<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- -------------------------------------------------------------------------------
FORM 10-K
Annual Report Under Sections 13 Or 15(d) Of
The Securities Exchange Act of 1934
For The Fiscal Year Ended Commission File Number:
DECEMBER 31, 1995 1-12244
EXCEL REALTY TRUST, INC.
(Exact Name of Registrant, As Specified In Its Charter)
MARYLAND 33-0160389
(State Or Other Jurisdiction Of (IRS Employer Identification Number)
Incorporation Or Organization)
16955 VIA DEL CAMPO, SUITE 110, SAN DIEGO, CALIFORNIA 92127
(Address Of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code:
(619) 485-9400
Securities Registered Pursuant To Section 12(b) Of The Act:
Title of Each Class Name of Each Exchange
Common Stock, $0.01 on which Registered
Par Value Per Share New York Stock Exchange
Securities Registered Pursuant to Section 12(g) Of The Act:
WARRANTS FOR THE PURCHASE OF COMMON STOCK
(Title Of Class)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by sections 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), (2) has been subject to such
filing requirements for the past 90 days. YES X NO .
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of the Form 10-K or any amendment to this
Form 10-K. [ X ]
The aggregate market value of the Registrant's shares of common stock held by
non-affiliates: $230,005,241 as of March 7, 1996 based on the $19.00 closing
price of the NYSE.
Indicate the number of shares outstanding of each of the issuer's class of
common stock, as of the latest practical date.
Class Outstanding At March 7, 1996
COMMON STOCK $0.01 PAR VALUE PER SHARE 13,233,805
Documents incorporated by reference: Portions of the Proxy Statement for the
1996 Annual Meeting of the stockholders of the Registrant to be filed
subsequently with the Commission, are incorporated by reference into part III of
this report.
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EXCEL REALTY TRUST, INC.
PART I
ITEM 1. BUSINESS
General.
Excel Realty Trust, Inc. (the "Company") was incorporated under the laws of
California in 1985 and reincorporated as a Maryland corporation in 1993. The
Company is a self-administered, self-managed equity real estate investment trust
("REIT") which owns and manages neighborhood and community shopping centers and
other retail and commercial properties primarily leased on a long-term basis to
major retail companies. The terms of such leases typically provide that the
tenant is responsible for costs and expenses associated with the ongoing
maintenance of the property. The majority of the single tenant property leases
also require that tenants pay for structural repairs and maintenance. At
December 31, 1995, the Company owned 109 operating properties and managed 3
additional operating properties under master lease agreements. The 112
properties are located in 27 states as outlined in Item 2.
The Company has operated and intends to operate in a manner to qualify as a REIT
under Sections 856 through 860 of the Internal Revenue Code of 1986. In order to
maintain qualification as a REIT, the Company must distribute at least 95% of
its real estate investment trust taxable income and meet certain other asset and
income tests. As a REIT, the Company is not subject to federal income tax with
respect to that portion of its income which meets certain criteria and is
distributed annually to the stockholders. Additionally, ownership of the shares
of common stock of the Company, directly or constructively, by any single person
is limited, by the Company, to 9.8% of the total number of outstanding shares,
subject to certain exceptions. Any purported ownership in excess of such limit
will be void ab initio.
As of March 7, 1996, the Company employed 53 persons. Its executive offices are
located at 16955 Via Del Campo, Suite 110, San Diego, California 92127 and its
telephone number is (619) 485-9400.
Properties
The Company emphasizes investments in retail and commercial properties where a
substantial majority of gross leasable area ("GLA") is subject to long-term net
leases to national or regional tenants. The properties consist of three primary
types: (i) multi-tenant retail properties (the "Shopping Centers"); (ii) single
tenant net leased retail properties (the "Single Tenant Properties"); and (iii)
commercial properties and office buildings (the "Commercial Properties"). At
December 31, 1995, the Company and its subsidiaries owned (i) 38 Shopping
Centers (three of which were master leased) which accounted for approximately
61% of the Company's scheduled annualized base rent ("ABR") at December 31,
1995; (ii) 71 Single Tenant Properties which accounted for approximately 38% of
the Company's ABR at December 31, 1995; and (iii) 3 Commercial Properties which
accounted for approximately 1% of the Company's ABR at December 31, 1995. These
112 properties total approximately 7.4 million square feet of GLA, of which the
Shopping Centers, Single Tenant Properties, and Commercial Properties comprise
approximately 60%, 39%, and 1% respectively.
During 1995, the Company purchased 10 properties for a total purchase price of
approximately $48 million. All ten properties were Shopping Centers. At December
31, 1995, the Company operated an additional three Shopping Centers under master
lease agreements. These three properties were purchased and the master lease
agreements terminated in January and February of 1996. Also during 1995, the
Company sold nine Single Tenant Properties and one Commercial Property for net
sales proceeds of $29 million.
