<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 JUNE 30, 1997 COMMISSION FILE NUMBER 001-13243
---------------------------
PAN PACIFIC RETAIL PROPERTIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
MARYLAND 33-0752457
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1631-B S. Melrose Drive 92083
Vista, California (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (760) 727-1002
---------------------------
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 / /
As of September 18, 1997, 16,814,012 shares of the registrant's Common
Stock, $.01 par value, were outstanding.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
2
<PAGE>
PAN PACIFIC DEVELOPMENT PROPERTIES
COMBINED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
---------- --------
(unaudited)
<S> <C> <C>
ASSETS:
Operating properties, at cost:
Land $100,170 $ 82,792
Buildings and improvements (including related party
development and acquisition fees of $1,235 and $1,182, respectively) 225,222 173,250
Tenant improvements 32,661 32,051
---------- --------
358,053 288,093
Less accumulated depreciation and amortization (30,354) (26,857)
---------- --------
327,699 261,236
Property under development, at cost 4,588 2,781
---------- --------
332,287 264,017
Investments in uncombined partnerships 2,970 2,502
Cash and cash equivalents 3,232 8,235
Restricted cash 1,439 697
Accounts receivable (less allowance for doubtful accounts
of $37 and $72, respectively) 1,093 1,074
Accrued rent receivable (less allowance for doubtful accounts of $701
and $666, respectively) 6,306 5,995
Notes receivable 7,258 3,457
Deferred lease commissions (including unamortized related party
amounts of $2,567 and $2,275, respectively, and net of accumulated
amortization of $3,456 and $3,368, respectively) 2,576 2,399
Prepaid expenses 2,915 3,283
Other assets 2,331 1,527
---------- --------
$362,407 $293,186
---------- --------
---------- --------
LIABILITIES AND OWNER'S EQUITY:
Notes payable $220,725 $192,915
Advances from parent 70,684 32,113
Accounts payable (including related party amounts of $221 and $79,
respectively) 2,166 1,279
Accrued expenses and other liabilities (including related party amounts
of $162 and $440, respectively) 4,451 3,532
Minority interest 1,596 1,539
Owner's equity 62,785 61,808
---------- --------
$362,407 $293,186
---------- --------
---------- --------
See accompanying notes to combined financial statements.
</TABLE>
3
<PAGE>
PAN PACIFIC DEVELOPMENT PROPERTIES
COMBINED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------------------------- ------------------------
1997 1996 1997 1996
---- ---- ---- ----
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
REVENUE:
Rental $ 8,386 $ 6,967 $15,683 $13,445
Recoveries from tenants 1,847 1,487 3,536 3,015
Income (loss) from uncombined partnerships 61 (68) 116 57
Other 305 181 496 181
-------- -------- -------- --------
10,599 8,567 19,831 16,698
-------- -------- -------- --------
EXPENSES:
Property operating 1,474 1,110 2,728 2,296
Property taxes 787 541 1,476 1,091
Property management fees 53 36 68 48
Depreciation and amortization 2,102 1,810 3,929 3,576
Interest 4,149 3,520 7,985 7,122
General and administrative 962 622 1,880 1,489
Other expenses, net 216 547 666 1,103
-------- -------- -------- --------
9,743 8,186 18,732 16,725
-------- -------- -------- --------
INCOME (LOSS) BEFORE
INCOME TAX EXPENSE
AND MINORITY INTEREST 856 381 1,099 (27)
Income tax expense (36) (43) (65) (85)
Minority interest (26) (4) (57) (2)
-------- -------- -------- --------
NET INCOME (LOSS) $794 $ 334 $ 977 $(114)
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
See accompanying notes to combined financial statements.
4
<PAGE>
PAN PACIFIC DEVELOPMENT PROPERTIES
COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
For the Six Months Ended
June 30,
------------------------
1997 1996
---- ----
(unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $977 $(114)
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
Depreciation and amortization 3,929 3,576
Amortization of prepaid financing costs 177 120
Income from uncombined partnerships (116) (57)
Minority interest 57 2
Changes in assets and liabilities:
Decrease (increase) in restricted cash (742) 1,004
Decrease (increase) in accounts receivable (412) 368
Increase in accrued rent receivable (311) (283)
Increase in deferred lease commissions (255) (762)
Decrease in prepaid expenses 170 123
Increase in other assets (907) (233)
Increase (decrease) in accounts payable 879 (966)
Increase in accrued expenses and other liabilities 919 295
------- -------
Net cash provided by operating activities 4,365 3,073
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to properties (51,169) (14,363)
Additions to property under development (1,807) (196)
Increase (decrease) in construction accounts payable 8 (579)
Contributions to uncombined partnerships (352) -
Distributions from uncombined partnerships - 114
Acquisition of notes receivable (4,651) -
Collections of notes receivable 2,369 2,222
------- -------
Net cash used in investing activities (55,602) (12,802)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Notes payable proceeds 9,600 9,524
Notes payable payments (2,351) (3,887)
Advances from parent 38,571 3,595
Prepaid financing costs 21 (249)
Refunds from loan escrow 393 -
------- -------
Net cash provided by financing activities 46,234 8,983
------- -------
NET DECREASE IN CASH AND CASH
EQUIVALENTS (5,003) (746)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 8,235 5,578
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 3,232 $ 4,832
------- -------
------- -------
</TABLE>
5
<PAGE>
PAN PACIFIC DEVELOPMENT PROPERTIES
COMBINED STATEMENTS OF CASH FLOWS (CONTINUED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
For the Six Months Ended
June 30,
------------------------
1997 1996
---- ----
(unaudited)
<S> <C> <C>
SUPPLEMENTARY DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for mortgage interest (net of amounts capitalized of
$128 and $19, respectively) $ 7,536 $ 7,178
Income taxes paid $ 13 $ 87
SUPPLEMENTAL DISCLOSURE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:
Transfer from property under development to operating properties $ - $ 9,327
Transfer from property under development to prepaid
financing costs $ - $ 116
Transfer from property under development to deferred lease
commissions $ - $ 197
Interest capitalized $ - $ 250
Note payable assumed upon acquisition $ 19,042 $ -
Note receivable/wrap note payable assumed $ 1,519 $ -
</TABLE>
See accompanying notes to combined financial statements.
6
<PAGE>
PAN PACIFIC DEVELOPMENT PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS
For the six months ended June, 30, 1997 and 1996 (unaudited)
and for the year ended December 31, 1996
(Tabular amounts are in thousands)
1. ORGANIZATION AND BASIS OF PRESENTATION
The accompanying combined financial statements include the accounts of Pan
Pacific Development (U.S.) Inc. ("PPD"), a wholly-owned subsidiary of
Revenue Properties Company Limited (the "Parent"), and its subsidiaries
including Pan Pacific Retail Properties, Inc. ("PPRP") related to the
ownership of its neighborhood and community shopping centers, its medical
office building and leasing and management activities of its portfolio (the
"Company"). All of the accounts of PPD unrelated to these activities have
been excluded from these combined financial statements. The shopping
center portfolio is comprised of approximately 3,600,000 square feet and is
located primarily in the western region of the United States.
Pan Pacific Realty Corporation was incorporated in the state of Maryland on
April 16, 1997. Pan Pacific Realty Corporation subsequently changed its
name to Pan Pacific Retail Properties, Inc. On August 13, 1997, PPRP
completed an initial public offering of 7,000,000 shares of $.01 par value
common stock. The offering price was $19.50 per share resulting in gross
proceeds of $136,500,000. On September 8, 1997, the underwriters exercised
their over-allotment option and, accordingly, the Company issued an
additional 1,050,000 shares of common stock and received gross proceeds of
$20,475,000. The aggregate proceeds to the Company, net of underwriters'
discount, advisory fee and offering costs were approximately $141,134,000.
PPRP intends to qualify and be taxed as a real estate investment trust
under Sections 856 through 860 of the Internal Revenue Code commencing with
its taxable year ending December 31, 1997. In addition, simultaneously
with the initial public offering, the Company obtained a $150,000,000
credit facility which will be used to help finance additional shopping
center acquisitions and for other corporate purposes.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) PRINCIPLES OF COMBINATION
The combined financial statements include the accounts of the Company (Note
1). All material intercompany transactions and balances have been
eliminated.
(b) CASH AND CASH EQUIVALENTS
For purposes of reporting cash flows, highly liquid investments with an
original maturity of three months or less are considered cash equivalents.
(c) INCOME RECOGNITION
Rental revenue is recognized on a straight-line basis over the terms of the
leases, less a general allowance for doubtful accounts relating to accrued
rent receivable for leases which may be terminated before the end of the
contracted term.
(d) CAPITALIZATION OF COSTS
The Company capitalizes direct carrying costs such as interest, property
taxes and other related costs to property under development.
(e) DEPRECIATION AND AMORTIZATION
Depreciation on buildings and improvements is provided using a forty-year
straight-line basis. Tenant improvements and costs incurred in obtaining
leases are depreciated on a straight-line basis over the lives of the
respective leases.
Prepaid loan fees are amortized over the lives of the loans and the related
amortization expense is included as a component of interest expense.
(f) IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF
The Company reviews long-lived assets and certain identifiable intangibles
for impairment whenever events or changes in circumstances indicate that
the carrying amount of an asset may not be recoverable. Recoverability of
assets to be held and used is measured by a comparison of the carrying
amount of an asset to future net cash flows, undiscounted and without
interest, expected to be generated by the asset. If such assets are
considered to be impaired, the impairment to be recognized is measured by
the amount by which the carrying amount of the assets exceed the fair value
of the assets. Assets to be disposed of are reported at the lower of the
carrying amount or fair value less costs to sell.
7
<PAGE>
PAN PACIFIC DEVELOPMENT PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS
For the six months ended June, 30, 1997 and 1996 (unaudited)
and for the year ended December 31, 1996
(Tabular amounts are in thousands)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(g) INCOME TAXES
Income taxes are accounted for using the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax bases and operating loss and tax credit carryforwards. Deferred tax
assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences
are expected to be recovered or settled. The effect on deferred tax assets
and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
(h) CREDIT RISK
The Company predominantly operates in one industry segment, real estate
ownership, management and development. No single tenant accounts for 10%
or more of combined revenue. Financial instruments which potentially
subject the Company to concentrations of credit risk consist principally of
temporary cash investments and trade receivables. The Company places its
temporary cash investments with financial institutions which the Company
believes are of high credit quality. Concentration of credit risk with
respect to trade receivables are limited due to the large number of tenants
comprising the Company's customer base, and their dispersion across many
geographical areas. At June 30, 1997 and December 31, 1996, the Company
had no significant concentration of credit risk.
(i) NET INCOME PER SHARE
Since these combined financial statements report the activities of
partnerships and wholly-owned corporations, net income per share is not
relevant and is therefore not included.
(j) USE OF ESTIMATES
Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the combined financial
statements and the reporting of revenue and expenses during the reporting
period to prepare these combined financial statements in conformity with
generally accepted accounting principles. Actual results could differ from
those estimates.
(k) UNAUDITED INTERIM COMBINED FINANCIAL STATEMENTS
The combined financial statements as of June 30, 1997 and for the three and
six months ended June 30, 1997 and 1996 are unaudited. In the opinion of
management, such financial statements reflect all adjustments necessary for
a fair presentation of the results of the respective interim periods. All
such adjustments are of a normal, recurring nature.
3. PROPERTY UNDER DEVELOPMENT
At June 30, 1997 and December 31, 1996, property under development included
the construction of Phase II of a shopping center located in Sacramento,
California. Phase II will consist of approximately 60,000 square feet with
an anticipated opening in the third quarter of 1997. Land included in
property under development was $1,357,804 and $1,342,323 at June 30, 1997
and December 31, 1996, respectively.
At June 30, 1997, there remained a commitment of $1,933,413 under the
development contract for work to be performed on Phase II.
8
<PAGE>
PAN PACIFIC DEVELOPMENT PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS
For the six months ended June 30, 1997 and 1996 (unaudited)
and for the year ended December 31, 1996
(Tabular amounts are in thousands)
4. NOTES PAYABLE
In connection with the initial public offering (Note 1), notes payable were
paid off in the amount of $139,217,000. The table below represents future
principal payments due as of June 30, 1997 on the debt remaining:
July 1 through December 31, 1997 $ 553
1998 1,194
1999 2,527
2000 27,145
2001 665
2002 and subsequent 60,610
---------
$ 92,694
---------
---------
Interest rates on the debt remaining are fixed and range from 7.75% to
9.38%, with a weighted average interest rate of 8.13%.
5. INVESTMENTS IN UNCOMBINED PARTNERSHIPS
The accompanying combined financial statements include investments in two
partnerships in which the Company does not own a controlling interest. The
Company owns 50% general partner interests in Melrose Village and North
Coast Health Center. These investments are reported using the equity
method.
Summarized combined financial information for the partnership is presented
below:
JUNE 30, DECEMBER 31,
1997 1996
-------- --------
(unaudited)
Properties $ 19,500 $ 19,706
Other assets 574 806
-------- --------
Total assets $ 20,074 $ 20,512
-------- --------
-------- --------
Notes payable $ 14,000 $ 15,100
Other liabilities 402 568
Equity 5,672 4,844
-------- --------
$ 20,074 $ 20,512
-------- --------
-------- --------
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------------- -------------------------
1997 1996 1997 1996
---- ---- ---- ----
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Revenue $ 1,046 $ 1,008 $ 2,050 $ 2,032
Expenses 938 924 1,852 1,876
------- ------- ------- -------
Net income $ 108 $ 84 $ 198 $ 156
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
9
<PAGE>
PAN PACIFIC DEVELOPMENT PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS
For the six months ended June 30, 1997 and 1996 (unaudited)
and for the year ended December 31, 1996
(Tabular amounts are in thousands)
6. FUTURE LEASE REVENUE
Total future minimum lease receipts under noncancellable operating tenant
leases in effect at June 30, 1997 are as follows:
July 31 through December 31, 1997 $ 17,583
1998 34,622
1999 31,940
2000 29,253
2001 25,255
2002 and subsequent 110,664
---------
$ 249,317
---------
---------
Total percentage rents for the six months ended June 30, 1997 and for the
year ended December 31, 1996 are $130,335 and $239,339, respectively, and
are included in rental revenue.
7. RELATED PARTY TRANSACTIONS
(a) Included in general and administrative expenses are management fees
totaling $390,000 for each of the six months ended June 30, 1997 and 1996,
respectively, which are a reimbursement by the Company of costs incurred
by the Parent for managing the development of the Company's properties,
directing corporate strategy, and consulting on operations.
(b) The Company paid a consulting fee of $210,000 for each of the six months
ended June 30, 1997 and 1996, respectively, to a sole proprietorship owned
by a director of an affiliate of the Company.
(c) The Company incurred $431,000 and $939,000 for the six months ended June
30, 1997 and 1996, respectively, of loan guaranty fees charged by the
Parent.
(d) The Company received net advances from parent of $38,443,000 and $3,595,000
for the six months ended June 30, 1997 and 1996, respectively. These
advances are due on demand and are non-interest bearing.
(e) On January 1, 1996 the Company acquired the remaining 98% of Laurentian
Center from an affiliate and a related party. As a result of this
transaction, the Company has a note and related accrued interest payable to
the related party of $141,000 at June 30, 1997.
8. COMMITMENTS AND CONTINGENCIES
(a) The Company leases certain real estate and office equipment under operating
leases expiring at various dates through 2002. Rental expense was $309,531
and $309,009 for the six months ended June 30, 1997 and 1996, respectively.
(b) Various claims and legal proceedings arise in the ordinary course of
business. The ultimate amount of liability from all claims and actions
cannot be determined with certainty, but in the opinion of management, the
ultimate liability from all pending and threatened legal claims will not
materially affect the combined financial statements taken as a whole.
9. SUBSEQUENT EVENTS
(a) In August 1997, the Company purchased Green Valley Town & Country, a
130,553 square foot shopping center located in Henderson, Nevada, a
suburban community near Las Vegas. The purchase price was $16,383,547
which included a prepayment penalty of $1,083,547 to pay off the existing
mortgage at closing.
(b) In August 1997, the Company acquired the remaining ten percent interest in
Tanasbourne Limited Partnership for $1,050,000.
(c) In September 1997, the Company purchased Rainbow Promenade, a 228,960
square foot shopping center located in Las Vegas, Nevada. The purchase
price was $31,300,000.
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
The following discussion should be read in conjunction with the Combined
Financial Statements of Pan Pacific Development Properties, and the notes
thereto, appearing elsewhere in this report.
The Company receives income primarily from rental revenue (including
recoveries from tenants) from shopping center properties. As a result of the
Company's acquisition and development program, the financial data shows
increases in total revenue from period to period, largely attributable to the
acquisitions and properties placed into operation during the period and the
benefit of a full period of rental and other revenue for properties acquired or
placed into operation in the preceding period.
The Company believes that overhead costs will decrease as a percentage of
revenue as the Company achieves economies of scale through increases in its
portfolio's revenue base. For example, during the first six months of 1997 the
Company owned properties comprising a weighted average GLA of 3,247,705 square
feet. Total expenses, excluding interest, depreciation and amortization for the
six months ended June 30, 1997 were $6,818,000 or an annualized $4.20 per square
foot. By comparison, during the first six months of 1996, the Company owned
properties comprising a weighted average GLA of 2,845,000 square feet. Total
expenses, excluding interest, depreciation and amortization, for the six months
ended June 30, 1996 were $6,027,000 or an annualized $4.24 per square foot.
The Company expects that the more significant part of its revenue growth in
the next one to two years will come from additional acquisitions and contractual
rent increases rather than from occupancy increases.
RESULTS OF OPERATIONS
COMPARISON OF SIX MONTHS ENDED JUNE 30, 1997 TO SIX MONTHS ENDED JUNE 30,
1996.
Total revenue increased by $3,133,000 or 18.8% to $19,831,000 for the six
months ended June 30, 1997 as compared to $16,698,000 for the six months ended
June 30, 1996.
Rental revenue increased by $2,238,000 or 16.6% to $15,683,000 from
$13,445,000 for the six months ended June 30, 1997, compared to the six months
ended June 30, 1996. The increase in rental revenue resulted principally from
the completion of construction at Laguna Village Phase I in May 1996 and the
acquisition of Chico Crossroads in February 1997, Monterey Plaza in April 1997
and Fairmont Shopping Center in May 1997. Rental revenue also increased as a
result of increased occupancy levels, primarily at Canyon Ridge Plaza and Sahara
Pavilion North.
Recoveries from tenants increased by $521,000 or 17.3% to $3,536,000 for
the six months ended June 30, 1997, compared to $3,015,000, for the six months
ended June 30, 1996. This increase resulted primarily from the inclusion of
recoveries from Laguna Village Phase I, Chico Crossroads, Monterey Plaza and
Fairmont Shopping Center in 1997. Recoveries from tenants were 84.1% of
property operating expenses and property taxes for the six months ended June
30, 1997 as compared to 89.0% of the same expenses for the same period in
1996. This percentage has decreased as a result of the impact of leases in
place at properties acquired in 1997. The Company expects this percentage to
increase over time as new leases are initiated by Company management.
Property expenses include property operating expenses, property taxes and
property management fees. For the six months ended June 30, 1997 and 1996,
property operating expenses were $2,728,000 and $2,296,000, respectively. The
increase in property operating expenses was primarily attributable to the
development property placed into operation during calendar year 1996 and the
properties acquired during the six months ended June 30, 1997. Property taxes
increased by $385,000 or 35.3% for the six months ended June 30, 1997, compared
to the six months ended June 30, 1996. The increase in property taxes was
primarily the result of the completion of Laguna Village Phase I and the
acquisitions of Chico Crossroads,
11
<PAGE>
Monterey Plaza and Fairmont Shopping Center.
Depreciation and amortization for the six months ended June 30, 1997
increased by $353,000 or 9.9% to $3,929,000 from $3,576,000 for the six months
ended June 30, 1996. This was primarily due to the May 1996 completion of
Laguna Village Phase I and the acquisitions of Chico Crossroads, Monterey Plaza
and Fairmont Shopping Center.
Interest expense increased by approximately $863,000 or 12.1% for the six
months ended June 30, 1997, compared to the six months ended June 30, 1996,
primarily as a result of debt assumed pursuant to the acquisition of Monterey
Plaza, the net impact of the December 1996 refinancing of variable rate debt and
the completion of Laguna Village Phase I. This increase was partially offset by
reduced debt levels related to certain properties.
General and administrative expenses amounted to $1,880,000 for the six
months ended June 30, 1997, as compared to $1,489,000 for the six months ended
June 30, 1996, an increase of $391,000 or 26.2%. This increase was primarily
attributable to salary increases and costs associated with additional staff
necessitated by the acquisitions discussed above. As a percentage of total
revenue, general and administrative expenses were 9.5% and 8.9% for the six
months ended June 30, 1997 and 1996, respectively. The Company expects that
general and administrative expenses will decrease as a percentage of total
revenue in subsequent periods due to economies of scale which the Company
anticipates should be realized as additional properties are acquired.
Other expenses, net, consist primarily of loan guaranty fees and the
write-off of capitalized leasing commissions and tenant improvements. Other
expenses for the six months ended June 30, 1997 amounted to $666,000, a decrease
of $437,000 when compared to $1,103,000 for the six months ended June 30, 1996.
The decrease occurred primarily due to a decrease in loan guaranty fees and a
decrease in the write-off of capitalized leasing commissions and tenant
improvements, partially offset by the expensing of due diligence costs related
to the acquisition of a company which was not consummated.
The following table compares the operating data for the properties ("Same
Store Properties") that were owned and in operation for the six months ended
June 30, 1997 and June 30, 1996:
<TABLE>
<CAPTION>
1997 1996
------ -----
<S> <C> <C>
Revenue:
Rental $ 13,864,000 $ 13,445,000
Recoveries from tenants 3,188,000 3,015,000
Income from uncombined partnerships 116,000 57,000
Other 452,000 181,000
------------ -------------
$ 17,620,000 $ 16,698,000
Expenses:
Property operating, property taxes and
property management fees 3,757,000 3,435,000
------------ -------------
Operating income $ 13,863,000 $ 13,263,000
------------ -------------
------------ -------------
</TABLE>
Operating income for the Same Store Properties for the six months ended
June 30, 1997 increased over the same period in the prior year by $600,000.
This increase was attributable to increased rental revenue due to increased
occupancy levels primarily at Canyon Ridge Plaza, Cheyenne Commons, Sahara
Pavilion North and Tanasbourne Village. In addition, other revenue increased at
Sunset Square by approximately $100,000 due to a judgement received and there
were approximately $90,000 of lease termination fees received by Canyon Ridge
Plaza and Sahara Pavilion North. Property operating expenses for these Same
Store Properties increased by $322,000 for the six months ended June 30, 1997,
over the same period in the prior year due primarily to increased property tax
expense and center enhancement costs such as painting new awnings, signage and
landscaping at Cheyenne Commons as well as increased bad debt expense at Sunset
Square.
12
<PAGE>
COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 1997 TO THE THREE MONTHS ENDED
JUNE 30, 1996.
Total revenue increased by $2,032,000 or 23.7% to $10,599,000 for the three
months ended June 30, 1997, as compared to $8,567,000 for the three months ended
June 30, 1996.
Rental revenue increased $1,419,000 or 20.4% to $8,386,000 for the three
months ended June 30, 1997, as compared to $6,967,000 for the three months ended
June 30, 1996. The increase in rental revenue resulted primarily from the
completion of Laguna Village Phase I in May 1996 and the acquisitions of Chico
Crossroads in February 1997, Monterey Plaza in April 1997 and Fairmont Shopping
Center in May 1997.
Recoveries from tenants increased to $1,847,000 for the three months
ended June 30, 1997, an increase of $360,000 or 24.2%, as compared to
$1,487,000 for the three months ended June 30, 1996. This increase resulted
principally from recoveries from tenants of Laguna Village Phase I, Chico
Crossroads, Monterey Plaza, and Fairmont Shopping Center. Recoveries from
tenants were 81.7% of property operating expenses and property taxes for the
three months ended June 30, 1997 as compared to 90.1% of the same expenses
for the same period in 1996. This percentage has decreased as a result of the
impact of leases in place at properties acquired in 1997. The Company expects
this percentage to increase over time as new leases are initiated by Company
management.
Property expenses include property operating expenses, property taxes and
property management fees. Property operating expenses for the three months
ended June 30, 1997 increased to $1,474,000, an increase of $364,000 or 32.8%,
from $1,110,000 for the three months ended June 30, 1996. This increase was
primarily attributable to the completion of Laguna Village Phase I and its
subsequent operations, as well as the acquisitions of Chico Crossroads, Monterey
Plaza and Fairmont Shopping Center. Property taxes increased by $246,000 or
45.5% to $787,000 for the three months ended June 30, 1997, compared to $541,000
for the three months ended June 30, 1996. The increase in property taxes was
primarily the result of the completion of Laguna Village Phase I and its
subsequent operations, and the acquisitions of Chico Crossroads, Monterey Plaza
and Fairmont Shopping Center.
Depreciation and amortization increased by $292,000 or 16.1% to $2,102,000
from $1,810,000 primarily due to the effect of the properties acquired or placed
into operation.
Interest expense for the three months ended June 30, 1997 increased by
$629,000 or 17.9% to $4,149,000, as compared to $3,520,000 for the three months
ended June 30, 1996, primarily as a result of debt assumed pursuant to the
acquisition of Monterey Plaza, the construction loan interest at Laguna Village
Phase I and the net impact of the December 1996 refinancing of variable rate
debt. This increase was partially offset by reduced debt levels related to
certain properties.
General and administrative expenses increased by $340,000 or 54.7% for
the three months ended June 30, 1997, compared to the three months ended June
30, 1996, primarily due to salary increases and costs associated with
additional staff necessitated by the acquisitions discussed above. As a
percentage of total revenue, general and administrative expenses were 9.1%
and 7.3% for the three months ended June 30, 1997 and 1996, respectively. The
Company expects that general and administrative expenses will decrease as a
percentage of total revenue in subsequent periods due to economies of scale
which the Company anticipates should be realized as additional properties are
acquired.
Other expenses, net, consist primarily of loan guaranty fees, and the
write-off of capitalized leasing commissions and tenant improvements. Other
expenses amounted to $216,000 for the three months ended June 30, 1997, a
decrease of $331,000 when compared to other expenses of $547,000 for the three
months ended June 30, 1996. The decrease resulted from a decrease in loan
guaranty fees and a decrease in the write-off of capitalized leasing commissions
and tenant improvements.
13
<PAGE>
The following table compares the operating data for the Same Store
Properties that were owned and in operation for the three months ended June 30,
1997 and June 30, 1996.
<TABLE>
<CAPTION>
1997 1996
---- -----
<S> <C> <C>
Revenue:
Rental $ 6,956,000 $ 6,967,000
Recoveries from tenants 1,611,000 1,487,000
Income (loss) from uncombined partnerships 61,000 (68,000)
Other 295,000 181,000
------------ ---------------
8,923,000 8,567,000
Expenses:
Property operating, property taxes and property
management fees 1,930,000 1,687,000
------------ ---------------
Operating income $ 6,993,000 $ 6,880,000
------------ ---------------
------------ ---------------
</TABLE>
Operating income for the Same Store Properties for the three months ended
June 30, 1997 increased over the three months ended June 30, 1996 by $113,000.
This increase was primarily attributable to increased recoveries from tenants at
Chino Town Square of approximately $74,000. In addition, income from the
uncombined partnerships (Melrose Village Plaza and North Coast Health Center)
increased. Also, other revenue increased at Sunset Square by approximately
$100,000 due to a judgement received related to a past tenant. Operating
expenses for these Same Store Properties increased by $243,000 for the three
months ended June 30, 1997 over the prior year primarily due to increased common
area maintenance expenditures at Chino, as discussed above, and increased bad
debt expense at Sunset Square.
CASH FLOWS
COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 1997 TO THE SIX MONTHS ENDED
JUNE 30, 1996.
Net cash provided by operating activities increased by $1,292,000 to
$4,365,000 for the six months ended June 30, 1997, as compared to $3,073,000 for
the six months ended June 30, 1996. The increase was primarily the result of
increases in net income, accounts payable and other accrued liabilities,
partially offset by increases in restricted cash and accounts receivable. Net
cash used in investing activities increased by $42,800,000 to $55,602,000 for
the six months ended June 30, 1997, compared to $12,802,000 for the six months
ended June 30, 1996. The increase was primarily the result of additions to
properties for the acquisitions of Chico Crossroads, Monterey Plaza, Fairmont
Shopping Center and Lakewood Shopping Center as well as the acquisition of notes
receivable during the six months ended June 30, 1997, compared to the lower
costs of the acquisition of the remaining ownership interests in Laurentian
Center in 1996. Net cash provided by financing activities increased by
$37,251,000 to $46,234,000 for the six months ended June 30, 1997 compared to
$8,983,000 for the six months ended June 30, 1996. The increase was primarily
the result of increases in advances from parent for the acquisitions noted above
as well an increase in note payable to finance an acquisition.
LIQUIDITY AND CAPITAL RESOURCES
The Company believes the initial public offering and the formation
transactions that were completed in August 1997 improved its financial
position through changes to its capital structure, principally the
substantial reduction in its overall debt and its debt-to-equity ratio. In
connection with the formation transactions, the Company repaid all of its
existing floating rate mortgage debt. As a result, the total principal
amount of outstanding secured debt after the formation transactions was
reduced by approximately $146,000,000. This will result in a significant
reduction in annual mortgage interest expense as a percentage of total
revenue
14
<PAGE>
(16.5% on a pro forma basis as compared to 41.8% for the historical year
ended December 31, 1996). Thus, cash from operations required to fund debt
service requirements will decrease substantially. The market capitalization
of the Company, based on the initial public offering price of the issued and
outstanding shares of Common Stock, including the full exercise of the
underwriter's over-allotment option, and the debt outstanding at the
completion of the initial public offering was approximately $419,303,000 with
total debt (exclusive of accounts payable and accrued expenses) of
approximately $91,430,000. As a result, the Company's debt to total market
capitalization ratio was approximately 21.8% as of September 8, 1997. The
Unsecured Credit Facility combined with this lower leveraged capital
structuring will enhance the Company's ability to take advantage of
acquisition opportunities as well as to provide funds for working capital
resources.
The Company has approximately $150 million available under the Unsecured
Credit Facility. The Company anticipates that the Unsecured Credit Facility
will be used primarily to acquire additional properties and for general working
capital needs.
The Company's mortgage indebtedness outstanding after the closing of the
Offering requires balloon payments of $26,438,000, $4,004,000 and $52,748,000 in
2000, 2004 and 2007, respectively. It is likely that the Company will not have
sufficient funds on hand to repay these balloon amounts at maturity. Therefore,
the Company expects to refinance such debt either through additional debt
financing secured by individual properties or groups of properties, by unsecured
private or public debt offerings or by additional equity offerings.
The Company expects to make distributions from cash available for
distributions, which the Company believes will exceed historical cash available
for distributions through the reduction in debt service resulting from the
repayment of indebtedness described above. Amounts accumulated for distribution
will be invested by the Company primarily in short-term investments such as
collateralized securities of the United States government or its agencies,
high-grade commercial paper and bank deposits.
The Company expects to meet its short-term liquidity requirements generally
through its current working capital and net cash provided by operations. The
Company believes that its net cash provided by operations will be sufficient to
allow the Company to make the distributions necessary to enable the Company to
continue to qualify as a REIT. The Company also believes that the foregoing
sources of liquidity will be sufficient to fund its short-term liquidity needs
for the foreseeable future.
The Company expects to meet certain long-term liquidity requirements such
as property acquisition and development, scheduled debt maturities, renovations,
expansions and other non-recurring capital improvements through long-term
secured and unsecured indebtedness and the issuance of additional equity or debt
securities. The Company also expects to use funds available under the Unsecured
Credit Facility to finance acquisition and development activities and capital
improvements on an interim basis.
In the past, PPD received non-interest bearing advances from PPD's
parent, Revenue Properties, to meet short-term and long-term liquidity
requirements. These advances are to be repaid on demand. For reasons
discussed above, the Company does not anticipate the need for such advances
in the future.
INFLATION
Substantially all of the leases provide for the recovery of real estate
taxes and operating expenses incurred by the Company. In addition, many of the
leases provide for fixed base rent increases or indexed escalations (based on
the CPI or other measures) and percentage rent. The Company believes that
inflationary increases in expenses will be substantially offset by the expense
reimbursements, contractual rent increases and percentage rent described above.
The Unsecured Credit Facility bears interest at a variable rate, which will
be influenced by changes in short-term interest rates, and will be sensitive to
inflation.
15
<PAGE>
IMPACT OF ACCOUNTING PRONOUNCEMENTS ISSUED BUT NOT ADOPTED BY THE COMPANY
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings per Share"
("SFAS No. 128"), which establishes standards for computing and presenting
earnings per share ("EPS") and applies to entities with publicly held common
stock. SFAS No. 128 simplifies the standards for computing earnings per
share previously found in APB Opinion No. 15, "Earnings Per Share," and makes
them comparable to international EPS standards. It replaces the presentation
of primary EPS with a presentation of basic EPS.
In February 1997, SFAS No. 129, "Disclosure of Information about Capital
Structure", was issued. This statement establishes standards for disclosing
information about an entity's capital structure and is effective for periods
ending after December 15, 1997.
In June 1997, SFAS No. 130, "Reporting Comprehensive Income", was issued
and is effective for fiscal years beginning after December 15, 1997. This
statement requires companies to classify items of other comprehensive income by
their nature in an income statement and display the accumulated balance of other
comprehensive income separately from retained earnings and additional paid-in
capital in the equity section of a statement of financial position.
In June 1997, SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information", was issued and is effective for fiscal years beginning
after December 15, 1997. This statement establishes standards for segment
reporting in the financial statements.
The Company anticipates that the adoption of SFAS Nos. 128, 130 and 131
will not result in disclosures that will be materially different from those
presently required
PART II - OTHER INFORMATION
16
<PAGE>
<TABLE>
<CAPTION>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<S> <C>
Exhibit No. Description
- ----------- -----------
3.1 Articles of Amendment and Restatement of the Company (previously
filed as Exhibit 3.1 to the Company's Registration Statement on
Form S-11 (Registration No. 333-28715) and incorporated herein by
reference)
3.2 Amended and Restated Bylaws of the Company (previously filed as
Exhibit 3.2 to the Company's Registration Statement on Form S-11
(Registration No. 333-28715) and incorporated herein by reference)
4.1 Form of Certificate of Common Stock (previously filed as Exhibit
4.1 to the Company's Registration Statement on Form S-11
(Registration No. 333-28715) and incorporated herein by reference)
10.1 The 1997 Stock Option and Incentive Plan of Pan Pacific Retail
Properties, Inc. (previously filed as Exhibit 10.1 to the
Company's Registration Statement on Form S-11 (Registration
No. 333-28715) and incorporated herein by reference)
10.2 Form of Officers and Directors Indemnification Agreement
(previously filed as Exhibit 10.2 to the Company's Registration
Statement on Form S-11 (Registration No. 333-28715) and incorporated
herein by reference)
10.3 Form of Employment Agreement between the Company and Mr. Stuart
A. Tanz (previously filed as Exhibit 10.3 to the Company's
Registration Statement on Form S-11 (Registration No. 333-28715)
and incorporated herein by reference)
10.4 Form of Employment Agreement between the Company and Mr. David L.
Adlard (previously filed as Exhibit 10.4 to the Company's
Registration Statement on Form S-11 (Registration No. 333-28715)
and incorporated herein by reference)
10.5 Form of Employment Agreement between the Company and Mr. Jeffrey
S. Stauffer (previously filed as Exhibit 10.5 to the Company's
Registration Statement on Form S-11 (Registration No. 333-28715)
and incorporated herein by reference)
10.6 Form of Miscellaneous Rights Agreement (previously filed as
Exhibit 10.6 to the Company's Registration Statement on Form S-11
(Registration No. 333-28715) and incorporated herein by reference)
10.7 Form of Non-Competition Agreement (previously filed as Exhibit
10.7 to the Company's Registration Statement on Form S-11
(Registration No. 333-28715) and incorporated herein by reference)
10.8 Credit Agreement with Bank of America NT&SA
10.9 Purchase and Sale Agreement for Rainbow Promenade
27 Financial Data Schedule (electronically filed with the Securities
and Exchange Commission only)
(b) REPORTS ON FORM 8-K. - NONE
</TABLE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 on September 18,
1997.
PAN PACIFIC RETAIL PROPERTIES, INC.
By: /s/ Stuart A. Tanz
Stuart A. Tanz
President and Chief Executive Officer
By: /s/ David L. Adlard
David L. Adlard
Executive Vice President and
Chief Financial Officer
By: /s/ Laurie A. Sneve
Laurie A. Sneve, CPA
Vice President and Controller
18
<PAGE>
$150,000,000.00
CREDIT AGREEMENT
Dated as of August 13, 1997
among
PAN PACIFIC RETAIL PROPERTIES, INC.
as the Company,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
U.S. BANK NATIONAL ASSOCIATION,
KEYBANK NATIONAL ASSOCIATION,
THE BANK OF NOVA SCOTIA,
SIGNET BANK,
and
SANWA BANK CALIFORNIA,
(and any additional commercial institutions which from
time to time are a party to this Agreement),
as the Banks,
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as the Agent
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE 1: DEFINITIONS AND ACCOUNTING TERMS................................1
1.1 DEFINED TERMS.............................................1
1.2 USE OF DEFINED TERMS.....................................21
1.3 ACCOUNTING TERMS.........................................21
1.4 EXHIBITS.................................................22
1.5 REFERENCES...............................................22
ARTICLE 2: RECITALS.......................................................22
ARTICLE 3: BORROWING PROCEDURES AND LETTER OF CREDIT SUBLIMIT.............22
3.1 DISBURSEMENT OF LOAN PROCEEDS............................22
3.2 REFERENCE RATE BORROWINGS................................24
3.3 LIBOR BORROWING..........................................24
3.4 REDESIGNATION OF BORROWINGS..............................25
3.5 CALCULATION OF BORROWING BASE............................27
3.6 AVAILABILITY LIMITS......................................30
3.7 PAYMENTS BY THE BANKS TO THE AGENT.......................30
3.8 SHARING OF PAYMENTS, ETC.................................31
3.9 LETTER OF CREDIT SUBLIMIT................................32
3.9.1 AMOUNT AND TERMS OF THE CREDIT...........................32
3.9.2 STANDBY LETTERS OF CREDIT................................32
3.9.3 REQUEST FOR CREDIT.......................................33
3.9.4 CONDITIONS PRECEDENT TO ISSUANCE OF LETTERS OF CREDIT....33
ARTICLE 4: PAYMENTS AND FEES..............................................34
4.1 PRINCIPAL AND INTEREST...................................34
4.2 UNUSED FEE...............................................38
4.3 FEES FOR ISSUANCE OF LETTERS OF CREDIT...................38
4.4 LATE PAYMENTS............................................38
4.5 TAXES....................................................38
4.6 ILLEGALITY...............................................39
4.7 INCREASED COSTS AND REDUCTION OF RETURN..................39
4.8 FUNDING LOSSES...........................................40
4.9 INABILITY TO DETERMINE RATES.............................41
4.10 RESERVES ON LIBOR RATE LOANS.............................42
-i-
<PAGE>
4.11 CERTIFICATES OF BANKS....................................42
4.12 SUBSTITUTION OF BANKS....................................42
4.13 SURVIVAL.................................................42
4.14 MANNER AND TREATMENT OF PAYMENTS.........................43
4.15 CHANGE IN CAPITAL REQUIREMENTS; ADDITIONAL COSTS.........43
4.16 MANDATORY PREPAYMENT.....................................43
4.17 AGENCY FEE AND OTHER CONSIDERATION PAYABLE TO BOFA.......43
4.18 MATURITY DATE EXTENSION OPTION...........................44
ARTICLE 5: SECURITY.......................................................44
5.1 UNSECURED CREDIT.........................................44
ARTICLE 6: CONDITIONS.....................................................44
6.1 CONDITIONS TO DISBURSEMENT OF FIRST BORROWINGS...........45
6.2 CONDITIONS FOR SUBSEQUENT BORROWINGS OR FOR A
REDESIGNATION OF BORROWINGS..............................45
6.3 ANY BORROWING............................................45
ARTICLE 7: REPRESENTATIONS AND WARRANTIES OF THE COMPANY..................45
7.1 INCORPORATION, QUALIFICATION, POWERS AND CAPITAL STOCK...45
7.2 EXECUTION, DELIVERY AND PERFORMANCE OF LOAN DOCUMENTS....46
7.3 COMPLIANCE WITH LAWS AND OTHER REQUIREMENTS..............47
7.4 SUBSIDIARIES.............................................47
7.5 AFFILIATED PARTNERSHIPS..................................48
7.6 FINANCIAL STATEMENTS OF THE COMPANY AND THE SUBSIDIARIES.48
7.7 NO MATERIAL ADVERSE CHANGE...............................48
7.8 TAX LIABILITY............................................49
7.9 LITIGATION...............................................49
7.10 ERISA COMPLIANCE.........................................49
7.11 REGULATIONS U AND X; INVESTMENT COMPANY ACT..............50
7.12 NO DEFAULT...............................................50
7.13 BORROWING BASE...........................................51
7.14 ENVIRONMENTAL MATTERS....................................51
7.15 INSURANCE................................................52
7.16 NO BURDENSOME RESTRICTIONS...............................52
7.17 FULL DISCLOSURE..........................................52
ARTICLE 8: COVENANTS OF THE COMPANY.......................................52
8.1 CONSOLIDATED TANGIBLE NET WORTH..........................53
8.2 DEBT SERVICE COVERAGE RATIO..............................53
-ii-
<PAGE>
8.3 LEVERAGE RATIO............................................53
8.4 SECURED DEBT RATIO........................................53
8.5 UNENCUMBERED ASSET RATIOS.................................53
8.6 PAYMENT OF TAXES AND OTHER POTENTIAL LIENS................53
8.7 PRESERVATION OF EXISTENCE.................................54
8.8 REIT STATUS; NO PROHIBITED TRANSACTIONS...................54
8.9 MAINTENANCE OF PROPERTIES.................................54
8.10 MAINTENANCE OF INSURANCE..................................54
8.11 MERGERS...................................................55
8.12 BOOKS AND RECORDS.........................................55
8.13 INSPECTION RIGHTS.........................................55
8.14 REPORTING REQUIREMENTS....................................55
8.15 NOTICES...................................................57
8.16 [Intentionally Deleted.]..................................59
8.17 LIENS.....................................................59
8.18 NO OTHER NEGATIVE PLEDGE..................................60
8.19 PREPAYMENT OF INDEBTEDNESS................................60
8.20 LOANS AND INVESTMENTS.....................................60
8.21 COMPLIANCE WITH LAWS AND OTHER REQUIREMENTS...............61
8.22 CHANGE IN NATURE OF BUSINESS..............................61
8.23 COMPLIANCE WITH ERISA.....................................61
8.24 DIVIDENDS.................................................61
8.25 DISPOSITION OF PROPERTIES.................................62
8.26 MANAGEMENT; OWNERSHIP.....................................62
8.27 COMPLIANCE WITH AVAILABILITY LIMITS.......................62
8.28 DEVELOPMENT LIMITATION....................................62
8.29 ENVIRONMENTAL LAWS........................................62
8.30 USE OF PROCEEDS...........................................63
8.31 TRANSACTIONS WITH AFFILIATES..............................63
8.32 ACCOUNTING CHANGES........................................63
ARTICLE 9: EVENTS OF DEFAULT AND REMEDIES UPON DEFAULT....................63
9.1 EVENTS OF DEFAULT.........................................63
9.2 REMEDIES..................................................66
9.3 RIGHTS NOT EXCLUSIVE......................................67
ARTICLE 10: THE AGENT......................................................67
10.1 APPOINTMENT AND AUTHORIZATION.............................67
10.2 DELEGATION OF DUTIES......................................67
-iii-
<PAGE>
10.3 LIABILITY OF AGENT.......................................67
10.4 RELIANCE BY AGENT........................................68
10.5 NOTICE OF DEFAULT........................................69
10.6 CREDIT DECISION..........................................69
10.7 INDEMNIFICATION..........................................70
10.8 AGENT IN INDIVIDUAL CAPACITY.............................70
10.9 SUCCESSOR AGENT..........................................71
10.10 WITHHOLDING TAX..........................................71
10.11 COLLATERAL MATTERS.......................................73
10.12 PERFORMANCE BY THE AGENT.................................74
10.13 ACTIONS..................................................74
10.14 CO-AGENT.................................................74
ARTICLE 11: MISCELLANEOUS.................................................74
11.1 AMENDMENTS AND WAIVERS...................................74
11.2 COSTS, EXPENSES AND TAXES................................75
11.3 NO WAIVER; CUMULATIVE REMEDIES...........................76
11.4 PAYMENTS SET ASIDE.......................................76
11.5 SUCCESSORS AND ASSIGNS...................................76
11.6 ASSIGNMENTS, PARTICIPATIONS, ETC.........................77
11.7 SET-OFF..................................................80
11.8 AUTOMATIC DEBITS.........................................80
11.9 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC..........80
11.10 SURVIVAL OF REPRESENTATIONS AND WARRANTIES...............81
11.11 NOTICES..................................................81
11.12 INDEMNITY BY THE COMPANY.................................81
11.13 INTEGRATION AND SEVERABILITY.............................82
11.14 COUNTERPARTS.............................................82
11.15 NO THIRD PARTIES BENEFITED...............................82
11.16 SECTION HEADINGS.........................................82
11.17 FURTHER ACTS BY THE COMPANY..............................82
11.18 TIME OF THE ESSENCE......................................82
11.19 GOVERNING LAW............................................82
11.20 REFERENCE AND ARBITRATION................................82
11.21 EFFECTIVENESS OF THIS AGREEMENT..........................83
-iv-
<PAGE>
LIST OF EXHIBITS
Exhibit "A" - Note
Exhibit "B" - Borrowing Base Certificate
Exhibit "C-1" - Request for Borrowing
Exhibit "C-2" - Request for Letter of Credit
Exhibit "D" - Request for Redesignation of Borrowing
Exhibit "E" - Subsidiaries
Exhibit "F" - Form of Legal Opinion
Exhibit "G" - Form of Assignment and Acceptance Agreement
LIST OF SCHEDULES
Schedule 1.1(A) - List of Assets and Initial Asset Classifications
Schedule 1.1(B) - Designated Responsible Officials
Schedule 3.5(c) - Assets Initially Constituting The Borrowing Base
Properties Pool
Schedule 7.14 - Environmental Matters
Schedule 8.20(e) - Description of Existing Partnerships
Schedule 11.21 - Description of Existing Pan Pacific/BofA Credit Facilities
-v-
<PAGE>
CREDIT AGREEMENT
This Credit Agreement ("AGREEMENT") is entered into as of August 13,
1997, by and among PAN PACIFIC RETAIL PROPERTIES, INC., a Maryland corporation
(the "COMPANY"), the several financial institutions from time to time party to
this Agreement (collectively, the "BANKS" and individually, a "BANK"), and BANK
OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking
association, as agent for the Banks ("Bofa" and the "AGENT").
