continuance of any other Event of Default,
the Payment and Disbursement Agent shall
at the request, or may with the consent,
of the Requisite Lenders, by written
notice to the Borrower, (i) declare that
the Revolving Credit Commitments are
terminated, whereupon the Revolving Credit
Commitments and the obligation of each
Lender to make any Loan hereunder and of
each Lender to issue or participate in any
Letter of Credit not then issued shall
immediately terminate, and/or (ii) declare
the unpaid principal amount of and any and
all accrued and unpaid interest on the
Obligations to be, and the same shall
thereupon be, immediately due and payable,
without presentment, demand, or protest or
other requirements of any kind (including,
without limitation, valuation and
appraisement, diligence, presentment,
notice of intent to demand or accelerate
and of acceleration), all of which are
hereby expressly waived by the Borrower.
11.2.2. Rescission. If at any time
after termination of the Revolving Credit
Commitments and/or acceleration of the
maturity of the Loans, the Borrower shall
pay all arrears of interest and all
payments on account of principal of the
Loans and Reimbursement Obligations which
shall have become due otherwise than by
acceleration (with interest on principal
and, to the extent permitted by law, on
overdue interest, at the rates specified
in this Agreement) and all Events of
Default and Potential Events of Default
(other than nonpayment of principal of and
accrued interest on the Loans due and
payable solely by virtue of acceleration)
shall be remedied or waived pursuant to
Section 15.7, then upon the written
consent of the Requisite Lenders and
written notice to the Borrower, the
termination of the Revolving Credit
Commitments and/or the acceleration and
their consequences may be rescinded and
annulled; but such action shall not affect
any subsequent Event of Default or
Potential Event of Default or impair any
right or remedy consequent thereon. The
provisions of the preceding sentence are
intended merely to bind the Lenders to a
decision which may be made at the election
of the Requisite Lenders; they are not
intended to benefit the Borrower and do
not give the Borrower the right to require
the Lenders to rescind or annul any
acceleration hereunder, even if the
conditions set forth herein are met.
11.2.3. Enforcement. The Borrower
acknowledges that in the event the
Borrower or any of its Subsidiaries fails
to perform, observe or discharge any of
their respective obligations or
liabilities under this Agreement or any
other Loan Document, any remedy of law may
prove to be inadequate relief to the
Payment and Disbursement Agent, the
Arrangers and the other Lenders;
therefore, the Borrower agrees that the
Payment and Disbursement Agent, the
Arrangers and the other Lenders shall be
entitled to temporary and permanent
injunctive relief in any such case without
the necessity of proving actual damages.
ARTICLE 12.
THE AGENTS
12.0.1. Appointment. 12.0.1. Each
Lender hereby designates and appoints UBS
as the Payment and Disbursement Agent, the
Arrangers as the Arrangers, the Co-
Arrangers as the Co-Arrangers and the Co-
Agents as the Co-Agents of such Lender
under this Agreement, and each Lender
hereby irrevocably authorizes the Payment
and Disbursement Agent, the Arrangers, the
Co-Arrangers and the Co-Agents to take
such actions on its behalf under the
provisions of this Agreement and the Loan
Documents and to exercise such powers as
are set forth herein or therein together
with such other powers as are reasonably
incidental thereto. The Payment and
Disbursement Agent, the Arrangers and the
Co-Agents each agree to act as such on the
express conditions contained in this
Article XII. The Payment and Disbursement
Agent shall administer this Agreement and
service the Loans with the same degree of
care as the Payment and Disbursement Agent
would use in servicing a loan of similar
size and type for its own account.
12.0.2. The provisions of this
Article XII are solely for the benefit of
the Payment and Disbursement Agent, the
Arrangers, the Co-Arrangers, the Co-Agents
and the other Lenders, and neither the
Borrower, the General Partners nor any
Subsidiary of the Borrower shall have any
rights to rely on or enforce any of the
provisions hereof (other than as expressly
set forth in Section 12.7). In performing
their respective functions and duties
under this Agreement, the Payment and
Disbursement Agent, each Arranger, each Co-
Arranger and each Co-Agent shall act
solely as agents of the Lenders and do not
assume and shall not be deemed to have
assumed any obligation or relationship of
agency, trustee or fiduciary with or for
any General Partner, the Borrower or any
Subsidiary of the Borrower. The Payment
and Disbursement Agent, each Arranger,
each Co-Arranger and each Co-Agent may
perform any of their respective duties
hereunder, or under the Loan Documents, by
or through their respective agents or
employees.
12.1. Nature of Duties. The Payment and
Disbursement Agent, the Arrangers, the Co-
Arrangers and the Co-Agents shall not have any
duties or responsibilities except those expressly
set forth in this Agreement or in the Loan
Documents. The duties of the Payment and
Disbursement Agent, the Arrangers, the Co-
Arrangers and the Co-Agents shall be mechanical
and administrative in nature. None of the
Payment and Disbursement Agent, any Arranger, any
Co-Arranger or any Co-Agent shall have by reason
of this Agreement a fiduciary relationship in
respect of any Holder. Nothing in this Agreement
or any of the Loan Documents, expressed or
implied, is intended to or shall be construed to
impose upon the Payment and Disbursement Agent or
any Arranger, Co-Arranger or Co-Agent any
obligations in respect of this Agreement or any
of the Loan Documents except as expressly set
forth herein or therein. The Payment and
Disbursement Agent and each Arranger, Co-Arranger
and Co-Agent each hereby agrees that its duties
shall include providing copies of documents
received by such Agent from the Borrower which
are reasonably requested by any Lender and
promptly notifying each Lender upon its obtaining
actual knowledge of the occurrence of any Event
of Default hereunder. In addition, the Payment
and Disbursement Agent shall promptly deliver to
each of the Lenders copies of all notices of
default and other formal notices (including,
without limitation, requests for waivers or
modifications) sent or received.
12.2. Right to Request Instructions. The
Payment and Disbursement Agent and each Arranger,
Co-Arranger and Co-Agent may at any time request
instructions from the Lenders with respect to any
actions or approvals which by the terms of any of
the Loan Documents such Agent is permitted or
required to take or to grant, and such Agent
shall be absolutely entitled to refrain from
taking any action or to withhold any approval and
shall not be under any liability whatsoever to
any Person for refraining from any action or
withholding any approval under any of the Loan
Documents until it shall have received such
instructions from those Lenders from whom such
Agent is required to obtain such instructions for
the pertinent matter in accordance with the Loan
Documents. Without limiting the generality of
the foregoing, such Agent shall take any action,
or refrain from taking any action, which is
permitted by the terms of the Loan Documents upon
receipt of instructions from those Lenders from
whom such Agent is required to obtain such
instructions for the pertinent matter in
accordance with the Loan Documents, provided,
that no Holder shall have any right of action
whatsoever against the Payment and Disbursement
Agent or any Arranger, Co-Arranger or Co-Agent as
a result of such Agent acting or refraining from
acting under the Loan Documents in accordance
with the instructions of the Requisite Lenders
or, where required by the express terms of this
Agreement, a greater proportion of the Lenders.
12.3. Reliance. The Payment and Disbursement
Agent and each Arranger, Co-Arranger and Co-Agent
shall each be entitled to rely upon any written
notices, statements, certificates, orders or
other documents or any telephone message believed
by it in good faith to be genuine and correct and
to have been signed, sent or made by the proper
Person, and with respect to all matters
pertaining to this Agreement or any of the Loan
Documents and its duties hereunder or thereunder,
upon advice of legal counsel (including counsel
for the Borrower), independent public accountants
and other experts selected by it.
12.4. Indemnification. To the extent that the
Payment and Disbursement Agent or any Arranger,
Co-Arranger or Co-Agent is not reimbursed and
indemnified by the Borrower, the Lenders will
reimburse and indemnify such Agent solely in its
capacity as such Agent and not as a Lender for
and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments,
suits, and reasonable costs, expenses or
disbursements of any kind or nature whatsoever
which may be imposed on, incurred by, or asserted
against it in any way relating to or arising out
of the Loan Documents or any action taken or
omitted by such Agent under the Loan Documents,
in proportion to each Lender's Pro Rata Share,
unless and to the extent that any such
liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, and
reasonable costs, expenses or disbursements shall
arise as a result of such Agent's gross
negligence or willful misconduct. Such Agent
agrees to refund to the Lenders any of the
foregoing amounts paid to it by the Lenders which
amounts are subsequently recovered by such Agent
from the Borrower or any other Person on behalf
of the Borrower. The obligations of the Lenders
under this Section 12.5 shall survive the payment
in full of the Loans, the Reimbursement
Obligations and all other Obligations and the
termination of this Agreement.
12.5. Agents Individually. With respect to
their respective Pro Rata Share of the Revolving
Credit Commitments hereunder, if any, and the
Loans made by them, if any, the Payment and
Disbursement Agent, the Arrangers, the Co-
Arrangers and the Co-Agents shall have and may
exercise the same rights and powers hereunder and
are subject to the same obligations and
liabilities as and to the extent set forth herein
for any other Lender. The terms "Lenders" or
"Requisite Lenders" or any similar terms shall,
unless the context clearly otherwise indicates,
include the Payment and Disbursement Agent, each
Arranger, each Co-Arranger and each other Co-
Agent in its respective individual capacity as a
Lender or as one of the Requisite Lenders. The
Payment and Disbursement Agent and each other
Arranger, Co-Arranger and Co-Agent and each of
their respective Affiliates may accept deposits
from, lend money to, and generally engage in any
kind of banking, trust or other business with the
Borrower or any of its Subsidiaries as if they
were not acting as the Payment and Disbursement
Agent, the Arrangers, Co-Arrangers, and Co-Agents
pursuant hereto.
12.6. Successor Agents.
12.6.1. Resignation and Removal.
Any Agent may resign from the performance
of all its functions and duties hereunder
at any time by giving at least thirty (30)
Business Days' prior written notice to the
Borrower and the other Lenders, unless
applicable law requires a shorter notice
period or that there be no notice period,
in which instance such applicable law
shall control. Any Agent may be removed
(i) at the direction of Lenders whose Pro
Rata Shares, in the aggregate, are greater
than fifty percent (50%), in the event the
Agent is not also a Lender having a
Revolving Credit Commitment of at least
$20,000,000 or six percent (6%) of the
Revolving Credit Commitments at such time
or (ii) at the direction of the Requisite
Lenders, in the event such Agent shall
commit gross negligence or willful
misconduct in the performance of its
duties hereunder. Such resignation or
removal shall take effect upon the
acceptance by a successor Agent of
appointment pursuant to this Section 12.7.