WHEREAS, the Banks have agreed to make available to the Company an
unsecured revolving credit facility upon the terms and conditions set forth in
this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE 1: DEFINITIONS AND ACCOUNTING TERMS.
1.1 DEFINED TERMS. As used in this Agreement, the following terms
shall have the meanings set forth respectively after each:
"ACCOUNT" means the Company's general account no. 1423100780
maintained with BofA, and any future similar account with BofA.
"ACTUAL DEBT SERVICE" means for any period, without duplication,
the sum of (a) the aggregate amount of interest which, in conformity with
GAAP, would be set opposite the caption "interest expense" or any like
caption on an income statement for the Company and consolidated
Subsidiaries, whether expensed directly, or included as a component of cost
of goods sold, or allocated to joint ventures, or otherwise (including
without limitation imputed interest on Capitalized Lease Obligations, all
commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing, the net costs
associated with Rate Hedging Obligations, amortization of other financing
fees and expenses, the interest portion of any deferred payment
-1-
<PAGE>
obligation, amortization of discount or premiums, in any, and all non-cash
interest expense other than interest and other charges amortized to cost of
sales), plus (b) the aggregate amount of all principal and other payments
due during such period with respect to Indebtedness of the Company or any
of its consolidated Subsidiaries (excluding, however, any principal
"balloon payments" paid or payable by the Company or any consolidated
Subsidiaries during such period), plus (c) cash dividends paid on any
preferred stock of the Company.
"ADJUSTED CURRENT VALUE" means, for any Asset, as of any date,
the Net Operating Income for such Asset as of such date DIVIDED BY the
Applicable Cap Rate; provided, however, that if the Agent has not received
quarterly operating statements for such Asset for each of the immediately
preceding four calendar quarters (whether because the Company has owned
such Asset for less than four calendar quarters, or otherwise), then the
"Adjusted Current Value" for such Asset shall be the LESSER of (a) the
Adjusted Current Value as calculated above, or (b) the purchase price paid
by the Company upon acquiring such Asset, net of all brokerage commissions,
finder's fees and other closing costs or expenses incurred by the Company
in connection with the acquisition of such Asset.
"ADJUSTED EBITDA" means, for any period, without duplication,
(a) the sum of the following amounts attributable to such period and
calculated on a consolidated basis for the Company and consolidated
Subsidiaries: (i) Consolidated Net Income, (ii) Consolidated Interest
Expense, (iii) charges against income for all federal, state and local
taxes, (iv) depreciation expense, (v) amortization expense, (vi) other
non-cash charges and expenses, and (vii) any losses arising outside of the
ordinary course of business which have been included in the determination
of Consolidated Net Income, less (b) any gains arising outside the ordinary
course of business which have been included in the determination of
Consolidated Net Income, as determined on a consolidated basis for the
Company and consolidated Subsidiaries, less (c) net income (determined in
accordance with GAAP) of, loans or contributions to, and other cash
investments in any Affiliated Partnership (provided that such net income
shall be included to the extent of the Company's direct or indirect
proportionate interest in the net income of such Affiliated Partnership),
less (d) the aggregate amount of all actual expenditures made by the
Company during such period for replacements or substitutions to
improvements to any of the Company's Asset, including remediation of
deferred maintenance, which, in accordance with GAAP, would be treated as a
capital expense, plus (e) net losses (determined in accordance with GAAP)
of, and dividends, distributions, loan payments or other cash return on
investments from,
-2-
<PAGE>
any Affiliated Partnership (provided that such net losses shall be included
to the extent of the Company's direct or indirect proportionate interest in
the net losses of such Affiliated Partnership).
"AFFILIATE" means any Person (a) which directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is
under common control with, the Company or any Subsidiary, as the context
may require, or (b) which owns beneficially or of record 10% or more of the
voting stock of the Company. The term "control" means the possession,
directly or indirectly, of the power to cause the direction of the
management and policies of a Person, whether through the ownership of
voting securities or partnership interests, by contract, family
relationship or otherwise.
"AFFILIATED PARTNERSHIP" means any general or limited partnership
or joint venture in which the Company, any Subsidiary, or any other
Affiliate is a partner or joint venturer.
"AGENT" means BofA when acting in its capacity as the Agent under
any of the Loan Documents, and any successor agent.
"AGENT-RELATED PERSONS" means the Agent and any successor agent
(pursuant to the terms of SECTION 10.9) together with their respective
Affiliates and the directors, officers, agents, employees and
attorneys-in-fact of such Persons and Affiliates.
"AGGREGATE ADJUSTED CURRENT VALUE" means, as of any date of
determination, the sum of the Adjusted Current Values as of such date for
all Assets.
"AGREEMENT" means this Credit Agreement, either as originally
executed or as it may from time to time be supplemented, modified or
amended.
"APPLICABLE CAP RATE" means, for each Asset Classification, and
for all time periods through the Maturity Date, the following:
Class A: 9.30%
Class B: 9.75%
Class C: 10.50%
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The Majority Banks shall have the right to change the Applicable Cap Rate
for each Asset Classification in connection with an extension of the
Maturity Date (if any).
"ASSET CLASSIFICATION" means, for any Asset, as of any date, the
then effective designation of such Asset as a "Class A", "Class B" or
"Class C" Asset as determined by the Majority Banks in their sole
discretion. The Asset Classification as of the Closing Date for each Asset
is set forth in SCHEDULE 1.1(A). Thereafter, the Majority Banks shall have
the right, at any time, to change the Asset Classification of any Asset,
which change shall be effective immediately.
"ASSETS" means, as of any date, (a) all real estate assets of the
Company as of such date, and (b) the Tanasbourne Asset; provided, however,
that in the event the Company (directly or through its wholly-owned
Subsidiaries) ceases to own and control at least 90% of all general and
limited partnership interests in Tanasbourne, then the term "Assets" shall
no longer include the Tanasbourne Asset. As of the Closing Date, "Assets"
consist of the real estate assets described in SCHEDULE 1.1(A).
"ASSIGNEE" shall have the meaning set forth in SECTION 11.6.
"ASSIGNMENT AND ACCEPTANCE" shall have the meaning set forth in
SECTION 11.6.
"ATTORNEY COSTS" means and includes all reasonable fees and
disbursements of any law firm or other external counsel, the allocated
reasonable cost of internal legal services and all reasonable disbursements
of internal legal counsel.
"BANKING DAY" means any Monday, Tuesday, Wednesday, Thursday or
Friday on which banks (including the Banks) are open for business in
California.
"BANKS" means Bank of America National Trust and Savings
Association, a national banking association ("BofA"), U.S. Bank National
Association (FKA First Bank National Association) ("U.S. Bank"), KeyBank
National Association ("KeyBank"), The Bank of Nova Scotia ("Bank of Nova
Scotia"), Signet Bank ("Signet Bank"), and Sanwa Bank California, a
California corporation ("Sanwa Bank"), and the additional financial
institutions (if any) from
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time to time party to this Agreement, any of their successors and assigns
(including any Assignee), or any one or more of them.
"BORROWING" means each of the Loans to be made by the Banks to
the Company as provided in Article 3.
"BORROWING BASE" has the meaning set forth in SECTION 3.5(b).
"BORROWING BASE CERTIFICATE" means a written calculation of the
Borrowing Base, substantially in the form of EXHIBIT "B" attached hereto
and made a part hereof, signed by a Responsible Official of the Company and
properly completed to provide all information required to be included
thereon.
"BORROWING BASE PROPERTIES POOL" has the meaning set forth in
SECTION 3.5(c) hereof.
"CAPITAL ADEQUACY REGULATION" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other
law, rule or regulation, whether or not having the force of law, in each
case, regarding capital adequacy of any bank or of any corporation
controlling a bank.
"CAPITALIZED LEASE OBLIGATIONS" means any obligations under a
lease that is required to be capitalized for financial reporting purposes
in accordance with GAAP.
"CERCLA" has the meaning specified in the definition of
"Environmental Laws."
"CLOSING DATE" means the time and Banking Day on which the
conditions precedent specified in SECTION 11.21 are satisfied or waived as
provided therein, or shall be as otherwise specified in SECTION 11.21.
"CO-AGENT" means each of the Banks which is designated in writing
by the Agent to receive the title of Co-Agent hereunder (subject to SECTION
10.14 hereof).
"CODE" means the Internal Revenue Code of 1986, and regulations
promulgated thereunder.
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"COMMITMENT" means, with respect to the Loans, the following
percentage obligations and aggregate dollar amounts as to each of the
following Banks:
PERCENTAGE AGGREGATE DOLLAR
BANK OBLIGATION AMOUNT
1. BofA 23.3333333 $35,000,000
2. U.S. Bank 16.6666666 $25,000,000
3. KeyBank 16.6666666 $25,000,000
4. Bank of Nova Scotia 16.6666666 $25,000,000
5. Signet Bank 13.3333333 $20,000,000
6. Sanwa Bank 13.3333333 $20,000,000
As Banks are added to this Agreement, or withdraw from this Agreement, and
assignments are made by the Banks in accordance with SECTION 11.6 hereof,
the amount of each Bank's Commitment shall change in accordance with that
Bank's Pro Rata Share of the Total Aggregate Commitments. The Assignment
and Acceptances executed by the Banks, and the records maintained by the
Agent, shall be presumptive evidence of each Bank's Commitment, as each
such Bank's Commitment may change from time to time in accordance with the
terms of this Agreement.
"COMPANY" means Pan Pacific Retail Properties, Inc., a Maryland
corporation, and its successors and assigns.
"CONSOLIDATED NET INCOME" means, for any period, the net income
(or loss) of the Company and consolidated Subsidiaries determined in
accordance with GAAP.
"CONSOLIDATED TANGIBLE NET WORTH" means, as of any time of
determination, (a) the total assets of the Company and consolidated
Subsidiaries, MINUS (b) the carrying value of all intangible assets of the
Company and consolidated Subsidiaries, including deferred costs associated
with goodwill, patents, franchises, organizational expense and the like,
MINUS (c) the total liabilities of the Company and consolidated
Subsidiaries, all determined in accordance with GAAP consistently applied.
"CONTINGENT OBLIGATION" means, as to any Person, any direct or
indirect liability of that Person, whether or not contingent, with or
without
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recourse, (a) with respect to any Indebtedness, lease, dividend, letter of
credit or other obligation (the "primary obligations") of another Person
(the "primary obligor"), including any obligation of that Person (i) to
purchase, repurchase or otherwise acquire such primary obligations or any
security therefor, (ii) to advance or provide funds for the payment or
discharge of any such primary obligation, or to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net
worth or solvency or any balance sheet item, level of income or financial
condition of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor to make payment of
such primary obligation, or (iv) otherwise to assure or hold harmless the
holder of any such primary obligation against loss in respect thereof
(each, a "GUARANTY OBLIGATION"); (b) with respect to any Surety Instrument
issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings or payments; (c) to purchase
any materials, supplies or other property from, or to obtain the services
of, another Person if the relevant contract or other related document or
obligation requires that payment for such materials, supplies or other
property, or for such services, shall be made regardless of whether
delivery of such materials, supplies or other property is ever made or
tendered, or such services are ever performed or tendered, or (d) in
respect of any Rate Hedging Obligation. The amount of any Contingent
Obligation shall, in the case of Guaranty Obligations, be deemed equal to
the stated or determinable amount of the primary obligation in respect of
which such Guaranty Obligation is made or, if not stated or if
indeterminable, the maximum reasonably anticipated liability in respect
thereof, and in the case of other Contingent Obligations, shall be equal to
the maximum reasonably anticipated liability in respect thereof.
"CONTRACTUAL OBLIGATION" means, as to any Person, any provision
of any security issued by such Person or of any agreement, undertaking,
contract, indenture, mortgage, deed of trust or other instrument, document
or agreement to which such Person is a party or by which it or any of its
property is bound.
"DESIGNATED RESPONSIBLE OFFICIAL" means a responsible official of
the Company that is specifically authorized to execute Requests for
Borrowings and Requests for Letters of Credit and to otherwise request
Borrowings or the issuance of Letters of Credit hereunder, request and
accept interest rate quotes and designate and redesignate LIBOR Borrowings,
LIBOR Periods and otherwise act for the Company in connection with
borrowing funds under this Agreement and establishing or reestablishing
applicable interest rates with respect thereto. As of
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the date of this Agreement, the Designated Responsible Officials are set
forth in SCHEDULE 1.1(b) hereto. The Company, by written notice to Agent
in accordance with the notice provisions of this Agreement, may, with the
written consent of the Agent (not to be unreasonably withheld) change the
persons who constitute Designated Responsible Officials hereunder.
"DOLLARS" or "$" means United States dollars.
"ELIGIBLE ASSIGNEE" means (i) a commercial bank organized under
the laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $100,000,000, (ii) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development, or a political
subdivision of any such country, and having a combined capital and surplus
of at least $100,000,000, provided that such bank is acting through a
branch or agency located in the United States, or (iii) a Person that is
primarily engaged in the business of commercial banking and that is (A) a
Subsidiary of a Bank, (B) a Subsidiary of a Person of which a Bank is a
Subsidiary, or (C) a Person of which a Bank is a Subsidiary.
"ENVIRONMENTAL CLAIMS" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or
injury to the environment or threat to public health, personal injury
(including sickness, disease or death), property damage, natural resources
damage, or otherwise alleging liability or responsibility for damages
(punitive or otherwise), cleanup, removal, remedial or response costs,
restitution, civil or criminal penalties, injunctive relief, or other type
of relief, resulting from or based upon the presence, placement, discharge,
emission or release (including intentional and unintentional, negligent and
non-negligent, sudden or non-sudden, accidental or non-accidental,
placement, spills, leaks, discharges, emissions or releases) of any
Hazardous Material at, in, or from any property, whether owned by the
Company or any other Person.
"ENVIRONMENTAL LAWS" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any
Governmental Authorities, in each case relating to environmental, health,
safety and land use matters; including the Comprehensive Environmental
Response, Compensation and Liability Act of 1980
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("CERCLA"), the Clean Air Act, the Federal Water Pollution Control Act of
1972, the Solid Waste Disposal Act, the Federal Resource Conservation and
Recovery Act, the Toxic Substances Control Act, the Emergency Planning and
Community Right-to-Know Act, the California Hazardous Waste Control Law,
the California Solid Waste Management, Resource, Recovery and Recycling
Act, the California Water Code, the California Health and Safety Code and
any other similar laws or other environmental, health or safety laws of
other states.
"ERISA" means the Employee Retirement Income Security Act of
1974, and any regulations issued pursuant thereto, as now or from time to
time hereafter in effect.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with the Company within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code
for purposes of provisions relating to Section 412 of the Code).
"ERISA EVENT" means (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by the Company or any ERISA Affiliate from a
Pension Plan subject to Section 4063 of ERISA during a plan year in which
it was a substantial employer (as defined in Section 4001(a)(2) of ERISA)
or a cessation of operations which is treated as such a withdrawal under
Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the
Company or any ERISA Affiliate from a Multiemployer Plan or notification
that a Multiemployer Plan is in reorganization; (d) the filing of a notice
of intent to terminate, the treatment of a Plan amendment as a termination
under Section 4041 or 4041A of ERISA, or the commencement of proceedings by
the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or
condition which might reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the
Company or any ERISA Affiliate.
"EVENTS OF DEFAULT" has the meaning set forth for that term in
SECTION 9.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
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"EXTENSION REQUEST" means a written request from the Company to
extend the Maturity Date pursuant to SECTION 4.18.
"FDIC" means the Federal Deposit Insurance Corporation, and any
Governmental Authority succeeding to any of its principal functions.
"FEDERAL FUNDS RATE" means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including
any such successor, "H.15(519)") on the preceding Banking Day opposite the
caption "Federal Funds (Effective)"; or, if for any relevant day such rate
is not so published on any such preceding Banking Day, the rate for such
day will be the arithmetic mean as determined by the Agent of the rates for
the last transaction in overnight Federal funds arranged prior to 9:00 a.m.
(New York City time) on that day by each of three leading brokers of
Federal funds transactions in New York City selected by the Agent.
"FEE LETTER AGREEMENT" has the meaning set forth in SECTION 4.17.
"FIXED RATE OPTION REQUESTS" means the combined number of LIBOR
Borrowings made in any specified period of time.
"FRB" means the Board of Governors of the Federal Reserve System,
and any Governmental Authority succeeding to any of its principal
functions.
"FUNDS FROM OPERATIONS" means net income (loss), computed in
accordance with GAAP, excluding gains (or losses) from debt restructuring
and sales of property, plus real estate related depreciation and
amortization and after adjustments for unconsolidated partnerships and
joint ventures.
"GAAP" means, as of any date, generally accepted accounting
principals set forth in the then current opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified Public
Accountants and the then current statements and pronouncements of the
Financial Accounting Standards Board (or agency with similar functions of
comparable stature and authority within the United States accounting
profession).
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"GOVERNMENT SECURITIES" means readily marketable direct
obligations of the United States of America or obligations fully guaranteed
by the United States of America.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
"GUARANTOR" means any Person who hereafter guarantees repayment
of all or part of the Loans (it being understood that as of the date of
this Agreement there is no Guarantor) and such Person's successors and
assigns.
"GUARANTY" means any guaranty hereafter executed by a Guarantor
and approved by Agent.
"HAZARDOUS MATERIALS" means all those substances that are
regulated by, or which may form the basis of liability under, any
Environmental Law, including all substances identified under any
Environmental Law as a pollutant, contaminant, hazardous waste, hazardous
constituent, special waste, hazardous substance, hazardous material, or
toxic substance, or petroleum or petroleum derived substance or waste.
"INDEBTEDNESS" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than
trade payables entered into in the ordinary course of business on ordinary
terms); (c) all non-contingent reimbursement or payment obligations with
respect to Surety Instruments; (d) all obligations evidenced by notes,
bonds, debentures or similar instruments, including obligations so
evidenced incurred in connection with the acquisition of property, assets
or businesses; (e) all indebtedness created or arising under any
conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to property acquired by the Person
(even though the rights and remedies of the seller or bank under such
agreement in the event of default are limited to repossession or sale of
such property); (f) all obligations with respect to capital leases; (g) all
Rate Hedging Obligations; (h) all indebtedness referred to in clauses
(a) through (g) above secured by (or for which
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the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property (including
accounts and contracts rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such
Indebtedness; and (i) all Guaranty Obligations in respect of indebtedness
or obligations of others of the kinds referred to in clauses (a) through
(g) above.
"INTEREST DIFFERENTIAL" means, with respect to any prepayment or
redesignation of a LIBOR Rate Loan on a day other than the last day of the
applicable LIBOR Period and with respect to any failure to borrow a LIBOR
Rate Loan on the date or in the amount specified in any Request for
Borrowing or any Request for Redesignation of Borrowing, (a) the LIBOR Rate
payable (or, with respect to a failure to borrow, the LIBOR Rate which
would have been payable) with respect to the LIBOR Rate Loan MINUS (b) the
LIBOR Rate on, or as near as practicable to the date of, the prepayment or
failure to borrow for a LIBOR Rate Loan with a LIBOR Period commencing on
such date and ending on the last day of the LIBOR Period of the LIBOR
Borrowing so prepaid or which would have been borrowed on such date. The
determination of the Interest Differential by the Agent shall be conclusive
in the absence of manifest error.
"INTEREST PAYMENT DATE" means the first day of any month.
"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
"ISSUING BANK" means BofA in its individual capacity as a bank
issuing Letters of Credit under this Agreement.
"LAWS" means, collectively, all international, foreign, federal,
state and local statutes, treaties, rules, regulations, ordinances, codes
and administrative or judicial precedents.
"L/C COMMITMENT" has the meaning set forth in SECTION 3.9.1.
"L/C COMMITMENT TERMINATION DATE" has the meaning set forth in
SECTION 3.9.1.
"L/C OBLIGATIONS" has the meaning set forth in SECTION 3.9.1.
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"LETTERS OF CREDIT" has the meaning set forth in SECTION
3.9.2(a).
"LIBOR BANKING DAY" means any Banking Day on which banks are open
for business in London, England and New York, New York and BofA is open for
business in San Francisco, California.
"LIBOR BASE RATE" means the rate of interest, rounded upward, if
necessary, to the nearest 1/16th of one percent (0.0625%), at which BofA's
London branch, London, England, would offer U.S. dollar deposits in amounts
and for periods equal to those of the applicable LIBOR Borrowing and LIBOR
Period to major banks in the London U.S. dollar inter-bank market at
approximately 11:00 a.m., London time, the first LIBOR Banking Day after
the Company's request. The determination of the LIBOR Base Rate by the
Agent shall be conclusive in the absence of manifest error.
"LIBOR BORROWING" means any portion of the Loan Proceeds
designated or redesignated by the Company as a LIBOR Borrowing pursuant to
Article 3.
"LIBOR LENDING OFFICE" means the office or branch of each Bank so
designated on the signature pages of this Agreement, or such other office
or branch of each Bank as it may hereafter designate, by written notice to
the Company, as its LIBOR Lending Office.
"LIBOR PERIOD" means, as to each LIBOR Borrowing, the period
commencing on the date specified by the Company pursuant to SECTIONS 3.3 OR
3.4 and ending one, two, three, six, nine or twelve months thereafter, as
designated by the Company in the applicable Request for Borrowing or
Request for Redesignation of Borrowing, PROVIDED that:
(a) the first day in any LIBOR Period shall be a LIBOR
Banking Day;
(b) any LIBOR Period that would otherwise end on a day that
is not a LIBOR Banking Day shall be extended to the next succeeding
LIBOR Banking Day UNLESS such LIBOR Banking Day falls in another
calendar month, in which case such LIBOR Period shall end on the next
preceding LIBOR Banking Day; and
(c) No LIBOR Period shall extend beyond the Maturity
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Date.
"LIBOR RATE" means, for any LIBOR Period for any LIBOR Borrowing,
the rate (rounded upward, if necessary, to the next 1/100 of 1%) obtained
by dividing (i) the LIBOR Base Rate for such LIBOR Period, by (ii) a
percentage equal to 100% minus the LIBOR Reserve Percentage for such LIBOR
Period.
"LIBOR RATE SPREAD" means the additional component of interest,
expressed as a percentage per annum, to be added to the LIBOR Rate in
determining the applicable rate of interest for LIBOR Borrowings. The
applicable LIBOR Rate Spread shall be based on the Company's current senior
long term debt ratings as published by Standard & Poors and Moody's
Investor Services as determined by the following pricing grid:
S&P/MOODY'S SENIOR DEBT RATING APPLICABLE LIBOR RATE SPREAD
BBB/Baa2 (or better) 1.15%
BBB-/Baa3 1.25%
Less than BBB-/Baa3 1.50%
(or not rated)
In the event of a difference in rating between Standard & Poors and Moody's
Investor Services, the lower rating shall prevail for purposes of
determining the applicable LIBOR Rate Spread. As of the date of this
Agreement, the Company is not rated by Standard & Poors or Moody's Investor
Services, and therefore the applicable LIBOR Rate Spread for the Loans as
of the date of this Agreement is 1.50%.
"LIBOR RESERVE PERCENTAGE" means the total of the maximum reserve
percentages for determining the reserves to be maintained by member banks
of the Federal Reserve System for Eurocurrency Liabilities, as defined in
Regulation D. The Reserve Percentage shall be expressed as a decimal and
rounded upward, if necessary, to the nearest 1/100th of one percent, and
shall include marginal, emergency, supplemental, special and other reserve
percentages.
"LIEN" means any security interest, mortgage, deed of trust,
pledge, hypothecation, assignment, charge or deposit arrangement,
encumbrance, lien (statutory or other) or preferential arrangement of any
kind or nature whatsoever in
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respect of any property (including those created by, arising under or
evidenced by any conditional sale or other title retention agreement, the
interest of a lessor under a capital lease, any financing lease having
substantially the same economic effect as any of the foregoing, or the
filing of any financing statement naming the owner of the asset to which
such lien relates as debtor, under the Uniform Commercial Code or any
comparable law) and any contingent or other agreement to provide any of the
foregoing, but not including the interest of a lessor under an operating
lease.
"LOAN" or "LOANS" means each of the loans and Borrowings under
this Agreement.
"LOAN DOCUMENTS" means, collectively, this Agreement, each Note,
and any Guaranty.
"LOAN PROCEEDS" means the proceeds of the Loans, in the aggregate
principal amount of up to $150,000,000.
"MAJORITY BANKS" means, at any time, if BofA is the only Bank,
BofA, and, if there is more than one Bank, at least two Banks then holding
in excess of 66 2/3% of the then aggregate unpaid principal amount of the
Loans, or, if no such principal amount is then outstanding, at least two
Banks then having in excess of 66 2/3% of the Total Aggregate Commitment.
"MATERIAL" means, in connection with the Company, its
Subsidiaries, and the Loan and the Loan Documents, such circumstances or
facts which the Banks in the exercise of their discretion could be expected
to rely upon in determining whether to enter into or to continue lending
under this Agreement or which could have a bearing on any actions
undertaken by the Banks. Such Material circumstances or facts shall
include, without limitation, such circumstances or facts as would alter,
enlarge, restrict or otherwise affect the rights and liabilities otherwise
existing between the parties to the Agreement or any other Loan Document.
"MATURITY DATE" means August 13, 2000, subject to possible
extension pursuant to SECTION 4.18.
"MULTIEMPLOYER PLAN" means a "multiemployer plan", within the
meaning of Section 4001(a)(3) of ERISA, to which the Company or any ERISA
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Affiliate makes, is making, or is obligated to make contributions or,
during the preceding three calendar years, has made, or been obligated to
make, contributions.
"NET OPERATING INCOME" means, for any Asset, as of any date and
calculated on a cash basis, (a) the gross rental income of such Asset for
the immediately preceding four consecutive calendar quarters, LESS (b) the
aggregate amount of all actual operating expenses (excluding capital
expenditures) for such Asset during such period, LESS (c) an imputed
capital expenditures amount equal to 3.5% of the difference between (a) and
(b) above. In the event the Agent receives operating statements covering
only a portion of the relevant four calendar quarter period (whether
because the Asset has been owned for less than four calendar quarters, or
otherwise), the Agent shall calculate Net Operating Income for such Asset
on the basis of the operating statements which have been provided, subject
to such adjustments as the Agent deems appropriate in its sole discretion
to accurately reflect anticipated annual operating results. In the event
(a) the Company has, within the two calendar quarters preceding the date of
calculation, completed the build-out of additional in-line shop space or
pad space on any Asset, (b) such additional space has been leased to
tenants who have commenced paying rent, are in occupancy and have opened
for business, and (c) the Agent determines that, as a result of the leasing
of such additional space, annual Net Operating Income for such Asset will
increase by at least $250,000, then Net Operating Income for such Asset
shall be calculated based upon the operating statement for such Asset
covering the most recently completed calendar quarter, subject to such
adjustments as the Agent deems appropriate in its sole and reasonable
discretion to accurately reflect anticipated annual operating results. In
addition, the Agent may, in its sole discretion, reduce the Net Operating
Income for any Asset by the amount of rents attributable to any leases
(i) which are in default or which have terminated or are otherwise no
longer in effect, or (ii) which are otherwise unacceptable to the Agent in
its sole discretion. The foregoing notwithstanding, the Net Operating
Income of the Tanasbourne Asset shall be the product obtained by
multiplying (x) the Net Operating Income of such Asset as calculated above,
by (y) the percentage of distributions from Tanasbourne to which the
Company or its wholly-owned Subsidiaries is entitled as of the date of such
calculation.
"NOTE" means each of the promissory notes, substantially in the
form of EXHIBIT "A" attached hereto and made a part hereof, executed by the
Company in favor of the Banks, each to the order of the applicable Bank as
payee to evidence such Bank's share of the Loans, and each in the original
principal amount
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of the applicable Bank's Commitment such that the aggregate original
principal amount of all Notes is initially $150,000,000; as originally
executed or as the same may from time to time be supplemented, modified,
amended, renewed, extended or refinanced (and any promissory note that may
be issued in substitution or exchange therefor).
"OBLIGATIONS" means all obligations of every nature of the
Company from time to time owed to the Banks under the Loan Documents.
"OPINION OF COUNSEL" means the favorable written legal opinion of
Hale, Lane, Peek, Dennison, Howard, Anderson & Pearl, as counsel to the
Company and the Subsidiaries, to this Agreement, substantially in the form
of EXHIBIT "F" attached hereto, together with copies of all factual
certificates and legal opinions upon which such counsel has relied.
"OTHER TAXES" means any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies
which arise from any payment made hereunder or from the execution, delivery
or registration of, or otherwise with respect to, this Agreement or any
other Loan Documents.
"PARTICIPANT" shall have the meaning set forth in SECTION 11.6.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions under
ERISA.
"PENSION PLAN" means a pension plan (as defined in Section 3(2)
of ERISA) subject to Title IV of ERISA which the Company sponsors,
maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a multiple employer plan (as described in
Section 4064(a) of ERISA) has made contributions at any time during the
immediately preceding five (5) plan years.
"PERSON" means any entity, whether an individual, trustee,
corporation, general partnership, limited partnership, limited liability
company, joint stock company, trust, unincorporated organization, bank,
business association, firm, joint venture, Governmental Authority or
otherwise.
"PLAN" means an employee benefit plan (as defined in Section 3(3)
of ERISA) which the Company sponsors or maintains or to which the Company
makes, is making, or is obligated to make contributions and includes any
Pension Plan.
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"PRO RATA SHARE" means, as to any Bank at any time, the
percentage equivalent (expressed as a decimal, rounded to the ninth decimal
place as determined by the Agent) at such time of such Bank's Commitment
divided by the combined Commitments of all Banks.
"RATE HEDGING OBLIGATIONS" means, for any Person, the net
obligations of such Person pursuant to any interest rate hedging agreement
or any foreign exchange contract, currency swap agreement or other similar
agreement to which such Person is a party or a beneficiary.
"REFERENCE RATE" means the higher of:
(a) the rate of interest publicly announced from time to
time by BofA in San Francisco, California, as its reference rate. It
is a rate set by BofA based upon various factors including BofA's
costs and desired return, general economic conditions, and other
factors, and is used as a reference point for pricing some loans,
which may be priced at, above, or below such announced rate; and
(b) 0.50% per annum above the latest Federal Funds Rate.
Any change in the Reference Rate shall take effect on the day specified in
the public announcement of such change.
"REFERENCE RATE BORROWING" means any portion of the Loan Proceeds
which is not designated or redesignated by the Company as a LIBOR Borrowing
pursuant to SECTIONS 3.3 OR 3.4.
"REFERENCE RATE SPREAD" means the additional component of
interest, expressed as a percentage per annum, to be added to the Reference
Rate in determining the applicable rate of interest for Reference Rate
Borrowings. For the period beginning on the Closing Date and continuing
through the entire term of the Loans, the Reference Rate Spread shall be
equal to one-half of one percent (.50%).
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System as now or from time to time hereafter in effect
and any other regulation issued in substitution therefor.
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"REPORTABLE EVENT" means, any of the events set forth in
Section 4043(b) of ERISA or the regulations thereunder, other than any such
event for which the 30-day notice requirement under ERISA has been waived
in regulations issued by the PBGC.
"REQUEST FOR BORROWING" means a written request for a Borrowing
substantially in the form of EXHIBIT "C-1" attached hereto, signed by a
Responsible Official of the Company and properly completed to provide all
information required to be included thereon.
"REQUEST FOR LETTER OF CREDIT" means a written request for a
Letter of Credit substantially in the form of EXHIBIT "C-2" attached
hereto, signed by a Responsible Official of the Company and properly
completed to provide all information required to be included thereon.
"REQUEST FOR REDESIGNATION OF BORROWING" means a written request
for redesignation of Borrowing substantially in the form of EXHIBIT "D"
attached hereto, signed by a Responsible Official of the Company and
properly completed to provide all information required to be included
thereon.
"REQUIREMENT OF LAW" means, as to any Person, any Law or
determination of an arbitrator or of a Governmental Authority, in each case
applicable to or binding upon the Person or any of its property or to which
the Person or any of its property is subject.
"RESPONSIBLE OFFICIAL" means: (a) when used with reference to a
Person other than an individual, any corporate officer of such Person,
general partner of such Person, corporate officer of a corporate general
partner of such Person, or corporate officer of a corporate general partner
of a partnership that is a general partner of such Person, or any other
responsible official thereof duly acting on behalf thereof, and (b) when
used with reference to a Person who is an individual, such Person. Any
document or certificate hereunder that is signed or executed by a
Responsible Official of another Person shall be conclusively presumed to
have been authorized by all necessary corporate, partnership and/or other
action on the part of such other Person.
"REVOLVING PERIOD TERMINATION DATE" means the date which is one
year prior to the Maturity Date.
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"SPECIAL CIRCUMSTANCE" means the adoption of any Law or
interpretation, or any change therein or thereof, or any change in the
interpretation, administration or application thereof by any Governmental
Authority, central bank or comparable authority, or compliance by the Banks
or their LIBOR Lending Offices with any request or directive (whether or
not having the force of Law) of any Governmental Authority, central bank or
comparable authority, or the occurrence of circumstances affecting the
applicable certificate of deposit market or London interbank eurodollar
market generally which are beyond the reasonable control of the Banks.
"SUBSIDIARY" means (i) any corporation of which at least 50% of
the outstanding securities of any class or classes (however designated)
having ordinary voting power to elect directors of the corporation is owned
by the Company and/or by one or more than one other Subsidiary, and
(ii) any partnership, joint venture or limited liability company in which
the Company and/or any Subsidiary owns at least a 50% interest, or which is
otherwise controlled by the Company and/or any Subsidiary.
"SURETY INSTRUMENTS" means all letters of credit (including
standby and commercial), banker's acceptances, bank guaranties, shipside
bonds, surety bonds and similar instruments.
"TANASBOURNE" means Tanasbourne Limited Partnership, an Oregon
limited partnership.
"TANASBOURNE ASSET" means that certain real property located in
Hillsboro, Oregon owned as of the date of this Agreement by Tanasbourne,
which is improved with an approximately 220,000 square foot community
shopping center commonly known as Tanasbourne Village.
"TANASBOURNE PARTNERSHIP INTERESTS" means, collectively, all
general and limited partnership interests now or hereafter held by the
Company or its wholly-owned Subsidiaries in Tanasbourne.
"TAXES" means any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Bank and the Agent, such
taxes (including income taxes or franchise taxes) as are imposed on or
measured by each Bank's net
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income.
"TOTAL AGGREGATE COMMITMENT" means the total aggregate combined
Commitments of each of the Banks. The Total Aggregate Commitment
concurrently equals $150,000,000.
"TOTAL LIABILITIES" means, at any time of determination thereof,
without duplication, (a) all Indebtedness of the Company and consolidated
Subsidiaries, that, in conformity with GAAP applied on a consistent basis,
should be included in determining total liabilities shown on the liability
side of a consolidated balance sheet of the Company and consolidated
Subsidiaries, PLUS (b) all Indebtedness of any Affiliated Partnership for
which the Company or its consolidated Subsidiaries could be held personally
liable, PLUS (c) all Contingent Obligations of the Company and consolidated
Subsidiaries.
"TREASURY RATE" means, as of any date of determination, the yield
to maturity of the most recently issued 10-year U.S. Treasury Security as
quoted by the Telerate News Services on such date. If such date is not a
business day, then the quote shall be obtained on the business day
immediately preceding such date. If the Telerate News Services (a)
publishes more than one such 10-year U.S. Treasury Security, the average of
such yields shall apply, or (b) ceases to publish such yield, the Treasury
Rate shall be determined from such substitute financial reporting service
or source as the Agent in its sole discretion deems appropriate.
"UNENCUMBERED ASSETS" means those Assets which are not subject to
or encumbered by any Liens (other than Liens of a type described in
SECTIONS 8.17(a) OR 8.17(b)).
"UNFUNDED PENSION LIABILITY" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of
that Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the
applicable plan year.
1.2 USE OF DEFINED TERMS. Any defined term used in the plural shall
refer to all members of the relevant class, and any defined term used in the
singular shall refer to any of the members of the relevant class.
1.3 ACCOUNTING TERMS. All accounting terms not specifically defined
in this Agreement shall be construed in conformity with, and all financial data
required to be
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submitted by this Agreement shall be prepared in conformity with, GAAP applied
on a consistent basis.
1.4 EXHIBITS. All exhibits to this Agreement, either as now existing
or as the same may from time to time be supplemented, modified or amended, are
incorporated herein by this reference.
1.5 REFERENCES. Any reference to any Loan Document or other document
shall include such document both as originally executed and as it may from time
to time be amended or modified. References herein to Articles, Sections,
Schedules and Exhibits shall be construed as references to this Agreement unless
a different document is named. References to subparagraphs shall be construed
as references to the same Section in which the reference appears. The terms
"INCLUDING" and "INCLUDE" mean "including (include) without limitation". This
SECTION 1.5 shall apply to all of the Loan Documents.
ARTICLE 2: RECITALS.
This Agreement is made with reference to the following facts:
(a) The Company is primarily engaged in the business of
acquiring, owning and operating (and, to a lesser extent, developing)
retail shopping centers.
(b) The Company has applied to the Banks for the Loans (i) to
finance or refinance the acquisition (and, within the limits specified
herein, the development) of retail shopping centers, and (ii) for general
working capital purposes.
(c) The Banks are willing to make the Loans to the Company on
the terms and conditions set forth in this Agreement and in the other Loan
Documents.
ARTICLE 3: BORROWING PROCEDURES AND LETTER OF CREDIT SUBLIMIT.
3.1 DISBURSEMENT OF LOAN PROCEEDS.
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(a) Subject to the terms and conditions set forth in this
Agreement, at any time and from time to time from the Closing Date through
the Banking Day immediately preceding the Revolving Period Termination
Date, each Bank shall, according to its Pro Rata Share, make Loans to the
Company in such amounts as the Company may request that do not exceed in
the aggregate at any one time outstanding, the Commitment of such Bank
(LESS the Pro Rata Share of such Bank's L/C Obligations, if any). Subject
to the limitations set forth herein, the Company may (prior to the
Revolving Period Termination Date) borrow, repay and reborrow under each
Bank's Commitment without premium or penalty. The Company may not request
more than two new Borrowings during any calendar month UNLESS the Company
shall pay to the Agent, for the ratable benefit of the Banks, a fee in the
amount of $1,500 for each new Borrowing in excess of two Borrowings per
calendar month. From and after the Revolving Period Termination Date,
Company shall have no further ability to borrow or reborrow under this
Agreement. In no event shall the Banks be obligated to make Loans to the
Company at any time if, after giving effect to such Loans, the provisions
of SECTION 3.6 would be violated.
(b) Unless the Agent otherwise consents, the aggregate amount of
each LIBOR Borrowing shall be not less than $2,000,000 and the aggregate
amount of each Reference Rate Borrowing shall be not less than $100,000.
(c) The Loans made by the Banks pursuant to this Agreement shall
be evidenced by each Note.
(d) A Request for Borrowing shall be irrevocable upon receipt by
the Agent. The Agent shall not be bound by any preliminary information
that it may give the Company concerning a particular LIBOR Rate before it
delivers the binding rate quote in accordance with SECTION 3.3(b) below.
(e) Unless the Agent otherwise consents, no more than five (5)
LIBOR Borrowings in the aggregate shall be outstanding at any one time.
(f) The Agent will notify each Bank of its receipt of a Request
for Borrowing and of the amount of such Bank's Pro Rata Share of that
Borrowing on the date of timely receipt of a Request for Borrowing by the
Company.
(g) Each Bank will make the amount of its Pro Rata Share of each
Borrowing available to the Agent for the account of the Company at the
Agent's
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Payment Office by 11:00 a.m. (California time) on the date of Borrowing
requested by the Company in funds immediately available to the Agent. The
proceeds of all such Loans will then be made available to the Company by
the Agent by wire transfer in accordance with written instructions provided
to the Agent by the Company of like funds as received by the Agent.
(h) The Company may not request more than two new Borrowings in
any calendar month; UNLESS the Company shall pay to the Agent, for the
account of the Banks in accordance with their Pro Rata Shares, a fee in the
amount of $1,500 for each new Borrowing per calendar month in excess of two
new Borrowings.
3.2 REFERENCE RATE BORROWINGS. All Loans shall at all times
constitute Reference Rate Borrowings unless properly designated or redesignated
as LIBOR Borrowings pursuant to SECTIONS 3.3. OR 3.4. Each request by the
Company for a new Reference Rate Borrowing shall be made pursuant to a Request
for Borrowing, executed by a Designated Responsible Official, received by the
Agent, at the Agent's office, not later than 9:00 a.m., California time, at
least one (1) Banking Day prior to the date the Reference Rate Borrowing is to
be funded to the Company. The Agent will notify each Bank of its receipt of a
Request for Borrowing in accordance with SECTION 3.1(f).
3.3 LIBOR BORROWING.
(a) Each request by the Company for a LIBOR Borrowing shall be
made pursuant to a Request for Borrowing, executed by a Designated
Responsible Official, received by the Agent, at the Agent's office, not
later than 9:00 a.m., California time, at least three (3) LIBOR Banking
Days before the first day of the applicable LIBOR Period. The Agent will
notify each Bank of its receipt of a Request for Borrowing in accordance
with SECTION 3.1(f).
(b) Each Request for Borrowing pertaining to a LIBOR Borrowing
shall designate the LIBOR Period applicable to such LIBOR Borrowing. If
any Request for Borrowing fails to specify the duration of the LIBOR Period
for the requested LIBOR Borrowing, the LIBOR Period shall be one month.
(c) At or about 9:00 a.m., California time, one (1) LIBOR
Banking Day after the LIBOR Banking Day on which Agent receives the
Company's Request for Borrowing, the Agent shall determine the applicable
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LIBOR Rate (which determination shall be conclusive in the absence of
manifest error) and shall promptly give notice of the same to the Company
and the Banks by telephone, telecopier or telex.
(d) Upon fulfillment of the applicable conditions set forth in
Article 6, a LIBOR Borrowing shall become effective on the first day of the
applicable LIBOR Period.
(e) The Agent in its sole discretion may require the Company to
request any LIBOR Borrowing of $100,000,000 or more, or any redesignation
of a Reference Rate Borrowing of $100,000,000 or more as a LIBOR Borrowing,
at a time or on a day which is earlier than the deadline stated above (or
for redesignations of Reference Rate Borrowings, stated SECTION 3.4 below)
for making such a request. The Company acknowledges that if this happens,
the LIBOR Period for that LIBOR Borrowing could begin later than the
Company had originally contemplated. The Company consents to any and all
such delays.
(f) Nothing contained herein shall require the Banks to fund any
LIBOR Borrowing in the London interbank eurodollar market.
3.4 REDESIGNATION OF BORROWINGS.
(a) Subject to SECTION 6.3, if any LIBOR Borrowing is not repaid
on the last day of the applicable LIBOR Period, such Borrowing
automatically shall be redesignated as a Reference Rate Borrowing on such
date.
(b) Subject to the terms and conditions set forth in this
Agreement, at any time and from time to time from the Closing Date until
one month preceding the Maturity Date, the Company may request that all or
a portion of outstanding Reference Rate Borrowings be redesignated as a
LIBOR Borrowing; provided that the LIBOR Period for such LIBOR Borrowing
shall end on or before the Maturity Date.
(c) Each redesignation of all or a portion of outstanding
Reference Rate Borrowings as a LIBOR Borrowing shall be made pursuant to a
written Request for Redesignation of Borrowing, executed by a Designated
Responsible Official. Not later than 9:00 a.m., California time, at least
three (3) LIBOR Banking Days prior to the first day of the applicable LIBOR
Period, the Agent shall have received, at the Agent's office, a properly
completed Request for
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Redesignation of Borrowing specifying (1) the requested date of
redesignation, (2) the requested amount of Reference Rate Borrowings to be
redesignated as a LIBOR Borrowing, and (3) the requested LIBOR Period. The
Agent may, in its sole and absolute discretion, permit a Request for
Redesignation of Borrowing to be made by telecopier or by telephone (with
confirmation sent promptly by telecopier) by the Company, in which case the
Company shall confirm same by mailing a written Request for Redesignation
of Borrowing to the Agent within 24 hours following the date of
redesignation.
(d) The Agent will notify each Bank of its receipt of a Request
for Redesignation on the date of timely receipt of a Request for
Redesignation from the Company. All redesignations shall be made ratably
according to the respective outstanding principal amount of the Loans with
respect to which the Request for Redesignation was given is then held by
each Bank.
(e) Unless all of the Banks otherwise agree, during the
existence of an Event of Default, the Company may not elect to have a Loan
converted into a LIBOR Borrowing.
(f) Unless the Banks otherwise consent, the amount of Reference
Rate Borrowings to be redesignated as a LIBOR Borrowing shall be not less
than $2,000,000.
(g) With respect to any redesignation of Reference Rate
Borrowing as a LIBOR Borrowing, at or about 9:00 a.m., California time,
one (1) LIBOR Banking Day after the LIBOR Banking Day on which Agent
receives Borrower's Request for Redesignation, the Agent shall determine
the applicable LIBOR Rate (which determination shall be conclusive in the
absence of manifest error) and shall promptly give notice of the same to
the Company and the Banks by telephone, telecopier or telex.
(h) Upon fulfillment of the applicable conditions set forth in
this Agreement, the redesignation of all or a portion of outstanding
Reference Rate Borrowings as a LIBOR Borrowing shall become effective on
the first day of the applicable LIBOR Period.
(i) A Request for Redesignation of Borrowing shall be
irrevocable upon receipt by the Agent.
(j) Nothing contained herein shall require the Banks to fund any
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LIBOR Borrowing resulting from redesignation of all or a portion of any of
the Reference Rate Borrowings, in the London interbank eurodollar market.
3.5 CALCULATION OF BORROWING BASE.
(a) The Borrowing Base shall be calculated at the times and in
the manner set forth in this SECTION 3.5(a):
(i) Within thirty (30) days after the end of each calendar
quarter, and at such other times as the Majority Banks may reasonably
require (including without limitation at any time following the
removal of any property from the Borrowing Base Properties Pool), the
Company shall provide the Agent with a Borrowing Base Certificate
showing the Company's calculations of the components of the Borrowing
Base and such data supporting such calculations as the Majority Banks
may require. The Majority Banks shall have a period of fifteen (15)
days following Agent's receipt of a Borrowing Base Certificate to
notify the Agent of the Majority Banks' approval or disapproval
thereof, and the Agent shall have five (5) Banking Days thereafter to
notify the Company of the decision of the Majority Banks. Failure of
the Majority Banks to so notify the Agent within such fifteen (15) day
period shall be deemed approval and such Borrowing Base as set forth
in such Borrowing Base Certificate shall be effective as of the date
approved (or deemed approved) by the Majority Banks.
(ii) In the event that the Agent (as requested by the
Majority Banks) timely notifies the Company of disapproval of a
Borrowing Base Certificate, then the Agent shall, at the same time,
notify the Company in writing of the amount of the Borrowing Base as
determined by the Majority Banks and the basis of such determination,
and the effective date thereof (which shall be the date of the giving
of such notice by the Agent), and such amount shall thereupon and
thereafter constitute the Borrowing Base which shall remain in effect
until such time as the Borrowing Base is redetermined in accordance
with this SECTION 3.5(a). The Company shall cooperate in good faith
with the Banks in the calculation of the Borrowing Base.
(iii) Each determination of the Borrowing Base in
accordance with this SECTION 3.5(a) shall be binding and conclusive
upon
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the parties hereto (i) provided that the Majority Banks are not bound
to rely on information and figures provided by the Company if the
Majority Banks determine in good faith that it would be inappropriate
to do so. Nothing contained herein shall be deemed to restrict the
Company from submitting additional Borrowing Base Certificates to the
Agent (but not more often than once per calendar month) for the
Majority Banks' approval at times other than those required hereunder
(including, without limitation, at any time following the addition of
a property to the Borrowing Base Properties Pool).
(b) AMOUNT OF BORROWING BASE. As used herein, the term
"BORROWING BASE" shall mean the LESSER of:
(i) an amount equal to the sum of: (A) an amount which
would be fully amortized in 25 equal annual installments of principal
and interest by 50% of the cumulative Net Operating Income from the
Tanasbourne Asset (so long as it remains in the Borrowing Base
Properties Pool) and the Assets within the Borrowing Base Properties
Pool which have been owned and held by the Company for at least one
full calendar quarter, assuming interest at a per annum rate equal to
the greater of (1) 2.5% per annum plus the Treasury Rate, or (2) 9.0%,
plus (B) an amount equal to 50% of the cumulative net purchase prices
paid by the Company for the Assets within the Borrowing Base
Properties Pool which have been owned and held by the Company for less
than one full calendar quarter (it being understood that an Asset may
not be counted under both subparagraph (A) and subparagraph (B)
immediately above); or
(ii) an amount equal to one-half of the aggregate Adjusted
Current Values of the Assets within the Borrowing Base Properties
Pool.
(c) Only those Assets which constitute part of the "Borrowing
Base Properties Pool" shall be included in the calculation of the Borrowing
Base as set forth above. As used herein, the "BORROWING BASE PROPERTIES
POOL" means those Assets which the Majority Banks, in the exercise of their
sole and absolute discretion, designate in writing as constituting part of
the Borrowing Base Properties Pool. The Assets which shall initially
constitute the Borrowing Base Properties Pool are as set forth on
SCHEDULE 3.5(c) hereto. From time to
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time after the Closing Date, the Company may submit written requests (not
more often than once each calendar month) to add additional Assets to the
Borrowing Base Properties Pool. In each instance, it shall be in the sole
and absolute discretion of the Majority Banks as to whether any additional
Assets are added to the Borrowing Base Properties Pool; provided that the
Majority Banks shall use reasonable efforts to respond to any requests by
the Company to add additional Assets to the Borrowing Base Properties Pool
within 30 days of the receipt by Agent of such written request from the
Company (together with such information regarding each of such Assets as
the Majority Banks and Agent shall request). Provided further, however,
that failure of the Majority Banks to respond to any such request within
such 30-day period shall be deemed to be a disapproval of such request.
Without limiting the Majority Banks' discretion as to which Assets shall be
designated as part of the Borrowing Base Properties Pool, the Company
acknowledges and understands that the Agent shall not be required to even
submit an Asset to the Banks for their consideration unless such Asset is
100% owned by the Company (in fee), is free of all Liens (other than Liens
of a type permitted under SECTION 8.17), is a well-located, stabilized
retail shopping center, is at least 90% leased to reputable, third party
tenants who are in occupancy and have opened for business, and as to which
a recent "Phase I" environmental report has disclosed no material toxic or
hazardous substances. In connection with each request from the Company to
add an Asset to the Borrowing Base Properties Pool, the Company shall
submit to the Agent the following information and documentation, in
addition to any other information, documentation or other items required by
the Agent or the Majority Banks in their sole discretion: (1) a current
Phase I environmental report addressed to the Company, which is dated
within the guidelines of the Majority Banks, (2) a title insurance policy
insuring the Company's lien free fee ownership interest in the subject
Asset, and a current title report with respect to such Asset, and (3) a
current rent roll (and detailed analysis of the net operating income
generated from such Asset, including gross rental receipts, operating
expenses, capital expenditures and other relevant information for at least
the prior four quarters, if available). Assets may be removed from the
Borrowing Base Properties Pool as follows:
(i) The Company may remove Assets at any time from the
Borrowing Base Properties Pool, upon not less than ten (10) days'
written notice to the Agent, so long as (A) the Company shall have
submitted a Borrowing Base Certificate to the Agent in accordance with
SECTION 3.5(a)(i) at least thirty (30) days (but not more than
ninety (90)
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days) prior to the date of the proposed release of the subject Asset from
the Borrowing Base Properties Pool, (B) the Company shall concurrently
reduce the outstanding amount of Loans and/or L/C Obligations (by repayment
of outstanding Loans, termination of issued Letters of Credit, or both) to
the extent necessary to comply with the availability limits set forth in
SECTION 3.6 below, and any other applicable provisions of this Agreement,
(C) following such removal, the Borrowing Base Properties Pool shall not
have less than three separate Assets as part of the Borrowing Base
Properties Pool, (D) following such removal, the aggregate Adjusted Current
Value of the properties in the Borrowing Base Properties Pool shall not be
less than $45,000,000, and (E) no Event of Default or event that with the
giving of notice and/or the passage of time would constitute an Event of
Default shall have occurred and be continuing; and
(ii) The Majority Banks may, at any time, remove Assets from
the Borrowing Base Properties Pool, upon not less than ten (10) days
written notice from the Agent to the Company, if the Majority Banks in
their sole and absolute discretion have determined that a material
adverse change has occurred with respect to any of such Assets.
3.6 AVAILABILITY LIMITS. The sum of the aggregate principal amount
at any time outstanding under the Loans PLUS the L/C Obligations shall not at
any time exceed the LESSER of (i) the Total Aggregate Commitment or (ii) the
Borrowing Base.
3.7 PAYMENTS BY THE BANKS TO THE AGENT.
(a) Unless the Agent receives notice from a Bank on or prior to
the Closing Date or, with respect to any Borrowing after the Closing Date,
at least one Banking Day prior to the date of such Borrowing, that such
Bank will not make available as and when required hereunder to the Agent
for the account of the Company the amount of that Bank's Pro Rata Share of
the Borrowing, the Agent may assume that each Bank has made such amount
available to the Agent in immediately available funds on the date of
Borrowing and the Agent may (but shall not be so required), in reliance
upon such assumption, make available to the Company on such date a
corresponding amount. If and to the extent any Bank shall not have made
its full amount available to the Agent in immediately available funds and
the Agent in such circumstances has made available to the
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Company such amount, that Bank shall on the Banking Day following such date
of Borrowing make such amount available to the Agent, together with
interest at the Reference Rate for each day during such period. A notice
of the Agent submitted to any Bank with respect to amounts owing under this
subsection (a) shall be conclusive, absent manifest error. If such amount
is so made available, such payment to the Agent shall constitute such
Bank's Loan on the date of Borrowing for all purposes of this Agreement.
If such amount is not made available to the Agent on the Banking Day
following the date of Borrowing, the Agent will notify the Company of such
failure to fund and, upon demand by the Agent, the Company shall pay such
amount to the Agent for the Agent's account, together with interest thereon
for each day elapsed since the date of such Borrowing, at a rate per annum
equal to the interest rate applicable at the time to the Loans comprising
such Borrowing.
(b) The failure of any Bank to make any Loan on any date of
Borrowing shall not relieve any other Bank of any obligation hereunder to
make a Loan on such date of Borrowing, but no Bank shall be responsible for
the failure of any other Bank to make the Loan to be made by such other
Bank on any date of Borrowing.
3.8 SHARING OF PAYMENTS, ETC. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its Pro Rata Share, such Bank shall
immediately (a) notify the Agent of such fact, and (b) purchase from the other
Banks such participations in the Loans made by them as shall be necessary to
cause such purchasing Bank to share the excess payment pro rata with each of
them; PROVIDED, HOWEVER, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Bank, such purchase shall to that
extent be rescinded and each other Bank shall repay to the purchasing Bank the
purchase price paid therefor, together with an amount equal to such paying
Bank's ratable share (according to the proportion of (i) the amount of such
paying Bank's required repayment to (ii) the total amount so recovered from the
purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. The Company agrees
that any Bank so purchasing a participation from another Bank may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off, but subject to SECTION 11.7) with respect to such
participation as fully as if such Bank were the direct creditor of the Company
in the amount of such participation. The Agent will keep records (which shall
be conclusive and binding in the absence of manifest error) of participations
purchased under this Section and will in each case notify the Banks
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following any such purchases or repayments.
3.9 LETTER OF CREDIT SUBLIMIT.
3.9.1 AMOUNT AND TERMS OF THE CREDIT. Subject to the terms
and upon the conditions of this Agreement, the Issuing Bank shall issue standby
letters of credit for the account of the Company from time to time up to but not
including the Revolving Period Termination Date (as extended by the Banks in
writing from time to time in their sole discretion, the "L/C COMMITMENT
TERMINATION DATE"). The maximum aggregate principal amount which remains
undrawn under all outstanding Letters of Credit (the "L/C OBLIGATIONS") under
this Agreement shall not exceed at any one time outstanding the aggregate
principal sum of TEN MILLION AND NO/100 DOLLARS ($10,000,000.00) (the "L/C
COMMITMENT").
3.9.2 STANDBY LETTERS OF CREDIT.
(a) AMOUNTS AND TERMS OF STANDBY LETTERS OF CREDIT. During
the period from the Closing Date to but excluding the L/C Commitment
Termination Date, and subject to the terms and conditions of this
Agreement, upon Company's request pursuant to SECTION 3.9.3, the
Issuing Bank shall issue one or more standby letter(s) of credit
(each, a "LETTER OF CREDIT," and collectively, the "LETTERS OF
CREDIT") for the account of Company (subject to SECTION 3.9.4);
PROVIDED that the Issuing Bank shall not be obligated to issue any
Letter of Credit if, after giving effect thereto, (i) the
L/C Obligations would exceed the L/C Commitment, or (ii) the total
aggregate outstanding Loans PLUS the L/C Obligations would exceed the
LESSER of (A) the Total Aggregate Commitment, or (B) the Borrowing
Base. All Letters of Credit shall be on Issuing Bank's standard forms
of letters of credit at the time of issuance. No Letter of Credit
shall have an expiration date (unless the Banks otherwise consent in
writing) later than the EARLIER of (i) 12 months after the date of
issuance, or (ii) the date which is 60 days prior to the Maturity
Date. No "evergreen" provisions shall be permitted. The Issuing Bank
shall not be required to issue any Letter of Credit hereunder unless
such Letter of Credit is for the benefit of a party to which the
Company or its Subsidiaries owe certain performance obligations
incurred in the ordinary course of their real estate business.
Issuing Bank shall not be required to issue any Letter of Credit for
the benefit of creditors to which the Company or its Subsidiaries are
obligated in
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respect of obligations for borrowed money, other than to back a
purchase money note generated in connection with the acquisition of
Assets.
(b) LETTER OF CREDIT DRAWS ARE LOANS UNDER THIS AGREEMENT.
The Company and each Bank agree that any draws under any Letters of
Credit shall constitute Loans under this Agreement for all purposes.
Without limiting the foregoing, (i) all draws under any Letter of
Credit shall bear interest and be repaid as Loans outstanding under
this Agreement, and (ii) if, at the time any draw is made under any
Letter of Credit, an Event of Default has occurred or the Maturity
Date has passed or the Loans have been accelerated or are otherwise
due and payable, such draw under such Letter of Credit shall be
immediately due and payable in full. Promptly upon being notified by
the Agent (after Agent has received notice from the Issuing Bank) that
a draw has occurred under any Letter of Credit, each Bank shall
reimburse the Agent, for the benefit of the Issuing Bank, for that
Bank's Pro Rata Share of such draw.
3.9.3 REQUEST FOR CREDIT. The Company, on or after the
Closing Date, shall give the Issuing Bank notice of its request for the
issuance of a Letter of Credit by delivering to the Issuing Bank (with a
copy to the Agent) a duly executed and completed L/C Application on Issuing
Bank's then current form (herein, an "L/C APPLICATION"). Such request
shall specify: (i) the date on which the issuance of the Letter of Credit
is requested to be made (which day shall be a Banking Day), and (ii) the
amount of the Letter of Credit. Subject to the conditions herein, the
Issuing Bank will issue the Letter of Credit as soon as reasonably
practicable after receiving the above described notice.
3.9.4 CONDITIONS PRECEDENT TO ISSUANCE OF LETTERS OF CREDIT.
The obligation of the Issuing Bank to issue any Letter of Credit requested
by the Company is subject to satisfaction of the following conditions
precedent:
(a) CONDITIONS TO LOANS SHALL BE SATISFIED. Each of the
conditions specified in SECTIONS 6.2 AND 6.3 to Borrowings shall also
be applicable as conditions precedent to the issuance of any Letter of
Credit.
(b) L/C APPLICATION. The Issuing Bank shall have received
from the Company, in form and substance satisfactory to the Issuing
Bank, (i) a duly executed and completed L/C Application which
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L/C Application shall set forth, among other things, the beneficiary,
the amount, and the term of the proposed Letter of Credit, and (ii) a
duly executed and completed Request for Letter of Credit (in the form
attached hereto as EXHIBIT "C-2").
(c) ISSUING BANK APPROVAL. The Issuing Bank shall have
determined that the amount of any requested Letter of Credit, the
beneficiary thereof and the other terms contained in the documents
pertaining to such Letter of Credit are satisfactory to the Issuing
Bank in the exercise of its sole discretion.
(d) PAYMENT OF FEES. The Company shall pay the Issuing
Bank an issuance fee ("ISSUANCE FEE") in accordance with the Fee
Letter Agreement for the issuance of each Letter of Credit. The
applicable Issuance Fee shall be payable prior to the issuance (or
renewal) of any Letter of Credit. In addition, the Company shall pay
to the Issuing Bank (for its own benefit) all reasonable and customary
processing fees and costs described in the documents pertaining to
such Letter of Credit.
(e) TELEPHONE CONFIRMATION. Prior to the issuance of any
Letter of Credit, the Issuing Bank shall confirm by telephone with the
Agent that, following the issuance of such Letter of Credit, none of
the limitations set forth in SECTION 3.9 would be violated.
ARTICLE 4: PAYMENTS AND FEES.
4.1 PRINCIPAL AND INTEREST.
(a) Interest shall be payable on the outstanding daily unpaid
principal amount of each Borrowing from the date thereof until payment in
full is made and shall accrue and be payable at the rates set forth herein
both before and after default and before and after maturity and judgment,
with interest on overdue interest to bear interest at the rate specified in
SECTION 4.4. Upon any partial prepayment or redesignation of outstanding
Reference Rate Borrowings, interest accrued through the date of such
prepayment or redesignation shall be payable on the next following Interest
Payment Date and shall be deducted from the Account on such date.
Insufficient funds in the Account shall not excuse the
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Company's obligation to pay accrued interest on the Interest Payment Date.
Upon any partial prepayment or payment in full or redesignation or
conversion of any LIBOR Borrowing, or upon any payment or redesignation in
full of all outstanding Reference Rate Borrowings, interest accrued through
the date of such prepayment, payment, redesignation or conversion shall be
payable on the next following Interest Payment Date.
(b) Interest on each Reference Rate Borrowing shall be computed
on the basis of a year of 360 days and the actual number of days elapsed
(which shall result in more interest being due than if a year of 365 days
were used), at the Reference Rate TIMES the total principal balance
outstanding under each Note. Interest accrued on each Reference Rate
Borrowing shall be payable on each Interest Payment Date, commencing with
the first such date to occur after the Closing Date, and shall be deducted
from the Account on each such Interest Payment Date. Insufficient funds in
the Account shall not excuse the Company's obligation to pay accrued
interest on the Interest Payment Date. The Agent shall use its best
efforts to notify the Company of the amount of interest so payable prior to
each Interest Payment Date, but failure of the Agent to do so shall not
excuse payment of such interest when payable. EXCEPT as otherwise provided
in SECTION 4.4, the unpaid principal amount of any Reference Rate Borrowing
shall bear interest at a fluctuating rate per annum equal to the Reference
Rate PLUS the Reference Rate Spread. Each change in the interest rate
shall take effect simultaneously with the corresponding change in the
Reference Rate. Each change in the Reference Rate shall be effective as of
12:01 a.m. on the Banking Day on which the change in the Reference Rate is
announced, unless otherwise specified in such announcement, in which case
the change shall be effective as so specified.
(c) Interest on each LIBOR Borrowing shall be computed on the
basis of a year of 360 days and the actual number of days elapsed (which
shall result in more interest being due than if a year of 365 days were
used). Interest accrued on each LIBOR Borrowing which is for a term of one
month shall be payable on the next Interest Payment Date following the
maturity date of that LIBOR Borrowing. Interest accrued on each other
LIBOR Borrowing outstanding as of each Interest Payment Date, commencing
with the first such date to occur after the Closing Date: (i) shall be
payable on each such Interest Payment Date and shall be deducted from the
Account on such date, and (ii) shall be payable on the next Interest
Payment Date following the maturity date of that LIBOR Borrowing.
Insufficient funds in the Account shall not
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excuse the Company's obligation to pay accrued interest on the Interest
Payment Date. The Agent shall use its best efforts to notify the Company
of the amount of interest so payable prior to each such date, but failure
of the Agent to do so shall not excuse payment of such interest when
payable. The unpaid principal amount of any LIBOR Borrowing shall bear
interest at a rate per annum equal to the LIBOR Rate for that LIBOR
Borrowing PLUS the applicable LIBOR Rate Spread.
(d) If not sooner paid, the principal indebtedness evidenced by
each Note shall be payable as follows:
(i) subject to the applicable provisions of this
Agreement providing for automatic redesignation of Borrowings upon
compliance with SECTION 3.4, the principal amount of each LIBOR
Borrowing shall be payable on the last day of the LIBOR Period for
such Borrowing;
(ii) the amount, if any, by which the principal
indebtedness evidenced by each Note at any time exceeds the applicable
Bank's Commitment shall be payable immediately;
(iii) the amount of each payment required pursuant to
SECTION 4.16 shall be payable immediately;
(iv) an amount equal to 20% of the outstanding Loans
and L/C Obligations as of the Revolving Period Termination Date,
DIVIDED BY twelve (12), shall be payable commencing on the Revolving
Period Termination Date, and continuing on the first day of each month
thereafter until the Maturity Date; and
(v) all remaining outstanding Loans (together with any
and all other indebtedness not otherwise paid when due under the Loan
Documents) shall be payable in full on the Maturity Date.
(e) Each Note may, at any time and from time to time, be paid or
prepaid in whole or in part, PROVIDED that (i) any partial prepayment shall
be in an amount not less than $100,000, (ii) EXCEPT as required by
subsection (d) above, no LIBOR Borrowing may be paid or prepaid in whole or
in part prior to the last day of the applicable LIBOR Period without the
prior consent of each
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Bank, and, notwithstanding such required prepayment or such consent, any
payment or prepayment of all or any part of any LIBOR Borrowing on a day
other than the last day of the applicable LIBOR Period shall be made on a
LIBOR Banking Day, as applicable, and shall be preceded by at least five
(5) LIBOR Banking Days, as applicable, written notice to the Agent of the
date and amount of such payment or payments, and (iii) any prepayment of a
LIBOR Borrowing shall be accompanied by a prepayment fee calculated in
accordance with subsection (f) below and any other amounts required to be
paid pursuant to SECTION 4.8. In addition, if at any time the amount of
any LIBOR Borrowing is reduced (by payment, prepayment or conversion of a
part thereof) to an amount less than $2,000,000, such LIBOR Borrowing shall
automatically convert into a Reference Rate Borrowing, and on and after
such date the right of the Company to continue such Borrowing as a LIBOR
Borrowing shall terminate.
(f) Prepayment fees shall be calculated as follows:
(i) $250; PLUS
(ii) principal amount of the LIBOR Borrowing, TIMES
[the number of days between the date of prepayment and the last day in
the applicable LIBOR Period] DIVIDED BY 360, TIMES the applicable
Interest Differential; PLUS
(iii) all reasonable out-of-pocket expenses (including
Attorney Costs) incurred by the Banks and reasonably attributable to
such prepayment; PROVIDED that no prepayment fee shall be payable (and
no credit or rebate shall be required) if the product of the foregoing
formula is not positive.
For purposes of calculating any prepayment fee under this subsection (f),
each LIBOR Borrowing (and each related reserve, special deposit or similar
requirement) shall be conclusively deemed to have been funded at the LIBOR
Base Rate used in determining the LIBOR Rate for such LIBOR Borrowing by a
matching deposit or other borrowing in the interbank eurodollar market for
a comparable amount and for a comparable period, regardless of whether such
LIBOR Borrowing is so funded. The Agent's determination of the amount of
any prepayment fee shall be conclusive in the absence of manifest error.
Nothing contained in this SECTION 4.1 shall relieve the Company from
its
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obligation to make interest payments to the Banks on each Interest Payment Date
(in accordance with the terms and conditions contained herein) in the event the
funds held in the Account are insufficient to make such interest payments on any
such Interest Payment Date.
4.2 UNUSED FEE. For the period commencing on the date of this
Agreement and ending on the Revolving Period Termination Date, the Company shall
pay to the Agent each quarter, for the account of each Bank in accordance with
its Pro Rata Share, an unused fee, computed on the basis of a year of 360 days
and the actual number of days elapsed, at the rate of .25% per annum TIMES the
average daily difference between (a) the Total Aggregate Commitment, and (b) the
total principal balance outstanding under the Notes plus the L/C Obligations
(PROVIDED, HOWEVER, that if during the applicable quarter as to which an unused
fee is owing, the average daily difference between the amounts specified in
subparagraphs (a) and (b) immediately above is less than one-half (50%) of the
amount of the Total Aggregate Commitment, the applicable rate to be used in
calculating the unused fee shall be .125% per annum, and not .25% per annum) .
The unused fee shall be measured quarterly and shall be payable quarterly in
arrears on October 1, January 1, April 1 and July 1 of each year, with the first
such payment due October 1, 1997, EXCEPT that upon payment of each Note in full,
the unused fee accrued to the date of payment shall be payable on the date of
payment.
4.3 FEES FOR ISSUANCE OF LETTERS OF CREDIT. The fees payable for the
issuance and processing of Letters of Credit shall be as set forth in
SECTION 3.9 and the Fee Letter Agreement.
4.4 LATE PAYMENTS. Should any installment of principal or interest
or any fee or cost or other amount payable under any Loan Document to the Banks
not be paid within 10 days of when due, it shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the sum of the
Reference Rate PLUS 3.00% per annum, to the fullest extent permitted by
applicable Law. Accrued and unpaid interest on past due amounts (INCLUDING,
without limitation, interest on past due interest) shall be compounded monthly,
on the last day of each calendar month, to the fullest extent permitted by
applicable Law.
4.5 TAXES. All payments payable to the Banks hereunder or with
respect to the Loan Documents shall be made to the Banks without deductions for
any Taxes or Other Taxes except to the extent the Company is required by any Law
or Governmental Authority to withhold and except in accordance with SECTION
10.10 to
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the extent, if any, that such amounts are required to be withheld by the Agent
under the laws of the United States of America or any other applicable taxing
authority.
4.6 ILLEGALITY.
(a) If any Bank determines that the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has
asserted that it is unlawful, for any Bank or its applicable Lending Office
to make LIBOR Rate Loans, then, on notice thereof by the Bank to the
Company through the Agent, any obligation of that Bank to make LIBOR Rate
Loans shall be suspended until the Bank notifies the Agent and the Company
that the circumstances giving rise to such determination no longer exist.
(b) If a Bank determines that it is unlawful to maintain any
LIBOR Rate Loan, the Company shall, upon its receipt of notice of such fact
and demand from such Bank (with a copy to the Agent), prepay in full such
LIBOR Borrowings of that Bank then outstanding, together with interest
accrued thereon and amounts required under SECTION 4.8, either on the last
day of the LIBOR Period thereof, if the Bank may lawfully continue to
maintain such LIBOR Rate Loans to such day, or immediately, if the Bank may
not lawfully continue to maintain such LIBOR Rate Loan. If the Company is
required to so prepay any LIBOR Rate Loan, then concurrently with such
prepayment, the Company shall borrow from the affected Bank, in the amount
of such repayment, a Reference Rate Loan.
(c) If the obligation of any Bank to make or maintain LIBOR Rate
Loans has been so terminated or suspended, all Loans which would otherwise
be made by the Bank as LIBOR Rate Loans shall be instead Reference Rate
Loans.
(d) Before giving any notice to the Agent under this Section,
the affected Bank shall designate a different Lending Office with respect
to its Reference Rate Loans if such designation will avoid the need for
giving such notice or making such demand and will not, in the judgment of
the Bank, be illegal or otherwise disadvantageous to the Bank.
4.7 INCREASED COSTS AND REDUCTION OF RETURN.
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(a) If any Bank determines that, due to either (i) the
introduction of or any change (other than any change by way of imposition
of or increase in reserve requirements included in the calculation of the
LIBOR Rate or in respect of the assessment rate payable by any Bank to the
FDIC for insuring U.S. deposits) in or in the interpretation of any law or
regulation or (ii) the compliance by that Bank with any guideline or
request from any central bank or other Governmental Authority (whether or
not having the force of law), there shall be any increase in the cost to
such Bank or reduction of return of agreeing to make or making, funding or
maintaining any LIBOR Rate Loans, then the Company shall be liable for, and
shall from time to time, upon demand (with a copy of such demand to be sent
to the Agent), pay to the Agent for the account of such Bank, additional
amounts as are sufficient to compensate such Bank for such increased costs.
(b) If any Bank shall have determined that (i) the introduction
of any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy
Regulation, (iii) any change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof, or
(iv) compliance by the Bank (or its Lending Office) or any corporation
controlling the Bank with any Capital Adequacy Regulation, affects or would
affect the amount of capital required or expected to be maintained by the
Bank or any corporation controlling the Bank and (taking into consideration
such Bank's or such corporation's policies with respect to capital adequacy
and such Bank's desired return on capital) determines that the amount of
such capital is increased as a consequence of its Commitment, loans,
credits or obligations under this Agreement, then, upon demand of such Bank
to the Company through the Agent, the Company shall pay to the Bank, from
time to time as specified by the Bank, additional amounts sufficient to
compensate the Bank for such increase.
4.8 FUNDING LOSSES. The Company shall reimburse each Bank and hold
each Bank harmless from any loss or expense which the Bank may sustain or incur
as a consequence of:
(a) the failure of the Company to borrow, continue or convert a
Loan after the Company has given (or is deemed to have given) a Request for
Borrowing or a Request for Redesignation of Borrowing; or
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(b) the prepayment (including pursuant to SECTION 4.16) or other
payment (including after acceleration thereof) of a LIBOR Rate Loan on a
day that is not the last day of the relevant LIBOR Period; or
(c) the automatic conversion under SECTION 4.1(e) of any LIBOR
Borrowing to a Reference Rate Borrowing on a day that is not the last day
of the relevant LIBOR Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its LIBOR Rate Loans or from fees payable to
terminate the deposits from which such funds were obtained. Such loss or
expense shall be calculated as follows:
(i) principal amount of the LIBOR Borrowing, TIMES [the number
of days between the date of the event and the last day in the applicable LIBOR
Period] DIVIDED BY 360, TIMES the applicable Interest Differential; PLUS
(ii) all out-of-pocket expenses (including Attorney Costs)
incurred by the Banks and reasonably attributable to such event; PROVIDED that
no prepayment fee shall be payable (and no credit or rebate shall be required)
if the product of the foregoing formula is not positive.
For purposes of calculating amounts payable by the Company to the Banks under
this SECTION 4.8, each LIBOR Borrowing (and each related reserve, special
deposit or similar requirement) shall be conclusively deemed to have been funded
at the LIBOR Base Rate used in determining the LIBOR Rate for such LIBOR
Borrowing by a matching deposit or other borrowing in the interbank eurodollar
market for a comparable amount and for a comparable period, regardless of
whether such LIBOR Borrowing is so funded.
4.9 INABILITY TO DETERMINE RATES. If any Bank determines that for
any reason adequate and reasonable means do not exist for determining the LIBOR
Rate for any requested LIBOR Period with respect to a proposed LIBOR Rate Loan,
or that the LIBOR Rate applicable pursuant to subsection 4.1(c) for any
requested LIBOR Period with respect to a proposed LIBOR Rate Loan does not
adequately and fairly reflect the cost to such Banks of funding such Loan, the
Agent will promptly so notify the Company and each Bank. Thereafter, the
obligation of the Banks to make or
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maintain LIBOR Rate Loans, as the case may be, hereunder shall be suspended
until the Agent upon the instruction of such Bank revokes such notice in
writing. Upon receipt of such notice, the Company may revoke any Request for
Borrowing or Request for Redesignation of Borrowing then submitted by it. If
the Company does not revoke such Request, the Banks shall make, convert or
continue the Loans, as proposed by the Company, in the amount specified in the
applicable notice submitted by the Company, but such Loans shall be made,
converted or continued as Reference Rate Loans instead of LIBOR Rate Loans.
4.10 RESERVES ON LIBOR RATE LOANS. The Company shall pay to each
Bank, as long as such Bank shall be required under regulations of the FRB to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency funds or deposits (currently known as "Eurocurrency
liabilities"), additional costs on the unpaid principal amount of each LIBOR
Rate Loan equal to the actual costs of such reserves allocated to such Loan by
the Bank (as determined by the Bank in good faith, which determination shall be
conclusive), payable on each date on which interest is payable on such Loan,
provided the Company shall have received at least 15 days' prior written notice
(with a copy to the Agent) of such additional costs from the Bank. If a Bank
fails to give notice 15 days prior to the relevant Interest Payment Date, such
additional costs shall be payable 15 days from receipt of such notice.
4.11 CERTIFICATES OF BANKS. Any Bank claiming reimbursement or
compensation under this Article 4 shall deliver to the Company (with a copy to
the Agent) a certificate setting forth in reasonable detail the amount payable
to the Bank hereunder and such certificate shall be conclusive and binding on
the Company in the absence of manifest error.
4.12 SUBSTITUTION OF BANKS. Upon the receipt by the Company from
any Bank (an "AFFECTED BANK") of a claim for compensation under SECTION 4.7 or
SECTION 4.15, the Company may: (i) request the Affected Bank to use its best
efforts to obtain a replacement bank or financial institution satisfactory to
the Company to acquire and assume all or a ratable part of all of such Affected
Bank's Loans and Commitment (a "REPLACEMENT BANK"); or (ii) request one or more
of the other Banks to acquire and assume all or part of such Affected Bank's
Loans and Commitment; or (iii) designate a Replacement Bank. Any such
designation of a Replacement Bank under clause (i) or (iii) shall be subject to
the prior written consent of the Agent (which consent shall not be unreasonably
withheld).
4.13 SURVIVAL. The agreements and obligations of the Company in
this
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Article 4 shall survive for one year following the payment in full of all
Obligations.
4.14 MANNER AND TREATMENT OF PAYMENTS. The amount of each
payment hereunder or on each Note shall be made to Agent for the account of each
applicable Bank in immediately available funds on the day of payment (which must
be a Banking Day). Any payment received after 11:00 a.m., California time, on
any Banking Day, shall be deemed received on the next succeeding Banking Day.
Whenever any payment to be made hereunder or on each Note is due on a day that
is not a Banking Day, payment shall be made on the next succeeding Banking Day;
provided that the extension shall be included in the computation of interest
owing on the next following Interest Payment Date. Any payment of the principal
of any LIBOR Borrowing shall be made on a LIBOR Banking Day as applicable.
4.15 CHANGE IN CAPITAL REQUIREMENTS; ADDITIONAL COSTS. If a Bank
at any time subsequent to the date of this Agreement determines that the amount
of capital required or expected to be maintained by the Bank or any corporation
controlling the Bank under any Law or any guideline, request or directive of any
Governmental Authority is based on or increased by advances and/or commitments
of the type contemplated by this Agreement, then Company shall pay to the Bank
on demand such additional amounts as the Bank may reasonably determine to be
sufficient to compensate the Bank or such other corporation in light of such
circumstances to the extent that the Bank reasonably determines that the
maintenance of such capital is allocable to advances and/or commitments under
this Agreement. If the occurrence of any Special Circumstance or other
regulatory development, or the imposition of any Tax or Other Tax, or change in
applicable Law, shall result in an increase in the cost or reduction of return
to the Bank of making, funding, maintaining or continuing the funding of any
Borrowing, then Company shall pay to the Bank on demand such additional amounts
as the Bank determines to be necessary to compensate the Bank for such increased
cost.
4.16 MANDATORY PREPAYMENT. In the event that the aggregate
principal amount of the outstanding Loans PLUS the L/C Obligations at any time
exceeds the limitations specified in SECTION 3.6, the Company shall immediately
make a prepayment of the Loans in such amount as is necessary to cause the
amount of outstanding Loans PLUS L/C Obligations to comply with the limitations
of SECTION 3.6.
4.17 AGENCY FEE AND OTHER CONSIDERATION PAYABLE TO BOFA. The
Banks have been informed that pursuant to a fee letter agreement dated as of
August 13, 1997 between BofA and the Company (the "FEE LETTER AGREEMENT"), the
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Company has agreed to pay BofA an agency fee, a commitment fee, Letter of Credit
issuance fees, and other fees and compensation as consideration for BofA's
performance of its duties as Agent under this Agreement, for its earlier
commitment to make the Loans and to issue Letters of Credit, and for other
reasons, as more fully set forth in the Fee Letter Agreement. The Company
covenants and agrees to pay such agency fee, commitment fee, Letter of Credit
issuance fees, and other fees and compensation to BofA at the times and in the
manner set forth in the Fee Letter Agreement. The agency fee, commitment fee,
Letter of Credit issuance fees, and other fees and compensation payable to BofA
under the Fee Letter Agreement shall belong solely to BofA, and BofA shall not
be required to share any such agency fee, commitment fee, Letter of Credit
issuance fees, or other fees or compensation specified in the Fee Letter
Agreement with any of the other Banks.
4.18 MATURITY DATE EXTENSION OPTION. The Maturity Date may be
extended to the first anniversary of the then applicable Maturity Date, at the
sole discretion of each of the Banks, upon receipt from the Company of an
Extension Request delivered to the Agent not earlier than ninety (90) days and
not later than sixty (60) days prior to the date which is two (2) years prior to
the then existing Maturity Date. No extension shall be effective as to any Bank
without the approval of all Banks. Approval or disapproval of each such
extension shall be in the sole and absolute discretion of each Bank. Each Bank
shall notify the Agent and the Company, in writing and within 30 days of receipt
of an Extension Request, whether it will extend the Maturity Date. If all Banks
approve such extension, the Maturity Date shall be extended to the first
anniversary of the then effective Maturity Date. If any Bank elects not to
extend the Maturity Date, or does not give notice of its election to extend the
Maturity Date on or before the date which is thirty (30) days before the date
which is two (2) years prior to the previously applicable Maturity Date, the
Maturity Date shall not be extended.
ARTICLE 5: SECURITY.
5.1 UNSECURED CREDIT. The Obligations shall be unsecured (except as
specified in SECTION 9.2, or as may otherwise now or hereafter be specifically
provided for to the contrary).
ARTICLE 6: CONDITIONS.
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6.1 CONDITIONS TO DISBURSEMENT OF FIRST BORROWINGS. The obligation
of the Banks to make the first new disbursement of the Loan Proceeds is subject
to the conditions precedent specified in SECTION 11.21.
6.2 CONDITIONS FOR SUBSEQUENT BORROWINGS OR FOR A REDESIGNATION OF
BORROWINGS. The obligation of the Banks to make any subsequent disbursement of
Loan Proceeds or redesignation of Borrowing is subject to the following
conditions precedent:
(a) the representations and warranties contained in ARTICLE 7,
as of the latest reporting required under this Agreement, shall be correct
in all Material respects on and as of the date of the Borrowing, or
redesignation thereof, as though made on and as of that date, and no Event
of Default or event that could become an Event of Default upon the giving
of notice and/or the passage of time shall have occurred and be continuing;
and
(b) the Company shall, at its sole expense, deliver or cause to
be delivered to the Agent, in form and substance satisfactory to the Agent,
a Request for Borrowing or a Request for Redesignation of Borrowing, as
applicable.
6.3 ANY BORROWING. In addition to any applicable conditions
precedent set forth elsewhere in this Article 6, the obligation of the Banks to
make any Loan is subject to the conditions precedent that the representations
and warranties contained in SECTION 7.2 shall be true and correct in all
Material respects on and as of the date of such Loan as though made on and as of
that date, and that there shall not have occurred any default which would
constitute an Event of Default or which would upon notice or the passage of time
constitute an Event of Default.
ARTICLE 7: REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Agent and each Bank that:
7.1 INCORPORATION, QUALIFICATION, POWERS AND CAPITAL STOCK. The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the state of Maryland, is duly qualified to do
business as, and is in good standing as, a foreign corporation in each
jurisdiction in which the conduct of its business or the ownership, leasing or
operation of its properties makes such qualifica-
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tion necessary, and has all requisite power and authority to conduct its
business and to own, lease and operate its properties. Without limiting the
foregoing, the Company qualifies as, and has elected to be taxed as, a real
estate investment trust under the Code. All outstanding shares of capital stock
of the Company are duly authorized, validly issued, fully paid, nonassessable,
and issued in compliance with all applicable state and federal securities and
other Laws.
7.2 EXECUTION, DELIVERY AND PERFORMANCE OF LOAN DOCUMENTS.
(a) The Company has all requisite power and authority to execute
and deliver, and to perform all of its obligations under, the Loan
Documents.
(b) The execution and delivery by the Company of, and the
performance by the Company of each of its obligations under, each Loan
Document have been duly authorized by all necessary action and do not and
will not:
(i) require any consent or approval not heretofore obtained
of any stockholder, security holder or creditor of the Company or any
Subsidiary;
(ii) violate any provision of the articles of incorporation
or bylaws of the Company or any provision of the articles or
certificate of incorporation or organization, bylaws, operating
agreement or partnership agreement of any Subsidiary;
(iii) result in or require the creation or imposition of
any Lien (except to the extent that any Lien is created under this
Agreement) upon or with respect to any property now owned or leased or
hereafter acquired by the Company or any Subsidiary;
(iv) violate any provision of any Law, order, writ,
judgment, injunction, decree, determination or award presently in
effect having applicability to the Company, any Subsidiary or any
property owned by the Company or any Subsidiary;
(v) result in a breach of or constitute a default under, or
cause or permit the acceleration of any Contractual Obligation of the
Company or any Subsidiaries.
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(c) The Company and each Subsidiary is not in default under any
Law, order, writ, judgment, injunction, decree, determination, award,
indenture, agreement, lease or instrument described in SECTIONS 7.2(b)(iv)
OR 7.2(b)(v) above, in any respect that (i) is Materially adverse to the
interests of the Banks, or that (ii) could Materially impair the ability of
the Company to perform its obligations under the Loan Documents, or
(iii) has a Material adverse effect on the business or financial condition
of the Company or any Subsidiary.
(d) No authorization, consent, approval, order, license, permit
or exemption from, or filing, registration or qualification with, or other
action by, or notice to any Governmental Authority not heretofore obtained
is or will be required under applicable Law to authorize or permit the
execution and delivery of, and performance by the Company of all of its
obligations under, the Loan Documents.
(e) Each of the Loan Documents, when executed and delivered,
will constitute the legal, valid and binding obligations of the Company
enforceable against it in accordance with its terms, except as enforcement
may be limited by bankruptcy, insolvency or other similar laws relating to
or affecting creditors' rights generally or equitable principles relating
to the granting of specific performance or other equitable remedies as a
matter of judicial discretion.
7.3 COMPLIANCE WITH LAWS AND OTHER REQUIREMENTS. The Company is in
compliance with all Requirements of Law and other requirements applicable to its
business and has obtained all authorizations, consents, approvals, orders,
licenses, permits and exemptions from, and has accomplished all filings,
registrations or qualifications with, any Governmental Authority that are
necessary for the transaction of its business.
7.4 SUBSIDIARIES.
(a) EXHIBIT "E" hereto correctly sets forth the names and
jurisdictions of incorporation or formation of all present Subsidiaries.
Except as described in EXHIBIT "E", the Company does not own any capital
stock, membership interest, equity interest or partnership interest in any
Person other than the Subsidiaries. All outstanding shares of capital
stock, membership
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interests or partnership interests, as the case may be, of each Subsidiary
that are owned by the Company or any Subsidiary are (i) owned of record and
beneficially by the Company and/or by one or more Subsidiaries, free and
clear of all liens, claims, encumbrances and rights of others, and are
(ii) duly authorized, validly issued, fully paid, nonassessable, and issued
in compliance with all applicable state and federal securities and other
Laws. The Company may update EXHIBIT "E" from time to time by sending
written notice to the Agent.
(b) Each Subsidiary is a corporation, partnership or limited
liability company duly incorporated, formed or organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation,
formation or organization (as applicable), is duly qualified to do business
as, and is in good standing as, a foreign corporation, partnership or
limited liability company in each jurisdiction in which the conduct of its
business or the ownership or leasing of its properties makes such
qualification necessary, and has all requisite power and authority to
conduct its business and to own and lease its properties.
(c) Each Subsidiary is in compliance with all Requirements of
Law and other requirements applicable to its business and has obtained all
authorizations, consents, approvals, orders, licenses, permits and
exemptions from, and has accomplished all filings, registrations or
qualifications with, any Governmental Authority that are necessary for the
transaction of its business.
7.5 AFFILIATED PARTNERSHIPS. There are no Affiliated Partnerships
presently in existence which are not Subsidiaries listed on EXHIBIT "E" hereto.
7.6 FINANCIAL STATEMENTS OF THE COMPANY AND THE SUBSIDIARIES. The
Company has furnished to the Banks a copy of the Pan Pacific Retail Properties,
Inc. Prospectus dated August 7, 1997, which contains certain financial
information of the Company and its Subsidiaries. Such financial information
fairly presents the consolidated financial position of the Company and the
Subsidiaries as at the dates specified therein and the consolidated results of
operations and cash flows for the periods then ended, all in conformity with
GAAP applied on a consistent basis.
7.7 NO MATERIAL ADVERSE CHANGE. There has been no Material adverse
change in the condition, financial or otherwise, of the Company and the
Subsidiaries, taken as a whole, from the financial condition of the Company and
the Subsidiaries, taken as a whole, as of August 7, 1997, and the Company and
the
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Subsidiaries, taken as a whole, do not have any Material liability or, to the
best knowledge of the Company, Material contingent liability, not reflected or
disclosed in the Prospectus described in SECTION 7.6.
7.8 TAX LIABILITY. The Company and each Subsidiary have filed all
tax returns (federal, state and local) required to be filed by them and have
paid all taxes shown thereon to be due and all property taxes due, including
interest and penalties, if any. To the best knowledge of the Company, there
does not exist any substantial likelihood that any Governmental Authority will
successfully assert a tax deficiency against the Company or any Subsidiary that
is Material to the Company and the Subsidiaries, taken as a whole, that has not
been adequately reserved against in the financial statements described in
SECTION 7.6. The Company and each Subsidiary has established and is maintaining
adequate reserves for tax liabilities, if any, sufficient to comply with GAAP.