12.6.2. Appointment by Requisite
Lenders. Upon any such resignation or
removal becoming effective, (i) if an
Arranger, Co-Arranger or Co-Agent shall
then be acting with respect to this
Agreement, such Arranger, Co-Arranger or
Co-Agent shall become the Payment and
Disbursement Agent or (ii) if no Arranger,
Co-Arranger or Co-Agent shall then be
acting with respect to this Agreement, the
Lenders shall have the right to appoint a
successor Payment and Disbursement Agent
selected from among the Lenders.
12.6.3. Appointment by Retiring
Agent. If a successor Payment and
Disbursement Agent shall not have been
appointed within the thirty (30) Business
Day or shorter period provided in
paragraph (a) of this Section 12.7, the
retiring Agent shall then appoint a
successor Agent who shall serve as Payment
and Disbursement Agent until such time, if
any, as the Lenders appoint a successor
Agent as provided above.
12.6.4. Rights of the Successor and
Retiring Agents. Upon the acceptance of
any appointment as Payment and
Disbursement 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
Agent, and the retiring Agent shall be
discharged from its duties and obligations
under this Agreement. After any retiring
Agent's resignation hereunder as Agent,
the provisions of this Article XII shall
inure to its benefit as to any actions
taken or omitted to be taken by it while
it was the Agent under this Agreement.
12.7. Relations Among the Lenders. Each
Lender agrees that it will not take any legal
action, nor institute any actions or proceedings,
against the Borrower hereunder with respect to
any of the Obligations, without the prior written
consent of the Lenders. Without limiting the
generality of the foregoing, no Lender may
accelerate or otherwise enforce its portion of
the Obligations, or unilaterally terminate its
Revolving Credit Commitment except in accordance
with Section 11.2(a).
ARTICLE 13.
YIELD PROTECTION
13.1. Taxes.
13.1.1. Payment of Taxes. Any and
all payments by the Borrower hereunder or
under any Note or other document
evidencing any Obligations shall be made,
in accordance with Section 4.2, free and
clear of and without reduction for any and
all present or future taxes, levies,
imposts, deductions, charges,
withholdings, and all stamp or documentary
taxes, excise taxes, ad valorem taxes and
other taxes imposed on the value of the
Property, charges or levies which arise
from the execution, delivery or
registration, or from payment or
performance under, or otherwise with
respect to, any of the Loan Documents or
the Revolving Credit Commitments and all
other liabilities with respect thereto
excluding, in the case of each Lender,
taxes imposed on or measured by net income
or overall gross receipts and capital and
franchise taxes imposed on it by (i) the
United States, (ii) the Governmental
Authority of the jurisdiction in which
such Lender's Applicable Lending Office is
located or any political subdivision
thereof or (iii) the Governmental
Authority in which such Person is
organized, managed and controlled or any
political subdivision thereof (all such
non-excluded taxes, levies, imposts,
deductions, charges and withholdings being
hereinafter referred to as "Taxes"). If
the Borrower shall be required by law to
withhold or deduct any Taxes from or in
respect of any sum payable hereunder or
under any such Note or document to any
Lender, (x) the sum payable to such Lender
shall be increased as may be necessary so
that after making all required withholding
or deductions (including withholding or
deductions applicable to additional sums
payable under this Section 13.1) such
Lender receives an amount equal to the sum
it would have received had no such
withholding or deductions been made, (y)
the Borrower shall make such withholding
or deductions, and (z) the Borrower shall
pay the full amount withheld or deducted
to the relevant taxation authority or
other authority in accordance with
applicable law.
13.1.2. Indemnification. The
Borrower will indemnify each Lender
against, and reimburse each Lender on
demand for, the full amount of all Taxes
(including, without limitation, any Taxes
imposed by any Governmental Authority on
amounts payable under this Section 13.1
and any additional income or franchise
taxes resulting therefrom) incurred or
paid by such Lender or any of its
Affiliates and any liability (including
penalties, interest, and out-of-pocket
expenses paid to third parties) arising
therefrom or with respect thereto, whether
or not such Taxes were lawfully payable.
A certificate as to any additional amount
payable to any Person under this Section
13.1 submitted by it to the Borrower
shall, absent manifest error, be final,
conclusive and binding upon all parties
hereto. Each Lender agrees, within a
reasonable time after receiving a written
request from the Borrower, to provide the
Borrower and the Payment and Disbursement
Agent with such certificates as are
reasonably required, and take such other
actions as are reasonably necessary to
claim such exemptions as such Lender may
be entitled to claim in respect of all or
a portion of any Taxes which are otherwise
required to be paid or deducted or
withheld pursuant to this Section 13.1 in
respect of any payments under this
Agreement or under the Notes.
13.1.3. Receipts. Within thirty
(30) days after the date of any payment of
Taxes by the Borrower, the Borrower will
furnish to the Payment and Disbursement
Agent, at its address referred to in
Section 15.8, the original or a certified
copy of a receipt evidencing payment
thereof.
13.1.3.0.1. Foreign Bank Certifications. 13.1.3.0.1.
Each Lender that is not created or organized under the laws of the
United States or a political subdivision thereof shall deliver to
the Borrower and the Payment and Disbursement Agent on the Closing
Date or the date on which such Lender becomes a Lender pursuant to
Section 15.1 hereof a true and accurate certificate executed in
duplicate by a duly authorized officer of such Lender to the effect
that such Lender is eligible to receive payments hereunder and
under the Notes without deduction or withholding of United States
federal income tax (I) under the provisions of an applicable tax
treaty concluded by the United States (in which case the
certificate shall be accompanied by two duly completed copies of
IRS Form 1001 (or any successor or substitute form or forms)) or
(II) under Sections 1442(c)(1) and 1442(a) of the Internal Revenue
Code (in which case the certificate shall be accompanied by two
duly completed copies of IRS Form 4224 (or any successor or
substitute form or forms)).
13.1.3.0.2. Each Lender further agrees to deliver to the
Borrower and the Payment and Disbursement Agent from time to time a
true and accurate certificate executed in duplicate by a duly
authorized officer of such Lender before or promptly upon the
occurrence of any event requiring a change in the most recent
certificate previously delivered by it to the Borrower and the
Payment and Disbursement Agent pursuant to this Section 13.1(d).
Each certificate required to be delivered pursuant to this Section
13.1(d)(ii) shall certify as to one of the following:
13.1.3.0.2.1. that such Lender can continue to receive
payments hereunder and under the Notes without deduction or
withholding of United States federal income tax;
13.1.3.0.2.2. that such Lender cannot continue to receive
payments hereunder and under the Notes without deduction or
withholding of United States federal income tax as specified
therein but does not require additional payments pursuant to
Section 13.1(a) because it is entitled to recover the full amount
of any such deduction or withholding from a source other than the
Borrower; or
13.1.3.0.2.3. that such Lender is no longer capable of
receiving payments hereunder and under the Notes without deduction
or withholding of United States federal income tax as specified
therein and that it is not capable of recovering the full amount of
the same from a source other than the Borrower.
Each Lender agrees to deliver to the Borrower and the Payment and
Disbursement Agent further duly completed copies of the above-mentioned
IRS forms on or before the earlier of (x) the date that any such form
expires or becomes obsolete or otherwise is required to be resubmitted
as a condition to obtaining an exemption from withholding from United
States federal income tax and (y) fifteen (15) days after the occurrence
of any event requiring a change in the most recent form previously
delivered by such Lender to the Borrower and Payment and Disbursement
Agent, unless any change in treaty, law, regulation, or official
interpretation thereof which would render such form inapplicable or
which would prevent the Lender from duly completing and delivering such
form has occurred prior to the date on which any such delivery would
otherwise be required and the Lender promptly advises the Borrower that
it is not capable of receiving payments hereunder and under the Notes
without any deduction or withholding of United States federal income
tax.
13.2. Increased Capital. If after the date
hereof any Lender determines that (i) the
adoption or implementation of or any change in or
in the interpretation or administration of any
law or regulation or any guideline or request
from any central bank or other Governmental
Authority or quasi-governmental authority
exercising jurisdiction, power or control over
any Lender or banks or financial institutions
generally (whether or not having the force of
law), compliance with which affects or would
affect the amount of capital required or expected
to be maintained by such Lender or any
corporation controlling such Lender and (ii) the
amount of such capital is increased by or based
upon (A) the making or maintenance by any Lender
of its Loans, any Lender's participation in or
obligation to participate in the Loans, Letters
of Credit or other advances made hereunder or the
existence of any Lender's obligation to make
Loans or (B) the issuance or maintenance by any
Lender of, or the existence of any Lender's
obligation to issue, Letters of Credit, then, in
any such case, upon written demand by such Lender
(with a copy of such demand to the Payment and
Disbursement Agent), the Borrower shall
immediately pay to the Payment and Disbursement
Agent for the account of such Lender, from time
to time as specified by such Lender, additional
amounts sufficient to compensate such Lender or
such corporation therefor. Such demand shall be
accompanied by a statement as to the amount of
such compensation and include a brief summary of
the basis for such demand. Such statement shall
be conclusive and binding for all purposes,
absent manifest error.
13.3. Changes; Legal Restrictions. If after
the date hereof any Lender determines that the
adoption or implementation of or any change in or
in the interpretation or administration of any
law or regulation or any guideline or request
from any central bank or other Governmental
Authority or quasi-governmental authority
exercising jurisdiction, power or control over
any Lender, or over banks or financial
institutions generally (whether or not having the
force of law), compliance with which:
13.3.1. does or will subject a Lender (or its
Applicable Lending
Office or Eurodollar Affiliate) to charges (other than taxes) of
any kind which such Lender reasonably determines to be applicable
to the Revolving Credit Commitments of the Lenders to make
Eurodollar Rate Loans or IBOR Rate Loans or issue and/or
participate in Letters of Credit or change the basis of taxation of
payments to that Lender of principal, fees, interest, or any other
amount payable hereunder with respect to Eurodollar Rate Loans,
IBOR Rate Loans, Letters of Credit or Money Market Loans; or
13.3.2. does or will impose, modify, or hold
applicable, in the
determination of a Lender, any reserve (other than reserves taken
into account in calculating the Eurodollar Rate), special deposit,
compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities (including those
pertaining to Letters of Credit) in or for the account of, advances
or loans by, commitments made, or other credit extended by, or any
other acquisition of funds by, a Lender or any Applicable Lending
Office or Eurodollar Affiliate of that Lender;
and the result of any of the foregoing is to increase the cost to that
Lender of making, renewing or maintaining the Loans or its Revolving
Credit Commitment or issuing or participating in the Letters of Credit
or to reduce any amount receivable thereunder; then, in any such case,
upon written demand by such Lender (with a copy of such demand to the
Payment and Disbursement Agent), the Borrower shall immediately pay to
the Payment and Disbursement Agent for the account of such Lender, from
time to time as specified by such Lender, such amount or amounts as may
be necessary to compensate such Lender or its Eurodollar Affiliate for
any such additional cost incurred or reduced amount received. Such
demand shall be accompanied by a statement as to the amount of such
compensation and include a brief summary of the basis for such demand.
Such statement shall be conclusive and binding for all purposes, absent
manifest error.
13.4. Replacement of Certain Lenders. In the
event a Lender (a "Designee Lender") shall have
requested additional compensation from the
Borrower under Section 13.2 or under Section
13.3, the Borrower may, at its sole election, (a)
make written demand on such Designee Lender (with
a copy to the Payment and Disbursement Agent) for
the Designee Lender to assign, and such Designee
Lender shall assign pursuant to one or more duly
executed Assignment and Acceptances to one or
more Eligible Assignees which the Borrower or the
Payment and Disbursement Agent shall have
identified for such purpose, all of such Designee
Lender's right and obligations under this
Agreement and the Notes (including, without
limitation, its Revolving Credit Commitment, all
Loans owing to it, and all of its participation
interests in Letters of Credit) in accordance
with Section 15.1 or (b) repay all Loans owing to
the Designee Lender together with interest
accrued with respect thereto to the date of such
repayment and all fees and other charges accrued
or payable under the terms of this Agreement for
the benefit of the Designee Lender to the date of
such repayment and remit to the Payment and
Disbursement Agent to be held as cash collateral
an amount equal to the participation interest of
the Designee Lender in Letters of Credit. Any
such repayment and remittance shall be for the
sole credit of the Designee Lender and not for
any other Lender. Upon delivery of such repayment
and remittance in immediately available funds as
aforesaid, the Designee Lender shall cease to be
a Lender under this Agreement. All expenses
incurred by the Payment and Disbursement Agent in
connection with the foregoing shall be for the
sole account of the Borrower and shall constitute
Obligations hereunder. In no event shall
Borrower's election under the provisions of this
Section 13.4 affect its obligation to pay the
additional compensation required under either
Section 13.2 or Section 13.3.
ARTICLE 14.
INTENTIONALLY OMITTED
ARTICLE 15.
MISCELLANEOUS
15.1. Assignments and Participations.
15.1.1. Assignments. No
assignments or participations of any
Lender's rights or obligations under this
Agreement shall be made except in
accordance with this Section 15.1. Each
Lender may assign to one or more Eligible
Assignees all or a portion of its rights
and obligations under this Agreement
(including all of its rights and
obligations with respect to the Loans and
the Letters of Credit) in accordance with
the provisions of this Section 15.1.
15.1.2. Limitations on Assignments.
For so long as no Event of Default has
occurred and is continuing, each
assignment shall be subject to the
following conditions: (i) each assignment
shall be of a constant, and not a varying,
ratable percentage of all of the assigning
Lender's rights and obligations under this
Agreement and, in the case of a partial
assignment, shall be in a minimum
principal amount of $15,000,000, (ii) each
such assignment shall be to an Eligible
Assignee, (iii) the parties to each such
assignment shall execute and deliver to
the Payment and Disbursement Agent, for
its acceptance and recording in the
Register, an Assignment and Acceptance,
(iv) each Arranger shall maintain a
minimum Revolving Credit Commitment in an
amount greater than the Revolving Credit
Commitment of any other Lender (other than
the other Arrangers) or an amount
sufficient to maintain such Arranger's Pro
Rata Share as of the Closing Date,
whichever is less, and (v) each Co-Agent
shall maintain a minimum Revolving Credit
Commitment in an amount greater than the
Revolving Credit Commitment of any other
Lender (other than the other Co-Agents and
the Arrangers) or an amount sufficient to
maintain such Co-Agent's Pro Rata Share as
of the Closing Date, whichever is less.
Upon the occurrence and continuance of an
Event of Default, none of the foregoing
restrictions on assignments shall apply.
Upon such execution, delivery, acceptance
and recording in the Register, from and
after the effective date specified in each
Assignment and Acceptance and agreed to by
the Payment and Disbursement Agent, (A)
the assignee thereunder shall, in addition
to any rights and obligations hereunder
held by it immediately prior to such
effective date, if any, have the rights
and obligations hereunder that have been
assigned to it pursuant to such Assignment
and Acceptance and shall, to the fullest
extent permitted by law, have the same
rights and benefits hereunder as if it
were an original Lender hereunder, (B) the
assigning Lender shall, to the extent that
rights and obligations hereunder have been
assigned by it pursuant to such Assignment
and Acceptance, relinquish its rights and
be released from its obligations under
this Agreement (and, in the case of an
Assignment and Acceptance covering all or
the remaining portion of such assigning
Lender's rights and obligations under this
Agreement, the assigning Lender shall
cease to be a party hereto) and (C) the
Borrower shall execute and deliver to the
assignee thereunder a Note evidencing its
obligations to such assignee with respect
to the Loans.
15.1.3. The Register. The Payment
and Disbursement Agent shall maintain at
its address referred to in Section 15.8 a
copy of each Assignment and Acceptance
delivered to and accepted by it and a
register (the "Register") for the
recordation of the names and addresses of
the Lenders, the Revolving Credit
Commitment of, and the principal amount of
the Loans under the Revolving Credit
Commitments owing to, each Lender from
time to time and whether such Lender is an
original Lender or the assignee of another
Lender pursuant to an Assignment and
Acceptance. The entries in the Register
shall be conclusive and binding for all
purposes, absent manifest error, and the
Borrower and each of its Subsidiaries, the
Payment and Disbursement Agent and the
other Lenders may treat each Person whose
name is recorded in the Register as a
Lender hereunder for all purposes of this
Agreement. The Register shall be
available for inspection by the Borrower
or any Lender at any reasonable time and
from time to time upon reasonable prior
notice.
15.1.4. Fee. Upon its receipt of
an Assignment and Acceptance executed by
the assigning Lender and an Eligible
Assignee and a processing and recordation
fee of $3,500 (payable by the assignee to
the Payment and Disbursement Agent), the
Payment and Disbursement Agent shall, if
such Assignment and Acceptance has been
completed and is in compliance with this
Agreement and in substantially the form of
Exhibit A hereto, (i) accept such
Assignment and Acceptance, (ii) record the
information contained therein in the
Register and (iii) give prompt notice
thereof to the Borrower and the other
Lenders.
15.1.5. Participations. Each
Lender may sell participations to one or
more other financial institutions in or to
all or a portion of its rights and
obligations under and in respect of any
and all facilities under this Agreement
(including, without limitation, all or a
portion of any or all of its Revolving
Credit Commitment hereunder and the
Committed Loans owing to it and its
undivided interest in the Letters of
Credit); provided, however, that (i) such
Lender's obligations under this Agreement
(including, without limitation, its
Revolving Credit Commitment hereunder)
shall remain unchanged, (ii) such Lender
shall remain solely responsible to the
other parties hereto for the performance
of such obligations, (iii) the Borrower,
the Payment and Disbursement Agent and the
other Lenders shall continue to deal
solely and directly with such Lender in
connection with such Lender's rights and
obligations under this Agreement, (iv)
each participation shall be in a minimum
amount of $10,000,000, and (v) such
participant's rights to agree or to
restrict such Lender's ability to agree to
the modification, waiver or release of any
of the terms of the Loan Documents, to
consent to any action or failure to act by
any party to any of the Loan Documents or
any of their respective Affiliates, or to
exercise or refrain from exercising any
powers or rights which any Lender may have
under or in respect of the Loan Documents,
shall be limited to the right to consent
to (A) increase in the Revolving Credit
Commitment of the Lender from whom such
participant purchased a participation,
(B) reduction of the principal of, or rate
or amount of interest on the Loans subject
to such participation (other than by the
payment or prepayment thereof),
(C) postponement of any date fixed for any
payment of principal of, or interest on,
the Loan(s) subject to such participation
and (D) release of any guarantor of the
Obligations. Participations by a Person
in a Money Market Loan of any Lender shall
not be deemed "participations" for
purposes of this Section 15.1(e) and shall
not be subject to the restrictions on
"participations" contained herein.
15.1.6. Any Lender (each, a
"Designating Lender") may at any time
designate one Designated Bank to fund
Money Market Loans on behalf of such
Designating Lender subject to the terms of
this Section 15.1(f) and the provisions in
Section 15.1 (b) and (e) shall not apply
to such designation. No Lender may
designate more than one (1) Designated
Bank. The parties to each such
designation shall execute and deliver to
the Payment and Disbursement Agent for its
acceptance a Designation Agreement. Upon
such receipt of an appropriately completed
Designation Agreement executed by a
Designating Lender and a designee
representing that it is a Designated Bank,
the Payment and Disbursement Agent will
accept such Designation Agreement and will
give prompt notice thereof to the
Borrower, whereupon, (i) the Borrower
shall execute and deliver to the
Designating Bank a Designated Bank Note
payable to the order of the Designated
Bank, (ii) from and after the effective
date specified in the Designation
Agreement, the Designated Bank shall
become a party to this Agreement with a
right to make Money Market Loans on behalf
of its Designating Lender pursuant to
Section 2.2 after the Borrower has
accepted a Money Market Loan (or portion
thereof) of the Designating Lender, and
(iii) the Designated Bank shall not be
required to make payments with respect to
any obligations in this Agreement except
to the extent of excess cash flow of such
Designated Bank which is not otherwise
required to repay obligations of such
Designated Bank which are then due and
payable; provided, however, that
regardless of such designation and
assumption by the Designated Bank, the
Designating Lender shall be and remain
obligated to the Borrower, the Payment and
Disbursement Agent, the Arrangers, the Co-
Arrangers, the Co-Agents and the other
Lenders for each and every of the
obligations of the Designating Lender and
its related Designated Bank with respect
to this Agreement, including, without
limitation, any indemnification
obligations under Section 12.5 hereof and
any sums otherwise payable to the Borrower
by the Designated Bank. Each Designating
Lender shall serve as the administrative
agent of the Designated Bank and shall on
behalf of, and to the exclusion of, the
Designated Bank: (i) receive any and all
payments made for the benefit of the
Designated Bank and (ii) give and receive
all communications and notices and take
all actions hereunder, including, without
limitation, votes, approvals, waivers,
consents and amendments under or relating
to this Agreement and the other Loan
Documents. Any such notice,
communication, vote, approval, waiver,
consent or amendment shall be signed by
the Designating Lender as administrative
agent for the Designated Bank and shall
not be signed by the Designated Bank on
its own behalf but shall be binding on the
Designated Bank to the same extent as if
actually signed by the Designated Bank.