7.9 LITIGATION. There are no actions, suits, proceedings, claims or
disputes pending or, to the best knowledge of the Company, threatened, at law,
in equity, in arbitration or before any Governmental Authority against or
affecting the Company or any Subsidiary, or any property of the Company or any
Subsidiary, which, if determined adversely to the Company or the Subsidiary,
could have a material adverse effect on the interests of any Bank, or could
Materially impair the ability of the Company to perform its obligations under
the Loan Documents, or could have a Material adverse effect on the business or
financial condition of the Company and the Subsidiaries, taken as a whole.
7.10 ERISA COMPLIANCE.
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law.
Each Plan which is intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the IRS and to the best
knowledge of the Company, nothing has occurred which would cause the loss
of such qualification. The Company and each ERISA Affiliate has made all
required contributions to any Plan subject to Section 412 of the Code, and
no application for a funding waiver or an extension of any amortization
period pursuant to Section 412 of the Code has been made with respect to
any Plan.
(b) There are no pending or, to the best knowledge of Company,
threatened claims, actions or lawsuits, or action by any
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Governmental Authority, with respect to any Plan which has resulted or
could reasonably be expected to result in (i) a Material adverse change in,
or a Material adverse effect upon, the operations, business, properties,
condition (financial or otherwise) of the Company, or (ii) a Material
impairment of the ability of the Company to perform its obligations under
the Loan Documents or to avoid any Event of Default. There has been no
prohibited transaction or violation of the fiduciary responsibility rules
with respect to any Plan which has resulted or could reasonably be expected
to result in (i) a Material adverse change in, or a Material adverse effect
upon, the operations, business, properties, condition (financial or
otherwise) of the Company, or (ii) a Material impairment of the ability of
the Company to perform its obligations under the Loan Documents or to avoid
any Event of Default.
(c) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability;
(iii) neither the Company nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability under Title IV of ERISA with
respect to any Pension Plan (other than premiums due and not delinquent
under Section 4007 of ERISA); (iv) neither the Company nor any ERISA
Affiliate has incurred, or reasonably expects to incur, any liability (and
no event has occurred which, with the giving of notice under Section 4219
of ERISA, would result in such liability) under Section 4201 or 4243 of
ERISA with respect to a Multiemployer Plan; and (v) neither the Company nor
any ERISA Affiliate has engaged in a transaction that could be subject to
Section 4069 or 4212(c) of ERISA.
7.11 REGULATIONS U AND X; INVESTMENT COMPANY ACT. Neither the
Company nor any Subsidiary is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of "purchasing"
or "carrying" any "margin stock" within the meanings of Regulation U of the FRB.
No part of the Loan Proceeds will be used to purchase or carry any margin stock,
or to extend credit to others for that purpose, or for any purpose that violates
the provisions of Regulations U or X of the Board of Governors. Neither the
Company nor any Subsidiary is or is required to be registered under the
Investment Company Act of 1940.
7.12 NO DEFAULT. No event has occurred and is continuing that is
an Event of Default or that could become an Event of Default upon the giving of
notice and/or the passage of time. As of the Closing Date, neither the Company
nor any Subsidiary is in default under or with respect to any Contractual
Obligation in any respect which, individually or together with all other such
defaults, could reasonably
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be expected to (a) have a Material adverse effect on the business or financial
condition of the Company or any Subsidiary, (b) be Materially adverse to the
interests of the Banks, or (c) Materially impair the ability of the Company to
perform its obligations under the Loan Documents.
7.13 BORROWING BASE. The sum of the aggregate principal amount
outstanding under the Loans PLUS the L/C Obligations does not exceed the
Borrowing Base.
7.14 ENVIRONMENTAL MATTERS.
(a) Except as specifically disclosed in SCHEDULE 7.14, the
on-going operations of the Company and each of its Subsidiaries comply in
all respects with all Environmental Laws, except such non-compliance which
would not ( if enforced in accordance with applicable law) result in
liability in excess of $200,000 in the aggregate.
(b) Except as specifically disclosed in SCHEDULE 7.14, the
Company and each of its Subsidiaries have obtained all licenses, permits,
authorizations and registrations required under any Environmental Law
("ENVIRONMENTAL PERMITS") and necessary for their respective ordinary
course operations, all such Environmental Permits are in good standing, and
the Company and each of its Subsidiaries are in compliance with all
material terms and conditions of such Environmental Permits.
(c) Except as specifically disclosed in SCHEDULE 7.14, none
of the Company, any of its Subsidiaries or any of their respective present
property or operations, is subject to any outstanding written order from or
agreement with any Governmental Authority, nor subject to any judicial or
docketed administrative proceeding, respecting any Environmental Law,
Environmental Claim or Hazardous Material.
(d) Except as specifically disclosed in SCHEDULE 7.14,
there are no Hazardous Materials or other conditions or circumstances
existing with respect to any property of the Company or any Subsidiary, or
arising from operations of the Company or any Subsidiaries that would
reasonably be expected to give rise to Environmental Claims with a
potential liability of the Company and Subsidiaries in excess of $200,000
in the aggregate for any such condition, circumstance or property. In
addition, (i) no underground storage
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tanks exist on any property owned or operated by the Company or any
Subsidiary (x) that are not properly registered or permitted under
applicable Environmental Laws, or (y) that are leaking or disposing of
Hazardous Materials off-site, and (ii) the Company and Subsidiaries have
notified all of their employees of the existence, if any, of any health
hazard arising from the conditions of their employment and have met all
notification requirements under Title III of CERCLA and all other
Environmental Laws.
7.15 INSURANCE. The properties of the Company and each Subsidiary
is insured with financially sound and reputable insurance companies not
Affiliates of the Company, in such amounts, with such deductibles and covering
such risks as are customarily carried by companies engaged in similar businesses
and owning similar properties in localities where the Company or such Subsidiary
operates. All such insurance is in compliance with the insurance requirements
specified in this Agreement.
7.16 NO BURDENSOME RESTRICTIONS. Neither the Company nor any
Subsidiary is a party to or bound by any Contractual Obligation, or subject to
any restriction in any formation documents or other organizational or charter
documents, or any Requirement of Law, which could reasonably be expected to
(a) have a Material adverse affect on the business or financial condition of the
Company or any Subsidiary, (b) be Materially adverse to the interests of the
Banks, or (c) Materially impair the ability of the Company to perform its
obligations under the Loan Documents.
7.17 FULL DISCLOSURE. None of the representations or warranties
made by the Company in the Loan Documents as of the date such representations
and warranties are made or deemed made, and none of the statements contained in
any exhibit, report, statement or certificate furnished by or on behalf of the
Company or any Subsidiary in connection with the Loan Documents (including the
offering and disclosure materials delivered by or on behalf of the Company to
the Banks prior to the Closing Date), contains any untrue statement of a
material fact or omits any material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they are made, not misleading as of the time when made or delivered.
ARTICLE 8: COVENANTS OF THE COMPANY.
As long as any Note remains unpaid or any other Obligation remains
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outstanding or any Commitment remains in effect:
8.1 CONSOLIDATED TANGIBLE NET WORTH. The Company shall not permit
Consolidated Tangible Net Worth at any time to be less than the sum of
(a) $240,000,000 PLUS (b) 75% of the net proceeds from any equity offerings of
the Company after the Company's initial public offering.
8.2 DEBT SERVICE COVERAGE RATIO. The Company shall not permit, at
any time, the ratio of (a) Adjusted EBITDA to (b) Actual Debt Service to be less
than 2.0 to 1.0.
8.3 LEVERAGE RATIO. The Company shall not permit, at any time, the
ratio of (a) Total Liabilities to (b) Aggregate Adjusted Current Value to exceed
.50 to 1.0.
8.4 SECURED DEBT RATIO. The Company shall not permit, at any time,
the ratio of (a) the aggregate amount of Total Liabilities then secured by real
property to (b) Aggregate Adjusted Current Value to exceed .35 to 1.0.
8.5 UNENCUMBERED ASSET RATIOS.
(a) the Company shall not permit, at any time, the ratio of
(i) the aggregate amount of the Adjusted Current Values of all Unencumbered
Assets to (ii) the aggregate amount of Total Liabilities which are not
secured by real property to be less than 2.0 to 1.0.
(b) Company shall not permit, at any time, the ratio of (i)
the aggregate amount of the Adjusted Current Values of all Unencumbered
Assets to (ii) Aggregate Adjusted Current Value to be less than .50 to 1.0.
8.6 PAYMENT OF TAXES AND OTHER POTENTIAL LIENS. The Company shall
pay and discharge promptly, and cause each Subsidiary to pay and discharge
promptly, all taxes, assessments and governmental charges or levies imposed upon
it, upon its property or any part thereof, upon its income or profits or any
part thereof, or upon any right or interest of any Bank under or in respect of
any Loan Document, EXCEPT that neither the Company nor any Subsidiary shall be
required to pay or cause to be paid (a) any income or gross receipts tax
generally applicable to banks and imposed on any Bank, or (b) any tax,
assessment, charge or levy that is not yet past due, or being actively contested
in good faith by appropriate proceedings, as long as the Company or
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Subsidiary, as the case may be, has established and maintains adequate reserves
for the payment of the same and, by reason of nonpayment, no property of the
Company or any Subsidiary is in danger of being lost or forfeited.
8.7 PRESERVATION OF EXISTENCE. The Company shall preserve and
maintain, and cause each Subsidiary to preserve and maintain, its corporate or
partnership existence, as the case may be, and all licenses, rights, franchises
and privileges in the jurisdiction of its incorporation or formation and all
authorizations, consents, approvals, orders, licenses, permits or exemptions
from, or registrations or qualifications with, any Governmental Authority that
are necessary for the transaction of its business, and qualify and remain
qualified, and cause each Subsidiary to qualify and remain qualified, to do
business as a foreign corporation or partnership in each jurisdiction in which
such qualification is necessary in view of its business or the ownership or
leasing of its properties.
8.8 REIT STATUS; NO PROHIBITED TRANSACTIONS. The Company shall at
all times elect to be taxed as, and shall take any and all action necessary to
qualify as, a real estate investment trust under the Code. The Company shall
not suffer or incur in any fiscal year any "net income from prohibited
transactions" as defined in Sections 857 and 1221 of the Code, as those sections
may be amended from time to time.
8.9 MAINTENANCE OF PROPERTIES. The Company shall maintain,
preserve and protect, and cause each Subsidiary to maintain, preserve and
protect, all of its properties in good order and condition, subject to wear and
tear in the ordinary course of business and, in the case of unimproved
properties, damage caused by the natural elements, and not allow any Subsidiary
to suffer or permit any waste of its properties.
8.10 MAINTENANCE OF INSURANCE. The Company shall maintain, and
shall cause each of its Subsidiaries to maintain, with financially sound and
reputable independent insurers, insurance with respect to its properties and
business against loss or damage of the kinds customarily insured against by
Persons engaged in the same or similar business, of such types and in such
amounts as are customarily carried under similar circumstances by such other
Persons; including workers' compensation insurance, public liability and
property and casualty insurance which amount shall not be reduced by the
Company in the absence of 10 days' prior notice to the Agent. All such
insurance shall name the Agent as loss payee/mortgagee and as additional
insured, for the benefit of the Banks, as their interests may appear. All
casualty and
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key man insurance maintained by the Company shall name the Agent as loss payee
and all liability insurance shall name the Agent as additional insured for the
benefit of the Banks, as their interests may appear. Upon request of the Agent
or any Bank, the Company shall furnish the Agent, with sufficient copies for
each Bank, at reasonable intervals (but not more than once per calendar year) a
certificate of the chief financial officer of the Company (and, if requested by
the Agent, any insurance broker of the Company) setting forth the nature and
extent of all insurance maintained by the Company and its Subsidiaries in
accordance with this Section (and which, in the case of a certificate of a
broker, were placed through such broker).
8.11 MERGERS. The Company shall not merge or consolidate, or permit
any Subsidiary to merge or consolidate, with or into any Person, except that any
Subsidiary existing on the date hereof may merge into the Company (provided that
the surviving entity is the Company) or into any other Subsidiary; provided that
if the transaction involves a merger of a Subsidiary and wholly-owned
Subsidiary, the wholly-owned Subsidiary shall be the continuing or surviving
corporation; and provided further that no Subsidiary who is a Guarantor at the
time of the proposed merger shall merge with or into a non-guarantying
Subsidiary.
8.12 BOOKS AND RECORDS. The Company shall maintain, and cause each
Subsidiary to maintain, full and complete books of account and other records
reflecting the results of its operations in conformity with GAAP applied on a
consistent basis and all applicable requirements of any Governmental Authority
having jurisdiction over the Company or any Subsidiary or any business or
properties of the Company or any Subsidiary.
8.13 INSPECTION RIGHTS. At any time during regular business hours
and at any other reasonable time, and as often as requested, the Company shall
permit, and cause each Subsidiary to permit, each Bank or any employee, agent or
representative thereof to inspect and make copies and abstracts from the records
and books of account of, and to visit and inspect the properties of, the Company
and any Subsidiary, and to discuss any affairs, finances and accounts of the
Company and any Subsidiary with any of their respective officers or directors.
8.14 REPORTING REQUIREMENTS. The Company shall cause to be
delivered to the Agent, in form and detail satisfactory to the Agent and the
Majority Banks, with sufficient copies for each Bank:
(a) As soon as available and in any event within 45 days
after
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the end of each calendar quarter, unaudited consolidated balance sheets,
statements of income, retained earnings and cash flows of the Company and
the Subsidiaries for such period, all in reasonable detail and duly
certified (subject to year-end audit adjustments) by the chief financial
officer or the treasurer of the Company. Additionally, the Company shall
deliver with the unaudited consolidated balance sheets a schedule which
shall reconcile the amounts used to calculate the covenants pursuant to
SECTIONS 8.1, 8.2, 8.3, 8.4, 8.5, 8.20(d), 8.24 and 8.28 to such unaudited
consolidated balance sheet.
(b) As soon as available and in any event within 120 days
after the end of each calendar year, a consolidated balance sheet of the
Company and the Subsidiaries as of the end of the calendar year most
recently ended and consolidated statements of income, retained earnings and
cash flows of the Company and the Subsidiaries for such year, setting forth
in each case in comparative form the corresponding figures for the
preceding fiscal year, audited by and with the unqualified opinion of an
independent certified public accountants of nationally recognized standing
selected by the Company and acceptable to the Majority Banks.
(c) Within five (5) days of the sending or filing thereof,
copies of each annual report, proxy or financial statement or other report
or communication sent to the shareholders of the Company, and copies of all
annual, regular, periodic and special filings, reports and registration
statements which the Company or any of its Subsidiaries may file or be
required to file with the Securities Exchange Commission or any similar or
corresponding Governmental Agency, with any securities exchange or other
national market trading system, or with the National Association of
Securities Dealers, including Forms 8K, 10-K, 10-Q, 126-25 and NASD report
no. 10b-17.
(d) At the time of the delivery of the financial statements
described in (a) and (b) above, a certificate of the chief financial
officer or the treasurer of the Company stating that no event exists that
is, or with the giving of notice and/or the passage of time would be, an
Event of Default, or if such an event exists, stating the nature thereof
and the action that the Company proposes to take with respect thereto.
(e) As soon as available and in any event within 30 days
after the end of each calendar quarter, a rent roll, tenant sales
performance data (to the extent provided by tenants to the Company) and a
leasing activity summary
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covering such quarter for each of the Assets in the Borrowing Base
Properties Pool.
(f) As soon as practicable, and in any event within 30 days
after the end of each calendar quarter, a report covering each of the
Assets and each of the real estate assets owned by one or more Subsidiaries
showing the actual operating results of each Asset and each such other real
estate asset for the calendar quarter most recently ended, duly certified
by the chief financial office of the Company.
(g) Within 45 days after the end of each calendar quarter,
a certificate of the Company's chief financial officer or treasurer,
together with such backup information as the Agent may reasonably require,
demonstrating in reasonable detail that the Company was in compliance
during the applicable period with the covenants set forth in SECTIONS 8.1,
8.2, 8.3, 8.4, 8.5, 8.20(d), 8.24 and 8.28.
(h) As soon as practicable, and in any event within 60 days
after the end of each fiscal year, projections of cash flow for the Company
for the next succeeding three-year period.
(i) Such other information about the business, assets,
operation or condition, financial or otherwise, of the Company or any
Subsidiary, as each Bank may reasonably request from time to time.
8.15 NOTICES. The Company shall promptly notify the Agent and each
Bank:
(a) of the occurrence of any Event of Default, and of the
occurrence or existence of any event or circumstance that foreseeably will
become an Event of Default (and in each case such notice shall include the
action that the Company proposes to take with respect thereto);
(b) of (i) any breach or non-performance of, or any default
under, any Contractual Obligation of the Company or any Subsidiaries that
is Materially adverse to the interests of the Banks, or that could
Materially impair the ability of the Company to perform its obligations
under the Loan Documents, or that has a Material adverse effect on the
business or financial condition of the Company or any Subsidiary, and
(ii) any dispute, litigation,
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investigation, proceeding or suspension which may exist at any time between
the Company or any Subsidiaries and any Governmental Authority;
(c) of the commencement of, or any Material development in,
any litigation or proceeding affecting the Company or any Subsidiary (i) in
which the amount of damages claimed is $1,000,000 or more, (ii) in which
injunctive or similar relief is sought and which, if adversely determined,
would reasonably be expected to be Materially adverse to the interests of
the Banks, to Materially impair the ability of the Company to perform its
obligations under the Loan Documents, or to have a Material adverse effect
on the business or financial condition of the Company or any Subsidiary, or
(iii) in which the relief sought is an injunction or other stay of the
performance of this Agreement or any Loan Document;
(d) upon, but in no event later than 10 days after,
becoming aware of (i) any and all enforcement, cleanup, removal or other
governmental or regulatory actions instituted, completed or threatened
against the Company or any Subsidiary or any of their respective properties
pursuant to any applicable Environmental Laws, (ii) all other Environmental
Claims, and (iii) any environmental or similar condition on any real
property adjoining or in the vicinity of the property of the Company or any
Subsidiary that could reasonably be anticipated to cause such property or
any part thereof to be subject to any restrictions on the ownership,
occupancy, transferability or use of such property under any Environmental
Laws;
(e) of any other litigation or proceeding affecting the
Company or any Subsidiaries which the Company would be required to report
to the Securities Exchange Commission pursuant to the Exchange Act, within
four days after reporting the same to the Securities Exchange Commission;
(f) of any of the following events affecting the Company,
together with a copy of any notice with respect to such event that may be
required to be filed with a Governmental Authority and any notice delivered
by a Governmental Authority to the Company with respect to such event:
(i) an ERISA Event;
(ii) if any of the representations and warranties in
SECTION 7.10 ceases to be true and correct;
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(iii) the adoption of any new Pension Plan or other Plan
subject to Section 412 of the Code;
(iv) the adoption of any amendment to a Pension Plan or
other Plan subject to Section 412 of the Code, if such amendment
results in a material increase in contributions or Unfunded Pension
Liability; or
(v) the commencement of contributions to any Pension Plan
or other Plan subject to Section 412 of the Code; and
(g) of any material change in accounting policies or
financial reporting practices by the Company or any Subsidiaries.
Each notice under this Section shall be accompanied by a written
statement by the Company's chief financial officer setting forth details of the
occurrence referred to therein, and stating what action the Company or any
affected Subsidiary proposes to take with respect thereto and at what time.
Each notice under subsection (a) shall describe with particularity any and all
clauses or provisions of this Agreement or other Loan Document that have been
(or foreseeably will be) breached or violated.
8.16 [Intentionally Deleted.]
8.17 LIENS. The Company shall not create, incur, assume or allow to
exist (or, with respect to the Tanasbourne Asset, permit Tanasbourne to create,
incur, assume or allow to exist) any Lien of any nature upon or with respect to
any Asset in the Borrowing Base Properties Pool, except the following
permissible Liens:
(a) Liens for taxes, assessments or governmental charges or
levies to the extent that neither the Company nor any Subsidiary is
required to pay the amount secured thereby under SECTION 8.6; and
(b) Liens imposed by law, such as carrier's,
warehouseman's, mechanic's, materialman's and other similar Liens, arising
in the ordinary course of business in respect of obligations that are not
overdue or are being actively contested in good faith by appropriate
proceedings, as long as the Company or Subsidiary, as the case may be, has
established and maintains adequate reserves
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for the payment of the same and, by reason of nonpayment, no property of
the Company or any Subsidiary is in danger of being lost or forfeited.
8.18 NO OTHER NEGATIVE PLEDGE. The Company shall not covenant or
otherwise agree with any Person (other than the Banks and Agent pursuant to this
Agreement), whether in connection with obtaining or modifying credit
accommodations from such Person, or incurring other Indebtedness, or otherwise,
to keep its Unencumbered Assets free of any or all Liens.
8.19 PREPAYMENT OF INDEBTEDNESS. If an Event of Default has
occurred and is continuing or an acceleration of the Obligations has occurred,
the Company shall not prepay the principal amount, in whole or in part, of any
Indebtedness other than (a) Obligations owed to each Bank hereunder or under
some other agreement between the Company and such Bank, and (b) Indebtedness
which ranks pari passu with the Obligations and which is or becomes due and
owing whether by reason of acceleration or otherwise.
8.20 LOANS AND INVESTMENTS. The Company shall not purchase or
acquire, or suffer or permit any Subsidiary to purchase or acquire, or make any
commitment to purchase or acquire, any capital stock, equity interest or any
obligations or securities of, or any interest in, any Person, or make or commit
to make any advance, loan, extension of credit or capital contribution to or any
other investment in, any Person, including any Affiliate, except for:
(a) investments in cash equivalents;
(b) Extensions of credit by the Company, in the ordinary
course of business and at market terms, to any of its wholly-owned
Subsidiaries or by any of its wholly-owned Subsidiaries to another of its
wholly-owned Subsidiaries;
(c) Extensions of credit by the Company to tenants leasing
space within the Assets for the build out of tenant improvements within the
Assets, provided that the aggregate amount of all such extensions of credit
(outstanding plus committed) shall not at any time exceed $1,000,000; or
(d) investments in Persons, provided that (i) any such
investment is undertaken in accordance with all Requirements of Law;
(ii) the Company's (or a Subsidiary's) percentage ownership interest in
such Person after such investment will not cause such Person to become a
Subsidiary; and
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(iii) the aggregate amount of all such Investments shall not at any time
exceed an amount equal to 15% of the Aggregate Adjusted Current Value; or
(e) investments in existing partnerships which the Company,
as of the date hereof, is a partner (as reflected in SCHEDULE 8.20(e)
hereof).
8.21 COMPLIANCE WITH LAWS AND OTHER REQUIREMENTS.
(a) The Company shall comply, and cause each Subsidiary to
comply, with all Requirements of Law and orders of any Governmental
Authority.
(b) The Company shall comply, and cause each Subsidiary (to
the extent they are so engaged) to comply, with all Requirements of Law
relating to the development, management and operation of each of its real
estate assets, and shall obtain, and cause each Subsidiary (to the extent
they are so engaged) to obtain, all necessary authorizations, consents,
approvals, licenses and permits of any Governmental Authority with respect
thereto.
8.22 CHANGE IN NATURE OF BUSINESS. The Company shall not make, or
permit any Subsidiary to make, any change in the nature of its or their
respective businesses as carried on at the date hereof that is Material to the
Company and Subsidiaries, taken as a whole, which has not been consented to by
the Majority Banks in writing.
8.23 COMPLIANCE WITH ERISA. The Company shall , and shall cause
each of its ERISA Affiliates to: (a) maintain each Plan in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
federal or state law; (b) cause each Plan which is qualified under
Section 401(a) of the Code to maintain such qualification; and (c) make all
required contributions to any Plan subject to Section 412 of the Code. In
addition, the Company shall not, and shall not suffer or permit any of its ERISA
Affiliates to: (a) engage in a prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan which has resulted or
could reasonably expected to result in liability of the Company in an aggregate
amount in excess of $500,000; or (b) engage in a transaction that could be
subject to Section 4069 or 4212(c) of ERISA.
8.24 DIVIDENDS. The Company shall not declare or pay any dividend
on any of its capital stock now or hereafter outstanding which exceeds the
LESSER of
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(a) 100% of the Funds From Operations for the calendar quarter in which such
dividend is paid, and (b) 95% of the average quarterly Funds From Operations
(calculated based upon the current calendar quarter and the immediately
preceding three calendar quarters. Notwithstanding the foregoing, the Company
may pay dividends that exceed the foregoing limitation to the extent (but only
to the extent) that the payment of such dividends is necessary to maintain its
status as a real estate investment trust under the Code.
8.25 DISPOSITION OF PROPERTIES. The Company shall not, and shall
not permit the Subsidiaries to, sell, assign, exchange, transfer, lease or
otherwise dispose of any of their respective properties (whether real or
personal), other than properties sold, assigned, exchanged, transferred, leased
or otherwise disposed of for fair value and in the ordinary course of business.
8.26 MANAGEMENT; OWNERSHIP. The Company shall at all times, unless
the Majority Banks otherwise agree, maintain Stuart Tanz as president and chief
executive officer of the Company.
8.27 COMPLIANCE WITH AVAILABILITY LIMITS. The Company shall not
permit the aggregate outstanding principal amount of the Loans PLUS the L/C
Obligations to exceed the LESSER of (a) the Total Aggregate Commitment, or
(b) the Borrowing Base.
8.28 DEVELOPMENT LIMITATION. The Company and its Subsidiaries shall
not commit to, commence or continue construction of any improvements (excluding
normal repair or rehabilitation work on currently owned properties) on any
undeveloped or partially developed property of the Company or any of its
Subsidiaries, if the cost to complete such construction, together with the
aggregate cost to complete construction of all other improvements to be
constructed on undeveloped or partially developed property of the Company or any
of its Subsidiaries, would exceed 10% of the Aggregate Adjusted Current Value.
8.29 ENVIRONMENTAL LAWS.
(a) The Company shall, and shall cause each Subsidiary to,
conduct its operations and keep and maintain its property in compliance
with all Environmental Laws.
(b) Upon the written request of the Agent or any Bank, the
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Company shall submit and cause each of its Subsidiaries to submit, to the
Agent with sufficient copies for each Bank, at the Company's sole cost and
expense, at reasonable intervals, a report providing an update of the
status of any environmental, health or safety compliance, hazard or
liability issue identified in any notice or report required pursuant to
SECTION 8.15(d), that could, individually or in the aggregate, result in
liability in excess of $50,000.
8.30 USE OF PROCEEDS. The Company shall use the proceeds of the
Loans for working capital purposes not in contravention of any Laws or of any
Loan Document. Without limiting the foregoing, the Company shall not, and shall
not suffer or permit any Subsidiary to, use any portion of the Loan proceeds,
directly or indirectly, (i) to purchase or carry "margin stock" as such term is
defined in Regulation G, T, U or X of the FRB, (ii) to repay or otherwise
refinance indebtedness of the Company or others incurred to purchase or carry
margin stock, (iii) to extend credit for the purpose of purchasing or carrying
any margin stock, or (iv) to acquire any security in any transaction that is
subject to Section 13 or 14 of the Exchange Act.
8.31 TRANSACTIONS WITH AFFILIATES. The Company shall not, and shall
not suffer or permit any Subsidiary to, enter into any transaction with any
Affiliate of the Company, except upon fair and reasonable terms no less
favorable to the Company or such Subsidiary than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate of the Company or such
Subsidiary.
8.32 ACCOUNTING CHANGES. The Company shall not, and shall not
suffer or permit any Subsidiary to, make any significant change in accounting
treatment or reporting practices, except as required by GAAP, or change the
fiscal year of the Company or of any Subsidiary.
ARTICLE 9: EVENTS OF DEFAULT AND REMEDIES UPON DEFAULT.
9.1 EVENTS OF DEFAULT. The occurrence of any one or more of the
following events shall constitute an Event of Default hereunder:
(a) failure to pay within 5 days after the date when due
the principal of each Note or any portion thereof or any interest thereon;
or
(b) failure to pay any fee or any other amount payable by
the Company or any Subsidiary under the Loan Documents within 15 days after
the
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date when due; or
(c) failure to perform or observe any other term, covenant
or agreement contained in any Loan Document on the Company's or any
Subsidiary's part to be performed or observed, and such failure shall
continue uncured for a period of thirty (30) days following notice from the
Agent to the Company (PROVIDED, HOWEVER, that the cure period specified in
this subparagraph (c) shall not be applicable to any of the other Events of
Default set forth in the other subparagraphs of this Section 9.1, or with
respect to the failure to perform any covenants set forth in Sections 8.10
or 8.11, or with respect to any other provisions of any of the other Loan
Documents as to which a cure period is specifically stated); or
(d) any representation or warranty in any Loan Document or
in any certificate, agreement, instrument or other document made or
delivered pursuant to or in connection with any Loan Document proves to
have been incorrect when made in any respect that is materially adverse to
the interests of any Bank under the Loan Documents; or
(e) the occurrence of any default under any other agreement
between the Company and any Bank, including without limitation, the failure
to pay when due (or within any stated grace period) the principal or any
principal installment of, or any interest, on any present or future
indebtedness for borrowed money owed by the Company to any Bank; or
(f) the Company, any Subsidiary or any Guarantor is
dissolved or liquidated or all or substantially all of the assets of the
Company are sold or otherwise transferred or encumbered without the prior
written consent of each Bank; or
(g) the Company, any Subsidiary or any Guarantor is the
subject of an order for relief by any bankruptcy court, or is unable or
admits in writing its inability to pay its debts as they mature or makes an
assignment for the benefit of creditors; or applies for or consents to the
appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any part of its
property; or any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed without the application or
consent of the Company, Subsidiary or Guarantor and the appointment
continues undischarged or unstayed for 60 days; or institutes or
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consents to any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, dissolution, custodianship, conservatorship,
liquidation, rehabilitation or similar proceeding relating to it or to all
or any part of its property under the laws of any jurisdiction; or any
similar proceeding is instituted without the consent of the Company,
Subsidiary or Guarantor and continues undismissed or unstayed for 45 days;
or any judgment, writ, warrant of attachment or execution or similar
process is issued or levied against all or any part of the property of the
Company, any Subsidiary or any Guarantor and is not released, vacated or
fully bonded within 45 days after its issue or levy; or
(h) the Majority Banks have reasonably determined that a
Material adverse change has occurred since the date hereof in the
operations, business or financial condition of the Company and the
Subsidiaries taken as a whole, and 30 calendar days have elapsed since the
date that notice of such determination is given to the Company; or
(i) the Company, any Subsidiary or any Guarantor shall
(i) fail to pay any indebtedness to any other Person or any interest or
premium thereon, when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such indebtedness, or (ii) fail to
perform any term, covenant or condition on its part to be performed under
any agreement or instrument relating to any such indebtedness, when
required to be performed, and such failure shall continue after the
applicable grace period, if any, specified in such agreement or instrument,
if the effect of such failure to perform is to accelerate, or to permit the
acceleration of, the maturity of such indebtedness; or any such
indebtedness shall be declared to be due and payable, or required to be
prepaid (other than by a regularly scheduled required prepayment), prior to
the stated maturity thereof; or
(j) any Guarantor shall reject or disaffirm its Guaranty,
or otherwise notify the Agent that it does not intend the Guaranty or its
liability thereunder to apply to any one or more future Borrowings or other
Obligations; or
(k) (i) An ERISA Event shall occur with respect to a
Pension Plan or Multiemployer Plan which has resulted or could reasonably
be expected to result in liability of the Company under Title IV of ERISA
to the Pension
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Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of
$500,000; or (ii) the aggregate amount of Unfunded Pension Liability among
all Pension Plans at any time exceeds $500,000; or (iii) the Company or any
ERISA Affiliate shall fail to pay when due, after the expiration of any
applicable grace period, any installment payment with respect to its
withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan
in an aggregate amount in excess of $500,000; or
(l) any Borrowing Base Certificate proves to have been
incorrect in any Material respect when delivered to the Agent.
9.2 REMEDIES. If any Event of Default occurs, the Agent shall, at
the request of, or may, with the consent of, the Majority Banks,
(a) declare the Commitment of each Bank to make Loans to be
terminated, whereupon such Commitments shall be terminated;
(b) declare the unpaid principal amount of all outstanding
Loans, all interest accrued and unpaid thereon, and all other amounts owing
or payable hereunder or under any other Loan Document to be immediately due
and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by the Company; and
(c) exercise on behalf of itself and the Banks all rights
and remedies available to it and the Banks under the Loan Documents or
applicable law;
PROVIDED, HOWEVER, that upon the occurrence of any event specified in
subsection (g) of SECTION 9.1, the obligation of each Bank to make Loans
shall automatically terminate and the unpaid principal amount of all
outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable without further act of the Agent or
any Bank. Upon the occurrence of any Event of Default, the Company shall
immediately pay to Agent, for the benefit of the Banks, an amount (the "L/C
OBLIGATIONS AMOUNT") equal to the aggregate outstanding L/C Obligations;
and upon written receipt of the payment of the L/C Obligations Amount, the
Agent shall deposit such funds in an interest-bearing cash account (the
"CASH ACCOUNT") in the name of the Company maintained with the Agent as to
which the Company shall have NO right of withdrawal except as provided
below. The Company hereby irrevocably authorizes and directs the Agent to
apply amounts on deposit in the
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Cash Account against draws on the outstanding Letters of Credit as such
draws are made. The Agent shall have, and is hereby granted, a security
interest in the Cash Account and all funds therein, to secure all
Obligations owing to the Agent and the Banks by the Company. Upon
expiration of all Letters of Credit and payment in full of all draws
thereunder and all outstanding Loans and other Obligations, the amounts
then on deposit in the Cash Account and any interest accrued thereon shall
then be returned to the Company (to the extent any funds remain in the Cash
Account after application of such funds as provided above.)
9.3 RIGHTS NOT EXCLUSIVE. The rights and remedies of the Agent and
Banks provided for in this Agreement and the other Loan Documents are cumulative
and are not exclusive of any other rights, powers, privileges or remedies
provided by law or in equity, or under any other instrument, document or
agreement now existing or hereafter arising.
ARTICLE 10: THE AGENT.
10.1 APPOINTMENT AND AUTHORIZATION. Each Bank hereby irrevocably
appoints, designates and authorizes the Agent to take such action in its behalf
under the provisions of this Agreement and each other Loan Document and to
exercise such powers and perform such duties as are expressly delegated to it by
the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary contained elsewhere in this Agreement or in any other Loan
Document, the Agent shall not have any duties or responsibilities, except those
expressly set forth herein, nor shall the Agent have or be deemed to have any
fiduciary relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent.
10.2 DELEGATION OF DUTIES. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
10.3 LIABILITY OF AGENT. None of the Agent-Related Persons shall:
(a) be liable for any action taken or omitted to be taken
by any of them under or in connection with this Agreement or any other Loan
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Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct), or
(b) be responsible in any manner to any of the Banks for
any recital, statement, representation or warranty made by the Company or
any Subsidiary or Affiliate of the Company, or any officer thereof,
contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided
for in, or received by the Agent under or in connection with, this
Agreement or any other Loan Document, or for the value of or title to any
collateral, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any
failure of the Company or any other party to any Loan Document to perform
its obligations hereunder or thereunder.
No Agent-Related Person shall be under any obligation to any Bank to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of the Company or any of the Company's
Subsidiaries or Affiliates.
10.4 RELIANCE BY AGENT.
(a) The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel
(including counsel to the Company), independent accountants and other
experts selected by the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other
Loan Document unless it shall first receive such advice or concurrence of
each Bank as it deems appropriate and, if it so requests, it shall first be
indemnified to its satisfaction by the Banks against any and all liability
and expense which may be incurred by it by reason of taking or continuing
to take any such action. The Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement or any other
Loan Document in accordance with a request or consent of each Bank and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all of the Banks.
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(b) For purposes of determining compliance with the
conditions specified in SECTION 6.1 and SECTION 11.21, each Bank that has
executed this Agreement shall be deemed to have consented to, approved or
accepted or to be satisfied with, each document or other matter either sent
by the Agent to such Bank for consent, approval, acceptance or
satisfaction, or required thereunder to be consented to or approved by or
acceptable or satisfactory to the Bank.
10.5 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any default or Event of Default, except
with respect to defaults in the payment of principal, interest and fees required
to be paid to the Agent for the account of the Banks, unless the Agent shall
have received written notice from a Bank or the Company referring to this
Agreement, describing such default or Event of Default and stating that such
notice is a "notice of default". The Agent will notify the Banks of its receipt
of any such notice. The Agent shall take such action with respect to such
default or Event of Default as may be requested by the Majority Banks in
accordance with Article 9; PROVIDED, HOWEVER, that unless and until the Agent
has received any such request, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
default or Event of Default as it shall deem advisable or in the best interest
of the Banks.
10.6 CREDIT DECISION. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Company and its Subsidiaries, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Bank. Each Bank represents to
the Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Company and its Subsidiaries, the value of and title to any collateral, and all
applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to the Company hereunder. Each Bank also represents that it will,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects,
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operations, property, financial and other condition and creditworthiness of the
Company. Except for notices, reports and other documents expressly herein
required to be furnished to the Banks by the Agent, the Agent shall not have any
duty or responsibility to provide any Bank with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Company which may come into the possession
of any of the Agent-Related Persons.
10.7 INDEMNIFICATION. Whether or not the transactions contemplated
hereby are consummated, the Banks shall indemnify upon demand the Agent-Related
Persons (to the extent not reimbursed by or on behalf of the Company and without
limiting the obligations of the Company to do so), pro rata, from and against
any and all liabilities covered by any indemnification hereunder; PROVIDED,
HOWEVER, that no Bank shall be liable for the payment to the Agent-Related
Persons of any portion of such liabilities resulting solely from such Person's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Bank shall reimburse the Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including attorney costs) incurred by the Agent
in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Company. The undertaking in
this Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of the Agent.
10.8 AGENT IN INDIVIDUAL CAPACITY. BofA and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though BofA were not the Agent hereunder and
without notice to or consent of the Banks. Each Bank acknowledges that,
pursuant to such activities, BofA or its Affiliates may receive information
regarding the Company or its Affiliates (including information that may be
subject to confidentiality obligations in favor of the Company or such
Subsidiary) and acknowledge that the Agent shall be under no obligation to
provide such information to it. With respect to its Loans, BofA shall have the
same rights and powers under this Agreement as any other bank and may exercise
the same as though it were not the Agent, and the terms "Bank" and "Banks"
include BofA in its individual capacity.
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10.9 SUCCESSOR AGENT. The Agent may resign as Agent upon 30 days'
notice to the Banks. If the Agent resigns under this Agreement, the Majority
Banks shall appoint from among the Banks a successor agent for the Banks upon
the written consent of the Company and the Banks (which consents shall not be
unreasonably withheld). If no successor agent is appointed prior to the
effective date of the resignation of the Agent, the Agent may appoint a
successor agent from among the Banks upon the written consent of the Company and
the Banks (which consents shall not be unreasonably withheld). Upon the
acceptance of its appointment as successor agent hereunder, such successor agent
shall succeed to all the rights, powers and duties of the retiring Agent and the
term "Agent" shall mean such successor agent and the retiring Agent's
appointment, powers and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article 10 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement. If no successor agent has accepted
appointment as Agent by the date which is 30 days following a retiring Agent's
notice of resignation, the retiring Agent's resignation shall nevertheless
thereupon become effective and the Banks shall perform all of the duties of the
Agent hereunder until such time, if any, as the Majority Banks appoint a
successor agent as provided for above. If BofA reduces its Commitment to zero
dollars hereunder (and a percentage obligation of zero), or BofA dissolves,
liquidates, or ceases doing business (it being understood that a merger would
not constitute dissolution, liquidation or cessation of business), the Majority
Banks may require BofA to discontinue acting as Agent hereunder, and the
Majority Banks may appoint a new Agent.
10.10 WITHHOLDING TAX.
(a) If any Bank is a "foreign corporation, partnership or
trust" within the meaning of the Code and such Bank claims exemption from,
or a reduction of, U.S. withholding tax under Sections 1441 or 1442 of the
Code, such Bank agrees with and in favor of the Agent, to deliver to the
Agent:
(i) if such Bank claims an exemption from, or a reduction
of, withholding tax under a United States tax treaty, properly
completed IRS Forms 1001 and W-8 before the payment of any interest in
the first calendar year and before the payment of any interest in each
third succeeding calendar year during which interest may be paid under
this Agreement;
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(ii) if such Bank claims that interest paid under this
Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such
Bank, two properly completed and executed copies of IRS Form 4224
before the payment of any interest is due in the first taxable year of
such Bank and in each succeeding taxable year of such Bank during
which interest may be paid under this Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required under the
Code or other laws of the United States as a condition to exemption
from, or reduction of, United States withholding tax.
Such Bank agrees to promptly notify the Agent of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
(b) If any Bank claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form 1001
and such Bank sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations of the Company to such Bank in
accordance with SECTION 11.6, such Bank agrees to notify the Agent of the
percentage amount in which it is no longer the beneficial owner of
Obligations of the Company to such Bank. To the extent of such percentage
amount, the Agent will treat such Bank's IRS Form 1001 as no longer valid.
(c) If any Bank claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Agent sells, assigns,
grants a participation in, or otherwise transfers all or part of the
Obligations of the Company to such Bank in accordance with SECTION 11.6,
such Bank agrees to undertake sole responsibility for complying with the
withholding tax requirements imposed by Sections 1441 and 1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such
Bank an amount equivalent to the applicable withholding tax after taking
into account such reduction. If the forms or other documentation required
by subsection (a) of this Section are not delivered to the Agent, then the
Agent may withhold from any interest payment to such Bank not providing
such forms or other documentation an amount equivalent to the applicable
withholding tax.
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(e) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that the Agent did not
properly withhold tax from amounts paid to or for the account of any Bank
(because the appropriate form was not delivered, was not properly executed,
or because such Bank failed to notify the Agent of a change in
circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason) such Bank shall
indemnify the Agent fully for all amounts paid, directly or indirectly, by
the Agent as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to
the Agent under this Section, together with all costs and expenses
(including Attorney Costs). The obligation of the Banks under this
subsection shall survive the payment of all Obligations and the resignation
or replacement of the Agent.
10.11 COLLATERAL MATTERS.
(a) [Intentionally Deleted.]
(b) The Banks irrevocably authorize the Agent, at its
option and in its discretion, to release any Lien granted to or held by the
Agent upon any collateral (i) upon termination of the Commitments and
payment in full of all Loans and all other Obligations known to the Agent
and payable under this Agreement or any other Loan Document;
(ii) constituting property sold or to be sold or disposed of as part of or
in connection with any disposition permitted hereunder; (iii) constituting
property in which the Company or any Subsidiary owned no interest at the
time the Lien was granted or at any time thereafter; (iv) constituting
property leased to the Company or any Subsidiary under a lease which has
expired or been terminated in a transaction permitted under this Agreement
or is about to expire and which has not been, and is not intended by the
Company or such Subsidiary to be, renewed or extended; (v) consisting of an
instrument evidencing Indebtedness or other debt instrument, if the
indebtedness evidenced thereby has been paid in full; or (vi) if approved,
authorized or ratified in writing by all the Banks. Upon request by the
Agent at any time, the Banks will confirm in writing the Agent's authority
to release particular types or items of collateral.
(c) Each Bank agrees with and in favor of each other (which
agreement shall not be for the benefit of the Company or any Subsidiary)
that
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the Company's obligation to such Bank under this Agreement and the other
Loan Documents is not and shall not be secured by any real property
collateral now or hereafter acquired by such Bank.
10.12 PERFORMANCE BY THE AGENT. In the event that the Company shall
default in or fail to perform any of its obligations under the Loan Documents,
which default is not cured within any applicable cure period, the Agent shall
have the right, but not the duty, without limitation upon any of the Agent's or
the Banks' rights pursuant thereto, to perform the same, and the Company agrees
to pay to the Agent within five (5) Banking Days after demand, all reasonable
costs and expenses incurred by the Agent in connection therewith, including
without limitation reasonable Attorney Costs, together with interest thereon
from the date which is 5 Banking Days after demand until paid at a rate per
annum equal to the Reference Rate PLUS 3%.
10.13 ACTIONS. The Agent shall have the right to commence, appear
in, and defend any action or proceeding purporting to affect the rights or
duties of the Banks hereunder or the payment of any funds, and in connection
therewith the Agent may pay necessary expenses, employ counsel, and pay Attorney
Costs. The Company agrees to pay to the Agent, within 5 Banking Days after
demand, all reasonable costs and expenses incurred by the Agent in connection
therewith, including without limitation reasonable Attorney Costs, together with
interest thereon from the date which is 5 Banking Days after demand until paid
at a rate per annum equal to the Reference Rate PLUS 3%.
10.14 CO-AGENT. Notwithstanding anything contained herein which may
be construed to the contrary, the Co-Agent shall not exercise any of the rights
or have any of the responsibilities of the Agent hereunder, or any other rights
or responsibilities other than its rights and responsibilities as a Bank
hereunder.
ARTICLE 11: MISCELLANEOUS.