The Borrower, the Payment and Disbursement
Agent, the Arrangers, the Co-Arrangers, Co-
Agents and Lenders may rely thereon
without any requirement that the
Designated Bank sign or acknowledge the
same. No Designated Bank may assign or
transfer all or any portion of its
interest hereunder or under any other Loan
Document, other than assignments to the
Designating Lender which originally
designated such Designated Bank or
otherwise in accordance with the
provisions of Section 15.1 (b) and (e).
15.1.7. Information Regarding the
Borrower. Any Lender may, in connection
with any assignment or participation or
proposed assignment or participation
pursuant to this Section 15.1, disclose to
the assignee or participant or proposed
assignee or participant, any information
relating to the Borrower or its
Subsidiaries furnished to such Lender by
the Payment and Disbursement Agent or by
or on behalf of the Borrower; provided
that, prior to any such disclosure, such
assignee or participant, or proposed
assignee or participant, shall agree, in
writing, to preserve in accordance with
Section 15.20 the confidentiality of any
confidential information described
therein.
15.1.8. SPC Assignment.
Notwithstanding anything to the contrary
contained herein, any Lender (a "Granting
Lender") may grant to a special purpose
funding vehicle (a "SPC"), identified in
writing from time to time by the Granting
Lender to the Payment and Disbursement
Agent, the option to purchase from the
Granting Lender all or any part of any
Loan that such Granting Lender would
otherwise be obligated to make as provided
herein, provided that (i) nothing herein
shall constitute a commitment to purchase
any Loan by any SPC, and (ii) if a SPC
elects not to exercise such option or
otherwise fails to fund all or any part of
such Loan, the Granting Lender shall be
obligated to fund such Loan pursuant to
the terms hereof. The funding of a Loan by
a SPC hereunder shall utilize the
Revolving Credit Commitment of the
Granting Lender to the same extent, and as
if, such Loan were funded by such Granting
Lender. Each party hereby agrees that no
SPC shall be liable for any indemnity or
payment under this Agreement for which a
Lender would otherwise be liable, for so
long as, and to the extent, the Granting
Lender provides such indemnity or makes
such payment. In furtherance of the
foregoing, each party hereto hereby agrees
that, prior to the date that is one year
and one day after the payment in full of
all outstanding Loans of any SPC, it will
not institute against, or join any other
person in instituting against, such SPC
any bankruptcy, reorganization,
arrangement, insolvency or liquidation
proceedings or similar proceedings under
the laws of the United States.
Notwithstanding anything to the contrary
contained in this Agreement, the Granting
Lender may disclose to a SPC and any SPC
may disclose to any Rating Agency or
provider of any surety or guarantee to
such SPC any information relating to the
SPC's funding of Loans, all on a
confidential basis. This clause (h) may
not be amended without the prior written
consent of each Granting Lender, all or
any part of whose Loans are being funded
by a SPC at the time of such amendment.
15.1.9. Payment to Participants.
Anything in this Agreement to the contrary
notwithstanding, in the case of any
participation, all amounts payable by the
Borrower under the Loan Documents shall be
calculated and made in the manner and to
the parties required hereby as if no such
participation had been sold.
15.1.10. Lenders' Creation of
Security Interests. Notwithstanding any
other provision set forth in this
Agreement, any Lender may at any time
create a security interest in all or any
portion of its rights under this Agreement
(including, without limitation,
Obligations owing to it and any Note held
by it) in favor of any Federal Reserve
bank in accordance with Regulation A of
the Federal Reserve Board.
15.2. Expenses.
15.2.1. Generally. The Borrower
agrees upon demand to pay or reimburse the
Payment and Disbursement Agent and each
Arranger for all of their respective
reasonable external audit and
investigation expenses, and for the fees,
expenses and disbursements of Skadden,
Arps, Slate, Meagher & Flom LLP (but not
of other legal counsel) and for all other
out-of-pocket costs and expenses of every
type and nature incurred by the Payment
and Disbursement Agent or each Arranger in
connection with (i) the audit and
investigation of the Consolidated
Businesses, the Projects and other
Properties of the Consolidated Businesses
in connection with the preparation,
negotiation, and execution of the Loan
Documents; (ii) the preparation,
negotiation, execution and interpretation
of this Agreement (including, without
limitation, the satisfaction or attempted
satisfaction of any of the conditions set
forth in Article VI), the Loan Documents,
and the making of the Loans hereunder;
(iii) the ongoing administration of this
Agreement and the Loans, including
consultation with attorneys in connection
therewith and with respect to the Payment
and Disbursement Agent's rights and
responsibilities under this Agreement and
the other Loan Documents; (iv) the
protection, collection or enforcement of
any of the Obligations or the enforcement
of any of the Loan Documents; (v) the
commencement, defense or intervention in
any court proceeding relating in any way
to the Obligations, any Project, the
Borrower, any of its Subsidiaries, this
Agreement or any of the other Loan
Documents; (vi) the response to, and
preparation for, any subpoena or request
for document production with which the
Payment and Disbursement Agent or any
other Agents or any other Lender is served
or deposition or other proceeding in which
any Lender is called to testify, in each
case, relating in any way to the
Obligations, a Project, the Borrower, any
of the Consolidated Businesses, this
Agreement or any of the other Loan
Documents; and (vii) any amendments,
consents, waivers, assignments,
restatements, or supplements to any of the
Loan Documents and the preparation,
negotiation, and execution of the same.
15.2.2. After Default. The
Borrower further agrees to pay or
reimburse the Payment and Disbursement
Agent, the Arrangers, the Co-Arrangers,
the Co-Agents and each of the Lenders upon
demand for all out-of-pocket costs and
expenses, including, without limitation,
reasonable attorneys' fees (including
allocated costs of internal counsel and
costs of settlement) incurred by such
entity after the occurrence of an Event of
Default (i) in enforcing any Loan Document
or Obligation or any security therefor or
exercising or enforcing any other right or
remedy available by reason of such Event
of Default; (ii) in connection with any
refinancing or restructuring of the credit
arrangements provided under this Agreement
in the nature of a "work-out" or in any
insolvency or bankruptcy proceeding; (iii)
in commencing, defending or intervening in
any litigation or in filing a petition,
complaint, answer, motion or other
pleadings in any legal proceeding relating
to the Obligations, a Project, any of the
Consolidated Businesses and related to or
arising out of the transactions
contemplated hereby or by any of the other
Loan Documents; and (iv) in taking any
other action in or with respect to any
suit or proceeding (bankruptcy or
otherwise) described in clauses (i)
through (iii) above.
15.3. Indemnity. The Borrower further agrees
(a) to defend, protect, indemnify, and hold
harmless the Payment and Disbursement Agent, the
Arrangers, the Co-Arrangers, the Co-Agents and
each and all of the other Lenders and each of
their respective officers, directors, employees,
attorneys and agents (including, without
limitation, those retained in connection with the
satisfaction or attempted satisfaction of any of
the conditions set forth in Article VI)
(collectively, the "Indemnitees") from and
against any and all liabilities, obligations,
losses (other than loss of profits), damages,
penalties, actions, judgments, suits, claims,
costs, reasonable expenses and disbursements of
any kind or nature whatsoever (excluding any
taxes and including, without limitation, the
reasonable fees and disbursements of counsel for
such Indemnitees in connection with any
investigative, administrative or judicial
proceeding, whether or not such Indemnitees shall
be designated a party thereto), imposed on,
incurred by, or asserted against such Indemnitees
in any manner relating to or arising out of (i)
this Agreement or the other Loan Documents, or
any act, event or transaction related or
attendant thereto, the making of the Loans and
the issuance of and participation in Letters of
Credit hereunder, the management of such Loans or
Letters of Credit, the use or intended use of the
proceeds of the Loans or Letters of Credit
hereunder, or any of the other transactions
contemplated by the Loan Documents, or (ii) any
Liabilities and Costs relating to violation of
any Environmental, Health or Safety Requirements
of Law, the past, present or future operations of
the Borrower, any of its Subsidiaries or any of
their respective predecessors in interest, or,
the past, present or future environmental, health
or safety condition of any respective Property of
the Borrower or any of its Subsidiaries, the
presence of asbestos-containing materials at any
respective Property of the Borrower or any of its
Subsidiaries, or the Release or threatened
Release of any Contaminant into the environment
(collectively, the "Indemnified Matters");
provided, however, the Borrower shall have no
obligation to an Indemnitee hereunder with
respect to Indemnified Matters caused by or
resulting from the willful misconduct or gross
negligence of such Indemnitee, as determined by a
court of competent jurisdiction in a non-
appealable final judgment; and (b) not to assert
any claim against any of the Indemnitees, on any
theory of liability, for consequential or
punitive damages arising out of, or in any way in
connection with, the Revolving Credit
Commitments, the Revolving Credit Obligations, or
the other matters governed by this Agreement and
the other Loan Documents. To the extent that the
undertaking to indemnify, pay and hold harmless
set forth in the preceding sentence may be
unenforceable because it is violative of any law
or public policy, the Borrower shall contribute
the maximum portion which it is permitted to pay
and satisfy under applicable law, to the payment
and satisfaction of all Indemnified Matters
incurred by the Indemnitees.
15.4. Change in Accounting Principles. If any
change in the accounting principles used in the
preparation of the most recent financial
statements referred to in Sections 8.1 or 8.2 are
hereafter required or permitted by the rules,
regulations, pronouncements and opinions of the
Financial Accounting Standards Board or the
American Institute of Certified Public
Accountants (or successors thereto or agencies
with similar functions) and are adopted by any
General Partner or the Borrower, as applicable,
with the agreement of its independent certified
public accountants and such changes result in a
change in the method of calculation of any of the
covenants, standards or terms found in Article X,
the parties hereto agree to enter into
negotiations in order to amend such provisions so
as to equitably reflect such changes with the
desired result that the criteria for evaluating
compliance with such covenants, standards and
terms by the Borrower shall be the same after
such changes as if such changes had not been
made; provided, however, no change in GAAP that
would affect the method of calculation of any of
the covenants, standards or terms shall be given
effect in such calculations until such provisions
are amended, in a manner satisfactory to the
Payment and Disbursement Agent and the Borrower,
to so reflect such change in accounting
principles.