11.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent with
respect to any departure by the Company therefrom, shall be effective unless the
same shall be in writing and signed by the Majority Banks (or by the Agent at
the written request of the Majority Banks) and the Company and acknowledged by
the Agent, and then any such waiver of consent shall be effective only in the
specific instance and for the specific purpose for which given; PROVIDED,
HOWEVER, that no such waiver, amendment, or consent shall, unless in writing and
signed by all the Banks and the Company and
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acknowledged by the Agent, do any of the following:
(a) increase or extend the Commitment of any Bank, unless
such Bank has consented thereto in writing;
(b) postpone or delay any date fixed by this Agreement or
any other Loan Document for any payment of principal, interest, fees or
other amounts due to the Banks (or any of them) hereunder or under any
other Loan Document;
(c) reduce the principal of, or the rate of interest
specified herein on any Loan, or any fees or other amounts payable
hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which is required for the
Banks or any of them to take any action hereunder;
(e) amend the definitions of Borrowing Base or Majority
Banks, or amend SECTIONS 3.5 or 3.6;
(f) amend this Section or any provision herein providing
for consent or other action by all Banks;
(g) discharge any Guarantor, or release any Material
portion of any collateral except where the consent of the Majority Banks
only is specifically provided for; or
(h) amend, or perform any act pursuant to, any provision
herein expressly requiring the consent of each Bank;
and, PROVIDED FURTHER, that no amendment, waiver or consent shall, unless in
writing and signed by the Agent in addition to the Majority Banks or all the
Banks, as the case may be, affect the rights or duties of the Agent under this
Agreement or any other Loan Document. Each Bank shall bear its Pro Rata Share
of all costs and expenses incurred in any amendment, waiver or consent pursuant
to this Agreement.
11.2 COSTS, EXPENSES AND TAXES. The Company shall pay on demand the
reasonable costs and expenses of the Agent and the Banks in connection with the
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negotiation, preparation, execution, delivery, administration, amendment, waiver
and enforcement of the Loan Documents and any matter related thereto and any
litigation or dispute with respect thereto (including any bankruptcy or similar
proceedings), including without limitation Attorney Costs; PROVIDED, HOWEVER,
the Company shall not be liable for any expenses of any Bank other than BofA
(for itself and as Agent) in connection with the negotiation and preparation of
the Loan Documents (PROVIDED FURTHER, that the immediately preceding proviso
shall not be deemed to limit the right of each Bank to payment from the Company
of all reasonable costs and expenses incurred by each Bank as aforesaid in
connection with any and all future administration, amendments, waivers,
enforcement actions, litigation, negotiations and other actions or matters other
than assignments or participations with respect to which the only amounts
payable shall be the processing fee owing pursuant to SECTION 11.6(a) relating
to the Loans and Loan Documents). Any amount payable to the Agent and the Banks
under this SECTION 11.2 shall, from the date of demand for payment, and any
other amount payable to the Agent under the Loan Documents which is not paid
when due or within any applicable grace period shall, thereafter, bear interest
at the rate in effect under each Note with respect to Reference Rate Borrowings.
11.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Agent or any Bank, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.
11.4 PAYMENTS SET ASIDE. To the extent that the Company makes a
payment to the Agent or the Banks, or the Agent or the Banks exercise their
right of set-off, and such payment or the proceeds of such set-off or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered into by the
Agent or such Bank in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any bankruptcy, insolvency, reorganization,
arrangement, moratorium or other similar proceeding relating to or affecting
creditors' rights generally or otherwise, then (a) to the extent of such
recovery the obligation or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect as if such payment had
not been made or such set-off had not occurred, and (b) each Bank severally
agrees to pay to the Agent upon demand its Pro Rata Share of any amount so
recovered from or repaid by the Agent.
11.5 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
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be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Company may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of the Agent and each Bank, and no Bank may assign or transfer
any of its rights or obligations under this Agreement except in accordance with
SECTION 11.6.
11.6 ASSIGNMENTS, PARTICIPATIONS, ETC.
(a) Any Bank may, with the written consent of (i) the
Company at all times other than during the existence of an Event of Default
(which consent shall not be unreasonably withheld) and (ii) the Agent
(which consent shall not be unreasonably withheld), at any time assign and
delegate to one or more Eligible Assignees (provided that no written
consent of the Company or the Agent shall be required in connection with
any assignment and delegation by a Bank to an Eligible Assignee that is an
affiliate of such Bank) which have not been a party to any Material
litigation with the Agent or the Company (each an "ASSIGNEE") all, or any
ratable part of all, of the Loans, the Commitments and the other rights and
obligations of such Bank hereunder, in an initial minimum amount of
$10,000,000 and in minimum amounts of $1,000,000 after the first
assignment; PROVIDED, HOWEVER, that (A) each Bank (including each Eligible
Assignee) must retain a Commitment of not less than $15,000,000 after
giving effect to such assignment (unless such assignor Bank transfers and
assigns ALL of its Commitment hereunder), and (B) the Company and the Agent
may continue to deal solely and directly with such Bank in connection with
the interest so assigned to an Assignee until (1) written notice of such
assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the
Company and the Agent by such Bank and the Assignee; (2) such Bank and its
Assignee shall have delivered to the Company and the Agent an Assignment
and Acceptance in the form of EXHIBIT "G" ("ASSIGNMENT AND ACCEPTANCE")
together with any Note or Notes subject to such assignment and (3) the
assignor Bank has paid to the Agent a processing fee in the amount of
$3,000. All costs and expenses incurred by an assigning Bank in such
assignment shall be borne by such Bank.
(b) From and after the date that the Agent notifies the
assignor Bank that it has received (and provided its consent with respect
to and received the consent of the Company with respect to) an executed
Assignment and Acceptance and payment of the above-referenced processing
fee, (i) the
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Assignee thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a Bank
under the Loan Documents, and (ii) the assignor Bank shall, to the extent
that rights and obligations hereunder and under the other Loan Documents
have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Loan
Documents.
(c) Within five Banking Days after its receipt of notice by
the Agent that it has received an executed Assignment and Acceptance and
payment of the processing fee (and provided that it consents to such
assignment in accordance with SECTION 11.6(a)), the Company shall execute
and deliver to the Agent, new Notes evidencing such Assignee's assigned
Loans and Commitment and, if the assignor Bank has retained a portion of
its Loans and its Commitment, replacement Notes in the principal amount of
the Loans retained by the assignor Bank (such Notes to be in exchange for,
but not in payment of, the Notes held by such Bank). Immediately upon each
Assignee's making its processing fee payment under the Assignment and
Acceptance, this Agreement shall be deemed to be amended to the extent, but
only to the extent, necessary to reflect the addition of the Assignee and
the resulting adjustment of the Commitments arising therefrom. The
Commitment allocated to each Assignee shall reduce such Commitments of the
assigning Bank PRO TANTO.
(d) Any Bank may, with the written consent (which consent
shall not be required if the participation is to an affiliate of the Bank)
of (i) the Company at all times other than during the existence of an Event
of Default (which consent shall not be unreasonably withheld) and (ii) the
Agent (which consent shall not be unreasonably withheld), at any time sell
to one or more commercial banks or other Persons not Affiliates of the
Company (a "PARTICIPANT") participating interests in any Loans, the
Commitment of that Bank and the other interests of that Bank (the
"ORIGINATING BANK") hereunder and under the other Loan Documents; PROVIDED,
HOWEVER, that (A) the originating Bank's obligations under this Agreement
shall remain unchanged, (B) the originating Bank shall remain solely
responsible for the performance of such obligations, (C) the Company and
the Agent shall continue to deal solely and directly with the originating
Bank in connection with the originating Bank's rights and obligations under
this Agreement and the other Loan Documents, and (D) no Bank shall transfer
or grant any participating interest under which the Participant has rights
to approve any amendment to, or any consent or waiver
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with respect to, this Agreement or any other Loan Document, except to the
extent such amendment, consent or waiver would require unanimous consent of
the Banks as described in the FIRST PROVISO to SECTION 11.1. In the case
of any such participation, the Participant shall be entitled to the benefit
of SECTIONS 4.5, 4.7, 4.8 and 11.12 as though it were also a Bank
hereunder, and, if amounts outstanding under this Agreement are due and
unpaid, or shall have been declared or shall have become due and payable
upon the occurrence of an Event of Default, each Participant shall be
deemed to have the right of set-off in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as a Bank
under this Agreement.
(e) Each Bank agrees to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all
information identified as "confidential" or "secret" by the Company and
provided to it by the Company or any Subsidiary, or by the Agent on such
Company's or Subsidiary's behalf, under this Agreement or any other Loan
Document, and neither it nor any of its Affiliates shall use any such
information other than in connection with or in enforcement of this
Agreement and the other Loan Documents; except to the extent such
information (i) was or becomes generally available to the public other than
as a result of disclosure by the Bank, or (ii) was or becomes available on
a non-confidential basis from a source other than the Company, provided
that such source is not bound by a confidentiality agreement with the
Company known to the Bank; PROVIDED, HOWEVER, that any Bank may disclose
such information (A) at the request or pursuant to any requirement of any
Governmental Authority to which the Bank is subject or in connection with
an examination of such Bank by any such authority; (B) pursuant to subpoena
or other court process; (C) when required to do so in accordance with the
provisions of any applicable Requirement of Law; (D) to the extent
reasonably required in connection with any litigation or proceeding to
which the Agent, any Bank or their respective Affiliates may be party;
(E) to the extent reasonably required in connection with the exercise of
any remedy hereunder or under any other Loan Document; (F) to such Bank's
independent auditors and other professional advisors; (G) to any
Participant or Assignee, actual or potential, provided that such Person
agrees in writing to keep such information confidential to the same extent
required of the Banks hereunder, and (H) as to any Bank, as expressly
permitted under the terms of any other document or agreement regarding
confidentiality to which the Company is party or is deemed party with such
Bank.
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(f) Notwithstanding any other provision in this Agreement,
any Bank may at any time create a security interest in, or pledge, all or
any portion of its rights under and interest in this Agreement and the Note
held by it in favor of any Federal Reserve Bank in accordance with
Regulation A of the FRB or U.S. Treasury Regulation 31 CFR Section 203.14,
and such Federal Reserve Bank may enforce such pledge or security interest
in any manner permitted under applicable Law.
11.7 SET-OFF. Subject to SECTION 3.8 and in addition to any rights
and remedies of the Banks provided by Law, if an Event of Default exists or the
Loans have been accelerated, each Bank is authorized at any time and from time
to time, without prior notice to the Company, any such notice being waived by
the Company to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final excluding
the Company's customer trust accounts) at any time held by, and other
indebtedness at any time owing by, such Bank to or for the credit or the account
of the Company against any and all Obligations owing to the Banks, now or
hereafter existing, irrespective of whether or not the Agent or such Bank shall
have made demand under this Agreement or any Loan Document and although such
Obligations may be contingent or unmatured. Each Bank agrees promptly to notify
the Company and the Agent after any such set-off and application made by such
Bank; PROVIDED, HOWEVER, that the failure to give such notice shall not affect
the validity of such set-off and application.
11.8 AUTOMATIC DEBITS. With respect to any principal or interest
payment, commitment fee or usage fee, or any other cost or expense (including
Attorney Costs), due and payable to the Agent or the Banks under the Loan
Documents, the Company hereby irrevocably authorizes and directs the Agent to
debit any deposit account of the Company with the Agent (as one of the Banks) in
an amount such that the aggregate amount debited from all such deposit accounts
does not exceed such payment, fee, or other cost or expense. If there are
insufficient funds in such deposit accounts to cover the amount of the payment,
fee, other cost or expense then due, such debits will be reversed (in whole or
in part, in the Agent's sole discretion) and such amount not debited shall be
deemed to be unpaid. No such debit under this Section shall be deemed a
set-off.
11.9 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC. Each Bank
shall notify the Agent in writing of any changes in the address to which notices
to the Bank should be directed, of addresses of any Lending Office, of payment
instructions in
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respect of all payments to be made to it hereunder and of such other
administrative information as the Agent shall reasonably request.
11.10 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties of the Company contained herein or in any
certificate or other writing delivered by or on behalf of the Company pursuant
to any Loan Document will survive the making and repayment of the Loan and the
execution and delivery of each Note, and have been or will be relied upon by
each Bank, notwithstanding any investigation made by such Bank or on its behalf.
11.11 NOTICES. Except as otherwise provided herein or in each Note:
(a) all notices, requests, demands, directions and other
communications provided for hereunder and under each Note must be in
writing and must be mailed, telecopied, delivered or sent by telex or cable
to the appropriate party at the address set forth on the signature pages of
this Agreement or, as to any party, at any other address as may be
designated by it in a written notice sent to the other party in accordance
with this SECTION 11.11, and
(b) if any notice, request, demand, direction or other
communication is given by mail it will be effective on the earlier of
receipt or the third calendar day after deposit in the United States mails
with first class or airmail postage prepaid; if given by telecopier, when
receipt is confirmed by the recipient; if given by cable, when delivered to
the telegraph company with charges prepaid; if given by telex, when sent;
or if given by personal delivery, when delivered.
11.12 INDEMNITY BY THE COMPANY. The Company agrees to indemnify,
save and hold harmless each Bank, the Agent and their directors, officers,
agents, attorneys and employees (collectively the "INDEMNITEES") from and
against (a) any and all claims, demands, actions or causes of action that are
asserted against any indemnitee by any Person if the claim, demand, action or
cause of action directly or indirectly relates to a claim, demand, action or
cause of action that the Person has or asserts against the Company or any
officer, director or shareholder of the Company, and (b) any and all
liabilities, losses, costs or expenses (including Attorney Costs) that any
indemnitee suffers or incurs as a result of the assertion of any such claim,
demand, action or cause of action.
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11.13 INTEGRATION AND SEVERABILITY. This Agreement and the other
Loan Documents comprise the complete and integrated agreement of the parties on
the subject matter hereof and supersede all prior agreements, written or oral,
on the subject matter hereof. Any provision in any Loan Document that is held
to be inoperative, unenforceable or invalid in any jurisdiction shall, as to
that jurisdiction, be inoperative, unenforceable or invalid without affecting
the remaining provisions or the operation, enforceability or validity of that
provision in any other jurisdiction, and to this end the provisions of the Loan
Documents are declared to be severable.
11.14 COUNTERPARTS. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
11.15 NO THIRD PARTIES BENEFITED. This Agreement is made and entered
into for the sole protection and legal benefit of the Company, the Banks, the
Agent and the Agent-Related Persons, and their successors and permitted assigns,
and no other Person shall be a direct or indirect legal beneficiary of, or have
any direct or indirect cause of action or claim in connection with, this
Agreement or any of the other Loan Documents.
11.16 SECTION HEADINGS. Section headings in this Agreement are
included for convenience of reference only and are not part of this Agreement
for any other purpose.
11.17 FURTHER ACTS BY THE COMPANY. The Company agrees, at its own
expense, to do such acts and execute and deliver such documents as any Bank from
time to time reasonably requires for the purpose of carrying out the intention
or facilitating the performance of the terms hereof.
11.18 TIME OF THE ESSENCE. Time is of the essence of the Loan
Documents.
11.19 GOVERNING LAW. The Loan Documents shall be governed by, and
construed and enforced in accordance with, the internal laws of the State of
California without regard to the conflict of law provisions thereof.
11.20 REFERENCE AND ARBITRATION.
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(a) In any judicial action between or among the parties,
including any action or cause of action arising out of or relating to this
Agreement or the Loan Documents or based on or arising from an alleged
tort, all decisions of fact and law shall at the request of any party be
referred to a referee in accordance with California Code of Civil Procedure
Sections 638 ET SEQ. The parties shall designate to the court a referee or
referees selected under the auspices of the American Arbitration
Association ("AAA") in the same manner as arbitrators are selected in
AAA-sponsored proceedings. The presiding referee of the panel, or the
referee if there is a single referee, shall be an active attorney or
retired judge. Judgment upon the award rendered by such referee or
referees shall be entered in the court in which such proceeding was
commenced in accordance with California Code of Civil Procedure
Sections 644 and 645.
(b) Any controversy or claim between or among the parties,
including those arising out of or relating to this Agreement or the Loan
Documents and any claim based on or arising from an alleged tort, shall at
the request of any party be determined by arbitration. The arbitration
shall be conducted in accordance with the United States Arbitration Act
(Title 9, U.S. Code), notwithstanding any choice of law provision in this
Agreement, and under the Commercial Rules of the AAA. The arbitrator(s)
shall give effect to statutes of limitation in determining any claim. Any
controversy concerning whether an issue is arbitrable shall be determined
by the arbitrator(s). Judgment upon the arbitration award may be entered
in any court having jurisdiction. The institution and maintenance of an
action for judicial relief or pursuit of a provisional or ancillary remedy
shall not constitute a waiver of the right of any party, including the
plaintiff, to submit the controversy or claim to arbitration if any other
party contests such action for judicial relief.
(c) No provision of this SECTION 11.20 shall limit the
right of any party to this Agreement to exercise self-help remedies such as
setoff, foreclosure against or sale of any real or personal property
collateral or security, or to obtain provisional or ancillary remedies from
a court of competent jurisdiction before, after, or during the pendency of
any arbitration or other proceeding. The exercise of a remedy does not
waive the right of either party to resort to arbitration or reference.
11.21 EFFECTIVENESS OF THIS AGREEMENT. Notwithstanding anything
contained herein to the contrary, the effectiveness of this Agreement and the
Banks'
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and the Agent's obligations hereunder are expressly conditioned upon
satisfaction of all of the following conditions precedent (any one or more of
which the Banks may waive in their sole discretion):
(a) The Agent shall have received the following original
executed documents (in form and substance satisfactory to the Agent and
legal counsel for the Agent in sufficient number for the Agent and each
Bank):
(i) this Agreement;
(ii) each Note;
(iii) the Guaranty (if any);
(iv) the Opinion of Counsel;
(v) a certified copy of resolutions of the board of
directors of the Company authorizing the execution of the Loan
Documents, together with an incumbency certificate executed by the
corporate secretary of the Company;
(vi) a certified copy of resolutions of the board of
directors of each Guarantor (if any) authorizing the execution of the
Guaranty, together with an incumbency certificate executed by the
corporate secretary of each Guarantor (if any); and
(vii) such other agreements, instruments and documents as
any Bank shall reasonably request.
(b) The Agent shall have received evidence satisfactory to
the Agent and legal counsel to the Agent that the Company has been duly
incorporated, validly exists and is in good standing under the laws of the
State of Maryland, is duly qualified to do business as, and is in good
standing as, a foreign corporation in each jurisdiction in which the
conduct of its business or the ownership or leasing of its properties makes
such qualification necessary, and has all requisite power and authority to
conduct its business and to own and lease its properties.
(c) The Agent shall have received evidence satisfactory to
the
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Agent that the Company received at least $120,000,000 in net proceeds from
its initial public offering.
Following the date that this Agreement becomes effective, and subject
to the satisfaction (or waiver by Agent in its sole discretion) of all
applicable conditions to advances hereunder, the Company authorizes and directs
each of the Banks to disburse sufficient funds under this Agreement to the Agent
to pay all sums owing under the BofA loan agreements and credit facilities
described in SCHEDULE 11.21 attached hereto (the "EXISTING PAN PACIFIC/BofA
CREDIT FACILITIES") (each Bank in accordance with such Bank's Pro Rata Share),
to the extent the Company has not already paid all such Existing Pan
Pacific/BofA Credit Facilities. Until all sums owing to BofA under all Existing
Pan Pacific/BofA Credit Facilities have been repaid in full, the Company may not
request or use any Loans hereunder for any other purpose. Following the date
this Agreement becomes effective, the borrowers under each of the Existing Pan
Pacific/BofA Credit Facilities shall have no further right to borrow any
additional sums under any of the Existing Pan Pacific/BofA Credit Facilities.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
THE COMPANY:
PAN PACIFIC RETAIL PROPERTIES, INC., A
MARYLAND CORPORATION
By:
------------------------------------
Stuart A. Tanz, Director Chairman, Chief
Executive Officer and President
By:
------------------------------------
David L. Adlard, Executive Vice
President and Chief Financial Officer
Address for notices:
Pan Pacific Retail Properties, Inc.
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1631-B South Melrose Drive
Vista, California 92083
Attention: Mr. Stuart Tanz
Telephone: (619) 727-1002
Telecopier: (619) 727-1430
THE BANKS:
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, A NATIONAL BANKING ASSOCIATION
By:
------------------------------------
Russell A. Ruhnke, Vice President
Address for Notices:
Bank of America National
Trust and Savings Association
CRESG - San Diego Unit #1328
450 B Street, Suite 680
San Diego, California 92101
Attention: Mr. Russell A. Ruhnke or
Mr. Ron Montoro
Telephone: (619) 515-5913
Telecopier: (619) 515-5917
LIBOR LENDING OFFICE:
Bank of America National
Trust and Savings Association
5 Park Plaza, Suite 500
Irvine, California 92614-8525
Attention: Ms. Kathryn Oliver
Telephone: (714) 260-5864
Telecopier: (714) 260-5644
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U.S. BANK NATIONAL ASSOCIATION, (FKA: FIRST
BANK NATIONAL ASSOCIATION)
By:
------------------------------------
Peter M. Brockelman, Assistant Vice
President
Address for Notices:
U.S. Bank National Association, (FKA: First
Bank National Association)
601 Second Avenue South
Minneapolis, Minnesota 55402
Attention: Peter M. Brockelman
Telephone: (612) 973-1158
Telecopier: (612) 973-0830
LIBOR LENDING OFFICE:
U.S. Bank National Association, (FKA: First
Bank National Association)
601 Second Avenue South
Minneapolis, Minnesota 55402
Attention: Greg Fiedorow
Telephone: (612) 973-1158
Telecopier: (612) 973-0830
KEYBANK NATIONAL ASSOCIATION
By:
------------------------------------
Laird Fairchild, Assistant Vice
President
Address for Notices:
KeyBank National Association
127 Public Square
OH-01-27-0603
-87-
<PAGE>
Cleveland, Ohio 44114
Attention: Laird Fairchild
Telephone: (216) 689-4998
Telecopier: (216) 689-4997
LIBOR LENDING OFFICE:
KeyBank National Association
127 Public Square
OH-01-27-0603
Cleveland, Ohio 44114
Attention: Julie Lewis
Telephone: (216) 689-0219
Telecopier: (216) 689-3566
THE BANK OF NOVA SCOTIA
By:
------------------------------------
Bruce Ganong, Relationship Manager
Address for Notices:
The Bank of Nova Scotia
580 California Street, 21st Floor
San Francisco, California 94119
Attention: Bruce Ganong
Telephone: (415) 986-1100
Telecopier: (415) 397-0791
LIBOR LENDING OFFICE:
The Bank of Nova Scotia
600 Peachtree Street N.E., Suite 2700
Atlanta, Georgia 30308
Attention: Marianne Veiker
Telephone: (404) 877-1525
Telecopier: (404) 888-8998
-88-
<PAGE>
SIGNET BANK
By:
------------------------------------
Barry Cooper, Vice President
Address for Notices:
Signet Bank
7799 Leesburg Pike, Suite 400
Falls Church, Virginia 22043
Attention: Barry Cooper
Telephone: (703) 714-5024
Telecopier: (703) 506-0284
LIBOR LENDING OFFICE:
Signet Bank
7799 Leesburg Pike, Suite 400
Falls Church, Virginia 22043
Attention: Rebecca Kelly
Telephone: (703) 714-5024
Telecopier: (703) 506-0284
SANWA BANK CALIFORNIA, A CALIFORNIA
CORPORATION
By:
------------------------------------
Michael P. White, Vice President
Address for Notices:
Sanwa Bank California
401 MacArthur Boulevard, Suite 100
Newport Beach, California 92660
Attention: Michael P. White
Telephone: (714) 622-6020
Telecopier: (714) 652-1510
LIBOR LENDING OFFICE:
-89-
<PAGE>
Sanwa Bank California
401 MacArthur Boulevard, Suite 100
Newport Beach, California 92660
Attention: Betty Myers
Telephone: (714) 622-6020
Telecopier: (714) 652-1510
THE AGENT:
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, A NATIONAL BANKING ASSOCIATION
By:
------------------------------------
Russell A. Ruhnke, Vice President
Address for Notices:
(Agent's Payment Office)
Bank of America National
Trust and Savings Association
5 Park Plaza, Suite 500
Irvine, California 92614-8525
Attention: Ms. Kathryn Oliver
Telephone: (714) 260-5864
Telecopier: (714) 260-5644
-90-
<PAGE>
EXHIBIT "A"
NOTE
$_________________ August 13, 1998
Irvine, California
FOR VALUE RECEIVED, Pan Pacific Retail Properties, Inc., a Maryland
corporation (the "COMPANY"), promises to pay to the order of
____________________ _______________________________________________ ("Bank")
the principal amount of _________________________________ AND NO/100 DOLLARS
($___________), or such lesser aggregate amount of Loans as may be made pursuant
to Bank's Commitment under the Credit Agreement hereinafter described, payable
as hereinafter set forth. Company promises to pay interest on the principal
amount hereof remaining unpaid from time to time from the date hereof until the
date of payment in full, payable as hereinafter set forth.
Reference is made to the Credit Agreement of even date herewith among
Company and the Banks (the "AGREEMENT"). Terms defined in the Agreement and not
otherwise defined herein are used herein with the meanings defined for those
terms in the Agreement. This is one of the Notes referred to in the Agreement,
and any holder hereof is entitled to all of the rights, remedies, benefits and
privileges provided for in the Agreement as originally executed or as it may
from time to time be supplemented, modified or amended. The Agreement, among
other things, contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events upon the terms and conditions therein
specified.
The principal indebtedness evidenced by this Note shall be payable as
provided in the Agreement and in any event on the Maturity Date (which shall be
August 13, 2000, subject to possible extension as provided in SECTION 4.18 of
the Agreement).
Interest shall be payable on the outstanding daily unpaid principal
amount of each Loan hereunder from the date thereof until payment in full and
shall accrue and be payable at the rates and on the dates set forth in the
Agreement both before and after default and before and after maturity and
judgment, with interest on overdue interest to bear interest at the rate set
forth in SECTION 4.4 of the Agreement, to the fullest extent
EXHIBIT "A"-- Page 1
<PAGE>
permitted by applicable Law.
The amount of each payment hereunder shall be made to Bank at Agent's
office located in [Irvine], California, for the account of Bank, in lawful money
of the United States of America and in immediately available funds not later
than 11:00 a.m., California time, on the day of payment (which must be a Banking
Day). All payments received after 11:00 a.m., California time, on any Banking
Day, shall be deemed received on the next succeeding Banking Day. Bank shall
use its best efforts to keep a record of Loans made by it and payments of
principal with respect to this Note, and such record shall be presumptive
evidence of the principal amount owing under this Note.
Company hereby promises to pay all costs and expenses of any holder
hereof incurred in collecting the undersigned's obligations hereunder or in
enforcing or attempting to enforce any of any holder's rights hereunder,
including Attorney Costs, whether or not an action is filed in connection
therewith.
Company hereby waives presentment, demand for payment, dishonor,
notice of dishonor, protest, notice of protest and any other notice or
formality, to the fullest extent permitted by applicable Laws.
Assignment of this Note is subject to the consent of certain parties
pursuant to SECTION 11.6 of the Agreement.
This Note shall be delivered to and accepted by Bank in the State of
California, and shall be governed by, and construed and enforced in accordance
with, the internal Laws thereof without regard to the choice of law provisions
thereof.
"Company"
PAN PACIFIC RETAIL PROPERTIES, INC., a
Maryland corporation
By:
----------------------------------
----------------------------------
[Printed Name and Title]
By:
----------------------------------
----------------------------------
[Printed Name and Title]
EXHIBIT "A"-- Page 2
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
(Reference Rate Borrowings)
BANK AMOUNT OF AMOUNT OF UNPAID NOTATION DATE
ADVANCE OR OF PRINCIPAL PAID OR PRINCIPAL AND MADE BY
REDESIGNATION REDESIGNATED INTO BALANCE
FROM ANOTHER ANOTHER TYPE OF
TYPE OF BORROWING BORROWING
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EXHIBIT "A" -- Page 3
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
(LIBOR Borrowings)
BANK AMOUNT OF AMOUNT OF UNPAID NOTATION DATE
ADVANCE OR OF PRINCIPAL PAID OR PRINCIPAL AND MADE BY
REDESIGNATION REDESIGNATED INTO BALANCE
FROM ANOTHER ANOTHER TYPE OF
TYPE OF BORROWING BORROWING
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EXHIBIT "B" -- Page 1
<PAGE>
EXHIBIT "B"
BORROWING BASE CERTIFICATE
The undersigned, being the duly elected chief financial officer of
Pan Pacific Retail Properties, Inc., a Maryland corporation, hereby certifies
that the following is a true and correct calculation of the Borrowing Base as of
_____________, 199__:
[AGENT TO PROVIDE FORM OF CALCULATION AND
SCHEDULES IT WOULD DESIRE]
PAN PACIFIC RETAIL PROPERTIES, INC., a
Maryland corporation
By:
---------------------------------
---------------------------------
[Printed Name and Title]
By:
---------------------------------
---------------------------------
[Printed Name and Title]
EXHIBIT "B" -- Page 2
<PAGE>
EXHIBIT "C-1"
REQUEST FOR BORROWING
1. This REQUEST FOR BORROWING is executed and delivered by the
Company to the Agent for the Banks pursuant to the Credit Agreement (the
"AGREEMENT") dated as of August 13, 1997, entered into by the Company, the Banks
and the Agent. Any terms used herein and not defined herein shall have the
meanings defined in the Agreement.
2. The Company hereby requests that the Banks make a Loan for the
account of the Company pursuant to the Agreement, as follows:
(a) Amount of Loan: $________________.
(b) Date of Loan: _______________, 19__.
(c) Type of Loan (check one box only):
[] Reference Rate Borrowing.
[] LIBOR Borrowing with a ____-month LIBOR Period
ending _______________, 19__.
3. In connection with the Loan requested herein, the Company
hereby represents, warrants and certifies to the Banks that, as of the date of
the Loan requested herein: Each representation and warranty made by the Company
in ARTICLE 7 of the Agreement will be true and correct, both immediately before
and after such Loan is made, as though such representation and warranty was made
on and as of the date of such Loan, provided, however, the representations and
warranties made by the Company in SECTION 7.13 of the Agreement are true and
correct as of the last reporting under the Agreement; no actions, suits or
proceedings will be pending against or affecting the Company or any of its
Subsidiaries or any property of any of them in any court of Law or before any
Governmental Authority which might reasonably be expected to Materially
adversely affect the business, operations or financial condition of the Company
and its Subsidiaries taken as a whole; no Material adverse change will have
occurred in the business, operations or financial condition of the Company and
its Subsidiaries taken as a whole since the Closing Date; and no Event of
Default or event
EXHIBIT "C-1" -- Page 1
<PAGE>
that upon notice or passage of time would constitute an Event of Default will
have occurred and be continuing. (If any of the foregoing statements is not
true and correct, attach a statement specifying in detail the circumstances
thereof and the actions the Company is taking or proposes to take with respect
thereto.)
4. This Request for Borrowing is executed on ____________, 19__,
by a Responsible Official of the Company on behalf of the Company. The
undersigned, in such capacity, hereby certifies each and every matter contained
herein to be true and correct.
Dated: _________________
PAN PACIFIC RETAIL PROPERTIES, INC., a
Maryland corporation
By:
---------------------------------
---------------------------------
[Printed Name and Title]
By:
---------------------------------
---------------------------------
[Printed Name and Title]
EXHIBIT "C-1" -- Page 2
<PAGE>
EXHIBIT "C-2"
REQUEST FOR LETTER OF CREDIT
1. This REQUEST FOR LETTER OF CREDIT is executed and delivered by
the Company to the Agent for the Banks pursuant to the Credit Agreement (the
"AGREEMENT") dated as of August 13, 1997, entered into by the Company, the Banks
and the Agent. Any terms used herein and not defined herein shall have the
meanings defined in the Agreement.
2. The Company hereby requests that the Issuing Bank issue a
Letter of Credit in accordance with the L/C Application accompanying this
request.
3. In connection with the Letter of Credit requested herein, the
Company hereby represents, warrants and certifies to the Banks that, as of the
date of the Letter of Credit requested herein: Each representation and warranty
made by the Company in ARTICLE 7 of the Agreement will be true and correct, both
immediately before and after such Letter of Credit is issued, as though such
representation and warranty was made on and as of the date of such issuance,
provided, however, the representations and warranties made by the Company in
SECTION 7.13 of the Agreement are true and correct as of the last reporting
under the Agreement; no actions, suits or proceedings will be pending against or
affecting the Company or any of its Subsidiaries or any property of any of them
in any court of Law or before any Governmental Authority which might reasonably
be expected to Materially adversely affect the business, operations or financial
condition of the Company and its Subsidiaries taken as a whole; no Material
adverse change will have occurred in the business, operations or financial
condition of the Company and its Subsidiaries taken as a whole since the Closing
Date; and no Event of Default or event that upon notice or passage of time would
constitute an Event of Default will have occurred and be continuing. (If any of
the foregoing statements is not true and correct, attach a statement specifying
in detail the circumstances thereof and the actions the Company is taking or
proposes to take with respect thereto.)
4. This Request for Letter of Credit is executed on ____________,
19__, by a Responsible Official of the Company on behalf of the Company. The
undersigned, in such capacity, hereby certifies each and every matter contained
herein to be true and correct.
EXHIBIT "C-2" -- Page 1
<PAGE>
Dated: _________________
PAN PACIFIC RETAIL PROPERTIES, INC., a
Maryland corporation
By:
---------------------------------
---------------------------------
[Printed Name and Title]
By:
---------------------------------
---------------------------------
[Printed Name and Title]
EXHIBIT "C-2" -- Page 2
<PAGE>
EXHIBIT "D"
REQUEST FOR REDESIGNATION OF BORROWING
1. This REQUEST FOR REDESIGNATION OF BORROWING is executed and
delivered by the Company to the Agent for the Banks pursuant to the Credit
Agreement (the "AGREEMENT") dated as of August 13, 1997, entered into by the
Company, the Banks and the Agent. Any terms used herein and not defined herein
shall have the meanings defined in the Agreement.
2. The Company hereby requests that the Banks redesignate
outstanding Reference Rate Borrowings heretofore made or redesignated for the
account of the Company pursuant to the Agreement, as follows:
(a) Total Amount of Loans to be Redesignated:
$_______________.
(b) Date of Redesignation: ________________, 19__.
(c) Type of Loan as so Redesignated: LIBOR Borrowing with
a ____-month LIBOR Period ending _______________, 19__.
3. In connection with the redesignation of Borrowing requested
herein, the Company hereby represents, warrants and certifies to the Banks that,
as of the date of the Loan requested herein: Each representation and warranty
made by the Company in ARTICLE 7 of the Agreement will be true and correct, both
immediately before and after such redesignation of Borrowing is made, as though
such representation and warranty was made on and as of the date of such
redesignation of Borrowing, provided, however, the representations and
warranties made by the Company in SECTION 7.13 of the Agreement are true and
correct as of the last reporting under the Agreement; no actions, suits or
proceedings will be pending against or affecting the Company or any of its
Subsidiaries or any property of any of them in any court of Law or before any
Governmental Authority which might reasonably be expected to Materially
adversely affect the business, operations or financial condition of the Company
and its Subsidiaries taken as a whole; no Material adverse change will have
occurred in the business, operations or financial condition of the Company and
its Subsidiaries taken as a whole since the Closing Date; and no Event of
Default or event
EXHIBIT "D" -- Page 1
<PAGE>
that upon notice or passage of time would constitute an Event of Default will
have occurred and be continuing. (If any of the foregoing statements is not
true and correct, attach a statement specifying in detail the circumstances
thereof and the actions the Company is taking or proposes to take with respect
thereto.)
4. This Request for Redesignation of Borrowing is executed on
____________, 19__, by a Responsible Official on behalf of the Company. The
undersigned, in such capacity, hereby certifies each and every matter contained
herein to be true and correct.
Dated: _________________
PAN PACIFIC RETAIL PROPERTIES, INC., a
Maryland corporation
By:
---------------------------------
---------------------------------
[Printed Name and Title]
By:
---------------------------------
---------------------------------
[Printed Name and Title]
EXHIBIT "D" -- Page 2
<PAGE>
EXHIBIT "E"
SUBSIDIARIES
1. Pan Pacific Development (Tennessee) Acquisition, Inc., a Delaware
corporation
2. Pan Pacific Development (Rosewood), Inc., a California corporation
3. Pan Pacific Development (Olympia Square), Inc., a Washington corporation
4. Pan Pacific Development (Kentucky), Inc., a Kentucky corporation
5. Sahara Pavilion North - U.S., Inc., a Nevada corporation
6. Pan Pacific Development (New Mexico), Inc., a New Mexico corporation
7. Pan Pacific Development (Chino), Inc., a Delaware corporation
8. Melrose Village Plaza Partners, a California general partnership
9. Tanasbourne Village Limited Partnership, an Oregon limited partnership
10. North Coast Health Center Joint Venture, a California general partnership
11. Pan Pacific U.S. Shopping Center I Limited Partnership, a Delaware limited
partnership
EXHIBIT "E" -- Page 1
<PAGE>
EXHIBIT "F"
FORM OF LEGAL OPINION
_________________, 199___
Bank of America National Trust and
Savings Association, as Agent and to
the Banks that are, or may become,
parties to the to the Agreement
[_______________________
San Diego, California _____________]
Re: PAN PACIFIC RETAIL PROPERTIES, INC.
Ladies and Gentlemen:
We have acted as special counsel to Pan Pacific Retail Properties,
Inc., a Maryland corporation (the "COMPANY"), in connection with the execution
and delivery of a Credit Agreement, dated as of even date herewith (the
"AGREEMENT") by and among the Company and Bank of America National Trust and
Savings Association, a national banking association, and other Banks that are,
or may become, parties to the Agreement. Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Agreement.
In our capacity as counsel for the Company, we have made such legal
and factual inquiries and examinations as we deemed advisable for purposes of
rendering this opinion, and, in the course thereof, we have examined originals,
or copies of originals certified to our satisfaction, of such agreements,
documents, certificates and other statements of government officials, officers
of the Company and others as we deemed relevant and necessary as a basis for
this opinion. We have relied upon such certificates and documents with respect
to the accuracy of factual matters contained therein, which factual matters were
not independently established or verified by us. In all such examinations, we
have assumed the genuineness of all signatures by
EXHIBIT "F" -- Page 1
<PAGE>
each party and the authenticity of all documents submitted to us as originals
and the conformity to authentic original documents of all documents submitted to
us as conformed or photostatic copies. For the purpose of the opinions
hereinafter expressed, we have assumed the due execution and delivery, pursuant
to due authorization, of each document referred to herein by each party thereto
other than the Company and the Subsidiaries and that each document constitutes
the valid and binding obligation of each party thereto other than the Company
and the Subsidiaries, enforceable against such party in accordance with its
terms.
On the basis of our inquiries and examinations, and subject to the
qualifications, exceptions, assumptions and limitations contained herein, we are
of the opinion that:
1. The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Maryland and is qualified to
do business in the jurisdictions in which the nature of the property owned or
leased by the Company or the nature of the business transacted by the Company
makes such qualification necessary, except where the failure to be so qualified
would not have a Material adverse effect on the business or financial condition
of the Company and the Subsidiaries taken as a whole.
2. The execution, delivery and performance by the Company of the
Agreement and each Note pursuant thereto are within the Company's corporate
powers, have been duly authorized by all necessary corporate action and do not
contravene (a) the Company's certificate of incorporation or bylaws, (b) any law
or (c) any agreement or instrument identified to us by the Company as being
Material to the business or financial condition of the Company and the
Subsidiaries taken as a whole.
3. The Agreement is, and the Notes when delivered thereunder will
be, valid and binding obligations of the Company enforceable against the Company
in accordance with their respective terms.
4. No action of, or filing with, or approval or other action by,
any governmental or public body or authority which has not been taken, made or
obtained is required to authorize, or is otherwise required in connection with,
the execution, delivery and performance of the Agreement and the Notes.
5. Each Subsidiary is duly organized, existing and in good
standing
EXHIBIT "F" -- Page 2
<PAGE>
under the laws of the jurisdiction of its incorporation. Each of the
Subsidiaries is duly qualified as a foreign corporation to transact business and
is in good standing in each jurisdiction in which the ownership of property or
the nature of the business transacted by such Subsidiary makes such
qualification necessary.
6. To the best of our knowledge, the Company owns all of the
issued and outstanding capital stock of each of the Subsidiaries.
Very truly yours,
-------------------------------------
EXHIBIT "F" -- Page 3
<PAGE>
EXHIBIT "G"
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "ASSIGNMENT AND
ACCEPTANCE") dated as of __________, 199__ is made between
______________________________ (the "ASSIGNOR") and
______________________________ (the "ASSIGNEE").
RECITALS
WHEREAS, the Assignor is party to that certain Credit Agreement dated
as of _____________, 1997 (as amended, amended and restated, modified,
supplemented or renewed, the "CREDIT AGREEMENT") among Pan Pacific Retail
Properties, Inc., a Maryland corporation (the "COMPANY"), the several financial
institutions from time to time party thereto (including the Assignor, the
"BANKS"), and Bank of America National Trust and Savings Association, as agent
for the Banks (the "AGENT"). Any terms defined in the Credit Agreement and not
defined in this Assignment and Acceptance are used herein as defined in the
Credit Agreement;
WHEREAS, as provided under the Credit Agreement, the Assignor has
committed to making Loans (the "COMMITTED LOANS") to the Company in an aggregate
amount not to exceed $__________ (the "COMMITMENT");
WHEREAS, [the Assignor has made Committed Loans in the aggregate
principal amount of $__________ to the Company] [no Committed Loans are
outstanding under the Credit Agreement]; and
WHEREAS, the Assignor wishes to assign to the Assignee [part of the]
[all] rights and obligations of the Assignor under the Credit Agreement in
respect of its Commitment, [together with a corresponding portion of each of its
outstanding Loans, in an amount equal to $__________ (the "ASSIGNED AMOUNT") on
the terms and subject to the conditions set forth herein and the Assignee wishes
to accept assignment of such rights and to assume such obligations from the
Assignor on such terms and subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual
EXHIBIT "G" -- Page 1
<PAGE>
agreements contained herein, the parties hereto agree as follows:
1. ASSIGNMENT AND ACCEPTANCE.
(a) Subject to the terms and conditions of this Assignment and
Acceptance, (i) the Assignor hereby sells, transfers and assigns to the
Assignee, and (ii) the Assignee hereby purchases, assumes and undertakes from
the Assignor, without recourse and without representation or warranty (except as
provided in this Assignment and Acceptance) __% (the "ASSIGNEE'S PERCENTAGE
SHARE") of (A) the Commitment [and the Loans] of the Assignor and (B) all
related rights, benefits, obligations, liabilities and indemnities of the
Assignor under and in connection with the Credit Agreement and the Loan
Documents.
[IF APPROPRIATE, ADD PARAGRAPH SPECIFYING PAYMENT TO ASSIGNOR BY
ASSIGNEE OF OUTSTANDING PRINCIPAL OF, ACCRUED INTEREST ON, AND FEES WITH RESPECT
TO, COMMITTED LOANS AND L/C OBLIGATIONS ASSIGNED.]
(b) With effect on and after the Effective Date (as defined in
Section 5 hereof), the Assignee shall be a party to the Credit Agreement and
succeed to all of the rights and be obligated to perform all of the obligations
of a Bank under the Credit Agreement, including the requirements concerning
confidentiality and the payment of indemnification, with a Commitment in an
amount equal to the Assigned Amount. The Assignee agrees that it will perform
in accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Bank. It is the intent
of the parties hereto that the Commitment of the Assignor shall, as of the
Effective Date, be reduced by an amount equal to the Assigned Amount and the
Assignor shall relinquish its rights and be released from its obligations under
the Credit Agreement to the extent such obligations have been assumed by the
Assignee; provided, however, the Assignor shall not relinquish its rights under
Section ___ and ___ of the Credit Agreement to the extent such rights relate to
the time prior to the Effective Date.
(c) After giving effect to the assignment and assumption set forth
herein, on the Effective Date the Assignee's Commitment will be $__________.
(d) After giving effect to the assignment and assumption set forth
herein, on the Effective Date the Assignor's Commitment will be $__________.
2. PAYMENTS.
EXHIBIT "G" -- Page 2
<PAGE>
(a) As consideration for the sale, assignment and transfer
contemplated in Section 1 hereof, the Assignee shall pay to the Assignor on the
Effective Date in immediately available funds an amount equal to $__________,
representing the Assignee's Pro Rata Share of the principal amount of all
Committed Loans.
(b) The [Assignor] [Assignee] further agrees to pay to the Agent a
processing fee in the amount specified in Section [ ](__) of the Credit
Agreement.
3. REALLOCATION OF PAYMENTS.
Any interest, fees and other payments accrued to the Effective Date with
respect to the Commitment [and] Loans shall be for the account of the Assignor.
Any interest, fees and other payments accrued on and after the Effective Date
with respect to the Assigned Amount shall be for the account of the Assignee.
Each of the Assignor and the Assignee agrees that it will hold in trust for the
other party any interest, fees and other amounts which it may receive to which
the other party is entitled pursuant to the preceding sentence and pay to the
other party any such amounts which it may receive promptly upon receipt.
4. INDEPENDENT CREDIT DECISION.
The Assignee (a) acknowledges that it has received a copy of the Credit
Agreement and the Schedules and Exhibits thereto, together with copies of the
most recent financial statements referred to in Section [ ](__) of the Credit
Agreement, and such other documents and information as it has deemed appropriate
to make its own credit and legal analysis and decision to enter into this
Assignment and Acceptance; and (b) agrees that it will, independently and
without reliance upon the Assignor, the Agent or any other Bank and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit and legal decisions in taking or not taking
action under the Credit Agreement.
5. EFFECTIVE DATE; NOTICES.
(a) As between the Assignor and the Assignee, the effective date
for this Assignment and Acceptance shall be __________, 199__ (the "EFFECTIVE
DATE"); PROVIDED that the following conditions precedent have been satisfied on
or before the Effective Date:
EXHIBIT "G" -- Page 3
<PAGE>
(i) this Assignment and Acceptance shall be executed and
delivered by the Assignor and the Assignee;
(ii) the consent of the Company and the Agent required for an
effective assignment of the Assigned Amount by the Assignor to the Assignee
under Section [ ](__) the Credit Agreement shall have been duly obtained and
shall be in full force and effect as of the Effective Date;
(iii) the Assignee shall pay to the Assignor all amounts due to
the Assignor under this Assignment and Acceptance;
[(iv) the Assignee shall have complied with Section [ ](__) of
the Credit Agreement (if applicable);
(v) the processing fee referred to in Section 2(b) hereof and in
Section [ ](__) of the Credit Agreement shall have been paid to the Agent; and
(vi) the Assignor shall have assigned and the Assignee shall have
assumed a percentage equal to the Assignee's Percentage Share of the rights and
obligations of the Assignor under the Credit Agreement (if such agreement
exists).
(b) Promptly following the execution of this Assignment and
Acceptance, the Assignor shall deliver to the Company [, the Issuing Bank] and
the Agent for acknowledgement by the Agent, a Notice of Assignment
[substantially] in the form attached hereto as SCHEDULE 1.
[6. AGENT. [INCLUDE ONLY IF ASSIGNOR IS AGENT]
(a) The Assignee hereby appoints and authorizes the Assignor to
take such action as agent on its behalf and to exercise such powers under the
Credit Agreement as are delegated to the Agent by the Banks pursuant to the
terms of the Credit Agreement.
(b) The Assignee shall assume no duties or obligations held by the
Assignor in its capacity as Agent under the Credit Agreement.]
7. WITHHOLDING TAX.
EXHIBIT "G" -- Page 4
<PAGE>
The Assignee (a) represents and warrants to the Bank, the Agent and the
Company that under applicable law and treaties no tax will be required to be
withheld by the Bank with respect to any payments to be made to the Assignee
hereunder, (b) agrees to furnish (if it is organized under the laws of any
jurisdiction other than the United States or any State thereof) to the Agent and
the Company prior to the time that the Agent or Company is required to make any
payment of principal, interest or fees hereunder, duplicate executed originals
of either U.S. Internal Revenue Service Form 4224 or U.S. Internal Revenue
Service Form 1001 (wherein the Assignee claims entitlement to the benefits of a
tax treaty that provides for a complete exemption from U.S. federal income
withholding tax on all payments hereunder) and agrees to provide new Forms 4224
or 1001 upon the expiration of any previously delivered form or comparable
statements in accordance with applicable U.S. law and regulations and amendments
thereto, duly executed and completed by the Assignee, and (c) agrees to comply
with all applicable U.S. laws and regulations with regard to such withholding
tax exemption.
8. REPRESENTATIONS AND WARRANTIES.
(a) The Assignor represents and warrants that (i) it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any Lien or other adverse claim; (ii) it is
duly organized and existing and it has the full power and authority to take, and
has taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance and to fulfill
its obligations hereunder; (iii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than any already given or obtained)
for its due execution, delivery and performance of this Assignment and
Acceptance, and apart from any agreements or undertakings or filings required by
the Credit Agreement, no further action by, or notice to, or filing with, any
Person is required of it for such execution, delivery or performance; and
(iv) this Assignment and Acceptance has been duly executed and delivered by it
and constitutes the legal, valid and binding obligation of the Assignor,
enforceable against the Assignor in accordance with the terms hereof, subject,
as to enforcement, to bankruptcy, insolvency, moratorium, reorganization and
other laws of general application relating to or affecting creditors' rights and
to general equitable principles.
(b) The Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity,
EXHIBIT "G" -- Page 5
<PAGE>
enforceability, genuineness, sufficiency or value of the Credit Agreement or any
other instrument or document furnished pursuant thereto. The Assignor makes no
representation or warranty in connection with, and assumes no responsibility
with respect to, the solvency, financial condition or statements of the Company,
or the performance or observance by the Company, of any of its respective
obligations under the Credit Agreement or any other instrument or document
furnished in connection therewith.
(c) The Assignee represents and warrants that (i) it is duly
organized and existing and it has full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance, and to
fulfill its obligations hereunder; (ii) no notices to, or consents,
authorizations or approvals of, any Person are required (other than any already
given or obtained) for its due execution, delivery and performance of this
Assignment and Acceptance; and apart from any agreements or undertakings or
filings required by the Credit Agreement, no further action by, or notice to, or
filing with, any Person is required of it for such execution, delivery or
performance; (iii) this Assignment and Acceptance has been duly executed and
delivered by it and constitutes the legal, valid and binding obligation of the
Assignee, enforceable against the Assignee in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights and to general equitable principles; and (iv) it is an
Eligible Assignee.
9. FURTHER ASSURANCES.
The Assignor and the Assignee each hereby agree to execute and deliver such
other instruments, and take such other action, as either party may reasonably
request in connection with the transactions contemplated by this Assignment and
Acceptance, including the delivery of any notices or other documents or
instruments to the Company or the Agent, which may be required in connection
with the assignment and assumption contemplated hereby.
10. MISCELLANEOUS.
(a) Any amendment or waiver of any provision of this Assignment and
Acceptance shall be in writing and signed by the parties hereto. No failure or
delay by either party hereto in exercising any right, power or privilege
hereunder shall
EXHIBIT "G" -- Page 6
<PAGE>
operate as a waiver thereof and any waiver of any breach of the provisions of
this Assignment and Acceptance shall be without prejudice to any rights with
respect to any other or further breach thereof.
(b) All payments made hereunder shall be made without any set-off
or counterclaim.
(c) The Assignor and the Assignee shall each pay its own costs and
expenses incurred in connection with the negotiation, preparation, execution and
performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any number of
counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF CALIFORNIA. The Assignor
and the Assignee each irrevocably submits to the non-exclusive jurisdiction of
any State or Federal court sitting in California over any suit, action or
proceeding arising out of or relating to this Assignment and Acceptance and
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such [California] State or Federal court. Each party
to this Assignment and Acceptance hereby irrevocably waives, to the fullest
extent it may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding. [Reference]
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE, THE CREDIT AGREEMENT, ANY
RELATED DOCUMENTS AND AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR
STATEMENTS (WHETHER ORAL OR WRITTEN).
[OTHER PROVISIONS TO BE ADDED AS MAY BE NEGOTIATED BETWEEN THE
ASSIGNOR AND THE ASSIGNEE, PROVIDED THAT SUCH PROVISIONS ARE NOT INCONSISTENT
WITH THE CREDIT AGREEMENT.]
EXHIBIT "G" -- Page 7
<PAGE>
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed and delivered by their duly authorized
officers as of the date first above written.
[ASSIGNOR]
By:
---------------------------------
---------------------------------
[Printed Name and Title]
[ASSIGNEE]
By:
---------------------------------
---------------------------------
[Printed Name and Title]
EXHIBIT "G" -- Page 8
<PAGE>
SCHEDULE 1
NOTICE OF ASSIGNMENT AND ACCEPTANCE
_________________, 19__
Bank of America National Trust
and Savings Association, as Agent
____________________________
____________________________
Attn: _______________________
Pan Pacific Retail Properties, Inc.
____________________________
____________________________
Attn: _______________________
Ladies and Gentlemen:
We refer to the Credit Agreement dated as of ______________, 1997 (as
amended, amended and restated, modified, supplemented or renewed from time to
time the "CREDIT AGREEMENT") among Pan Pacific Retail Properties, Inc., a
Maryland corporation (the "COMPANY"), the Banks referred to therein and Bank of
America National Trust and Savings Association as agent for the Banks (the
"AGENT"). Terms defined in the Credit Agreement are used herein as therein
defined.
1. We hereby give you notice of, and request your consent to, the
assignment by __________________ (the "ASSIGNOR") to _______________ (the
"ASSIGNEE") of _____% of the right, title and interest of the Assignor in and to
the Credit Agreement (including, without limitation, the right, title and
interest of the Assignor in and to the Commitments of the Assignor and all
outstanding Loans made by the Assignor) pursuant to the Assignment and
Acceptance Agreement attached hereto (the "ASSIGNMENT AND ACCEPTANCE"). Before
giving effect to such assignment, the Assignor's Commitment is $ ___________ and
the aggregate amount of its
SCHEDULE 1 -- Page 1
<PAGE>
outstanding Loans is $_____________. After giving effect to such assignment,
the Assignor's Commitment shall be $______________ and the Assignee's Commitment
shall be $______________.
2. The Assignee agrees that, upon receiving the consent of the
Agent and, if applicable, the Company to such assignment, the Assignee will be
bound by the terms of the Credit Agreement as fully and to the same extent as if
the Assignee were the Bank originally holding such interest in the Credit
Agreement.
3. The following administrative details apply to the Assignee:
(A) Notice Address:
Assignee name: __________________________
Address: _______________________________
_______________________________
_______________________________
Attention: _____________________________
Telephone: (___) _______________________
Telecopier: (___) ______________________
Telex (Answerback): ____________________
(B) Payment Instructions:
Account No.: ___________________________
At: ___________________________
___________________________
___________________________
Reference: ___________________________
Attention: ___________________________
4. You are entitled to rely upon the representations, warranties
and covenants of each of the Assignor and Assignee contained in the Assignment
and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused
SCHEDULE 1 -- Page 2
<PAGE>
this Notice of Assignment and Acceptance to be executed by their respective duly
authorized officials, officers or agents as of the date first above mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
By:
---------------------------------
Title:
---------------------------------
By:
---------------------------------
Title:
---------------------------------
[NAME OF ASSIGNEE]
By:
---------------------------------
Title:
---------------------------------
By:
---------------------------------
Title:
---------------------------------
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
PAN PACIFIC RETAIL PROPERTIES, INC., a Maryland corporation
SCHEDULE 1 -- Page 3
<PAGE>
By:
---------------------------------
Title:
---------------------------------
By:
---------------------------------
Title:
---------------------------------
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By:
---------------------------------
Title:
---------------------------------
By:
---------------------------------
Title:
---------------------------------
SCHEDULE 1 -- Page 4
<PAGE>
SCHEDULE 1.1(A)
LIST OF ASSETS AND INITIAL ASSET CLASSIFICATIONS
Asset Asset Classification
----- --------------------
1. Cheyenne Commons A
2. Sahara Pavilion North A
3. Sahara Pavilion South A
4. Green Valley Towne & Country B
5. Winterwood Pavilion B
6. Chico Crossroads A
7. Monterey Plaza A
8. Lakewood Shopping Center B
9. Fairmont Shopping Center B
10. Rosewood Village B
11. Laguna Village A
12. Chino Town Square A
13. Melrose Village Plaza B
14. Laurentian Center B
15. Vineyard Village East B
16. Foothill Center C
17. Arlington Courtyard C
18. Sunset Square B
19. Olympia Square B
20. Canyon Ridge Plaza A
21. Tanasbourne Village A
22. Maysville Market Square A
SCHEDULE 1.1(A)
<PAGE>
Asset Asset Classification
----- --------------------
23. Ocoee Plaza B
24. Sports Unlimited B
25. Country Club Center B
SCHEDULE 1.1(A)
<PAGE>
SCHEDULE 1.1(B)
DESIGNATED RESPONSIBLE OFFICIALS
1. Stuart A. Tanz, Director Chairman, Chief Executive Officer and President
2. David L. Adlard, Executive Vice President and Chief Financial Officer
3. Laurie A. Sneve, Vice President and Controller
SCHEDULE 1.1(B)
<PAGE>
SCHEDULE 3.5(c)
ASSETS INITIALLY CONSTITUTING THE
BORROWING BASE PROPERTIES POOL
Asset
-----
1. Cheyenne Commons
2. Sahara Pavilion South
3. Winterwood Pavilion
4. Chico Crossroads
5. Monterey Plaza
6. Lakewood Center
7. Fairmont Shopping Center
8. Laguna Village
9. Vineyard Village East
10. Arlington Courtyard
11. Sunset Square
12. Canyon Ridge Plaza
13. Ocoee Plaza
14. Sports Unlimited
15. Tanasbourne Village
SCHEDULE 3.5(c)
<PAGE>
SCHEDULE 7.14
ENVIRONMENTAL MATTERS
None.
SCHEDULE 7.14
<PAGE>
SCHEDULE 8.20(e)
DESCRIPTION OF EXISTING PARTNERSHIPS
1. Melrose Village Plaza Partners, a California general partnership
2. Tanasbourne Village Limited Partnership, an Oregon limited partnership
3. North Coast Health Center Joint Venture, a California general partnership
4. Pan Pacific Development (Tennessee), Limited Partnership, a California
limited partnership
5. Pan Pacific U.S. Shopping Center I Limited Partnership, a Delaware limited
partnership
6. Maysville Marketsquare Associate Limited Partnership, a Kentucky limited
partnership
SCHEDULE 8.20(e)
<PAGE>
SCHEDULE 11.21
DESCRIPTION OF EXISTING
PAN PACIFIC/BOFA CREDIT FACILITIES
Borrower Name Original Note Amount Date of Documents
- ------------- -------------------- -----------------
Pan Pacific Development $27,450,000 September 22, 1995
(Cheyenne Commons),
Inc., a Nevada corporation
Tanasbourne Limited $18,375,000 February 16, 1996
Partnership, an Oregon
limited partnership
Pan Pacific (Canyon $4,300,000 April 28, 1995
Ridge), Inc., a
Washington corporation
Sahara Pavilion U.S., Inc., $13,000,000 July 20, 1997
a Nevada corporation
SCHEDULE 11.21
<PAGE>
NOTE
$35,000,000 August 13, 1997
Irvine, California
FOR VALUE RECEIVED, Pan Pacific Retail Properties, Inc., a Maryland
corporation (the "COMPANY"), promises to pay to the order of Bank of America
National Trust and Savings Association, a national banking association ("Bank")
the principal amount of THIRTY-FIVE MILLION AND NO/100 DOLLARS ($35,000,000), or
such lesser aggregate amount of Loans as may be made pursuant to Bank's
Commitment under the Credit Agreement hereinafter described, payable as
hereinafter set forth. Company promises to pay interest on the principal amount
hereof remaining unpaid from time to time from the date hereof until the date of
payment in full, payable as hereinafter set forth.
Reference is made to the Credit Agreement of even date herewith among
Company and the Banks (the "AGREEMENT"). Terms defined in the Agreement and not
otherwise defined herein are used herein with the meanings defined for those
terms in the Agreement. This is one of the Notes referred to in the Agreement,
and any holder hereof is entitled to all of the rights, remedies, benefits and
privileges provided for in the Agreement as originally executed or as it may
from time to time be supplemented, modified or amended. The Agreement, among
other things, contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events upon the terms and conditions therein
specified.
The principal indebtedness evidenced by this Note shall be payable as
provided in the Agreement and in any event on the Maturity Date (which shall be
August 13, 2000, subject to possible extension as provided in SECTION 4.18 of
the Agreement).
Interest shall be payable on the outstanding daily unpaid principal
amount of each Loan hereunder from the date thereof until payment in full and
shall accrue and be payable at the rates and on the dates set forth in the
Agreement both before and after default and before and after maturity and
judgment, with interest on overdue interest to bear interest at the rate set
forth in SECTION 4.4 of the Agreement, to the fullest extent permitted by
applicable Law.
1
<PAGE>
The amount of each payment hereunder shall be made to Bank at Agent's
office located in [Irvine], California, for the account of Bank, in lawful money
of the United States of America and in immediately available funds not later
than 11:00 a.m., California time, on the day of payment (which must be a Banking
Day). All payments received after 11:00 a.m., California time, on any Banking
Day, shall be deemed received on the next succeeding Banking Day. Bank shall
use its best efforts to keep a record of Loans made by it and payments of
principal with respect to this Note, and such record shall be presumptive
evidence of the principal amount owing under this Note.
Company hereby promises to pay all costs and expenses of any holder
hereof incurred in collecting the undersigned's obligations hereunder or in
enforcing or attempting to enforce any of any holder's rights hereunder,
including Attorney Costs, whether or not an action is filed in connection
therewith.
Company hereby waives presentment, demand for payment, dishonor,
notice of dishonor, protest, notice of protest and any other notice or
formality, to the fullest extent permitted by applicable Laws.
Assignment of this Note is subject to the consent of certain parties
pursuant to SECTION 11.6 of the Agreement.
This Note shall be delivered to and accepted by Bank in the State of
California, and shall be governed by, and construed and enforced in accordance
with, the internal Laws thereof without regard to the choice of law provisions
thereof.
"Company"
PAN PACIFIC RETAIL PROPERTIES, INC., a
Maryland corporation
By:
------------------------------------
------------------------------------
[Printed Name and Title]
By:
------------------------------------
------------------------------------
[Printed Name and Title]
2
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
(Reference Rate Borrowings)
BANK AMOUNT OF AMOUNT OF UNPAID NOTATION DATE
ADVANCE OR OF PRINCIPAL PAID OR PRINCIPAL AND MADE BY
REDESIGNATION REDESIGNATED INTO BALANCE
FROM ANOTHER ANOTHER TYPE OF
TYPE OF BORROWING BORROWING
---- ----------------- ----------------- --------- -------------
4
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
(LIBOR Borrowings)
BANK AMOUNT OF AMOUNT OF UNPAID NOTATION DATE
ADVANCE OR OF PRINCIPAL PAID OR PRINCIPAL AND MADE BY
REDESIGNATION REDESIGNATED INTO BALANCE
FROM ANOTHER ANOTHER TYPE OF
TYPE OF BORROWING BORROWING
---- ----------------- ----------------- --------- -------------
5
<PAGE>
NOTE
$25,000,000 August 13, 1997
Irvine, California
FOR VALUE RECEIVED, Pan Pacific Retail Properties, Inc., a Maryland
corporation (the "COMPANY"), promises to pay to the order of U.S. Bank National
Association ("Bank") the principal amount of TWENTY-FIVE MILLION AND NO/100
DOLLARS ($25,000,000), or such lesser aggregate amount of Loans as may be made
pursuant to Bank's Commitment under the Credit Agreement hereinafter described,
payable as hereinafter set forth. Company promises to pay interest on the
principal amount hereof remaining unpaid from time to time from the date hereof
until the date of payment in full, payable as hereinafter set forth.
Reference is made to the Credit Agreement of even date herewith among
Company and the Banks (the "AGREEMENT"). Terms defined in the Agreement and not
otherwise defined herein are used herein with the meanings defined for those
terms in the Agreement. This is one of the Notes referred to in the Agreement,
and any holder hereof is entitled to all of the rights, remedies, benefits and
privileges provided for in the Agreement as originally executed or as it may
from time to time be supplemented, modified or amended. The Agreement, among
other things, contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events upon the terms and conditions therein
specified.
The principal indebtedness evidenced by this Note shall be payable as
provided in the Agreement and in any event on the Maturity Date (which shall be
August 13, 2000, subject to possible extension as provided in SECTION 4.18 of
the Agreement).
Interest shall be payable on the outstanding daily unpaid principal
amount of each Loan hereunder from the date thereof until payment in full and
shall accrue and be payable at the rates and on the dates set forth in the
Agreement both before and after default and before and after maturity and
judgment, with interest on overdue interest to bear interest at the rate set
forth in SECTION 4.4 of the Agreement, to the fullest extent permitted by
applicable Law.
The amount of each payment hereunder shall be made to Bank at Agent's
office located in [Irvine], California, for the account of Bank, in lawful money
of the United States of America and in immediately available funds not later
than 11:00 a.m., California time, on the day of payment (which must be a Banking
Day). All payments received after 11:00 a.m., California time, on any Banking
Day, shall be deemed received on the next succeeding
1
<PAGE>
Banking Day. Bank shall use its best efforts to keep a record of Loans made by
it and payments of principal with respect to this Note, and such record shall be
presumptive evidence of the principal amount owing under this Note.
Company hereby promises to pay all costs and expenses of any holder
hereof incurred in collecting the undersigned's obligations hereunder or in
enforcing or attempting to enforce any of any holder's rights hereunder,
including Attorney Costs, whether or not an action is filed in connection
therewith.
Company hereby waives presentment, demand for payment, dishonor,
notice of dishonor, protest, notice of protest and any other notice or
formality, to the fullest extent permitted by applicable Laws.
Assignment of this Note is subject to the consent of certain parties
pursuant to SECTION 11.6 of the Agreement.
This Note shall be delivered to and accepted by Bank in the State of
California, and shall be governed by, and construed and enforced in accordance
with, the internal Laws thereof without regard to the choice of law provisions
thereof.
"Company"
PAN PACIFIC RETAIL PROPERTIES, INC., a
Maryland corporation
By:
------------------------------------
------------------------------------
[Printed Name and Title]
By:
------------------------------------
------------------------------------
[Printed Name and Title]
2
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
(Reference Rate Borrowings)
BANK AMOUNT OF AMOUNT OF UNPAID NOTATION DATE
ADVANCE OR OF PRINCIPAL PAID OR PRINCIPAL AND MADE BY
REDESIGNATION REDESIGNATED INTO BALANCE
FROM ANOTHER ANOTHER TYPE OF
TYPE OF BORROWING BORROWING
---- ----------------- ----------------- --------- -------------
3
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
(LIBOR Borrowings)
BANK AMOUNT OF AMOUNT OF UNPAID NOTATION DATE
ADVANCE OR OF PRINCIPAL PAID OR PRINCIPAL AND MADE BY
REDESIGNATION REDESIGNATED INTO BALANCE
FROM ANOTHER ANOTHER TYPE OF
TYPE OF BORROWING BORROWING
---- ----------------- ----------------- --------- -------------
4
<PAGE>
NOTE
$25,000,000 August 13, 1997
Irvine, California
FOR VALUE RECEIVED, Pan Pacific Retail Properties, Inc., a Maryland
corporation (the "COMPANY"), promises to pay to the order of KeyBank National
Association ("Bank") the principal amount of TWENTY-FIVE MILLION AND NO/100
DOLLARS ($25,000,000), or such lesser aggregate amount of Loans as may be made
pursuant to Bank's Commitment under the Credit Agreement hereinafter described,
payable as hereinafter set forth. Company promises to pay interest on the
principal amount hereof remaining unpaid from time to time from the date hereof
until the date of payment in full, payable as hereinafter set forth.
Reference is made to the Credit Agreement of even date herewith among
Company and the Banks (the "AGREEMENT"). Terms defined in the Agreement and not
otherwise defined herein are used herein with the meanings defined for those
terms in the Agreement. This is one of the Notes referred to in the Agreement,
and any holder hereof is entitled to all of the rights, remedies, benefits and
privileges provided for in the Agreement as originally executed or as it may
from time to time be supplemented, modified or amended. The Agreement, among
other things, contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events upon the terms and conditions therein
specified.
The principal indebtedness evidenced by this Note shall be payable as
provided in the Agreement and in any event on the Maturity Date (which shall be
August 13, 2000, subject to possible extension as provided in SECTION 4.18 of
the Agreement).
Interest shall be payable on the outstanding daily unpaid principal
amount of each Loan hereunder from the date thereof until payment in full and
shall accrue and be payable at the rates and on the dates set forth in the
Agreement both before and after default and before and after maturity and
judgment, with interest on overdue interest to bear interest at the rate set
forth in SECTION 4.4 of the Agreement, to the fullest extent permitted by
applicable Law.
The amount of each payment hereunder shall be made to Bank at Agent's
office located in [Irvine], California, for the account of Bank, in lawful money
of the United States of America and in immediately available funds not later
than 11:00 a.m., California time, on the day of payment (which must be a Banking
Day). All payments received after 11:00 a.m., California time, on any Banking
Day, shall be deemed received on the next succeeding
1
<PAGE>
Banking Day. Bank shall use its best efforts to keep a record of Loans made by
it and payments of principal with respect to this Note, and such record shall be
presumptive evidence of the principal amount owing under this Note.
Company hereby promises to pay all costs and expenses of any holder
hereof incurred in collecting the undersigned's obligations hereunder or in
enforcing or attempting to enforce any of any holder's rights hereunder,
including Attorney Costs, whether or not an action is filed in connection
therewith.
Company hereby waives presentment, demand for payment, dishonor,
notice of dishonor, protest, notice of protest and any other notice or
formality, to the fullest extent permitted by applicable Laws.
Assignment of this Note is subject to the consent of certain parties
pursuant to SECTION 11.6 of the Agreement.
This Note shall be delivered to and accepted by Bank in the State of
California, and shall be governed by, and construed and enforced in accordance
with, the internal Laws thereof without regard to the choice of law provisions
thereof.
"Company"
PAN PACIFIC RETAIL PROPERTIES, INC., a
Maryland corporation
By:
------------------------------------
------------------------------------
[Printed Name and Title]
By:
------------------------------------
------------------------------------
[Printed Name and Title]
2
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
(Reference Rate Borrowings)
BANK AMOUNT OF AMOUNT OF UNPAID NOTATION DATE
ADVANCE OR OF PRINCIPAL PAID OR PRINCIPAL AND MADE BY
REDESIGNATION REDESIGNATED INTO BALANCE
FROM ANOTHER ANOTHER TYPE OF
TYPE OF BORROWING BORROWING
---- ----------------- ----------------- --------- -------------
3
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
(LIBOR Borrowings)
BANK AMOUNT OF AMOUNT OF UNPAID NOTATION DATE
ADVANCE OR OF PRINCIPAL PAID OR PRINCIPAL AND MADE BY
REDESIGNATION REDESIGNATED INTO BALANCE
FROM ANOTHER ANOTHER TYPE OF
TYPE OF BORROWING BORROWING
---- ----------------- ----------------- --------- -------------
4
<PAGE>
NOTE
$25,000,000 August 13, 1997
Irvine, California
FOR VALUE RECEIVED, Pan Pacific Retail Properties, Inc., a Maryland
corporation (the "COMPANY"), promises to pay to the order of The Bank of Nova
Scotia ("Bank") the principal amount of TWENTY-FIVE MILLION AND NO/100 DOLLARS
($25,000,000), or such lesser aggregate amount of Loans as may be made pursuant
to Bank's Commitment under the Credit Agreement hereinafter described, payable
as hereinafter set forth. Company promises to pay interest on the principal
amount hereof remaining unpaid from time to time from the date hereof until the
date of payment in full, payable as hereinafter set forth.
Reference is made to the Credit Agreement of even date herewith among
Company and the Banks (the "AGREEMENT"). Terms defined in the Agreement and not
otherwise defined herein are used herein with the meanings defined for those
terms in the Agreement. This is one of the Notes referred to in the Agreement,
and any holder hereof is entitled to all of the rights, remedies, benefits and
privileges provided for in the Agreement as originally executed or as it may
from time to time be supplemented, modified or amended. The Agreement, among
other things, contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events upon the terms and conditions therein
specified.
The principal indebtedness evidenced by this Note shall be payable as
provided in the Agreement and in any event on the Maturity Date (which shall be
August 13, 2000, subject to possible extension as provided in SECTION 4.18 of
the Agreement).
Interest shall be payable on the outstanding daily unpaid principal
amount of each Loan hereunder from the date thereof until payment in full and
shall accrue and be payable at the rates and on the dates set forth in the
Agreement both before and after default and before and after maturity and
judgment, with interest on overdue interest to bear interest at the rate set
forth in SECTION 4.4 of the Agreement, to the fullest extent permitted by
applicable Law.
The amount of each payment hereunder shall be made to Bank at Agent's
office located in [Irvine], California, for the account of Bank, in lawful money
of the United States of America and in immediately available funds not later
than 11:00 a.m., California time, on the day of payment (which must be a Banking
Day). All payments received after 11:00 a.m., California time, on any Banking
Day, shall be deemed received on the next succeeding
1
<PAGE>
Banking Day. Bank shall use its best efforts to keep a record of Loans made by
it and payments of principal with respect to this Note, and such record shall be
presumptive evidence of the principal amount owing under this Note.
Company hereby promises to pay all costs and expenses of any holder
hereof incurred in collecting the undersigned's obligations hereunder or in
enforcing or attempting to enforce any of any holder's rights hereunder,
including Attorney Costs, whether or not an action is filed in connection
therewith.
Company hereby waives presentment, demand for payment, dishonor,
notice of dishonor, protest, notice of protest and any other notice or
formality, to the fullest extent permitted by applicable Laws.
Assignment of this Note is subject to the consent of certain parties
pursuant to SECTION 11.6 of the Agreement.
This Note shall be delivered to and accepted by Bank in the State of
California, and shall be governed by, and construed and enforced in accordance
with, the internal Laws thereof without regard to the choice of law provisions
thereof.
"Company"
PAN PACIFIC RETAIL PROPERTIES, INC., a Maryland corporation
"Company"
PAN PACIFIC RETAIL PROPERTIES, INC., a
Maryland corporation
By:
------------------------------------
------------------------------------
[Printed Name and Title]
By:
------------------------------------
------------------------------------
[Printed Name and Title]
2
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
(Reference Rate Borrowings)
BANK AMOUNT OF AMOUNT OF UNPAID NOTATION DATE
ADVANCE OR OF PRINCIPAL PAID OR PRINCIPAL AND MADE BY
REDESIGNATION REDESIGNATED INTO BALANCE
FROM ANOTHER ANOTHER TYPE OF
TYPE OF BORROWING BORROWING
---- ----------------- ----------------- --------- -------------
3
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
(LIBOR Borrowings)
BANK AMOUNT OF AMOUNT OF UNPAID NOTATION DATE
ADVANCE OR OF PRINCIPAL PAID OR PRINCIPAL AND MADE BY
REDESIGNATION REDESIGNATED INTO BALANCE
FROM ANOTHER ANOTHER TYPE OF
TYPE OF BORROWING BORROWING
---- ----------------- ----------------- --------- -------------
4
<PAGE>
NOTE
$20,000,000 August 13, 1997
Irvine, California
FOR VALUE RECEIVED, Pan Pacific Retail Properties, Inc., a Maryland
corporation (the "COMPANY"), promises to pay to the order of Signet Bank
("Bank") the principal amount of TWENTY MILLION AND NO/100 DOLLARS
($20,000,000), or such lesser aggregate amount of Loans as may be made pursuant
to Bank's Commitment under the Credit Agreement hereinafter described, payable
as hereinafter set forth. Company promises to pay interest on the principal
amount hereof remaining unpaid from time to time from the date hereof until the
date of payment in full, payable as hereinafter set forth.
Reference is made to the Credit Agreement of even date herewith among
Company and the Banks (the "AGREEMENT"). Terms defined in the Agreement and not
otherwise defined herein are used herein with the meanings defined for those
terms in the Agreement. This is one of the Notes referred to in the Agreement,
and any holder hereof is entitled to all of the rights, remedies, benefits and
privileges provided for in the Agreement as originally executed or as it may
from time to time be supplemented, modified or amended. The Agreement, among
other things, contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events upon the terms and conditions therein
specified.
The principal indebtedness evidenced by this Note shall be payable as
provided in the Agreement and in any event on the Maturity Date (which shall be
August 13, 2000, subject to possible extension as provided in SECTION 4.18 of
the Agreement).
Interest shall be payable on the outstanding daily unpaid principal
amount of each Loan hereunder from the date thereof until payment in full and
shall accrue and be payable at the rates and on the dates set forth in the
Agreement both before and after default and before and after maturity and
judgment, with interest on overdue interest to bear interest at the rate set
forth in SECTION 4.4 of the Agreement, to the fullest extent permitted by
applicable Law.
The amount of each payment hereunder shall be made to Bank at Agent's
office located in [Irvine], California, for the account of Bank, in lawful money
of the United States of America and in immediately available funds not later
than 11:00 a.m., California time, on the day of payment (which must be a Banking
Day). All payments received after 11:00 a.m., California time, on any Banking
Day, shall be deemed received on the next succeeding Banking Day. Bank shall
use its best efforts to keep a record of Loans made by it and
1
<PAGE>
payments of principal with respect to this Note, and such record shall be
presumptive evidence of the principal amount owing under this Note.
Company hereby promises to pay all costs and expenses of any holder
hereof incurred in collecting the undersigned's obligations hereunder or in
enforcing or attempting to enforce any of any holder's rights hereunder,
including Attorney Costs, whether or not an action is filed in connection
therewith.
Company hereby waives presentment, demand for payment, dishonor,
notice of dishonor, protest, notice of protest and any other notice or
formality, to the fullest extent permitted by applicable Laws.
Assignment of this Note is subject to the consent of certain parties
pursuant to SECTION 11.6 of the Agreement.
This Note shall be delivered to and accepted by Bank in the State of
California, and shall be governed by, and construed and enforced in accordance
with, the internal Laws thereof without regard to the choice of law provisions
thereof.
"Company"
PAN PACIFIC RETAIL PROPERTIES, INC., a
Maryland corporation
By:
------------------------------------
------------------------------------
[Printed Name and Title]
By:
------------------------------------
------------------------------------
[Printed Name and Title]
2
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
(Reference Rate Borrowings)
BANK AMOUNT OF AMOUNT OF UNPAID NOTATION DATE
ADVANCE OR OF PRINCIPAL PAID OR PRINCIPAL AND MADE BY
REDESIGNATION REDESIGNATED INTO BALANCE
FROM ANOTHER ANOTHER TYPE OF
TYPE OF BORROWING BORROWING
---- ----------------- ----------------- --------- -------------
3
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
(LIBOR Borrowings)
BANK AMOUNT OF AMOUNT OF UNPAID NOTATION DATE
ADVANCE OR OF PRINCIPAL PAID OR PRINCIPAL AND MADE BY
REDESIGNATION REDESIGNATED INTO BALANCE
FROM ANOTHER ANOTHER TYPE OF
TYPE OF BORROWING BORROWING
---- ----------------- ----------------- --------- -------------
4
<PAGE>
NOTE
$20,000,000 August 13, 1997
Irvine, California
FOR VALUE RECEIVED, Pan Pacific Retail Properties, Inc., a Maryland
corporation (the "COMPANY"), promises to pay to the order of Sanwa Bank
California, a California corporation ("Bank") the principal amount of TWENTY
MILLION AND NO/100 DOLLARS ($20,000,000), or such lesser aggregate amount of
Loans as may be made pursuant to Bank's Commitment under the Credit Agreement
hereinafter described, payable as hereinafter set forth. Company promises to
pay interest on the principal amount hereof remaining unpaid from time to time
from the date hereof until the date of payment in full, payable as hereinafter
set forth.
Reference is made to the Credit Agreement of even date herewith among
Company and the Banks (the "AGREEMENT"). Terms defined in the Agreement and not
otherwise defined herein are used herein with the meanings defined for those
terms in the Agreement. This is one of the Notes referred to in the Agreement,
and any holder hereof is entitled to all of the rights, remedies, benefits and
privileges provided for in the Agreement as originally executed or as it may
from time to time be supplemented, modified or amended. The Agreement, among
other things, contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events upon the terms and conditions therein
specified.
The principal indebtedness evidenced by this Note shall be payable as
provided in the Agreement and in any event on the Maturity Date (which shall be
August 13, 2000, subject to possible extension as provided in SECTION 4.18 of
the Agreement).
Interest shall be payable on the outstanding daily unpaid principal
amount of each Loan hereunder from the date thereof until payment in full and
shall accrue and be payable at the rates and on the dates set forth in the
Agreement both before and after default and before and after maturity and
judgment, with interest on overdue interest to bear interest at the rate set
forth in SECTION 4.4 of the Agreement, to the fullest extent permitted by
applicable Law.
The amount of each payment hereunder shall be made to Bank at Agent's
office located in [Irvine], California, for the account of Bank, in lawful money
of the United States of America and in immediately available funds not later
than 11:00 a.m., California time, on the day of payment (which must be a Banking
Day). All payments received after 11:00 a.m., California time, on any Banking
Day, shall be deemed received on the next succeeding
1
<PAGE>
Banking Day. Bank shall use its best efforts to keep a record of Loans made by
it and payments of principal with respect to this Note, and such record shall be
presumptive evidence of the principal amount owing under this Note.
Company hereby promises to pay all costs and expenses of any holder
hereof incurred in collecting the undersigned's obligations hereunder or in
enforcing or attempting to enforce any of any holder's rights hereunder,
including Attorney Costs, whether or not an action is filed in connection
therewith.
Company hereby waives presentment, demand for payment, dishonor,
notice of dishonor, protest, notice of protest and any other notice or
formality, to the fullest extent permitted by applicable Laws.
Assignment of this Note is subject to the consent of certain parties
pursuant to SECTION 11.6 of the Agreement.
This Note shall be delivered to and accepted by Bank in the State of
California, and shall be governed by, and construed and enforced in accordance
with, the internal Laws thereof without regard to the choice of law provisions
thereof.
"Company"
PAN PACIFIC RETAIL PROPERTIES, INC., a
Maryland corporation
By:
------------------------------------
------------------------------------
[Printed Name and Title]
By:
------------------------------------
------------------------------------
[Printed Name and Title]
2
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
(Reference Rate Borrowings)
BANK AMOUNT OF AMOUNT OF UNPAID NOTATION DATE
ADVANCE OR OF PRINCIPAL PAID OR PRINCIPAL AND MADE BY
REDESIGNATION REDESIGNATED INTO BALANCE
FROM ANOTHER ANOTHER TYPE OF
TYPE OF BORROWING BORROWING
---- ----------------- ----------------- --------- -------------
3
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
(LIBOR Borrowings)
BANK AMOUNT OF AMOUNT OF UNPAID NOTATION DATE
ADVANCE OR OF PRINCIPAL PAID OR PRINCIPAL AND MADE BY
REDESIGNATION REDESIGNATED INTO BALANCE
FROM ANOTHER ANOTHER TYPE OF
TYPE OF BORROWING BORROWING
---- ----------------- ----------------- --------- -------------
4
<PAGE>
PURCHASE AND SALE AGREEMENT
AND ESCROW INSTRUCTIONS
BY AND BETWEEN
RAINBOW PROMENADE PARTNERS, L.L.C.,
AN ARIZONA LIMITED LIABILITY COMPANY
AS SELLER,
AND
PAN PACIFIC RETAIL PROPERTIES, INC.,
A MARYLAND CORPORATION,
AS BUYER.
DATED FOR REFERENCE PURPOSES AS OF
AUGUST 18, 1997
PROPERTY LOCATED AT:
THE INTERSECTION OF RAINBOW BOULEVARD
AND LAKE MEAD BOULEVARD
CITY OF LAS VEGAS
STATE OF NEVADA
<PAGE>
PURCHASE AND SALE AGREEMENT
AND ESCROW INSTRUCTIONS
This PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS (this "AGREEMENT")
is dated for reference purposes only as of AUGUST 18, 1997, and is made to be
effective as of the Effective Date (as hereafter defined), by and between
RAINBOW PROMENADE PARTNERS, L.L.C., an Arizona limited liability company
("SELLER"), and PAN PACIFIC RETAIL PROPERTIES, INC., a Maryland corporation
("BUYER").
R E C I T A L S
A. Seller is the owner of the Property (as hereafter defined), which
consists of a shopping center project containing approximately 228,273 square
feet of improvements, located at the intersection of Rainbow Boulevard and Lake
Mead Boulevard in Las Vegas, Nevada, as more particularly described in EXHIBIT
A.
B. Buyer desires to purchase the Property from Seller, and Seller desires
to sell the Property to Buyer, on the terms and conditions set forth herein.
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller and Buyer hereby agree as
follows:
ARTICLE I
EFFECTIVE DATE
This Agreement shall be effective on the day (the "EFFECTIVE DATE") when a
fully executed copy of this Agreement (or a fully executed copy in counterparts)
is deposited with Escrow Holder (as hereafter defined). Escrow Holder is hereby
instructed to immediately notify each party to this Agreement of the Effective
Date.
ARTICLE II
DEFINITIONS
The following terms and references shall have the meanings indicated below
(such meanings to be equally applicable to both the singular and plural forms of
the terms defined and to verbs of any tense):
1.
<PAGE>
(a) ADDITIONAL RENTS" means amounts tenants may be obligated to pay
as additional rent, including certain percentage rent, certain escalations in
base rent, and certain pass-throughs of operating and similar expenses.
(b) "ALTA" means American Land Title Association.
(c) "BALANCE" shall have the meaning set forth in SECTION 4.3.
(d) "BILL OF SALE" means a bill of sale as defined in ARTICLE III(c).
(e) "BUSINESS DAY" means any day other than a Saturday, Sunday or a
Holiday.
(f) "CLOSING" means the consummation of the transactions contemplated
by this Agreement.
(g) "CLOSING DATE" means the date the Deed is recorded in the
Official Records of Clark County, Nevada.
(h) "CLTA POLICY" means a standard coverage owner's policy of title
insurance.
(i) "CONTRACTS" shall have the meaning set forth in ARTICLE III(d).
(j) "CONTRACT ASSIGNMENT" shall have the meaning set forth in ARTICLE
III(d).
(k) "DEED" shall have the meaning set forth in ARTICLE III(a).
(l) "DEPOSIT" shall have the meaning set forth in SECTION 4.2(a).
(m) "DIMINUTION THRESHOLD" shall have the meaning set forth in
SECTION 13.1(a)(i).
(n) "DOCUMENTS" means the transfer documents attached as Exhibits to
this Agreement.
(o) "EFFECTIVE DATE" shall have the meaning set forth in ARTICLE I.
(p) "ESCROW HOLDER" means the Title Company (as hereafter defined)
where escrow shall be established, whose address for this transaction shall be:
First American Title Insurance Company
________________________________
________________________________
Telephone: ______________________
2.
<PAGE>
(q) "ESCROW PERIOD" means the period from and after the Effective
Date through the Closing Date or any earlier termination of this Agreement.
(r) "FF&E" means furniture, fixtures, equipment, machinery,
appliances, fittings, and other removable articles of personal property of every
kind and nature that are owned by Seller and used exclusively in the operation
of the Property, including, without limitation, (i) furnishings, furniture, and
equipment, (ii) art work and other decorative items, (iii) built-in appliances,
and (iv) office furniture and equipment.
(s) "GENERAL INTANGIBLES" means the Offsite Rights, the Permits, the
Repair Warranties, and other intangible personal property rights of whatever
nature (other than the rights evidenced by the Contracts) owned by Seller and
used exclusively in the operation and maintenance of the Property; it being
understood that Buyer is not acquiring any right, title or interest in and to
any intangible property not directly related to the Property or the operations
thereon, including, without limitation, any marks or names other than "Rainbow
Promenade Partners" and "Kitchell".
(t) "HOLIDAY" means any day on which banking institutions in the
State of Nevada are authorized or obligated by law or executive order to close.
(u) "IMPROVEMENTS" shall have the meaning set forth in ARTICLE
III(b).
(v) "INFORMATION" means all documents, reports, studies, and other
information or materials relating to the Property (including, without
limitation, the Records) delivered or disclosed to Buyer by Seller or its
agents.
(w) "INSPECTION PERIOD" means the period from and after the Effective
Date and ending at 4:00 p.m., Pacific Time, on September 2, 1997, unless
extended by Buyer pursuant to the provisions of Section 7.1(b) hereof.
(x) "INVENTORY" means the stock of supplies and other consumables of
every kind and nature that are owned by Seller and used exclusively in the
operation and maintenance of the Property in the ordinary course of business.
(y) "LAND" shall have the meaning set forth in ARTICLE III(a).
(z) "LEASE" means any lease, license, or other agreement for the
occupancy, possession, or use of any space within the Property (including,
without limitation, any rooms or other accommodations for guests or other
transient occupants and any storage space, containers, or other facilities),
including, without limitation, those leases described on EXHIBIT H attached
hereto.
(aa) "LEASE ASSIGNMENT" shall have the meaning set forth in ARTICLE
III(e).
(ab) "OFFSITE RIGHTS" means any lease, license, or other agreement
(other than a recorded easement) providing for the use of another's real
property in conjunction with the operation of the Property (as, by way of
illustration and not limitation, use for vehicular parking and/or access).
3.
<PAGE>
(ac) "OWNER'S TITLE POLICY" means a CLTA Policy, in the amount of the
Purchase Price.
(ad) "PERMIT" means any permit, certificate, license, or other form of
authorization or approval issued by a governmental agency or authority and
legally required for the proper operation and use of the Property (including,
without limitation, any certificates of occupancy with respect to the
Improvements, elevator permits, conditional use permits, and zoning variances)
to the extent held and assignable by Seller or otherwise transferable with the
Property.
(ae) "PERMITTED EXCEPTIONS" shall have the meaning set forth in
SECTION 6.2.
(af) "PERSONAL PROPERTY" shall have the meaning set forth in ARTICLE
III(c).
(ag) "PLANS AND SPECIFICATIONS" shall have the meaning set forth in
SECTION 5.3(b).
(ah) "PROPERTY" shall have the meaning set forth in ARTICLE III.
(ai) "PRORATIONS" shall have the meaning set forth in SECTION 9.7(a).
(aj) "PTR" means a current preliminary title report concerning the
Real Property issued by the Title Company.
(ak) "PURCHASE PRICE" shall have the meaning set forth in SECTION 4.1.
(al) "REAL PROPERTY" shall have the meaning set forth in ARTICLE
III(a).
(am) "RECORDS" means all books, records, pertinent correspondence, and
other files relating to the Property that have been received or generated and
maintained in the course of operating the Property that are in Seller's
possession or control.
(an) "REPAIR WARRANTIES" means any written guaranties, warranties, or
other obligations of any contractor, manufacturer, or vendor for the repair or
maintenance of any of the Improvements or FF&E, to the extent assignable by
Seller.
(ao) "REVENUES" shall have the meaning set forth in SECTION 9.7(a).
(ap) "SELLER'S NON-FOREIGN AFFIDAVIT" shall have the meaning set forth
in SECTION 9.3(b).
(aq) "SERVICE CONTRACT" means any contract or other arrangement,
written or oral, for the continuing provision of services relating to the
improvement, maintenance, repair, protection, or operation of the Property.
(ar) "SURVEY" shall have the meaning set forth in SECTION 7.1(b).
4.
<PAGE>
(as) "TENANT" means the tenant and occupant of, and another holder of
a possessory right in, all or any portion of the Property pursuant to a Lease.
(at) "TENANT ESTOPPEL CERTIFICATES" means estoppel certificates to be
executed and delivered as provided by Section 7.6, which estoppel certificates
shall be in the form required by, or otherwise satisfy the estoppel certificate
requirements of, the applicable Lease.