15.5. Setoff. In addition to any Liens
granted under the Loan Documents and any rights
now or hereafter granted under applicable law,
upon the occurrence and during the continuance of
any Event of Default, each Lender and any
Affiliate of any Lender is hereby authorized by
the Borrower at any time or from time to time,
without notice to any Person (any such notice
being hereby expressly waived) to set off and to
appropriate and to apply any and all deposits
(general or special, including, but not limited
to, indebtedness evidenced by certificates of
deposit, whether matured or unmatured (but not
including trust accounts)) and any other
Indebtedness at any time held or owing by such
Lender or any of its Affiliates to or for the
credit or the account of the Borrower against and
on account of the Obligations of the Borrower to
such Lender or any of its Affiliates, including,
but not limited to, all Loans and Letters of
Credit and all claims of any nature or
description arising out of or in connection with
this Agreement, irrespective of whether or not
(i) such Lender shall have made any demand
hereunder or (ii) the Payment and Disbursement
Agent, at the request or with the consent of the
Requisite Lenders, shall have declared the
principal of and interest on the Loans and other
amounts due hereunder to be due and payable as
permitted by Article XI and even though such
Obligations may be contingent or unmatured. Each
Lender agrees that it shall not, without the
express consent of the Requisite Lenders, and
that it shall, to the extent it is lawfully
entitled to do so, upon the request of the
Requisite Lenders, exercise its setoff rights
hereunder against any accounts of the Borrower
now or hereafter maintained with such Lender or
any Affiliate.
15.6. Ratable Sharing. The Lenders agree
among themselves that (i) with respect to all
amounts received by them which are applicable to
the payment of the Obligations (excluding the
repayment of Money Market Loans to a particular
Money Market Lender and the fees described in
Sections 3.1(g), 5.2(f), and 5.3 and Article
XIII) equitable adjustment will be made so that,
in effect, all such amounts will be shared among
them ratably in accordance with their Pro Rata
Shares, whether received by voluntary payment, by
the exercise of the right of setoff or banker's
lien, by counterclaim or cross-action or by the
enforcement of any or all of the Obligations
(excluding the repayment of Money Market Loans to
a particular Money Market Lender and the fees
described in Sections 3.1(g), 5.2(f), and 5.3 and
Article XIII), (ii) if any of them shall by
voluntary payment or by the exercise of any right
of counterclaim, setoff, banker's lien or
otherwise, receive payment of a proportion of the
aggregate amount of the Obligations held by it,
which is greater than the amount which such
Lender is entitled to receive hereunder, the
Lender receiving such excess payment shall
purchase, without recourse or warranty, an
undivided interest and participation (which it
shall be deemed to have done simultaneously upon
the receipt of such payment) in such Obligations
owed to the others so that all such recoveries
with respect to such Obligations shall be applied
ratably in accordance with their Pro Rata Shares;
provided, however, that if all or part of such
excess payment received by the purchasing party
is thereafter recovered from it, those purchases
shall be rescinded and the purchase prices paid
for such participations shall be returned to such
party to the extent necessary to adjust for such
recovery, but without interest except to the
extent the purchasing party is required to pay
interest in connection with such recovery. The
Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to
this Section 15.6 may, to the fullest extent
permitted by law, exercise all its rights of
payment (including, subject to Section 15.5, the
right of setoff) with respect to such
participation as fully as if such Lender were the
direct creditor of the Borrower in the amount of
such participation.
15.7. Amendments and Waivers.
15.7.1. General Provisions. Unless
otherwise provided for or required in this
Agreement, no amendment or modification of
any provision of this Agreement or any of
the other Loan Documents shall be
effective without the written agreement of
the Requisite Lenders (which the Requisite
Lenders shall have the right to grant or
withhold in their sole discretion) and the
Borrower; provided, however, that the
Borrower's agreement shall not be required
for any amendment or modification of
Sections 12.1 through 12.8. No termination
or waiver of any provision of this
Agreement or any of the other Loan
Documents, or consent to any departure by
the Borrower therefrom, shall be effective
without the written concurrence of the
Requisite Lenders, which the Requisite
Lenders shall have the right to grant or
withhold in their sole discretion. All
amendments, waivers and consents not
specifically reserved to the Payment and
Disbursement Agent, the Arrangers, the Co-
Arrangers, the other Co-Agents or the
other Lenders in Section 15.7(b), 15.7(c),
and in other provisions of this Agreement
shall require only the approval of the
Requisite Lenders. Any waiver or consent
shall be effective only in the specific
instance and for the specific purpose for
which it was given. No notice to or demand
on the Borrower in any case shall entitle
the Borrower to any other or further
notice or demand in similar or other
circumstances. Notwithstanding the
foregoing, no amendment, waiver or consent
shall, unless in writing and signed by the
Designating Lender on behalf of its
Designated Bank affected thereby, (a)
subject such Designated Bank to any
additional obligations, (b) reduce the
principal of, interest on, or other
amounts due with respect to, the
Designated Bank Note made payable to such
Designated Bank, or (c) postpone any date
fixed for any payment of principal of, or
interest on, or other amounts due with
respect to the Designated Bank Note made
payable to the Designated Bank.
15.7.2. Amendments, Consents and
Waivers by Affected Lenders. Any
amendment, modification, termination,
waiver or consent with respect to any of
the following provisions of this Agreement
shall be effective only by a written
agreement, signed by each Lender affected
thereby as described below:
15.7.2.0.1. waiver of any of the conditions specified in Sections
6.1 and 6.2 (except with respect to a condition based upon another
provision of this Agreement, the waiver of which requires only the
concurrence of the Requisite Lenders),
15.7.2.0.2. increase in the amount of such Lender's Revolving
Credit Commitment,
15.7.2.0.3. reduction of the principal of, rate or amount of
interest on the Loans, the Reimbursement Obligations, or any fees
or other amounts payable to such Lender (other than by the payment
or prepayment thereof), and
15.7.2.0.4. postponement or extension of any date (other than the
Revolving Credit Termination Date postponement or extension of
which is governed by Section 15.7(c)(i)) fixed for any payment of
principal of, or interest on, the Loans, the Reimbursement
Obligations or any fees or other amounts payable to such Lender
(except with respect to any modifications of the application
provisions relating to prepayments of Loans and other Obligations
which are governed by Section 4.2(b)).
15.7.3. Amendments, Consents and
Waivers by All Lenders. Any amendment,
modification, termination, waiver or
consent with respect to any of the
following provisions of this Agreement
shall be effective only by a written
agreement, signed by each Lender:
15.7.3.0.1. postponement of the Revolving Credit Termination Date,
or increase in the Maximum Revolving Credit Amount to any amount in
excess of $1,250,000,000,
15.7.3.0.2. change in the definition of Requisite Lenders or in
the aggregate Pro Rata Share of the Lenders which shall be required
for the Lenders or any of them to take action hereunder or under
the other Loan Documents,
15.7.3.0.3. amendment of Section 15.6 or this Section 15.7,
15.7.3.0.4. assignment of any right or interest in or under this
Agreement or any of the other Loan Documents by the Borrower, and
15.7.3.0.5. waiver of any Event of Default described in Sections
11.1(a), (f), (g), (i), (n), and (o).
15.7.4. Payment and Disbursement
Agent Authority. The Payment and
Disbursement Agent may, but shall have no
obligation to, with the written
concurrence of any Lender, execute
amendments, modifications, waivers or
consents on behalf of that Lender.
Notwithstanding anything to the contrary
contained in this Section 15.7, no
amendment, modification, waiver or consent
shall affect the rights or duties of the
Payment and Disbursement Agent under this
Agreement and the other Loan Documents,
unless made in writing and signed by the
Payment and Disbursement Agent in addition
to the Lenders required above to take such
action. Notwithstanding anything herein to
the contrary, in the event that the
Borrower shall have requested, in writing,
that any Lender agree to an amendment,
modification, waiver or consent with
respect to any particular provision or
provisions of this Agreement or the other
Loan Documents, and such Lender shall have
failed to state, in writing, that it
either agrees or disagrees (in full or in
part) with all such requests (in the case
of its statement of agreement, subject to
satisfactory documentation and such other
conditions it may specify) within thirty
(30) days after such Lender receives such
request, then such Lender hereby
irrevocably authorizes the Payment and
Disbursement Agent to agree or disagree,
in full or in part, and in the Payment and
Disbursement Agent's sole discretion, to
such requests on behalf of such Lender as
such Lenders' attorney-in-fact and to
execute and deliver any writing approved
by the Payment and Disbursement Agent
which evidences such agreement as such
Lender's duly authorized agent for such
purposes.
15.8. Notices. Unless otherwise specifically
provided herein, any notice or other
communication herein required or permitted to be
given shall be in writing and may be personally
served, sent by facsimile transmission or by
courier service and shall be deemed to have been
given when delivered in person or by courier
service, or upon receipt of a facsimile
transmission. Notices to the Payment and
Disbursement Agent pursuant to Articles II, IV or
XII shall not be effective until received by the
Payment and Disbursement Agent. For the purposes
hereof, the addresses of the parties hereto
(until notice of a change thereof is delivered as
provided in this Section 15.8) shall be as set
forth below each party's name on the signature
pages hereof or the signature page of any
applicable Assignment and Acceptance, or, as to
each party, at such other address as may be
designated by such party in a written notice to
all of the other parties to this Agreement.
15.9. Survival of Warranties and Agreements.
All representations and warranties made herein
and all obligations of the Borrower in respect of
taxes, indemnification and expense reimbursement
shall survive the execution and delivery of this
Agreement and the other Loan Documents, the
making and repayment of the Loans, the issuance
and discharge of Letters of Credit hereunder and
the termination of this Agreement and shall not
be limited in any way by the passage of time or
occurrence of any event and shall expressly cover
time periods when the Payment and Disbursement
Agent, any of the other Agents or any of the
other Lenders may have come into possession or
control of any Property of the Borrower or any of
its Subsidiaries.
15.10. Failure or Indulgence Not Waiver;
Remedies Cumulative. No failure or delay on the
part of the Payment and Disbursement Agent, any
other Lender or any other Agent in the exercise
of any power, right or privilege under any of the
Loan Documents shall impair such power, right or
privilege or be construed to be a waiver of any
default or acquiescence therein, nor shall any
single or partial exercise of any such power,
right or privilege preclude other or further
exercise thereof or of any other right, power or
privilege. All rights and remedies existing
under the Loan Documents are cumulative to and
not exclusive of any rights or remedies otherwise
available.
15.11. Marshalling; Payments Set Aside. None
of the Payment and Disbursement Agent, any other
Lender or any other Co-Agent shall be under any
obligation to marshall any assets in favor of the
Borrower or any other party or against or in
payment of any or all of the Obligations. To the
extent that the Borrower makes a payment or
payments to the Payment and Disbursement Agent,
any Agent or any other Lender or any such Person
exercises its rights of setoff, and such payment
or payments or the proceeds of such enforcement
or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid
to a trustee, receiver or any other party, then
to the extent of such recovery, the obligation or
part thereof originally intended to be satisfied,
and all Liens, right and remedies therefor, shall
be revived and continued in full force and effect
as if such payment had not been made or such
enforcement or setoff had not occurred.
15.12. Severability. In case any provision in
or obligation under this Agreement or the other
Loan Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining
provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
15.13. Headings. Section headings in this
Agreement are included herein for convenience of
reference only and shall not constitute a part of
this Agreement or be given any substantive
effect.
15.14. Governing Law. THIS AGREEMENT SHALL BE
INTERPRETED, AND THE RIGHTS AND LIABILITIES OF
THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO ITS CONFLICT OF LAWS
PRINCIPLES.
15.15. Limitation of Liability. No claim may
be made by any Lender, any Co-Agent, any Co-
Arranger, any Arranger, the Payment and
Disbursement Agent, or any other Person against
any Lender (acting in any capacity hereunder) or
the Affiliates, directors, officers, employees,
attorneys or agents of any of them for any
consequential or punitive damages in respect of
any claim for breach of contract or any other
theory of liability arising out of or related to
the transactions contemplated by this Agreement,
or any act, omission or event occurring in
connection therewith; and each Lender, each Co-
Agent, each Arranger, each Co-Arranger and the
Payment and Disbursement Agent hereby waives,
releases and agrees not to sue upon any such
claim for any such damages, whether or not
accrued and whether or not known or suspected to
exist in its favor.
15.16. Successors and Assigns. This Agreement
and the other Loan Documents shall be binding
upon the parties hereto and their respective
successors and assigns and shall inure to the
benefit of the parties hereto and the successors
and permitted assigns of the Lenders. The rights
hereunder of the Borrower, or any interest
therein, may not be assigned without the prior
written consent of all Lenders, except in
accordance with the provisions of Article XIV
hereof.
15.17. Certain Consents and Waivers of the
Borrower.
15.17.0.0.1. Personal Jurisdiction. 15.17.0.0.1. EACH
OF THE LENDERS AND THE BORROWER IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL COURT SITTING
IN NEW YORK, NEW YORK, AND ANY COURT HAVING JURISDICTION OVER
APPEALS OF MATTERS HEARD IN SUCH COURTS, IN ANY ACTION OR
PROCEEDING ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL
TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT, WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE,
OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH STATE COURT OR, TO THE EXTENT PERMITTED BY LAW,
IN SUCH FEDERAL COURT. THE BORROWER IRREVOCABLY DESIGNATES AND
APPOINTS CT CORPORATION SYSTEM, 1633 BROADWAY, NEW YORK, NEW YORK
10019, AS ITS AGENT (THE "PROCESS AGENT") FOR SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT, SUCH SERVICE
BEING HEREBY ACKNOWLEDGED TO BE EFFECTIVE AND BINDING SERVICE IN
EVERY RESPECT. EACH OF THE LENDERS AND THE BORROWER AGREES THAT A
FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE
AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT
OR IN ANY OTHER MANNER PROVIDED BY LAW. THE BORROWER WAIVES IN ALL
DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE
COURT CONSIDERING THE DISPUTE.
15.17.0.0.2. THE BORROWER AGREES THAT THE PAYMENT AND
DISBURSEMENT AGENT SHALL HAVE THE RIGHT TO PROCEED AGAINST THE
BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION NECESSARY OR
APPROPRIATE TO ENABLE THE PAYMENT AND DISBURSEMENT AGENT AND THE
OTHER LENDERS TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN
FAVOR OF THE PAYMENT AND DISBURSEMENT AGENT OR ANY OTHER LENDER.
THE BORROWER AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE
COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY THE PAYMENT AND
DISBURSEMENT AGENT, ANY LENDER OR ANY OTHER AGENT TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE PAYMENT AND
DISBURSEMENT AGENT, ANY LENDER OR ANY SUCH OTHER AGENT. THE
BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF
THE COURT IN WHICH THE PAYMENT AND DISBURSEMENT AGENT, ANY OTHER
AGENT OR ANY LENDER MAY COMMENCE A PROCEEDING DESCRIBED IN THIS
SECTION.
15.17.1. Service of Process. THE
BORROWER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION
OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE PROCESS AGENT OR
THE BORROWER'S NOTICE ADDRESS SPECIFIED
BELOW, SUCH SERVICE TO BECOME EFFECTIVE
UPON RECEIPT. THE BORROWER IRREVOCABLY
WAIVES ANY OBJECTION (INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION OF THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS) WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY SUCH ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT IN ANY
JURISDICTION SET FORTH ABOVE. NOTHING
HEREIN SHALL AFFECT THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR SHALL LIMIT THE RIGHT OF THE
PAYMENT AND DISBURSEMENT AGENT OR THE
OTHER LENDERS TO BRING PROCEEDINGS AGAINST
THE BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION.
15.17.2. WAIVER OF JURY TRIAL. EACH
OF THE PAYMENT AND DISBURSEMENT AGENT AND
THE OTHER LENDERS AND THE BORROWER
IRREVOCABLY WAIVES TRIAL BY JURY IN ANY
ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT.
15.18. Counterparts; Effectiveness;
Inconsistencies. This Agreement and any
amendments, waivers, consents, or supplements
hereto may be executed in counterparts, each of
which when so executed and delivered shall be
deemed an original, but all such counterparts
together shall constitute but one and the same
instrument. This Agreement shall become
effective against the Borrower and each Lender on
the Closing Date. This Agreement and each of the
other Loan Documents shall be construed to the
extent reasonable to be consistent one with the
other, but to the extent that the terms and
conditions of this Agreement are actually
inconsistent with the terms and conditions of any
other Loan Document, this Agreement shall govern.
In the event the Lenders enter into any co-lender
agreement with the Arrangers pertaining to the
Lenders' respective rights with respect to voting
on any matter referenced in this Agreement or the
other Loan Documents on which the Lenders have a
right to vote under the terms of this Agreement
or the other Loan Documents, such co-lender
agreement shall be construed to the extent
reasonable to be consistent with this Agreement
and the other Loan Documents, but to the extent
that the terms and conditions of such co-lender
agreement are actually inconsistent with the
terms and conditions of this Agreement and/or the
other Loan Documents, such co-lender agreement
shall govern. Notwithstanding the foregoing, any
rights reserved to the Payment and Disbursement
Agent or the Arrangers or the Co-Arrangers or the
Co-Agents under this Agreement and the other Loan
Documents shall not be varied or in any way
affected by such co-lender agreement and the
rights and obligation of the Borrower under the
Loan Documents will not be varied.
15.19. Limitation on Agreements. All
agreements between the Borrower, the Payment and
Disbursement Agent, each Arranger, each Co-
Arranger, each Co-Agent and each Lender in the
Loan Documents are hereby expressly limited so
that in no event shall any of the Loans or other
amounts payable by the Borrower under any of the
Loan Documents be directly or indirectly secured
(within the meaning of Regulation U) by Margin
Stock.
15.20. Confidentiality. Subject to Section
15.1(g), the Lenders shall hold all nonpublic
information obtained pursuant to the requirements
of this Agreement, and identified as such by the
Borrower, in accordance with such Lender's
customary procedures for handling confidential
information of this nature and in accordance with
safe and sound banking practices (provided that
such Lender may share such information with its
Affiliates in accordance with such Lender's
customary procedures for handling confidential
information of this nature and provided further
that such Affiliate shall hold such information
confidential) and in any event the Lenders may
make disclosure reasonably required by a bona
fide offeree, transferee or participant in
connection with the contemplated transfer or
participation or as required or requested by any
Governmental Authority or representative thereof
or pursuant to legal process and shall require
any such offeree, transferee or participant to
agree (and require any of its offerees,
transferees or participants to agree) to comply
with this Section 15.20. In no event shall any
Lender be obligated or required to return any
materials furnished by the Borrower; provided,
however, each offeree shall be required to agree
that if it does not become a transferee or
participant it shall return all materials
furnished to it by the Borrower in connection
with this Agreement. Any and all confidentiality
agreements entered into between any Lender and
the Borrower shall survive the execution of this
Agreement.
15.21. Disclaimers. The Payment and
Disbursement Agent, the Arrangers, the Co-
Arrangers, the other Co-Agents and the other
Lenders shall not be liable to any contractor,
subcontractor, supplier, laborer, architect,
engineer, tenant or other party for services
performed or materials supplied in connection
with any work performed on the Projects,
including any TI Work. The Payment and
Disbursement Agent, the Arrangers, the Co-
Arrangers, the other Co-Agents and the other
Lenders shall not be liable for any debts or
claims accruing in favor of any such parties
against the Borrower or others or against any of
the Projects. The Borrower is not and shall not
be an agent of any of the Payment and
Disbursement Agent, the Arrangers, the Co-
Arrangers, the other Co-Agents or the other
Lenders for any purposes and none of the Lenders,
the Co-Agents, the Arrangers the Co-Arrangers,,
or the Payment and Disbursement Agent shall be
deemed partners or joint venturers with Borrower
or any of its Affiliates. None of the Payment
and Disbursement Agent, the Arrangers, the Co-
Arrangers, the other Co-Agents or the other
Lenders shall be deemed to be in privity of
contract with any contractor or provider of
services to any Project, nor shall any payment of
funds directly to a contractor or subcontractor
or provider of services be deemed to create any
third party beneficiary status or recognition of
same by any of the Payment and Disbursement
Agent, the Arrangers, the Co-Arrangers, the other
Co-Agents or the other Lenders and the Borrower
agrees to hold the Payment and Disbursement
Agent, the Arrangers, the Co-Arrangers, the other
Co-Agents and the other Lenders harmless from any
of the damages and expenses resulting from such a
construction of the relationship of the parties
or any assertion thereof.
15.22. No Bankruptcy Proceedings. Each of
the Borrower, the Arrangers, the Co-Agents and
the other Lenders hereby agrees that it will not
institute against any Designated Bank or join any
other Person in instituting against any
Designated Bank any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding
under any federal or state bankruptcy or similar
law, until the later to occur of (i) one year and
one day after the payment in full of the latest
maturing commercial paper note issued by such
Designated Bank and (ii) the Revolving Credit
Termination Date.