(au) "TENANT NOTICES" means notices to the Tenants as defined in
SECTION 9.5(d).
(av) "TITLE COMPANY" means First American Title Insurance Company.
ARTICLE III
PROPERTY SUBJECT TO AGREEMENT
Seller hereby agrees to sell to Buyer, and Buyer hereby agrees to purchase
from Seller, subject to the terms and conditions set forth herein, all of
Seller's right, title, and interest in the following (collectively, the
"PROPERTY"):
(a) LAND - that certain land described in EXHIBIT A, and all
appurtenant rights, privileges, and easements thereto owned by Seller
(collectively, the "LAND"). The Land and the Improvements (collectively, the
"REAL PROPERTY") shall be conveyed from Seller to Buyer pursuant to a Grant,
Bargain and Sale Deed (the "DEED") substantially in the form of EXHIBIT B,
subject to the Permitted Exceptions and matters set forth on the Survey (defined
in Section 7.1(b) below).
(b) IMPROVEMENTS - all buildings, structures, fixtures, and other
improvements located on the Land (collectively, the "IMPROVEMENTS"), it being
understood that Improvements shall include buildings, structures, fixtures and
other improvements located on any portion of the Land that is ground leased to
third parties only to the extent of Seller's interest in same pursuant to such
ground leases.
(c) PERSONAL PROPERTY - all personal property, if any, owned by Seller
and used exclusively by Seller in the operation, maintenance, and management of
the Real Property as of the Closing Date, including, without limitation, the
FF&E, the Inventory, the Records, and the General Intangibles (collectively, the
"PERSONAL PROPERTY"). The Personal Property shall be conveyed from Seller to
Buyer pursuant to a Bill of Sale (the "BILL OF SALE") substantially in the form
of EXHIBIT C.
(d) CONTRACTS - all contracts and agreements in effect on the Closing
Date, if any, relating to the Property, including, without limitation, the
Service Contracts (collectively, the "CONTRACTS"). Seller's interest in the
Contracts shall be conveyed to Buyer pursuant to an Assignment and Assumption of
Contracts, Permits and Other Rights (the "CONTRACT ASSIGNMENT") substantially in
the form of EXHIBIT D.
5.
<PAGE>
(e) LEASES - Seller's interest in all Leases in effect on the Closing
Date. Seller's interest in the Leases shall be conveyed to Buyer pursuant to an
Absolute Assignment and Assumption of Leases (the "Lease Assignment")
substantially in the form of EXHIBIT E.
ARTICLE IV
PURCHASE PRICE, PAYMENT OF
PURCHASE PRICE AND LIQUIDATED DAMAGES
4.1 PURCHASE PRICE. Subject to the terms and conditions of this
Agreement, Buyer agrees to pay, and Seller agrees to accept, as consideration
for conveyance of the Property from Seller to Buyer, the sum of THIRTY-ONE
MILLION THREE HUNDRED THOUSAND AND NO/100THS DOLLARS ($31,300,000) (the
"PURCHASE PRICE").
4.2 DEPOSIT.
(a) Upon the full execution of this Agreement by Buyer and Seller,
Buyer shall tender to Escrow Holder an earnest money deposit in the amount of
Two Hundred Fifty Thousand and No/100ths Dollars ($250,000.00) (the "DEPOSIT").
The Deposit shall be tendered by certified check or cashier's check made payable
to Escrow Holder or by wire transfer of current federal funds received and
credited to an account of Escrow Holder.
(b) In the event Buyer has not terminated this Agreement on or before
August 21, 1997, One Hundred Thousand and No/100ths Dollars ($100,000.00) of the
Deposit shall be non-refundable to Buyer (the NON-REFUNDABLE DEPOSIT"), except
as otherwise provided in this subparagraph (b). The balance of the Deposit is
referred to herein as the "REFUNDABLE DEPOSIT." Upon Buyer's termination of
this Agreement under Section 9.12(a), 7.1(c), 7.6 or 13 hereof, Escrow Agent is
hereby instructed, without further instruction from either Buyer or Seller, to
immediately return the entire Deposit to Buyer (both the Non-Refundable Deposit
and the Refundable Deposit). Upon termination of this Agreement for any reason
other than as set forth in the preceding sentence, Escrow Agent is hereby
instructed, without further instruction from either Buyer or Seller, to return
the Refundable Deposit to Buyer, and to pay the Non-Refundable Deposit to
Seller, (ii) the costs of the Title Company and Escrow Holder shall be borne
equally by Buyer and Seller, (iii) all documents deposited in Escrow by Buyer or
Seller shall be returned to the depositing party, (iv) each party shall bear its
own costs incurred hereunder, and (v) except as provided in SECTIONS 5.3, 5.5,
15.2 and 15.10 hereof, the parties shall have no further rights and obligations
hereunder, other than those rights and obligations that, by their terms, survive
the termination of this Agreement.
(c) Provided that Buyer does not terminate this Agreement pursuant to
Article 7, Buyer shall tender to the Escrow Holder on or before the expiration
of the Inspection Period an additional earnest money deposit in the amount of
Two Hundred Fifty Thousand and No/100ths Dollars ($250,000.00), which shall
become a part of the Refundable Deposit from and after the date of tender. Upon
the satisfaction, or waiver by Buyer of all of Buyer's conditions to closing as
set forth in Article 7, the Refundable Deposit shall become non-refundable to
Buyer, except upon a failure of Seller to consummate the transactions
contemplated by this Agreement in accordance with
6.
<PAGE>
the terms and provisions hereof, or the failure, unless waived in writing to
Buyer, of any other condition provided for in this Agreement for the benefit of
Buyer.
4.3 PAYMENT OF PURCHASE PRICE. The Purchase Price less the amount of the
Deposit, subject to adjustments as provided in SECTIONS 9.7 and 9.8 hereof (the
"BALANCE"), shall be placed into Escrow by wire transfer of cash or other
immediately available funds or in other good funds acceptable to the Title
Company by 4:00 p.m., Pacific time, on the last Business Day prior to the
Closing Date.
4.4 INVESTMENT OF DEPOSIT. Escrow Holder shall place the Deposit in an
interest-bearing account with a bank or savings association, the deposits of
which are federally insured (up to the amount of One Hundred Thousand Dollars
($100,000)), as directed in writing by Buyer, with notice to Seller. All
references in this Agreement to the Deposit, the Non-Refundable Deposit and the
Refundable Deposit shall include the interest thereon.
4.5 DEPOSIT AS LIQUIDATED DAMAGES. IF THE SALE OF THE PROPERTY AS
CONTEMPLATED HEREUNDER IS NOT CONSUMMATED BECAUSE OF A DEFAULT UNDER THIS
AGREEMENT ON THE PART OF BUYER, ESCROW HOLDER, WITHOUT ANY FURTHER INSTRUCTION
FROM EITHER SELLER OR BUYER, SHALL PAY TO SELLER THE DEPOSIT AND SELLER SHALL
RETAIN THE DEPOSIT AND ALL INTEREST EARNED THEREON AS LIQUIDATED DAMAGES. THE
PARTIES ACKNOWLEDGE THAT SELLER'S ACTUAL DAMAGES IN THE EVENT OF A DEFAULT BY
BUYER WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE. THEREFORE, BY
PLACING THEIR SIGNATURES BELOW, THE PARTIES EXPRESSLY AGREE AND ACKNOWLEDGE THAT
THE DEPOSIT HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES' REASONABLE
ESTIMATE OF SELLER'S DAMAGES. THE PARTIES FURTHER ACKNOWLEDGE THAT SELLER'S
RETENTION OF THE DEPOSIT AND ALL INTEREST EARNED THEREON HAS BEEN AGREED UPON AS
SELLER'S EXCLUSIVE REMEDY AGAINST BUYER IN THE EVENT OF A DEFAULT ON THE PART OF
BUYER, OTHER THAN THE ADDITIONAL AND SEPARATE OBLIGATIONS OF BUYER UNDER
SECTIONS 5.3, 5.5, 15.2, AND 15.10 HEREOF, WHICH OBLIGATIONS SHALL SURVIVE THE
TERMINATION OF THIS AGREEMENT. IN ADDITION, BUYER SHALL PAY ALL TITLE AND
ESCROW CHARGES (INCLUDING, WITHOUT LIMITATION, CANCELLATION FEES) IN THE EVENT
OF A DEFAULT BY BUYER.
"Seller" "Buyer"
RAINBOW PROMENADE PARTNERS, L.L.C., PAN PACIFIC RETAIL PROPERTIES, INC.,
AN ARIZONA LIMITED LIABILITY COMPANY A MARYLAND CORPORATION
BY: BY:
------------------------------------ ---------------------------------
STUART A. TANZ, PRESIDENT
7.
<PAGE>
ITS: AND CHIEF EXECUTIVE OFFICER
------------------------------------
ARTICLE V
INSPECTION
5.1 DUE DILIGENCE REVIEW. Buyer, at its sole cost and expense, shall have
the right to a Due Diligence Review in accordance with the following terms and
conditions. A "DUE DILIGENCE REVIEW" means (a) an inspection, examination and
evaluation of the Information, and (b) the conduct of physical tests,
inspections and other investigations on the Property and all portions thereof
leased by Tenants ("INSPECTION STUDIES"), all in order that Buyer may determine,
in its sole and absolute judgment and discretion, whether the Property is
acceptable to Buyer.
5.2 RIGHT TO TERMINATE. Notwithstanding anything to the contrary in this
Agreement, Buyer may terminate this Agreement by giving notice of termination to
Seller on or before the termination of the Inspection Period, which termination
shall be subject to the provisions of Section 4.2(b) above. If Buyer does not
give the notice of termination, Buyer shall be deemed to have approved the Due
Diligence Review and waived its right to terminate this Agreement under this
Section 5.2, and this Agreement shall continue in full force and effect,
subject, however, to Buyer's other termination rights hereunder. Seller
acknowledges that Buyer may, but is not obligated to, expend time, money, and
other resources in connection with the Due Diligence Review of the Property, and
that, notwithstanding the fact that this Agreement may terminate pursuant to
this Section 5.2 and other applicable provisions of this Agreement, such time,
money, and other resources that may be expended constitute adequate
consideration for Seller's execution of and entry into this Agreement.
5.3 ACCESS & INQUIRIES.
(a) Buyer and its representatives, agents and contractors shall, upon
reasonable (but in no event less than twenty-four hours) notice, have reasonable
access to the Property, including all areas leased to Tenants, for the purpose
of causing a survey of the Land and Improvements to be performed by a licensed
surveyor, and conducting architectural, engineering, geotechnical, and
environmental inspections and tests (including intrusive inspection and
sampling), feasibility studies, and any other inspections, studies, or tests
reasonably required by Buyer. Buyer shall keep the Property free and clear of
any liens as a result of any entry on the Property pursuant to this Section
5.3(a).
(b) During the pendency of this Agreement, Seller shall, upon Buyer's
reasonable advance (but in no event less than twenty-four hours) request, make
available to Buyer, and Buyer and its representatives, agents and contractors
shall have a continuing right of reasonable access to and the right to examine
and make copies of, all books and records; construction plans; pertinent
correspondence; documents; contracts; agreements; Leases, as well as resident
ledger cards or Lease files with histories; and other materials; in each case
relating to the Property in Seller's possession
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or control, including, without limitation, the right to conduct a "walk-through"
of the Property prior to the Closing upon appropriate notice to Tenants and
subject to the rights of all Tenants under their Leases. In any event, by 4:00
p.m., Pacific time, on or before the 5th Business Day after the Effective Date,
Seller will deliver to Buyer, or allow Buyer reasonable access to, at the
Property, at Seller's place of business, or at such other location as Seller may
reasonably indicate, during reasonable times agreed upon in advance by Buyer and
Seller, copies of the following, expressly subject to such items being in the
possession of or reasonably available to Seller or its manager for the Property:
(i) a current rent roll and copies of all Leases disclosed
thereon, together with all amendments thereto and the most current financial
statement in Seller's possession for each tenant;
(ii) copies of all Contracts;
(iii) a schedule of all Personal Property;
(iv) copies of the most recent property tax bills for the
Property;
(v) operating statements, copies of sales reports and CAM
details beginning January, 1997;
(vi) plans and specifications (as-builts, if available) for
construction of the Improvements (the "PLANS AND SPECIFICATIONS");
(vii) copies of certificate(s) of occupancy, and any governmental
licenses and permits regarding the Property;
(viii) security incident reports;
(ix) a schedule of filed litigation (of which Seller is aware and
to which it is a party) regarding or affecting, directly or indirectly, the
Property; and
(x) an aged receivables report current as of the Effective Date;
(xi) copies of environmental reports, studies and assessments
within Seller's possession or control covering the Property;
(xii) copies of all CC&R's affecting the Property;
(xiii) copies of all soil reports and analyses within Seller's
possession or control pertaining to the soils, seismological, geological and
drainable conditions of the Property; and
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(xiv) copies of construction and equipment warranties within
Seller's possession.
(c) In the course of its Due Diligence Review, Buyer may make
inquiries to third parties (excluding Seller's lenders) including, without
limitation, Tenants, contractors, property managers, parties to the Information
and Contracts, and municipal, local, and other government officials and
representatives, and Seller consents to such inquiries.
5.4 NEW AGREEMENTS. During the period from the Effective Date until the
Closing Date, and as a condition to Buyer's obligations to purchase the
Property, Seller shall comply with the following:
(a) Without first obtaining Buyer's written consent, which consent
will not be unreasonably withheld or delayed, Seller shall not (i) amend or
terminate any lease, tenancy, license or other right of occupancy or use for any
portion of the Property or allow any assignment or sublet thereunder (except to
the extent required by any Lease), (ii) consent to the assignment of any Leases
or subleasing of any of the Property (except to the extent required by any
Lease), or (iii) enter into any new Lease of the Property or any portion thereof
(except as set forth on EXHIBIT "J"). If Seller does consent to any sublease or
assignment as described in items (i) and (ii) next preceding because Seller is
required to give such consent pursuant to the applicable Lease, then
concurrently with delivery of such consent to the Tenant, Seller shall deliver a
copy thereof, together with a copy of the assignment or sublet to which consent
is given, to Buyer.
(b) Seller shall not, without the prior written consent of Buyer in
each instance (such consent not to be unreasonably delayed or withheld), enter
into any commitment, contract, option or other agreement of any kind with
respect to the repair, maintenance or operation of the Property (excluding
emergency situations, as reasonably determined by Seller), unless such
contracts, etc. (i) by their terms expire prior to Closing, or (ii) involve
amounts less than $5,000.00 and will be performed and paid for by Seller at or
before the Closing.
5.5 CONDUCT OF INSPECTIONS.
(a) Any entry by Buyer onto the Property shall be subject to, and
conducted in accordance with, all applicable laws, statutes, rules and
regulations and the terms of any Leases so as to avoid any material interference
with the operations and occupancy of the Property and to avoid any material
disturbance of any of the Tenants or the possessory rights of any of the
Tenants. Buyer shall promptly restore the Property to its previous condition
before any such inspections, studies, or tests were performed.
(b) So long as no construction warranties will be voided or adversely
affected thereby, Buyer or its agents may undertake borings or other
disturbances of the soil with Seller's prior written approval (not to be
unreasonably withheld), provided that the soil borings and other disturbances
shall be sealed and closed using materials and techniques that conform with all
applicable laws, statutes, rules and regulations and industry and governmental
standards, and the soil shall be recompacted to the condition immediately before
any such borings were undertaken.
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(c) Notwithstanding any general liability or other insurance that may
be maintained by Buyer, Buyer hereby agrees to indemnify, defend and hold
harmless Seller and its members and its and their members, partners,
shareholders, directors, officers, employees, and agents and all Tenants from
and against any claims, losses or damages (including attorneys' fees and costs)
arising from or in connection with the due diligence and inspection activities
conducted on the Property by Buyer and/or its agents, including, without
limitation, any damages to the Property or any property of any Tenant arising
from or relating to any inspections, studies or tests performed by Buyer or its
agents. The foregoing indemnification obligation of Buyer shall survive any
termination of this Agreement or the delivery of the Deed and the transfer of
title to the Property. If this Agreement is terminated for any reason, Buyer
shall (i) deliver to Seller the results and copies of any and all surveys,
reports, tests or studies made by or for Buyer with respect to the Property
(upon Seller's payment of Buyer's costs therefor if Seller's default is the
cause of such termination), and (ii) return to Seller all items relating to the
Property which Seller has delivered or caused to be delivered to Buyer.
ARTICLE VI
TITLE TO PROPERTY
6.1 TITLE. At the Closing, Seller shall convey to Buyer title to the Real
Property by execution and delivery of the Deed.
6.2 TITLE INSURANCE. Buyer's obligation to purchase the Property shall be
subject to the irrevocable commitment of the Title Company to issue the Owner's
Title Policy, upon payment of its normal premium on the Closing Date, showing
title as subject to no exceptions other than the following (collectively, the
"PERMITTED EXCEPTIONS"):
(a) The lien for real estate taxes and assessments not yet
delinquent;
(b) Interests of Tenants pursuant to the Leases;
(c) The regular printed exceptions contained in said policy; and
(d) Such other exceptions as may be approved in writing by Buyer
pursuant to SECTION 7.1 hereof.
In addition, and provided Buyer satisfies any requirements of the Title
Company therefor prior to the Closing Date, the Owner's Title Policy shall be
issued together with such endorsements thereto as Buyer may request; PROVIDED,
HOWEVER, that if any such endorsements are requested by Seller to cure an
exception to title to which Buyer has objected, then the cost of such
endorsement shall be paid by Seller. During the Inspection Period, it shall be
Buyer's responsibility to determine the availability of extended coverage,
lender's insurance and any endorsements, and thereafter, Buyer's ability to
obtain any of the same shall not be a condition hereof.
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6.3 PERSONAL PROPERTY AND CONTRACTS. At the Closing, Seller shall
transfer to Buyer title to the Personal Property and Seller's interest in the
Contracts by execution and delivery of the Bill of Sale and the Contract
Assignment. Buyer shall assume the performance of all of Seller's obligations
under the Contracts arising after the Closing Date, but only as to those
Contracts not disapproved in writing by Buyer on or before the end of the
Inspection Period.
ARTICLE VII
BUYER'S ADDITIONAL CONDITIONS PRECEDENT TO CLOSING
Buyer's obligation to purchase the Property shall be conditioned upon the
fulfillment of each of the following conditions precedent:
7.1 APPROVAL OF TITLE.
(a) Buyer shall have approved title and Survey matters within the
time period and in the manner provided below.
(b) Seller has caused to be delivered to Buyer commitment for title
insurance of First American Title Company of Nevada no. LV-815003 RD dated as of
August 5, 1997 ("PTR") and copies of all documents referred to in the PTR
affecting title to the Property. Seller shall use commercially reasonable
efforts to procure and cause to be delivered to Buyer by 4:00 p.m., Pacific
time, on or before August 19, 1997 ("SURVEY DELIVERY DATE") a current or updated
ALTA survey of the Real Property dated no earlier than three (3) months prior to
the Effective Date (the "SURVEY"). In the event the Survey is not delivered to
Buyer by the date and time set forth in the preceding sentence, the Title
Disapproval Date (defined below) shall be extended to two (2) Business Days
after delivery of the Survey to Buyer. By 4:00 p.m., Pacific time, on or before
the August 21, 1997, Buyer shall notify Seller and Escrow Holder in writing (the
"TITLE/SURVEY OBJECTION"), of any exceptions to title shown in the PTR, which
will not be accepted by Buyer and those matters disclosed by the Survey, if any,
which will not be accepted by Buyer (collectively, the "DISAPPROVED TITLE
MATTERS"), it being understood that all other matters and exceptions to title
shown in the PTR and conditions disclosed by the Survey shall be deemed approved
by Buyer. If Buyer fails to notify Seller and Escrow Holder within the required
time period of any Disapproved Title Matters, Buyer shall be deemed to have
approved the condition to the Real Property as to such title and Survey matters.
(c) Upon receipt of a Title/Survey Objection, Seller shall have the
right, but not the obligation, to attempt to cure the Disapproved Title Matters
(either by causing any such matter to be removed by the Closing or by obtaining,
at Seller's expense, an endorsement or other curative effect acceptable to Buyer
in Buyer's sole and absolute discretion), in which case, Seller may extend the
Closing Date for such period as shall be required to effect such cure, but not
beyond October 1, 1997. Seller shall, within three (3) Business Days after
receiving a Title/Survey Objection (the "CURE NOTICE DATE"), notify Buyer in
writing of those Disapproved Title Matters which Seller will attempt to cure at
or prior to Closing ("CURE NOTICE"), it being understood that Seller may use the
proceeds of the Purchase Price to do so. Seller's agreement to attempt to
correct any Disapproved
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Title Matters shall not be deemed an agreement by Seller to cure such matter(s),
nor shall Seller's failure to cure such matter(s) be deemed a default or breach
by Seller of this Agreement; PROVIDED, HOWEVER, that in the event Seller fails
to so cure the items set forth in the Cure Notice on or before the Closing Date,
Buyer shall be entitled to a refund of the Non-Refundable Deposit and the
provisions of Section 4.2(b) shall govern the remaining obligations of the
parties. Seller shall be deemed to have elected not to cure any items not
contained in the Cure Notice and, if no Cure Notice is timely provided by
Seller, any Disapproved Title Matters. Buyer shall have until 4:00 p.m.,
Pacific time, on the 3rd Business Day following receipt of a Cure Notice (or, if
no Cure Notice is given, within three (3) Business Days after Seller notifies
Buyer in writing that Seller will not cure any Disapproved Title Matters) to
notify Seller and Escrow Holder that (i) Buyer revokes its disapproval of such
exceptions(s) and will proceed with the purchase without any reduction in the
Purchase Price and take title to the Property subject to such exception(s), or
(ii) Buyer terminates this Agreement. Buyer's failure to timely provide such a
notice shall conclusively be deemed Buyer's election to terminate this
Agreement. Any termination under this Section 7.1 shall be subject to the
provisions of Section 4.2(b) above.
(d) The foregoing procedure shall also be applicable to any new
matters which are disclosed in any updates, supplements or amendments to the PTR
or Survey, except that Buyer shall have ten (10) days from its receipt thereof
to provide its Title/Survey Objection with respect thereto.
7.3 COMPLIANCE BY SELLER. Seller shall have complied in all material
respects with each and every covenant, undertaking and agreement to be kept or
performed by Seller as provided in this Agreement; and each representation and
warranty made in this Agreement by Seller shall remain true and accurate in all
material respects both at the time made and on the Closing Date.
7.4 NO MATERIAL ADVERSE CHANGE IN PHYSICAL CONDITION. As of the Closing
Date, there shall have been no material adverse change in the condition of the
Property or any material portion thereof, excepting any event(s) of destruction,
damage, or condemnation described in SECTION 13.1 or 13.2.
7.5 NO INSOLVENCY. Neither Seller nor any of its affiliates (i) shall be
in receivership or dissolution, (ii) shall have made an assignment for the
benefit of creditors or admitted in writing its inability to pay its debts as
they mature, or (iii) shall have been adjudicated a bankrupt or filed a petition
in voluntary bankruptcy or a petition or answer seeking reorganization or an
arrangement with creditors under the federal bankruptcy law or any other similar
law or statute of the United States or any jurisdiction and no such petition
shall have been filed against Seller.
7.6 TENANT ESTOPPELS. Buyer shall have received from Seller, no later
than seven (7) days prior to the expiration of the Inspection Period, a Tenant
Estoppel Certificate in the form attached hereto as EXHIBIT "I" hereto for (a)
each of the following tenants: (A) Linens 'n Things, (B) Barnes & Noble,
(C) Cost Plus, (D) Office Max, (E) Petco and (F) United Artists (herein "Major
Tenants"), and (b) at least fifty percent (50%) of the remaining Tenants whose
lease term extends beyond the Closing Date, and (c) estoppel certificates from
Seller in such form and content as reasonably required by Buyer ("Seller's
Estoppel Certificate") for all other Tenants, it being
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understood that Seller shall use commercially reasonable efforts to obtain
Tenant Estoppel Certificates for all such remaining Tenants. If Seller fails to
obtain Tenant Estoppel Certificates for all of the Major Tenants, then Buyer may
elect any of the following: (i) to waive the remaining Tenant Estoppel
Certificates, in which case Seller shall provide to Buyer, no later than
three (3) business days prior to the expiration of the Inspection Period,
Seller's Estoppel Certificates for the spaces occupied by the Major Tenants who
have not given Tenant Estoppel Certificates which are satisfactory to Buyer, or
(ii) extend the Closing Date, but not beyond October 1, 1997, or (iii) to
terminate this Agreement. In the event Buyer elected (ii) next hereinabove and
has not received Tenant Estoppel Certificates from all of the Major Tenants on
or before the extended Closing Date, then Buyer may elect either (i) or (iii)
next hereinabove. If Buyer fails to provide written notice to Seller of Buyer's
objection to any of the estoppel certificates required by this Section 7.6 on or
before the expiration of the Inspection Period, Buyer shall be deemed to have
approved such estoppel certificates.
7.7 WAIVER. At any time or times on or before the Closing, at Buyer's
election, Buyer may waive any of the foregoing conditions by written notice to
Seller. Other than Buyer's closing the transaction contemplated by this
Agreement which shall waive all such unfulfilled conditions, and except as
otherwise provided in this Agreement, no waiver shall be effective unless made
in writing specific as to the conditions or matters so waived. No such waiver
shall be inferred or implied by any act or conduct of Buyer.
7.8 TERMINATION. If any of the foregoing conditions are neither fulfilled
nor waived as provided above, Buyer, at its election by written notice to
Seller, may terminate this Agreement, which termination shall be subject to the
provisions of Section 4.2(b) above; PROVIDED, HOWEVER, that Buyer may not
terminate this Agreement under this Section 7.8 unless Seller fails to cause any
non-fulfilled condition(s) to be satisfied within three (3) days after written
notice thereof from Buyer. If any non-fulfilled conditions also constitute a
breach by Seller of its obligations under this Agreement, Buyer shall have the
right to proceed under Section 9.12(a) below.
ARTICLE VIII
SELLER'S CONDITIONS PRECEDENT TO CLOSING
Seller's obligation to sell the Property shall be conditioned upon the
fulfillment of each of the following conditions precedent:
8.1 COMPLIANCE BY BUYER. Buyer shall have complied in all material
respects with each and every covenant, undertaking and agreement to be kept or
performed by Buyer as provided in this Agreement; and each representation and
warranty made in this Agreement by Buyer shall remain true and accurate in all
material respects both at the time made and on the Closing Date.
8.2 ORGANIZATIONAL AND AUTHORIZATION DOCUMENTS. Buyer shall have
delivered to Escrow Holder and to Seller certified copies of Buyer's articles of
incorporation, bylaws, and all amendments or modifications thereto, corporate
resolutions and incumbency certificates and a
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certificate of good standing issued within twenty (20) calendar days prior to
the Closing Date and certified as being correct by the appropriate official of
Buyer's jurisdiction of incorporation.
8.3 WAIVER. At any time or times on or before the Closing, at Seller's
election, Seller may waive any of the foregoing conditions by written notice to
Buyer. Other than Seller's closing the transaction contemplated by this
Agreement which shall waive all such unfulfilled conditions, and except as
otherwise provided in this Agreement, no waiver shall be effective unless made
in writing specific as to the conditions or matters so waived. No such waiver
shall be inferred or implied by any act or conduct of Seller.
8.4 TERMINATION. If any of the foregoing conditions are neither fulfilled
nor waived by Seller as provided above, Seller shall have the option to
terminate this Agreement by delivering to Buyer and Escrow Holder written notice
of such termination, which termination shall be subject to the provisions of
Section 4.2(b) above; PROVIDED, HOWEVER, that Seller may not terminate this
Agreement under this Section 8.3 unless Buyer fails to cause any non-fulfilled
condition(s) to be satisfied within three (3) days after written notice thereof
from Seller. If any non-fulfilled condition(s) also constitute a breach by
Buyer of its obligations under this Agreement, Seller shall have the right to
proceed under Section 9.12(b) below.
ARTICLE IX
ESCROW AND CLOSING
9.1 DEPOSIT WITH ESCROW HOLDER AND ESCROW INSTRUCTIONS. Escrow herein
(the "ESCROW") shall be established with Escrow Holder, at the address listed in
Article II(r) above. Upon execution of this Agreement, the parties shall
deposit an executed copy of this Agreement with Escrow Holder. This Agreement
shall serve as the instructions to Escrow Holder to consummate the purchase and
sale contemplated hereby. Seller and Buyer agree to execute such additional and
supplementary escrow instructions as may be appropriate to enable Escrow Holder
to comply with the terms of this Agreement. If there is any conflict between
the provisions of this Agreement and any additional or supplementary escrow
instructions, however, the terms of this Agreement shall control.
9.2 CLOSING.
Except as may be provided otherwise herein, the Closing shall occur by
4:00 p.m., Pacific time, on or September 8, 1997, unless the parties hereto
agree in writing to an earlier or later date and/or time.
9.3 DELIVERIES BY SELLER. At least one (1) Business Day prior to the
Closing Date, Seller shall deliver or cause to be delivered to Escrow Holder the
following:
(a) the Deed, duly executed and acknowledged by Seller and in
recordable form; and
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(b) Seller's Non-Foreign Affidavit, in the form of EXHIBIT F attached
hereto, duly executed and acknowledged by Seller; and
(c) any other cash, documents, or instruments called for hereunder to
be paid, executed, or delivered by Seller that have not previously been
delivered by Seller to Escrow Holder; and
(d) such articles of incorporation, agreements or certificates of
partnership, resolutions, authorizations, bylaws, certifications or other
corporate, partnership or trust documents or agreements or other reasonable
proof of authority relating to Seller as Buyer or Escrow Holder shall reasonably
require in connection with this transaction.
9.4 DELIVERIES BY BUYER. At least one (1) Business Day prior to the
Closing Date, Buyer shall deliver or cause to be delivered to Escrow Holder the
following:
(a) such articles of incorporation, agreements or certificates of
partnership, resolutions, authorizations, bylaws, certifications or other
corporate, partnership or trust documents or agreements or other reasonable
proof of authority relating to Buyer as Seller or Escrow Holder shall reasonably
require in connection with this transaction; and
(b) cash or other immediately available funds sufficient to pay the
Balance, Buyer's portion of the closing costs, and any other amounts payable by
Buyer in order to permit Escrow Holder to close the Escrow; and
(c) any other cash, documents or instruments called for hereunder to
be paid, executed or delivered by Buyer or that are required for the Closing
hereunder that have not been previously delivered by Buyer to Escrow Holder.
9.5 ADDITIONAL DELIVERIES BY BUYER AND SELLER. At least one (1) Business
Day prior to the Closing Date, Seller also shall deliver or cause to be
delivered to Escrow Holder, and Buyer also shall deliver or cause to be
delivered to Escrow Holder, the following documents:
(a) two (2) originals of the Bill of Sale, duly executed and
acknowledged by Seller and Buyer;
(b) two (2) originals of the Contract Assignment, duly executed and
acknowledged by Seller and Buyer;
(c) the Lease Assignment, duly executed and acknowledged by Seller
and Buyer and in recordable form;
(d) notices to the Tenants (the "TENANT NOTICES") substantially in
the form of EXHIBIT G, duly executed by Seller;
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(e) a Declaration of Value to be completed and executed by Escrow
Holder and filed with the office of the County Recorder of Clark County, Nevada;
and
(f) a pre-closing statement prepared by Escrow Holder and approved by
Buyer and approved by Seller.
9.6 OTHER INSTRUMENTS. Seller and Buyer each shall deposit any other
documents or instruments that may be reasonably required by the other party
and/or Escrow Holder, or that are otherwise required to close the Escrow and
consummate the purchase and sale of the Property in accordance with the terms
hereof.
9.7 PRORATIONS AND APPORTIONMENTS.
(a) All revenues from the Property and all expenses of the Property
shall be prorated and apportioned as of 11:59 p.m., Nevada time, on the day
before the Closing Date (the "PRORATIONS"). Taxes and assessments shall be
prorated as of the Closing Date, based on a 365-day year. Seller shall be
charged and credited for such Prorations up to the Closing Date and Buyer shall
be charged and credited (or, at Seller's option, paid by check for unused
security or other deposits) for all of the same on and after the Closing Date.
Prior to the Closing, Buyer and Seller shall review and approve the Prorations.
If the actual amounts to be prorated are not then known, or if any additional
expenses are incurred or income received after the date the Prorations are made,
the Prorations shall be made on the basis of the best evidence then available.
When actual figures are later received, a cash settlement will be made between
Seller and Buyer which shall be no later than March 1, 1998. All utility bills
shall be so prorated when the last bill incurred by Seller is received. No
Prorations shall be made for rents, license payments, receivables or accounts
("REVENUES") delinquent as of the Closing Date, and no credit shall be given to
Seller for any Revenues delinquent as of the Closing Date. As used in the
immediately preceding sentence, the term "delinquent" shall mean, with respect
to any Revenue, that the Revenue in question accrued at any time prior to the
then-current calendar month. Nevertheless, if Buyer collects any Revenues that
were delinquent on or before the Closing, such Revenues shall be attributed
first to the current Revenues and then to the portion that was delinquent on or
before the Closing and Buyer shall promptly remit to Seller the portion of such
Revenues collected, if any, attributable to the period of time prior to the
Closing Date. Buyer shall use commercially reasonable efforts to collect any
such delinquent Revenues, with the reasonable costs of such efforts to be
deducted from the amounts due Seller. As used in the next preceding sentence
"commercially reasonable efforts" shall require only that Buyer give written
notice to the applicable Tenant, setting forth in reasonable detail the nature
and extent of the deficiency and requiring its cure in accordance with the
applicable terms and provisions of that Tenant's Lease.
(b) Tenants may be obligated to pay Additional Rents. With respect
to any Additional Rents that are based on estimates and that are subject to
adjustment and/or reconciliation after the Closing Date, Seller and Buyer shall
re-prorate such Additional Rents (including any portions thereof that may be
required to be refunded to Tenants) at the time that such estimates are actually
adjusted and/or reconciled. Any amounts that may be due Seller or Buyer as a
result of such
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re-prorations shall be paid by the applicable party upon such re-proration, and
the parties shall cooperate in connection therewith.
(c) Seller shall be responsible for the payment of any leasing
commissions earned prior to the Effective Date, and Buyer shall be responsible
for the payment of any leasing commissions earned from and after the Effective
Date, regardless of when any such leasing commissions become due, provided that
such commissions have been disclosed to and approved by Buyer prior to
expiration of the Inspection Period. Each party to this Agreement shall
indemnify the other party against and hold the other party harmless (using
counsel reasonably satisfactory to such other party) from and against any and
all damages, liabilities, costs, expenses and losses (including, but not limited
to attorneys' fees and costs) arising out of any action for the collection of
leasing commissions that are such party's responsibility pursuant to this
subsection.
(d) The provisions of this Section shall survive the Closing.
9.8 COSTS AND EXPENSES. Seller shall pay for (i) the Survey, (ii) the
premium for the Owner's Title Policy in the amount of the Purchase Price, (iii)
the cost of any city and/or county transfer taxes applicable to the transfer of
the Property to Buyer (presently computed at $2.50 per each $1,000.00 of
Purchase Price), (iv) all recording charges for the Deed and the Lease
Assignment and (v) the cost, if any, to record any instruments correcting title.
If Buyer elects to obtain extended coverage, a lender's policy, or any
endorsements, Buyer shall be responsible for all additional premiums and
requirements related thereto (excluding endorsements obtained to cure title
objections as provided for in Section 6.2, which shall be Seller's
responsibility). Buyer shall also pay any special sales, gross receipts or
transaction taxes imposed on Buyer in connection with the purchase and sale of
the Property. Costs and charges of the Escrow shall be borne equally by Seller
and Buyer. All other taxes, costs, and charges for the sale of the Property
shall be paid by Seller and/or Buyer, as the case may be, in accordance with the
usual customs and practices in Clark County, Nevada.
9.9 INSURANCE; UTILITIES. Buyer acknowledges that Seller will cause its
policies of casualty and liability insurance to be terminated with respect to
the Property as of the Closing Date. Buyer shall be responsible for obtaining
its own insurance as of the Closing Date and thereafter. Any utility deposits
made by Seller shall be refunded to Seller. Buyer shall arrange for any
required replacements therefor, and shall be responsible for obtaining its own
utilities as of the Closing Date and thereafter.
9.10 CLOSE OF ESCROW. Provided that (i) Escrow Holder has received the
documents and funds described in SECTIONS 9.3, 9.4, and 9.5 hereof; (ii) Escrow
Holder has not received prior written notice from either party to the effect
that an agreement of either party made hereunder has not been performed or to
the effect that any condition set forth herein has not been satisfied or waived;
(iii) Buyer has not elected to terminate its rights and obligations hereunder
pursuant to ARTICLE VII; and (iv) the Title Company has issued or is
unconditionally prepared and committed to issue the Owner's Title Policy to
Buyer, Escrow Holder is authorized and instructed on the Closing Date to:
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(a) cause the Deed and the Lease Assignment to be recorded, in that
order, in the Official Records of Clark County, State of Nevada;
(b) deliver the cash portion of the Purchase Price to Seller, less
Seller's share of closing costs and Prorations (except to the extent paid to
Buyer by check in accordance with SECTION 9.7 hereof), in the manner specified
by Seller in separate instructions to Escrow Holder;
(c) deliver to Buyer an original of each of the Bill of Sale and the
Contract Assignment, and (1) as-recorded conformed copy of each of the Deed and
the Lease Assignment, and deliver to Seller an original of each of the Bill and
Sale and the Contract Assignment, and (1) as-recorded conformed copy of each of
the Deed and the Lease Assignment;
(d) deliver Seller's Non-Foreign Affidavit to Buyer; and
(e) deliver all of the executed Tenant Notices to the Tenants.
9.11 NOTIFICATION; CLOSING STATEMENTS. If Escrow Holder cannot comply with
the instructions herein (or as may be provided later), Escrow Holder is not
authorized to cause the recording of any of the Documents. If Escrow Holder is
unable to cause the recording, Escrow Holder shall notify the parties without
delay. Immediately after the Closing, Escrow Holder shall deliver to Buyer and
Seller, respectively, at their addresses listed in SECTION 15.1 hereof, a true,
correct and complete copy of the Seller's and Buyer's Closing Statements, in
forms customarily prepared by Escrow Holder, as well as all other instruments
and documents to be delivered to Buyer and Seller.
9.12 DEFAULT AND REMEDIES.
(a) If prior to or at the Closing, Seller shall have failed to
perform in any material respects any of the covenants and/or agreements
contained herein which are to be performed by Seller, or if any warranty or
representation made by Seller herein is not true and correct in all material
respects, Buyer may, after providing Seller with written notice thereof and the
same remaining uncured for at least five (5) days thereafter, seek specific
performance of this Agreement or, if the remedy of specific performance is not
available, may bring suit for damages against Seller[; PROVIDED, HOWEVER, THAT
IN NO EVENT SHALL BUYER BE ENTITLED TO RECOVER IN EXCESS OF $500,000.00 IN ANY
SUCH SUIT. OPEN ISSUE.] Any such suit for specific performance or damages must
be filed within one (1) year following Seller's breach or shall be deemed waived
for all purposes. Any breach or default by Seller after the Closing shall be
subject to the same notice and cure provisions and shall be governed by the
provisions of Section 10.3 below.
(b) If prior to or at the Closing, Buyer shall have failed to perform
in any material respect any of the covenants and/or agreements contained herein
which are to be performed by Buyer or if any warranty or representation made by
Buyer herein is not true and correct in all material respects, then Seller shall
be entitled, after providing Seller with written notice thereof and the same
remaining uncured for at least five (5) days thereafter, to exercise the
remedies set forth in Section 4.5, which shall be Seller's sole and exclusive
remedies in such event.
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ARTICLE X
REPRESENTATIONS AND WARRANTIES
10.1 BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer represents and warrants
to Seller as follows:
(a) Buyer is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Delaware, with full right, power,
and authority to take title to the Property, and to enter into and otherwise
perform and comply with the terms of this Agreement;
(b) this Agreement and all documents executed by Buyer that are to be
delivered to Seller at the Closing are, or at the time of Closing will be, duly
authorized, executed and delivered by Buyer;
(c) this Agreement and all documents executed by Buyer that are to be
delivered to Seller at the Closing are, or at the Closing will be, legal, valid
and binding obligations of Buyer, and do not, and at the time of Closing will
not, violate any provisions of any agreement or judicial order to which Buyer is
a party or to which Buyer is subject;
(d) Buyer has not relied on any appraisal that may have been made by
or for Seller as evidence or as an indication of the value of the Property or as
a basis for determining the value of the Property;
(e) Buyer has not relied on any projection of anticipated revenues
for the property that may have been made by or for Seller either as evidence or
an indication of the value of the Property or as a basis for determining the
value of the Property;
(f) except as set forth in SECTION 10.2, no representations of any
kind (whether oral or written, express or implied) have been made by Seller or
its members or its and their members, partners, shareholders, directors,
officers, employees or agents to Buyer, and except as provided otherwise in
Section 10.2, Buyer is investing in the Property solely in reliance on Buyer's
own investigations and evaluation thereof; and
(g) Buyer shall use diligent efforts to hold as confidential all
information and materials concerning Seller, the Property and the transaction
contemplated hereby; Buyer shall not, prior to Closing, release any such
information or materials to third parties without Buyer's prior written consent,
except (i) to the extent required by law, rule or regulation applicable to Buyer
(ii) as reasonably necessary to comply with the terms of this Agreement, [OR
(iii) AS TO SUCH INFORMATION AS IS DISCLOSED TO BUYER FROM A THIRD PARTY SOURCE
WITHOUT BUYER'S ACTUAL KNOWLEDGE THAT SUCH INFORMING PARTY IS UNDER ANY DUTY TO
SELLER NOT TO DISCLOSE SAME].
10.2 SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and
warrants to Buyer as follows:
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(a) Seller is a limited liability company, duly organized, validly
existing, and in good standing under the laws of the State of Arizona, with full
right, power, and authority to convey to Buyer all of Seller's right, title and
interest in and to the Property, and to enter into and otherwise perform and
comply with the terms of this Agreement;
(b) this Agreement and all documents executed by Seller that are to
be delivered to Buyer at the Closing are, or at the time of Closing will be,
duly authorized, executed and delivered by Seller; and
(c) this Agreement and all documents executed by Seller that are to
be delivered to Buyer at Closing are, or at the time of Closing will be, legal,
valid and binding obligations of Seller, and do not, and at the time of Closing
will not, violate any provisions of any agreement or judicial order to which
Seller is a party or to which Seller or the Property is subject.
(d) Other than the Property, there are no material items, tangible or
intangible, real or personal, owned by Seller or any affiliate of Seller which
(i) are now being, or have heretofore been, used exclusively in conjunction with
the Property or any portion thereof, and (ii) are reasonably necessary for the
present use thereof, other than items that have been replaced by Seller by an
article of equal suitability and value.
(e) To Seller's knowledge, all of the Property, and the existing uses
of the Property, are in compliance with all applicable laws, ordinances, rules,
regulations, and requirements of all governmental authorities having
jurisdiction thereof, including, without limitation, those pertaining to zoning,
land use, subdivision, building, safety, fire and health.
(f) Seller has not been served with a summons or other applicable
written service of notice advising Seller of any action, suit, proceeding or
investigation pending, nor to Seller's knowledge, is there any action, suit,
proceeding or investigation pending or threatened, before any agency, court, or
other governmental authority which relates to Seller or the ownership,
maintenance, or operation of the Property.
(g) Seller has not been served with written notice of, nor to
Seller's knowledge is there, any condemnation or eminent domain proceeding
affecting the Property or any portion thereof currently pending or threatened.
(h) Seller has received no written notice of any, and to Seller's
knowledge there is no, failure of the Seller to comply with any applicable
governmental requirements in respect of the use, occupation and construction of
the Property, including but not limited to environmental, zoning, platting and
other land use requirements which have not been heretofore corrected to the
satisfaction of the appropriate governmental authority, and Seller has received
no written notice of any, and to Seller's knowledge there are no, violations or
investigations relating to any such governmental requirement.
(i) Seller has received no written notice of any default or breach by
the Seller under any covenants, conditions, restrictions, rights-of-way, or
easements which may affect the
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Seller in respect to the Property or may affect the Property or any portion
thereof and, to Seller's knowledge, no such default or breach now exists.
(j) To Seller's knowledge, no general or special assessments have
been levied, nor are any such assessments threatened, against all or any part of
the Property other than as will be disclosed in the PTR, if any.
(k) Subject to the information contained in the estoppel certificates
to be provided under Section 7.6, [AND EXCEPT AS SET FORTH ON EXHIBIT _____,] to
Seller's knowledge (i) there has been no default or any claim of default, and no
event has occurred which with notice or lapse of time or both would constitute a
default, under any Lease, and (ii) no Tenant has asserted or has any defense,
set off, or claim with regard to his tenancy pursuant to the lease, any law or
otherwise.
(l) To Seller's knowledge, all water, sewer, gas, electric, telephone
and drainage facilities and all other utilities required by law or by the normal
use and operation of the Property are and at the time of Closing will be
installed to the property lines of the Real Property, are and at the time of
Closing will be connected and operating pursuant to valid permits, and are and
at the time of Closing will be adequate to service the Property and to permit
full compliance with all requirements of law and normal usage of the Property by
Seller and its licensees and invitees. To Seller's knowledge, all public
utilities required for the operation of the Property either enter the Property
through adjoining public streets, or if they pass through adjoining private land
do so in accordance with valid public easements or private easements which will
inure to the benefit of Buyer at Closing and thereafter.