15.23. Retained Properties. Notwithstanding
anything contained in this Agreement to the
contrary, the Company or any Subsidiary thereof
will retain direct or indirect ownership of the
Retained Properties, or, if the Company shall
elect to sell or otherwise transfer any of the
Retained Properties, it shall retain any and all
proceeds received in connection therewith, and
will not contribute any portion thereof to the
Borrower or any other entity or distribute any
portion thereof to any of its shareholders.
15.24. Entire Agreement. This Agreement, taken together with
all of the other Loan Documents, embodies the entire agreement and
understanding among the parties hereto and supersedes all prior
agreements and understandings, written and oral, relating to the subject
matter hereof.
IN WITNESS WHEREOF, this Agreement has been duly executed as
of the date first above written.
BORROWER: SIMON PROPERTY GROUP, L.P.,
a Delaware limited partnership
By: SIMON PROPERTY GROUP, INC.,
as Managing General Partner
By: _______________________
David Simon
Chief Executive Officer
Notice Address:
Merchants Plaza
P.O. Box 7033
Indianapolis, Indiana 46207
Attn: Mr. David Simon
Telecopy: (317) 263-7037
with a copy to:
Simon Property Group, L.P.
Merchants Plaza
P.O. Box 7033
Indianapolis, Indiana 46207
Attn: General Counsel
Telecopy: (317) 685-7221
PAYMENT AND DISBURSEMENT AGENT
AND LEAD ARRANGER:
UBS AG,
STAMFORD BRANCH
By:_
Name: Jeffrey W. Wald
Title:Executive Director
By:_____________________
Name:
Title:
Notice
Address, Domestic
Lending
Office and Eurodollar Lending Office:
UBS AG
299 Park Avenue
New York, New York 10171
Attn: Ms. Xiomara Martez
Telecopy: (212) 821-4138
Pro Rata Share: 6.12%
Revolving Credit Commitment: $76,500,000DOCUMENTATION AGENT
AND ARRANGER: MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By:_____________________
Name:
Title:
Notice Address:
c/o J.P. Morgan Services Inc.
500 Stanton Christiana Road
Newark, Delaware 19713-2107
Attn: Mr. William Lamb
Telecopy: (302) 634-1093
Domestic and Eurodollar
Lending Office:
c/o J.P. Morgan Services Inc.
500 Stanton Christiana Road
Newark, Delaware 19713-2107
Attn: Mr. William Lamb
Telecopy: (302) 634-1093
Pro Rata Share: 6.12%
Revolving Credit Commitment: $76,500,000
SYNDICATION AGENT
AND LEAD ARRANGER: THE CHASE MANHATTAN BANK
By:______________________
Name:
Title:
Notice Address,
Domestic and Eurodollar Lending Office:
The Chase Manhattan Bank
380 Madison Avenue, 10th floor
New York, New York 10017
Attention: Nancy Szatny
Telecopy: (212) 622-3395
Reference: Simon
Property Group, L.P. Loan # 564-4773
For Money Market Loans:
The Chase Manhattan Bank
270 Park Avenue, 6th floor
New York, New York 10017
Attention: Frank Angelico
Albert Reynolds
Telecopy: (212) 834-6160
Reference: Simon
Property Group, L.P.
with copy of all Notices to:
The Chase Manhattan Bank
380 Madison Avenue, 10th floor
New York, New York 10017
Attention: Fran Nuchims
Telecopy: (212) 270-3513
Reference: Simon Property
Group, L.P. Loan # 564-4773
Pro Rata Share: 6.12%
Revolving Credit Commitment: $76,500,000
DOCUMENTATION AGENT
AND ARRANGER: BANK OF AMERICA, NATIONAL ASSOCIATION
By:_____________________
Name: Cynthia C. Sanford
Title: Senior Vice President
Notice Address; Domestic and
Eurodollar Lending Office:
Bank of America, N.A.
901 Main Street, 51st Floor
Dallas, TX 75202
Attn: Alison B. Connell
Telecopy: 214-209-1571
Pro Rata Share: 6.12%
Revolving Credit Commitment: $76,500,000
CO-ARRANGER: DRESDNER BANK AG
NEW YORK AND GRAND CAYMAN BRANCHES
By:
Name:
Title:
By:
Name:
Title:
Notice Address and Domestic and Euro-
dollar Lending Office:
Dresdner Bank AG, New York
and Grand Cayman Branches
75 Wall Street, 33rd Floor
New York, New York 10005
Attn: Mr. Thomas Nadramia
Telecopy: (212) 429-2130
Reference: Simon Property Group
With copy to: Dresdner Bank AG, Chicago Branch
190 South LaSalle Street
Suite 2700
Chicago, Illinois 60603
Attn: Mr. James Blessing
Telecopy: (312) 444-1305
Reference: Simon Property Group
Borrowing and other administrative
and operational notices:
Dresdner Bank AG
75 Wall Street, 33rd Floor
New York, New York 10005
Attn: Mr. Robert Reddington
Telecopy: (212) 429-2130
Reference: Simon Property Group
Pro Rata Share: 6.12%
Revolving Credit Commitment: $76,500,000
CO-ARRANGER:THE FIRST NATIONAL BANK OF CHICAGO
By:_____________________
Name: Lynn Braun
Title: Corporate Banker
Notice Address:
The First National
Bank of Chicago
One First National Plaza
Suite 0151
Chicago, Illinois 60670
Attention: Lynn Braun
Telecopy: (312) 732-1117
Reference: Simon Property Group
Domestic Lending Office and Eurodollar
Lending Office or
Eurodollar Affiliate:
The First National
Bank of Chicago
One First National Plaza
Suite 0318
Chicago, Illinois 60670
Attention: Maria Torres
Telecopy: (312) 732-1582
Reference: Simon Property Group
Pro Rata Share: 6.12%
Revolving Credit Commitment: $76,500,000
SENIOR MANAGING AGENT: CITICORP REAL ESTATE, INC.
By:_______________________
Name: Mark Brown
Title: Vice President
Notice Address:
Citicorp Real Estate, Inc.
599 Lexington Avenue
20th Floor/Zone 6
New York, NY 10043
Attn: Mark Brown
Telecopy: 212-793-6314
Domestic Lending Office, Eurodollar
Lending Office or
Eurodollar Affiliate:
Citicorp Real Estate, Inc.
599 Lexington Avenue
20th Floor/Zone 6
New York, NY 10043
Attn: Mark Brown
Telecopy: 212-793-6314
And to:
Citicorp Real Estate, Inc.
599 Lexington Avenue
25th Floor/Zone 10
New York, NY 10043
Attn: Michael Broido, Esq.
General Counsel
Telecopy:
Pro Rata Share: 4.4%
Revolving Credit Commitment: $55,000,000
SENIOR MANAGING AGENT: BAYERISCHE HYPO- UND VEREINSBANK AG, ACTING
THROUGH ITS NEW YORK BRANCH
By:_______________________
Name:
Title:
By:_______________________
Name:
Title:
Notice Address, Domestic
Lending Office and
Eurodollar Lending Office:
BAYERISCHE HYPO-VEREINSBANK
AG NEW YORK BRANCH
150 East 42nd Street
New York, New York 10017-4679
Attn: Larney Bisbano
Director
Telecopy: 212-672-5527
and to:
Attn: Mr. Stephen Altman
Managing Director
Telecopy: 212-672-5583
Pro Rata Share: 4.4%
Revolving Credit Commitment: $55,000,000
SENIOR MANAGING AGENT:
COMMERZBANK AG, NEW YORK BRANCH
By:_______________________
Name:
Title:
By:_______________________
Name:
Title:
Notice Address, Domestic
Lending Office and
Eurodollar Lending Office:
Commerzbank AG
2 World Financial Center
New York, New York 10281
Attn: Mr. Doug Traynor
Telecopy: 212-266-7565
Pro Rata Share: 4.4%
Revolving Credit Commitment: $55,000,000
SENIOR MANAGING AGENT: FLEET NATIONAL BANK
By:_______________________
Name:
Margaret A. Mulcahy
Title: Senior Vice President
Notice Address, Domestic
Lending Office and
Eurodollar Lending Office:
Fleet Bank
75 State Street
Mail Stop: MA/BO/F11A
Boston, Massachusetts 02109
Attn: Lillian Munoz
Telecopy: 617-346-3220
and to:
Attn: Margaret Mulcahy
Telecopy: 617-364-3220
Pro Rata Share: 4.4%
Revolving Credit Commitment: $55,000,000
MANAGING AGENT: NATIONAL CITY BANK OF INDIANA
By:_______________________
Name:
Title:
Notice Address, Domestic
Lending Office and
Eurodollar lending Office:
National City Bank of Indiana
101 West Washington Street
Indianapolis, Indiana 46255
Attn: Kim Kord
Telecopy: 317-267-6249
and to:
Attn: Donna Huebner
Telecopy: 317-267-6249
Pro Rata Share: 2.8%
Revolving Credit Commitment: $35,000,000
MANAGING AGENT: PNC BANK, NATIONAL ASSOCIATION
By:_______________________
Name: Terri Wyda
Title: Vice President
Notice Address, Domestic
Lending Office and
Eurodollar Lending Office:
One PNC Plaza
P1-POPP-19-2
249 Fifth Avenue
Pittsburgh, Pennsylvania
15222-2707
Attn: Jay Baker
Telecopy: 412-762-6500
and to:
Attn: Matthew L. Koval
Loan Administrator
Telecopy: 412-768-5754
Pro Rata Share: 3.2%
Revolving Credit Commitment: $40,000,000
MANAGING AGENT: KEYBANK, NATIONAL ASSOCIATION
By:_______________________
Name: Dan Heberle
Title:Vice President
Notice Address, Domestic
Lending Office and
Eurodollar Lending Office:
KeyBank
127 Public Square, 6th floor
Cleveland, Ohio 44114-1306
Attn: Dan Heberle
Telecopy: 216-689-4997
and to:
Attn: Mr. Matt Shmelter
Telecopy: 216-689-3566
Pro Rata Share: 3.2%
Revolving Credit Commitment: $40,000,000
MANAGING AGENT: U.S. BANK NATIONAL ASSOCIATION
(formerly known as First Bank)
By:_______________________
Name:
Elliott Quigley
Title:
Vice President
Notice Address, Domestic
Lending Office and
Eurodollar Lending Office:
U.S. Bank National Association
111 East Wacker Drive
Suite 3000
Chicago, IL 60601
Attn: Elliott Quigley
Telecopy: 312-228-9402
And to:
Attn: Paul Castino
Telecopy: 312-228-9402
Pro Rata Share: 3.2%
Revolving Credit Commitment: $40,000,000
MANAGING AGENT: GUARANTY FEDERAL BANK, F.S.B.
By:_______________________
Name: Richard Thompson
Title: Senior Vice President
Notice Address, Domestic
Lending Office and
Eurodollar Lending Office:
Guaranty Federal Bank
8333 Douglas Avenue
Dallas, Texas 75225
Attn: Ms. Lesa Balsley
Telecopy: 214-360-1661
and to:
Attn: Clint Nanny
Telecopy: 214-360-5109
Pro Rata Share: 3.2%
Revolving Credit Commitment: $40,000,000
MANAGING AGENT: KBC BANK N.V.
By:_______________________
Name:
Title:
By:_______________________
Name:
Title:
Notice Address and Domestic
Lending Office:
KBC Bank N.V., New York
Branch
125 West 55th Street
New York, New York 10019
Attn: Francis X. Payne
Telecopy: 212-541-0793
and to:
Attn: Lynda Resuma
Telecopy: 212-956-5580
Eurodollar Lending Office or
Eurodollar Affiliate:
KBC Bank N.V., Grand Cayman
Branch
125 West 55th Street
New York, New York 10019
Attn: Francis X. Payne Telecopy: 212-541-
0793
and to:
Attn: Lynda Resuma
Telecopy: 212-956-5580
Pro Rata Share: 2.8%
Revolving Credit Commitment: $35,000,000
MANAGING AGENT: BAYERISCHE LANDESBANK, CAYMAN ISLANDS BRANCH
By:_______________________
Name:
Title:
By:_______________________
Name:
Title:
Notice Address and Domestic
Lending Office, and
Eurodollar Lending Office:
Bayerische Landesbank
560 Lexington Avenue
New York, New York 10022
Attn: John Wain
Telecopy: 212-310-9868
and to:
Attn:
Patricia Sanchez
Telecopy: 212-310-9930
Pro Rata Share: 2.8%
Revolving Credit Commitment: $35,000,000
CO-AGENT: BANK OF MONTREAL
By:_______________________
Name: Lynn A. Durning
Title:Portfolio Manager
Notice Address and Domestic
Lending Office and
Eurodollar Lending Office:
Bank of Montreal
115 South LaSalle Street
Chicago, Illinois 60603
Attn: Anita Blake
Telecopy: 312-750-6061
Pro Rata Share: 2.4
Revolving Credit Commitment: $30,000,000
CO-AGENT:LANDESBANK HESSEN-THURINGEN
GIRONZENTRALE, NEW YORK BRANCH
By:_______________________
Name:
Title:
By:_______________________
Name:
Title:
Notice Address, Domestic
Lending Office and
Eurodollar Lending Office:
Landesbank Hessen-Thuringen
420 Fifth Avenue, 24th floor
New York, New York 10018
Attn: Alfred Koch
Telecopy: 212-703-5296
and to:
Attn: Gudrun Dronca
Telecopy: 212-703-5256
Pro Rata Share: 2.4%
Revolving Credit Commitment: $30,000,000
========================================================================
<PAGE>
LENDER: CIBC INC.
By:_______________________
Name:
Title:
Notice Address, Domestic
Lending Office and
Eurodollar Lending Office:
CIBC World Markets Corp.
200 West Madison Street
Suite 2300
Chicago, Illinois 60606
Attn: Joel Gershkon
Telecopy: 312-855-3235
and to:
CIBC World Markets Corp.
Two Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, Georgia 30309
Attn: Vickie Rollins
Telecopy: 770-319-4950
Pro Rata Share: 2.24%
Revolving Credit Commitment: $28,000,000
========================================================================
<PAGE>
LENDER: UNION BANK OF CALIFORNIA, N.A
By:_______________________
Name: Michelle Guerra
Title: Vice President
By:_______________________
Name: D.
Tim Mahoney
Title: Senior Vice President
Notice Address:
Union Bank of California
350 California Street
7th Floor
San Francisco, California 94104
Attn: Ms. Michelle Guerra
Telecopy: 415-433-7438
Domestic Lending and
Eurodollar Lending Office:
Union Bank of California
Real Estate Capital Markets
200 Pringle Avenue, Suite 250
Walnut Creek, California 94596
Attn: Ms. Hertha Warren
Telecopy: (925) 947-2497
Pro Rata Share: 1.6%
Revolving Credit Commitment: $20,000,000
========================================================================
<PAGE>
LENDER: THE SUMITOMO BANK, LIMITED
By:_______________________
Name:
Title:
Notice Address, Domestic
Lending Office and
Eurodollar Lending Office:
The Sumitomo Bank, Limited
277 Park Avenue
New York, NY 10172
Attn: Mr. Mark Niwa
Telecopy: 212-224-4504
and to:
The Sumitomo Bank, Limited
277 Park Avenue
New York, New York 10172
Attn: Martin Lebovits
Telecopy: 212-224-4504
Pro Rata Share: 1.84%
Revolving Credit Commitment: $23,000,000
========================================================================
<PAGE>
LENDER: THE BANK OF TOKYO-MITSUBISHI, LTD.
acting through its New York Branch
By:_______________________
Name: James T. Taylor
Title:Vice President
Notice Address and Domestic
Lending Office, and
Eurodollar Lending Office:
Bank of Tokyo - Mitsubishi
1251 Avenue of the Americas
New York, NY 10020-1104
Attn: Leonard J. Crann
Telecopy: 212-782-4934
and to:
John C. Ng
Telecopy: 212-782-5870
Pro Rata Share: 1.6%
Revolving Credit Commitment: $20,000,000
========================================================================
<PAGE>
LENDER: SUMMIT BANK
By:_______________________
Name: Marianne W. de Jongh
Title: Vice President
Notice Address and Domestic
Lending Office, and
Eurodollar Lending Office:
Summit Bancorp
750 Walnut Avenue
Cranford, NJ 07016
Attn: Marianne W. de Jongh
Telecopy: 908-709-6435
and to:
Claudia Camejo
Telecopy: 908-709-6440
Pro Rata Share: 2%
Revolving Credit Commitment: $25,000,000
========================================================================
<PAGE>
LENDER: COMERICA BANK
By:_______________________
Name: David J. Campbell
Title:
Vice President
Notice Address and Domestic
Lending Office, and
Eurodollar Lending Office:
Comerica Bank
500 Woodward Avenue, 7th Floor
Detroit, Michigan 48226
Attn: David J. Campbell
Telecopy: 313-222-9295
and to:
Attn: Betsy Branson
Telecopy: 313-222-3697
U.S. Mail should be directed to:
Comerica Bank
P.O. Box 75000
Detroit Michigan 48275-3256
M/C 3256
Attn: David J. Campbell and
Attn: Betsy Branson
Pro Rata Share: 1.6%
Revolving Credit Commitment: $20,000,000
========================================================================
<PAGE>
LENDER: THE HUNTINGTON NATIONAL BANK
By:_______________________
Name: Eric M. Riedinger
Title: Vice President
Notice Address and Domestic
Lending Office, and
Eurodollar Lending Office:
The Huntington National Bank
41 South High Street, 8th Floor
Columbus, Ohio 43215
Attn: Mr. Eric Riedinger
Telecopy: 614-480-3698
Pro Rata Share: 1.6%
Revolving Credit Commitment: $20,000,000
========================================================================
<PAGE>
LENDER: MELLON BANK, N.A.
By:_______________________
Name:
Title:
Notice Address and Domestic
Lending Office, and
Eurodollar Lending Office:
Mellon Bank, N.A.
One Mellon Bank Center
Room 5325
Pittsburgh, Pennsylvania
15259-
0001
Attn: Mr. David
Tetrick
Telecopy: (412) 234-8657
Pro Rata Share: 1.6%
Credit Commitment: $20,000,000.00
========================================================================
<PAGE>
LENDER: GULF INTERNATIONAL BANK
By:_______________________
Name: Mireille Khalidi
Title:Assistant Vice President
By:_______________________
Name:
Title:
Notice Address and Domestic
Lending Office, and
Eurodollar Lending Office:
Gulf International Bank
380 Madison Avenue
21st Floor
New York, New York 10017
Attn: Mireille
Khalidi
Telecopy: (212) 922-2325
Pro Rata Share: 0.8%
Revolving Credit Commitment: $10,000,000
========================================================================
<PAGE>
LENDER: THE BANK OF NOVA SCOTIA,
NEW YORK AGENCY
By:_______________________
Name: Robert Boese
Title:Senior Relationship Manager
Notice Address and Domestic
Lending Office, and Eurodollar
Lending Office or Eurodollar
Affiliates:
The Bank of Nova Scotia
Atlanta Agency, for Nassau
Corporate Branch
600 Peachtree Street NE
Suite 2700
Atlanta, Georgia 30308
Attn: Nadine Bell
Telecopy:
(404) 888-8998
Pro Rata Share: 1.2%
Credit Commitment: $15,000,000
========================================================================
<PAGE>
LENDER: SOUTHTRUST BANK, NATIONAL ASSOCIATION
By:_______________________
Name: Sam Boroughs
Title:Assistant Vice President
Notice Address:
SouthTrust Bank, National Association
Corporate Banking - 11th Floor
420 North 20th Street
Birmingham, AL 35203
Attn: Sam Boroughs:
Telecopy: 205-254-8270
Domestic Lending Office, and
Eurodollar Lending Office or
Eurodollar Affiliates:
SouthTrust Bank, National Association
6434 First Avenue North
Birmingham, AL 35212
Attn:
Natalie Johnson
Operations Manager
Telecopy: 205-599-4350
With a copy to:
SouthTrust Bank, National Association
Corporate Banking - 11th Floor
420 North 20th Street
Birmingham, AL 35203
Attn: Sam Boroughs:
Telecopy: 205-254-8270
Pro Rata Share: 2%
Credit Commitment: $25,000,000
========================================================================
<PAGE>
LENDER: ING (U.S.) CAPITAL LLC
By:_______________________
Name: David Mazujian
Title:Managing Director
Notice Address and Domestic
Lending Office, and Eurodollar
Lending Office or Eurodollar
Affiliates:
ING (U.S.) Capital LLC
55 East 52nd Street
New York, NY 10055
Attn: David Mazujian
Telecopy: 212-409-5853
Pro Rata Share: 1.6%
Credit Commitment: $20,000,000