(m) To Seller's knowledge, the heating, ventilation, air
conditioning, mechanical, electrical and other systems and equipment forming a
part of or used in connection with the Property are operative and in good
working condition and in compliance with all applicable laws, ordinances,
regulations and requirements.
(n) Seller is not a foreign person as defined in Section 1445(f)(3)
of the Internal Revenue Code of 1986, as amended.
(o) To Seller's knowledge, no asbestos, PCBs or urea formaldehyde
were used in the construction of the improvements on the Property.
(p) To Seller's knowledge, the Property complies with all applicable
requirements of the Equal Opportunity for Individuals Act (ADA), 42 U.S.C. 12101
and the regulations promulgated and set forth at 28 CFR 36.401 ET SEQ.
(q) To Seller's knowledge, the survey, mechanical and structural
plans and specifications, soils reports, certificates of occupancy, warranties,
operating statements, income and expense reports and all other books and records
relating to or affecting the Property, and all other contracts or documents
delivered to Buyer pursuant to this Agreement or in connection with the
execution hereof are and at the time of Closing will be (i) true and correct
copies, (ii) in full force and effect, and (iii) contain no material
inaccuracies, omissions or misstatements of fact, and all such
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documents relating to or affecting the Property have been or will be delivered
to Buyer pursuant to this Agreement.
(r) The copies of the Leases delivered to Buyer are true and correct
copies of all such Leases and, to Seller's knowledge, are in full force and
effect; and Seller is not a party to, nor does Seller have knowledge of, any
other agreements, written or oral, with respect to the tenancies. There are no
unpaid amounts due and owing by Seller under any such Lease, except for amounts
for which Buyer is to receive full credit through proration at Closing. No
Tenant under any of the Leases has prepaid Seller any rent or other charges for
more than the current month. No Tenant under any of the Leases has any right or
option to purchase the Property or any portion thereof or interest therein from
Seller, and Seller is not a party to, nor does Seller have knowledge of, any
outstanding agreements of sale with respect to the Property or any portion
thereof or any interest therein. Except as provided in the Leases, no Tenant
has the right to (i) renew or extend any of the Leases or has any options or
rights of first refusal with respect to leasing of other space, or (ii) free
rent, rebate, allowance, concession, security or other deposit.
(s) The copies of the Contracts and all Information previously
delivered to Buyer are true and correct copies of all such Contracts and
Information and, to Seller's knowledge, are in full force and effect. There are
no unpaid amounts due and owing by Seller under any such Contract, except for
amounts for which Buyer is to receive full credit through proration at Closing.
There are no other service or maintenance contracts relating to the Property to
which Seller is a party or of which Seller has knowledge.
(t) Except as disclosed in writing to Buyer, there are no
commissions, finder's fees or other compensation owing or which may become owing
to any broker or any other person or entity by Seller, or to Seller's knowledge
by any other party, with respect to any Lease or occupancy agreement including,
without limitation, any such compensation with respect to any future renewals,
extensions or expansions thereof.
(u) Seller is not party to, or otherwise bound by, any collective
bargaining agreement or multi-employer pension fund covering employees who
service the Property.
(v) To Seller's knowledge, there is no current labor dispute with any
maintenance or other personnel or employees of Seller or any contracts with
respect to the Property which could materially and adversely affect the use,
operation or value of the Property.
(w) To Seller's knowledge, Seller has obtained all licenses, permits,
approvals, easements and rights of way required from all governmental
authorities having jurisdiction over the Property or from private parties for
the normal use and operation of the Property and to ensure free and unimpeded
vehicular and pedestrian ingress to and egress from the Property as required to
permit the normal intended usage of the Property by the tenants thereof, their
invitees and customers. Seller has materially complied with all such licenses
and permits and has not received any notice that any such licenses or permits
will not be renewed upon expiration, or of any material conditions which will be
imposed in order to receive any such renewal.
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(x) Except as disclosed to Buyer, to Seller's knowledge there are no
facts which would prevent Buyer from using and operating the Property after
Closing in all material respects in the manner in which the Property has been
used, leased and operated prior to the date hereof.
(y) Seller has not committed nor obligated itself in any manner
whatsoever to sell the Property to any party other than Buyer. Seller has not
hypothecated or assigned any rents or income from the Property in any manner,
other than pursuant to any existing mortgage financing secured by the Property
as of the Effective Date.
(z) Seller shall use diligent efforts to hold as confidential all
information concerning Buyer or the transaction contemplated hereby disclosed to
Seller in connection with said transaction; and Seller shall not, prior to
Closing, release any such information to third parties without Buyer's prior
written consent, except (i) to the extent required by law, rule or regulation
applicable to Seller, (ii) as reasonably necessary to comply with the terms of
this Agreement or [(iii) AS TO SUCH INFORMATION AS IS DISCLOSED TO BUYER FROM A
THIRD PARTY SOURCE WITHOUT SELLER'S ACTUAL KNOWLEDGE THAT SUCH INFORMING PARTY
IS UNDER ANY DUTY TO BUYER NOT TO DISCLOSE SAME].
For purposes of this Agreement, the term "to Seller's knowledge" and words
of similar import shall mean the actual knowledge of Don Glatthorn, John V.
Griggs, Chad Schubert and/or Kurt Kurtti without investigation (or requirement
of investigation), and without regard to any doctrine of imputed or constructive
knowledge.
Except as otherwise expressly set forth in this Agreement: (A) Seller makes
no guarantees, warranties or representations, express or implied, with respect
to (i) the Property, (ii) the condition of title, (iii) suitability for any
intended purpose, or habitability, (iv) size, location, physical condition,
encroachments, access, availability of utilities, zoning, value, future value,
income potential, productivity, rights to, adequacy of or quality of the water
supply or water rights, or (v) any other matter, and (B) by consummating this
transaction, Buyer agrees to accept the Property in its present condition, "AS
IS," with all faults and without any representation or warranty whatsoever as to
its condition or fitness for any particular purpose. No person acting on behalf
of Seller is authorized to make, and by execution hereof, Buyer acknowledges and
agrees that no such person has made, any representation, warranty, guarantee or
promise, whether oral or written, except as set forth herein, and no such
agreement, statement, representation or promise made by any such person which is
not contained in this Agreement shall be valid or binding against Seller.
No examination or investigation of the Property by or on behalf of Buyer
prior to the Closing shall in any way modify, affect, or diminish Seller's
obligation under the representations, warranties, covenants, and agreements
contained in this Agreement, except to the extent Buyer has actual knowledge of
any matter. For purposes of this Agreement, the term "Buyer has actual
knowledge" shall mean the actual knowledge of Stuart Tanz, Jeff Stauffer and/or
David Adlard without investigation (or requirement of investigation), and
without regard to any doctrine of imputed or constructive knowledge.
10.3 CONTINUATION AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties by the respective parties contained in this
Article 10 are intended to
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and shall remain true and correct as of the time of the Closing, shall be deemed
to be material, and shall survive the execution and delivery of this Agreement,
the delivery of the Deed and transfer of title to the Property for a period of
one (1) year following the Closing Date. Subject to the remaining provisions of
this Agreement, Seller or Buyer, as applicable, shall indemnify the other and
its successors and assigns against and shall defend and hold the other and its
successors and assigns, harmless from any and all costs, expenses and actual
damages, including reasonable attorneys' fees, which the other party and its
successors or assigns may incur because of any breach of any of the indemnifying
party's representations or warranties herein contained, but only to the extent
of such costs, expenses and damages in excess of Twenty-Five Thousand Dollars
($25,000.00) in the aggregate for all breaches. Any suit to enforce such
representations or warranties must be filed within one (1) year following
Closing or shall be deemed waived for all purposes.
ARTICLE XI
POSSESSION
Possession of the Property shall be delivered to Buyer immediately
following the Closing.
ARTICLE XII
OPERATION OF THE PROPERTY
During the Escrow Period, Seller shall not accept any payment of rent
(except as a security deposit) or other charges from any tenant of the Property
applicable to a period exceeding one (1) month in advance, nor apply any
security deposit to rent due from any tenant of the Property without in each
case obtaining Buyer's prior written consent thereto (which consent shall not be
unreasonably withheld or delayed). In addition to the foregoing, Seller shall
use commercially reasonable efforts to: (i) cause the Property to be operated,
maintained, managed and serviced in a professional manner and in accordance with
past practices, maintaining present services; (ii) keep the Property and every
portion thereof in reasonably good working order and repair; (iii) maintain a
sufficient inventory of supplies, materials, equipment and other personal
property for the proper management, maintenance, operation and servicing of the
Property. Except in the case of an emergency (as reasonably determined by
Seller) or as required by law or any lender of Seller with a mortgage/deed of
trust lien against the Property, Seller shall not, except with Buyer's prior
written consent (which consent shall not be unreasonably withheld or delayed),
approve, consent to, or otherwise permit any material change in the operations
of the Property during the Escrow Period, including, without limitation:
(a) any material alterations to the Improvements except (i) as may be
necessary in order to perform ordinary, scheduled maintenance, or (ii) as
required by any Lease;
(b) cancellation of or material reduction in the amount or scope of
coverage under any insurance currently maintained with respect to the Property;
(c) cancellation or surrender of any existing Permit; and
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(d) any other material variation from Seller's ordinary course of
business in connection with the Property.
ARTICLE XIII
LOSS BY FIRE OR OTHER CASUALTY; CONDEMNATION
13.1 DAMAGE OR DESTRUCTION.
(a) Before the Closing, risk of loss with regard to the Property
shall be borne by Seller. If, before the Closing, the Improvements or the
Personal Property are destroyed or materially damaged, Buyer's rights and
obligations with respect to the Property shall be as follows:
(i) if the destruction or damage involves a diminution in value
equal to or less than $250,000.00 (the "DIMINUTION THRESHOLD"), Buyer shall be
obligated to proceed to close the transaction (subject to satisfaction of the
other provisions hereof) and, if, but only if, Escrow actually closes and the
destruction or damage has not been repaired, Buyer shall receive a credit
against the Purchase Price equal to the lesser of (A) the cost to repair the
damage or destruction and (B) the amount of the deductible under Seller's
casualty insurance policy; or
(ii) if the destruction or damage involves a diminution in value
of more than the Diminution Threshold, Buyer shall, within fifteen (15) calendar
days after Buyer's receipt of written notice from Seller advising of such
destruction or damage, provide written notice to Seller electing either (A) to
terminate this Agreement (in which event the Non-Refundable Deposit shall be
returned to Buyer and the remaining provisions of Section 4.2(b) shall apply),
or (B) to proceed with the Closing and, if Buyer elects to proceed with Closing
and the destruction or damage has not been repaired, Buyer shall receive a
credit against the Purchase Price equal to the lesser of (x) the cost to repair
the damage or destruction and (y) the amount of the deductible under Seller's
casualty insurance policy. Buyer's failure to timely provide notice of its
election shall be deemed to be an election to proceed with the Closing.
(b) If Buyer and Seller cannot agree as to the diminution in value,
then such diminution in value shall be determined by subtracting from the
Purchase Price the fair market value of the Property after the damage, as
determined by Landauer & Associates or, if Landauer & Associates is unable to
undertake such appraisal, Andy Briefer, M.A.I. of KB Appraisers. The expense of
the appraiser shall be borne equally by Buyer and Seller.
(c) If Buyer is obligated or elects to proceed to close the
transaction under either subsection (a)(i) or (a)(ii) above, all casualty
insurance proceeds from Seller's casualty insurance policy shall be assigned by
Seller to Buyer at the Closing and forwarded to Buyer immediately upon receipt
thereof by Seller.
13.2 CONDEMNATION.
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(a) If, before the Closing, all of the Property shall be taken by
condemnation or eminent domain, this Agreement shall become null and void and of
no further force or effect and shall be deemed terminated subject to the
provisions of Section 4.2(b) above, except that the Non-Refundable Deposit shall
be returned to Buyer.
(b) If, before the Closing, (i) less than all of the Property shall
be taken by condemnation or eminent domain, (ii) there is any taking of land
lying in the bed of any street, road, highway or avenue, open or proposed, in
front of or adjoining all or any part of the Land, or (iii) there is any change
of grade of such street, road, highway or avenue, provided such taking or
change of grade involves a diminution in value of more than the Diminution
Threshold, then Buyer shall, within fifteen (15) calendar days after Buyer's
receipt of written notice from Seller advising of such condemnation, provide
written notice to Seller electing either (A) to terminate this Agreement (which
termination shall be subject to the provisions of Section 4.2(b) above except
that the Non-Refundable Deposit shall be returned to Buyer), or (B) to proceed
with the Closing. Buyer's failure to timely provide notice of its election
shall be deemed to be an election to proceed with the Closing.
(c) If Buyer and Seller cannot agree as to the diminution in value,
then such diminution in value shall be determined by subtracting from the
Purchase Price the fair market value of the Property after the taking, as
determined by Landauer & Associates or, if Landauer & Associates is unable to
undertake such appraisal, Andy Briefer, M.A.I. of KB Appraisers. The expense of
the appraiser shall be borne equally by Buyer and Seller.
(d) If this Agreement is not terminated in accordance with the
foregoing, or if such taking involves a diminution in value equal to or less
than the Diminution Threshold, Buyer shall accept title to the Property subject
to such taking. In such event, Seller shall pay to Buyer any awards collected
in connection with such taking and shall assign to Buyer all of Seller's rights
to collect any awards which thereafter may be payable as a result of, or to
recover against others for, such taking; provided, however, that to the extent
such awards proceeds are required to be paid or assigned to any lender of Seller
with a mortgage/deed of trust lien against the Property, Buyer shall receive a
credit against the Purchase Price equal to such paid and/or assigned amounts.
ARTICLE XIV
ENVIRONMENTAL RESPONSIBILITIES AND LIABILITIES
14.1 As used herein, the term "HAZARDOUS MATERIAL" means any hazardous or
toxic substance, material or waste which is regulated by any local government
authority, the State of Nevada or the United States Government.
14.2 Seller represents and warrants to Buyer that, during any period of
time that Seller held title to or otherwise controlled the Property, no
Hazardous Material has been brought upon, kept, or used in or about the Property
by Seller nor, to Seller's knowledge, by any tenant of the Property or any of
their respective agents, employees, contractors or invitees, except for
Hazardous Materials which are or were necessary or convenient to the operation
of the businesses being operated on the Property and which at all times have
been used, kept and stored in a manner that complies with all
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laws regulating any such Hazardous Material so brought upon or used or kept in
or about the Property. Seller shall indemnify, protect, defend and hold Buyer,
and its assigns and transferees, and each of their respective representatives,
employees, trustees, officers, directors and agents (collectively, the
"INDEMNIFIED PARTIES") harmless from any and all claims, judgments, damages,
penalties, fines, costs, expenses, liabilities or losses (including, without
limitation, sums paid in settlement of claims, attorneys' fees, consultant fees
and expert fees) which Buyer or any other Indemnified Party may incur or suffer
as a result of the inaccuracy of the foregoing representation and warranty, but
only to the extent of such claims, judgments, damages, penalties, fines, costs,
expenses, liabilities or losses in excess of Twenty-Five Thousand Dollars
($25,000.00) in the aggregate for all inaccuracies. The foregoing obligation of
Seller to indemnify, protect, defend and hold Buyer and the other Indemnified
Parties harmless includes, without limitation, costs incurred in connection with
any investigation of site conditions or any cleanup, remedial, removal,
restoration or other response work required by any federal, state, or local
governmental agency or political subdivision which Buyer or any other
Indemnified Party may incur or suffer as a result of the inaccuracy of the
foregoing representation and warranty.
14.3 The foregoing representations, warranties and indemnities shall
survive the execution and delivery of this Agreement, the delivery of the Deed
and transfer of title to the Property for a period of one (1) year following the
Closing Date. Any suit to enforce such representations, warranties or
indemnities must be filed within one (1) year following Closing or shall be
deemed waived for all purposes.
ARTICLE XV
MISCELLANEOUS
15.1 NOTICES. Any communication, notice or demand of any kind whatsoever
that either party may be required or may desire to give to or serve upon the
other shall be in writing, addressed to the parties at the addresses set forth
below, and delivered by personal service, by Federal Express or other reputable
overnight delivery service, or by facsimile transmission:
If to Seller: ______________________________
______________________________
______________________________
Telephone No.: (___)___-____
Facsimile No.: (___)___-____
With a copy to: ______________________________
______________________________
______________________________
Telephone No.: (___)___-____
Facsimile No.: (___)___-____
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If to Buyer: Pan Pacific Retail Properties, Inc.
1631-B South Melrose Drive
Vista, California 92083
Attention: Stuart A. Tanz,
President and Chief
Executive Officer
Telephone No.: (619)727-1002
Facsimile No.: (619)727-1430
With a copy to: Hale, Lane, Peek, Dennison, Howard,
Anderson and Pearl
100 West Liberty Street, 10th Floor
Reno, Nevada 89501
Attention: William C. Davis, Jr., Esq.
Telephone No.: (702) 786-7900
Facsimile No.: (702) 786-6179
Any such notice shall be deemed delivered as follows: (a) if
personally delivered, the date of delivery to the address of the person to
receive such notice; (b) if sent by Federal Express or other reputable overnight
courier service, the date of delivery to the address of the person to receive
such notice; or (c) if sent by facsimile transmission, on the Business Day
transmitted to the person to receive such notice if sent by 5:00 p.m., Nevada
time, on such Business Day, and the next Business Day if sent after 5:00 p.m.,
Nevada time, or on a day other than a Business Day. Any notice sent by
facsimile transmission must be confirmed by personally delivering or by sending
by Federal Express or other reputable overnight delivery service a copy of the
notice sent by facsimile transmission. Any party may change its address for
notice by written notice given to the other at least five (5) calendar days
before the effective date of such change in the manner provided in this SECTION
15.1.
15.2 BROKERS AND FINDERS. Buyer and Seller each represents to the other
that it has not dealt with any broker or agent in connection with the proposed
purchase and sale of the Property. In the event of a claim for broker's fees,
finder's fees, commissions or other similar compensation in connection herewith:
(i) Buyer, if such claim is based upon any agreement alleged to have been made
by Buyer, shall indemnify, defend (using counsel reasonably satisfactory to
Seller) and hold Seller harmless from and against any and all damages,
liabilities, costs, expenses and losses (including, without limitation,
attorneys' fees and costs) that Seller sustains or incurs by reason of such
claim; and (ii) Seller, if such claim is based upon any agreement alleged to
have been made by Seller, shall indemnify, defend (using counsel reasonably
satisfactory to Buyer) and hold Buyer harmless from and against any and all
damages, liabilities, costs, expenses and losses (including, without limitation,
attorneys' fees and costs) that Buyer sustains or incurs by reason of such
claim. The provisions of this subsection shall survive the termination of this
Agreement or the Closing.
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15.3 SUCCESSORS AND ASSIGNS. Seller may assign its rights and obligations
hereunder. Buyer's interest under this Agreement may be assigned to an
affiliate of Buyer provided Buyer guarantees in writing to Seller the full
performance by such affiliate of Buyer's obligations hereunder. All other
assignments of Buyer's interest shall be subject to the prior written consent of
Seller, which consent shall not be withheld unreasonably. This Agreement shall
be binding upon, and inure to the benefit of, the parties hereto and their
respective heirs, administrators and permitted successors and assigns.
15.4 AMENDMENTS. This Agreement may be amended or modified only by a
written instrument executed by both parties.
15.5 INTERPRETATION. Words used in the singular shall include the plural,
and vice-versa, and any gender shall be deemed to include the other. The
captions and headings of the Articles and Sections of this Agreement are for
convenience of reference only, and shall not be deemed to define or limit the
provisions hereof. Further, each party hereby acknowledges that such party and
its counsel, after negotiation and consultation, have reviewed and revised this
Agreement. As such, the terms of this Agreement shall be fairly construed and
the usual rule of construction, to the effect that any ambiguities herein should
be resolved against the drafting party, shall not be employed in the
interpretation of this Agreement or any amendments, modifications or exhibits
hereto or thereto.
15.6 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada.
15.7 MERGER OF PRIOR AGREEMENTS. This Agreement constitutes the entire
understanding of the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous oral or written representations,
warranties, statements, documents, understandings and agreements with respect
thereto.
15.8 ATTORNEYS' FEES AND COSTS. If either Buyer or Seller brings any suit
or other proceeding with respect to the subject mater or the enforcement of this
Agreement, the prevailing party (as determined by the court, agency or other
authority before which such suit or proceeding is commenced), in addition to
such other relief as may be awarded, shall be entitled to recover reasonable
attorneys' fees, expenses and costs of investigation actually incurred. The
foregoing includes, without limitation, attorneys' fees, expenses and costs of
investigation incurred in appellate proceedings, costs incurred in establishing
the right to indemnification, or in any action or participation in, or in
connection with, any case or proceeding under Chapter 7, 11 or 13 of the
Bankruptcy Code, 11 United States Code Section 101 ET SEQ., or any successor
statutes.
15.9 TIME OF ESSENCE. Time is of the essence of this Agreement.
15.10 CONFIDENTIALITY. Buyer and Seller agree that, to the extent
reasonably practical, they shall keep the contents of this Agreement and the
contents of any environmental report prepared by or for Buyer in connection with
this Agreement confidential and that no publicity or press release to the
general public or otherwise with respect to this transaction shall be made by
either party without the prior written consent of the other party (which consent
may be given or denied in the
30.
<PAGE>
other party's sole and absolute discretion). The confidentiality provisions of
this SECTION 15.10 shall survive the Closing.
15.11 NO WAIVER. No waiver of any of the provisions of this Agreement
shall be deemed, or shall constitute, a waiver of any other provision, whether
or not similar, nor shall any waiver constitute a continuing waiver. No waiver
shall be binding unless executed in writing by the party make the waiver.
15.12 FURTHER ACTS. Each party, at the request of the other, shall
execute, acknowledge (if appropriate) and deliver whatever additional documents,
and do such other additional acts, as may be reasonably required in order to
accomplish the intent and purposes of this Agreement.
15.13 EXHIBITS. EXHIBITS A through I, inclusive, are attached hereto
and incorporated herein by reference.
15.14 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original, but all
of which, when taken together, shall constitute one and the same instrument,
with the same effect as if all of the parties to this Agreement had executed the
same counterpart. Any signature page of any counterpart of this Agreement may
be detached and reattached to any other counterpart of this Agreement.
15.15 NO INTENT TO BENEFIT THIRD PARTIES. Seller and Buyer do not
intend by any provision of this Agreement to confer any right, remedy or benefit
upon any third party, and no third party shall be entitled to enforce, or
otherwise shall acquire any right, remedy or benefit by reason of, any provision
of this Agreement.
15.16 PERFORMANCE DUE ON DAY OTHER THAN BUSINESS DAY. If the time
period for the performance of any act called for under this Agreement expires on
a Saturday, Sunday or Holiday, the act in question may be performed on the next
succeeding Business Day.
15.17 AUDIT RESPONSIBILITIES. From time to time, both before and after
Closing, Buyer may be engaged in financing and other transactions which will
require that both Buyer and the operation of the Property be audited as to then
current and past operations of the Property, including periods of time during
which Seller owned the Property. As a material inducement for Buyer to enter
into this Agreement, Seller agrees that upon written request of Buyer, Seller
shall render its timely and cooperative efforts to any such auditors in
delivering such responses to inquiries and information as is within the
knowledge or records of Seller with respect to the operations of the Property or
which is within the control or reasonable ability of Seller to obtain,
including, without limitation, operating statements and other financial
information relevant to the Property and its operations. In addition to the
foregoing, Seller shall sign and deliver to any such auditor, such auditor's
standard representation letter with respect to the foregoing matters, revised by
Seller only to the extent necessary to make same true and correct as to the
matters represented therein by Seller.
31.
<PAGE>
Buyer shall pay all reasonable out-of-pocket costs and expenses incurred by
Seller in complying with the requirements of this Section 15.17. The terms and
provisions of this Section 15.17 shall survive the Closing.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the dates written below.
"SELLER"
RAINBOW PROMENADE PARTNERS, L.L.C.,
an Arizona limited liability company
By:
-------------------------------------
Its:
-------------------------------------
"BUYER"
PAN PACIFIC RETAIL PROPERTIES, INC.,
a Maryland corporation
By:
--------------------------------------
Stuart A. Tanz
Its: President and Chief Executive Officer
32.
<PAGE>
EXHIBIT A
LEGAL DESCRIPTION
[To Be Attached]
<PAGE>
EXHIBIT B
FORM OF DEED
[See Following Pages]
<PAGE>
WHEN RECORDED, MAIL TO:
Hale, Lane, Peek, Dennison, Howard,
Anderson and Pearl
100 West Liberty Street, 10th Floor
Reno, Nevada 89501
Attn: William C. Davis, Jr., Esq.
GRANT, BARGAIN AND SALE DEED
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
_______________________________________________________, does hereby GRANT,
BARGAIN and SELL to PAN PACIFIC RETAIL PROPERTIES, INC., A MARYLAND CORPORATION
(whose address is: ________________________________________), the real property
situate in the County of Clark, State of Nevada, described in EXHIBIT A attached
hereto and incorporated herein by this reference (the "Property");
TOGETHER with the tenements, hereditaments and appurtenances, including
easements and water rights, if any, thereto belonging or appertaining, and any
reversions, remainders, rents, issues or profits thereof.
[SUBJECT, HOWEVER, TO THE FOLLOWING:
1. MATTERS DISCLOSED ON THAT CERTAIN ALTA SURVEY OF THE PROPERTY DATED AS
OF _________________, 1997 PREPARED BY ____________________________;
2. [PERMITTED EXCEPTIONS TO BE INSERTED.]]
Assessor's Parcel No. ___________________.
DATED: this _____ day of _______________, 1997.
-----------------------------------
-----------------------------------
By:
--------------------------------
Its:
--------------------------
1
<PAGE>
STATE OF ________ )
)ss.
COUNTY OF ________ )
This instrument was acknowledged before me on _______________, 1997, by
___________________________________, as ______________________ of _____________
____________________________________________________________, a________________
_____________________________________________________.
-------------------------------------
Notary Public
My Commission Expires:
--------------
2
<PAGE>
EXHIBIT C
FORM OF BILL OF SALE
[See Following Pages]
<PAGE>
BILL OF SALE
For valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, ____________________________________________________
("TRANSFEROR"), hereby sells, bargains, transfers, assigns, grants, delivers and
conveys to PAN PACIFIC RETAIL PROPERTIES, INC., a Maryland corporation
("TRANSFEREE"), all of the personal property owned by Transferor and located on,
or used exclusively by in connection with, the real property located in the
County of Clark, State of Nevada, described in EXHIBIT A attached hereto and
incorporated herein by this reference, including, without limitation, those
items described on EXHIBIT B attached hereto and incorporated herein by this
reference (collectively, the "PERSONAL PROPERTY");
TO HAVE AND TO HOLD the Personal Property, together with, all and singular,
the rights and appurtenances thereto belonging to Transferee, its successors and
assigns.
In addition to any representations and warranties set forth in the Purchase
and Sale Agreement dated August ___, 1997 between Transferor and Transferee,
which representations are incorporated herein by reference, Transferor hereby
represents and warrants that the Personal Property is free and clear of all
liens, charges and other encumbrances, except personal property taxes not due or
payable. Except as otherwise set forth in the preceding sentence, the Personal
Property is transferred to the Transferee without representation or warranty.
Transferor hereby covenants that it will, at any time and from time to
time, following a written request therefor, execute and deliver to Transferee
and its successors and assigns, any additional or confirmatory instruments and
take such further acts as Transferee may reasonably request to evidence fully
the conveyance contained herein.
DATED: this _____ day of _______________, 1997.
-----------------------------------
-----------------------------------
By:
--------------------------------
Its:
--------------------------
"Assignor"
<PAGE>
EXHIBIT D
FORM OF CONTRACT ASSIGNMENT
[See Following Pages]
<PAGE>
ASSIGNMENT AND ASSUMPTION OF CONTRACTS,
PERMITS AND OTHER RIGHTS
THIS ASSIGNMENT AND ASSUMPTION OF CONTRACTS, PERMITS AND OTHER RIGHTS (this
"ASSIGNMENT") is made as of this _____ day of _______________, 19__, by
__________________________________________________ ("ASSIGNOR"), and PAN PACIFIC
RETAIL PROPERTIES, INC., a Maryland corporation ("ASSIGNEE").
RECITALS:
A. Assignor is a party to and presently has certain rights under those
contracts more particularly described in SCHEDULE 1 attached hereto and
incorporated herein by this reference (collectively, the "SCHEDULE 1
CONTRACTS"); and
B. Pursuant to that certain Purchase and Sale Agreement and Escrow
Instructions, dated as of August __, 1997 (the "AGREEMENT"), by and between
Assignor and Assignee, Assignee has agreed to purchase from Assignor all of
Assignor's right, title and interest in and to the real property located in the
County of Clark, State of Nevada, described in EXHIBIT A attached hereto and
incorporated herein by this reference (the "REAL PROPERTY"), together with all
of Assignor's right, title, and interest in and to the Agreements.
NOW, THEREFORE, in order to carry out the terms of the Agreement, and in
consideration of the mutual covenants and agreements herein contained, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Assignor and Assignee hereby agree as follows:
1. ASSIGNMENT. Assignor hereby assigns, transfers and conveys to
Assignee, subject to the provisions of the Schedule 1 Contracts, all of
Assignor's right, title, and interest (if any) in and to the Schedule 1
Contracts, all plans, drawings and specifications for the improvements located
upon the Real Property, and all intangible property used exclusively in
connection with the Real Property or the improvements thereon to the extent
assignable by Assignor, including, without limitation, all tradenames (except
the names "Rainbow Promenade Partners" and "Kitchell"), approvals, variances,
entitlements, contract rights, guarantees, licenses, permits, approvals and
warranties. The Schedule 1 Contracts and the other property and rights assigned
in this SECTION 1 are hereinafter collectively referred to as the "CONTRACTS".
2. ASSUMPTION. Assignee hereby accepts such assignment of the Contracts
and, in addition, (i) assumes and agrees to be bound by all of the terms of the
Contracts, and (ii) agrees to keep, perform, fulfill, and observe all of the
terms, covenants, obligations, agreements and conditions required to be kept,
performed, fulfilled, and observed by Assignor under, or with respect to, the
Contracts from and after the execution and delivery of this Assignment by
Assignor and Assignee.
1
<PAGE>
3. INDEMNIFICATION OF ASSIGNOR. Assignee hereby agrees to indemnify,
defend, and hold Assignor harmless from and against any and all liability, loss,
cost, damage and expense (including, without limitation, reasonable attorneys'
fees and costs) directly or indirectly arising out of or based upon the failure
of Assignee to keep, perform, fulfill, and observe all of the terms, covenants,
obligations, agreements, and conditions required to be kept, performed,
fulfilled, or observed by Assignee under, or with respect to, the Contracts from
and after the execution and delivery of this Assignment by Assignor and
Assignee.
4. INDEMNIFICATION OF ASSIGNEE. Assignor hereby agrees to indemnify,
defend, and hold Assignee harmless from and against any and all liability, loss,
cost, damage and expense (including, without limitation, reasonable attorneys'
fees and costs) directly or indirectly arising out of or based upon the failure
of Assignor to keep, perform, fulfill, and observe all of the terms covenants,
obligations, agreements, and conditions required to be kept, performed,
fulfilled, or observed by Assignor under, or with respect to, the Contracts
prior to the execution and delivery of this Assignment by Assignor and Assignee.
5. CONTRACT PAYMENTS. All amounts payable by Assignor or to Assignor
under or pursuant to the Contracts shall be prorated as between Assignor and
Assignee pursuant to, and in accordance with, the terms of the Agreement.
6. FURTHER ASSURANCES. Assignor hereby covenants that it will, at any
time and from time to time following a written request therefor, execute and
deliver to Assignee and its successors and assigns, any additional or
confirmatory instruments and take such further acts as Assignee may reasonably
request to evidence fully the assignment contained herein.
7. APPOINTMENT. Assignor hereby irrevocably appoints Assignee and its
successors and assigns, as the true and lawful attorney and agent of Assignor,
in Assignor's name and stead, to enforce the provisions of the Contracts.
8. COUNTERPARTS. This Assignment may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which when
taken together shall constitute one and the same instrument.
9. GOVERNING LAW. This Assignment shall be construed in accordance with
and governed by the laws of the State of Nevada.
10. BINDING EFFECT. This Assignment shall inure to the benefit of and
shall be binding upon the parties hereto and their respective successors and
assigns.
11. WARRANTIES. Except for the representations and warranties set forth
in the Purchase and Sale Agreement and Escrow Instructions dated August ___,
1997 between Assignor and Assignee, which representations and warranties are
incorporated herein by reference and as expressly set forth herein, Assignor
makes no representations or warranties with respect to the Contracts.
2
<PAGE>
----------------------------------------
----------------------------------------
By:
-----------------------------------
Its:
------------------------------
"Assignor"
PAN PACIFIC RETAIL PROPERTIES, INC.,
a Maryland corporation
By:
----------------------------------
Name:
-----------------------------------
Title:
---------------------------------
By:
-----------------------------------
Name:
-----------------------------------
Title:
---------------------------------
"Assignee"
3
<PAGE>
EXHIBIT E
FORM OF LEASE ASSIGNMENT
[See Following Pages]
<PAGE>
RECORDING REQUESTED BY,
WHEN RECORDED MAIL TO:
Hale, Lane, Peek, Dennison, Howard,
Anderson and Pearl
100 West Liberty Street, 10th Floor
Reno, Nevada 89501
ATTN: William C. Davis, Jr., Esq.
- -------------------------------------------------
- -------------------------------------------------
ASSIGNMENT AND ASSUMPTION OF LEASES
This ASSIGNMENT AND ASSUMPTION OF LEASES (this "ASSIGNMENT") is made as of
this _____ day of _______________, 19__, by __________________________________
___________________________________________ ("ASSIGNOR"), and PAN PACIFIC
RETAIL PROPERTIES, INC., a Maryland corporation ("ASSIGNEE").
RECITALS:
A. Assignor is presently the owner and holder of all of the lessor's
interest in the leases and tenancies described in SCHEDULE 1 attached hereto and
incorporated herein by this reference (collectively, the "LEASES"), which Leases
affect the real property located in the County of Clark, State of Nevada, more
particularly described in EXHIBIT A attached hereto and incorporated herein by
this reference the ("PROPERTY"); and
B. Pursuant to that certain Purchase and Sale Agreement and Escrow
Instructions, dated as of _____________, 19__ (the "AGREEMENT"), by and between
Assignor and Assignee, Assignee has agreed to purchase from Assignor all of
Assignor's right, title, estate and interest in and to the Property and all of
Assignor's right, title, estate and interest as lessor in, to and under the
Leases.
NOW, THEREFORE, in order to carry out the terms of the Agreement, and in
consideration of the mutual covenants and agreements herein contained, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged. Assignor and Assignee hereby agree as follows:
1. ASSIGNMENT. Assignor hereby grants, transfers, conveys and assigns to
Assignee all of Assignor's right, title, estate and interest in, to and under
the Leases, together with (i) any and all right, title, estate and interest of
Assignor as lessor or landlord under the Leases, whether now owned or hereafter
acquired, in and to the real property which is the subject thereof and any
improvements and fixtures located thereon, (ii) any rights, privileges,
easements, rights of way,
1
<PAGE>
or appurtenances appertaining thereto (including, without limitation, any and
all rents, issues, profits, royalties, license revenues, concession revenues,
income and other benefits derived from such real property hereafter accruing,
and any and all claims, causes of action, rights to proceeds or awards related
to such real property hereafter accruing), (iii) all right, title, estate and
interest of Assignor in and to security deposits and prepaid rents, if any, as
have been paid to Assignor pursuant to such Leases and have not, prior to the
date hereof, been applied or repaid by Assignor, and (iv) all right, title,
estate and interest of Assignor in and to subleases, if any, relating to such
real property.
2. ASSUMPTION. Assignee hereby accepts such assignment of Assignor's
right, title, estate and interest in, to and under the Leases, and, in addition,
(i) assumes and agrees to be bound by all of the terms of the Leases, and (ii)
agrees to keep, perform, fulfill, and observe all of the terms, covenants,
obligations, agreements, and conditions required to be kept, performed,
fulfilled, and observed by the lessor under the Leases from and after the
execution and delivery of this Assignment by Assignor and Assignee.
3. INDEMNIFICATION OF ASSIGNOR. Assignee hereby agrees to indemnify,
defend, and hold Assignor harmless from and against any and all liability, loss,
cost, damage and expense (including, without limitation, reasonable attorneys'
fees and costs) directly or indirectly arising out of or based upon Assignee's
failure to keep, perform, fulfill and observe any of the terms, covenants,
obligations, agreements, and conditions required to be kept, performed,
fulfilled, and observed by the lessor under the Leases from and after the
execution and delivery of this Assignment by Assignor and Assignee.
4. INDEMNIFICATION OF ASSIGNEE. Assignor hereby agrees to indemnify,
defend, and hold Assignee harmless from and against any and all liability, loss,
cost, damage and expense (including, without limitation, reasonable attorneys'
fees and costs) directly or indirectly arising out of or based upon Assignor's
failure to keep, perform, fulfill, and observe any of the terms covenants,
obligations, agreements, and conditions required to be kept, performed,
fulfilled, and observed by the lessor under the Leases prior to the execution
and delivery of this Assignment by Assignor and Assignee.
5. RENTALS. All rents payable under or pursuant to the Leases shall be
prorated as between Assignor and Assignee pursuant to, and in accordance with,
the terms of the Agreement.
6. FURTHER ASSURANCES. Assignor hereby covenants that it will, at any
time and from time to time following a written request therefor, execute and
deliver to Assignee and its successors and assigns, any additional or
confirmatory instruments and take such further acts (including, without
limitation, sending notices of this Assignment to the tenants under the Leases)
as Assignee may reasonably request to evidence fully the assignment contained
herein.
7. APPOINTMENT. Assignor hereby irrevocably appoints Assignee and its
successors and assigns, as the true and lawful attorney and agent of Assignor,
in Assignor's name and stead, to enforce the provisions of the Leases.
2
<PAGE>
8 BINDING EFFECT. This Assignment shall inure to the benefit of and
shall be binding upon the parties hereto and their respective successors and
assigns.
9. NO REPRESENTATIONS OR WARRANTIES. Except for the representations and
warranties set forth in the Purchase and Sale Agreement and Escrow Instructions
dated August ___, 1997 between Assignor and Assignee, which representations and
warranties are incorporated herein by reference in the Seller's Estoppel
Certificates, and as expressly set forth herein, Assignor makes no
representations or warranties with respect to the Leases.
10. GOVERNING LAW. This Assignment shall be construed in accordance with
and governed by the laws of the State of Nevada.
11. COUNTERPARTS. This Assignment may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which when
taken together shall constitute one and the same instrument.
----------------------------------------
----------------------------------------
By:
------------------------------------
Its:
------------------------------
"Assignor"
PAN PACIFIC RETAIL PROPERTIES, INC.,
a Maryland corporation
By:
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
By:
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
"Assignee"
3
<PAGE>
STATE OF ________ )
)ss.
COUNTY OF _________ )
This instrument was acknowledged before me on _______________, 1997, by
___________________________________, as ______________________ of ____________
____________________________ , a ___________________________________.
------------------------------------
Notary Public
My Commission Expires:
--------------
STATE OF _________ )
)ss.
COUNTY OF _________ )
This instrument was acknowledged before me on _______________, 1997, by
___________________________________, as ______________________ of PAN PACIFIC
RETAIL PROPERTIES, INC., a Maryland corporation.
------------------------------------
Notary Public
My Commission Expires:
--------------
4
<PAGE>
EXHIBIT F
FORM OF SELLER'S NON-FOREIGN AFFIDAVIT
[See Following Pages]
<PAGE>
NON-FOREIGN AFFIDAVIT
Section 1445 of the Internal Revenue Code of 1986, as amended (the "IRC"),
provides that a transferee of a U.S. real property interest must withhold tax if
the transferor is a foreign person, To inform the transferee that withholding of
tax is not required upon the disposition of a U.S. real property interest by
______________________________________________________________ ("TRANSFEROR"),
the undersigned hereby certifies the following on behalf of Transferor:
1. Transferor is not a foreign person, foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms are defined in the
IRC and the regulations promulgated thereunder);
2. Transferor's U.S. taxpayer I.D. number is _________________; and
3. Transferor's office address is _______________________________________
______________________________________________________________.
Transferor understands that this certification may be disclosed to the
Internal Revenue Service and that any false statement contained herein could be
punished by fine, imprisonment, or both.
Under penalties of perjury, I declare that I have examined the foregoing
certification and, to the best of my knowledge and belief, it is true, correct,
and complete, and I further declare that I have authority to sign this document
on behalf of the Transferor.
"TRANSFEROR"
----------------------------------------
----------------------------------------
By:
-------------------------------------
Its:
-------------------------------
<PAGE>
STATE OF ________ )
)ss.
COUNTY OF _________ )
This instrument was acknowledged before me on _______________, 1997, by
___________________________________, as ______________________ of ____________
________________________________, a _______________________________________.
------------------------------------
Notary Public
My Commission Expires:
--------------
<PAGE>
EXHIBIT G
FORM OF TENANT NOTICES
[See Following Pages.]
_______________, 1997
<PAGE>
VIA CERTIFIED MAIL --
RETURN RECEIPT REQUESTED
- -------------------------------
- -------------------------------
- -------------------------------
- -------------------------------
Re: Lease Dated _______________, 19__
Dear _______________:
This is to notify you
that___________________________________________________ ("_________") has sold
its interest in the property commonly known as the
________________________________ and located at ___________________________
_________________________________________ ______, and has assigned its interest
as landlord under your lease to the new owner, PAN PACIFIC RETAIL PROPERTIES,
INC., a Maryland corporation, has also transferred to the new owner the security
deposit held by ________ under the lease in the amount of $__________ [if none,
so state].
Please direct all future rental and other payments and communications under
your lease to:
----------------------------------------------
----------------------------------------------
----------------------------------------------
"_____________"
-------------------------------------
<PAGE>
EXHIBIT H
TENANT ROSTER
[See Following Pages.]
<PAGE>
EXHIBIT I
FORM OF TENANT ESTOPPEL CERTIFICATE
[See Following Pages]
<PAGE>
TENANT ESTOPPEL CERTIFICATE
(TENANT NAME)
TO: PAN PACIFIC RETAIL PROPERTIES, INC., a Maryland corporation
THIS IS TO CERTIFY THAT:
1. The undersigned is the tenant under that certain Lease dated
_______________, 19__ "Lease") by and between _________________________________
________________ as lessor ("Landlord") and ___________________________________
as tenant ("Tenant"), covering certain premises commonly known and designated
as Space _____, ___________________________________________________("Premises").
2. The Lease has not been modified, changed, altered, assigned,
supplemented or amended in any, respect except as indicated below (if none,
state "none"). The Lease is valid and in full force and effect on the date
hereof. The Lease, as modified by the amendments or assignments listed below,
if any, represents the entire agreement between Landlord and Tenant with respect
to the Premises.
- ------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------
3. Tenant is not entitled to, and has made no agreement with Landlord, or
its agents or employees, concerning free rent, partial rent, rebate of rent
payments, credit or offset or reduction in rent, or any other type of rental
concession including, without limitation, lease, support payments or lease
buy-outs, except as indicated below, (if none, state "none").
- ------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------
4. The Lease term began on _______________, 19__ and the termination date
of the present term of the Lease, excluding unexercised renewals, is
_______________, 19__.
5. Tenant has paid rent for the Premises for the period up to and
including ____________, 19__. No such rent (not including security deposits)
has been paid more than one (1) month in advance of its due date, except as
indicated below, (if none, state "none"). The Tenant's security deposit is
_______________.
- ------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------
6. No event has occurred and no condition exists which, with the giving
of notice or the lapse of time or both, will constitute a default by Tenant or,
to Tenant's best knowledge, by Landlord, under the Lease. To the best knowledge
of Tenant, Tenant has no existing defenses or offsets against the enforcement of
the lease by Landlord.
1
<PAGE>
7. All required contributions by Landlord to Tenant on account of
Tenant's tenant improvements have been completed in accordance with the terms of
the Lease, except as indicated below (if none, state "none").
8. Except as set forth in the Lease, Tenant has no outstanding options,
rights of first refusal or rights of first offer to purchase the Premises or any
part thereof or all or any part of the real property of which the Premises are a
part.
9. No action, whether voluntary or otherwise, are pending against Tenant
under the bankruptcy laws of the United States or any state thereof.
10. Tenant has not sublet the Premises to any sublessee and has not
assigned any, of its rights under the Lease, except as indicated below (if none,
state "none"). No one except Tenant and its employees occupies the Premises.
- ------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------
11. The address for notice to be sent to Tenant is as set forth in the
Lease. (If not, indicate correct address below.)
- ------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------
12. The Premises have not been used by Tenant and Tenant does not plan to
use the Premises for any activities which, directly or indirectly, involve the
use, generation, treatment storage, transportation or disposal of any petroleum
product or any toxic or hazardous chemical material, substance, pollutant or
waste in violation of any applicable law.
13. Tenant has not received any written notice from any government
authority of violation of any federal, state, county or local statutes, laws,
rules or regulations of area governmental authorities relating to environmental,
health or safety matters and, to Tenant's actual knowledge, there are no writs,
injunctions, decrees, orders or judgments outstanding lawsuits, claims,
proceedings or investigations pending or threatened, relating to Tenant's use,
maintenance or operation of the Premises.
2
<PAGE>
14. The undersigned is authorized to execute this Tenant Estoppel
Certificate on behalf of Tenant.
Dated: _______________, 1997.
[NAME OF TENANT]
By:
-----------------------------
Its:
-----------------------
3
<PAGE>
EXHIBIT J
APPROVED NEW LEASES
1. Chico's IV, LLC, a California limited liability company
4
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIALS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1996
<PERIOD-START> JAN-01-1997 JAN-01-1996
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0 0
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