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Strategy and Philosophy
The following is a brief discussion of the Company's current strategies and
policies concerning acquisitions, management, dispositions, investments,
finances and operations, and certain support practices. The Company may,
however, from time to time, alter or change one or more of these strategies or
its policies in these areas. There can be no assurance that the Company's
strategies will be successful.
In general, the Company's policies and strategies are determined by the Board of
Directors and implemented by its executive officers. Certain policies and
objectives of the Company are subject to restrictions set forth in the Company's
bylaws which may not be altered without the majority vote of the directors,
including the Independent Directors, and by the Company's shareholders. The
Company's objectives are to acquire, own, and manage a portfolio of commercial
retail properties that will provide cash for quarterly distributions to
stockholders, while protecting investor capital and providing potential for
capital appreciation.
Aggressive Management - The Company aggressively manages its properties, with an
emphasis on maintaining high occupancy rates and a strong base of nationally
recognized anchor tenants. In addition, the Company emphasizes monitoring of the
physical condition of the properties and the financial condition of the tenants.
Over time, the Company will seek to increase cash flow and portfolio value
primarily through contractual rent increases during the terms of its leases,
reletting of existing space at higher rents, expansion of existing properties
and the minimization of overhead and operating costs.
Acquisition of Properties - The Company intends to continue its portfolio focus
on retail properties with predictable cash flow and growth potential. The
Company seeks to expand its portfolio by acquiring well-located neighborhood and
community shopping centers and other retail properties with comparable rents. In
addition, the Company seeks to acquire properties with tenants that have a
national or regional presence and an established credit quality. The Company
intends to continue to concentrate its property acquisitions in the southwestern
and southeastern United States, where a majority of its current properties are
located. Management believes that such emphasis will allow the Company to
utilize its current property management and maintenance personnel in these
areas. The Company may, however, acquire properties in other areas of the United
States. Additionally, the Company intends to continue to evaluate its property
type mix and may purchase from time to time other properties that the Company
believes will meet its objectives. Such properties may include power centers,
which are anchored by multiple major retail tenants, or other types of
properties which management believes will meet the Company's objectives.
Occasionally, the Company may acquire certain "opportunity" properties which may
be either retail or non-retail, but are well located and present significant
appreciation potential when combined with the Company's aggressive style of
management. These are typically properties which are purchased at a great
discount to their replacement cost.
Acquisitions through Partnerships - The Company may from time to time acquire
properties from unaffiliated property owners by forming partnerships and
exchanging limited partnership units in such partnerships for the property
owners' equity in the acquired properties. Such partnership units are generally
exchangeable for shares of common stock under certain circumstances. The Company
believes that this acquisition method may permit the Company to acquire
properties at attractive prices from property owners wishing to enter into tax
deferred transactions. In 1994, the Company acquired six properties through a
single partnership using the foregoing structure. In 1995, the Company formed a
second partnership, Excel Realty Partners, L.P. ("ERP"), a Delaware limited
partnership, to facilitate the acquisition of five properties and additional
potential acquisitions in the southeastern United States (see "Recent
Developments").
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Ground Lease Developments - The Company may from time to time finance properties
under development. In such circumstances, the Company generally requires that
the developer of such property has previously obtained (i) all necessary
entitlements allowing completion of the property, and (ii) signed leases from
the principal tenant(s) who will occupy the property. Under this financing
method, the Company purchases the undeveloped property and leases such property
back to the developer, and upon completion, the Company has the option to
purchase the development. The Company believes that this method of financing may
give the Company opportunities to purchase developed properties at
capitalization rates slightly above those which might otherwise be available
after completion of development.
Disposition of Properties - The Company continually analyzes each asset in its
portfolio and identifies those properties which can be sold (to the extent
consistent with REIT qualification requirements) for optimal sales prices given
prevailing market conditions and the particular characteristics of each
property. Through this strategy, the Company seeks to continually update its
core property portfolio and redeploy capital into newer properties or properties
where its aggressive management techniques may maximize property values. The
Company, however, holds its properties for investment and the production of
rental income and not for sale to customers or other buyers in the ordinary
course of the Company's business. If the Company were treated as holding
properties for sale to customers in the ordinary course of its business, it
would be subject to tax equal to 100% of its gain from each property sold (with
no offset allowed for properties sold at a loss). In addition, if the gain
recognized in any taxable year from certain asset dispositions were to exceed
specified limits, such gain could cause the disqualification of the Company as a
REIT. The Company intends to take appropriate measures before entering into any
binding agreement to dispose of an asset to determine that such disposition will
not result in the imposition of such tax on the Company and will not result in
the disqualification of the Company as a REIT.
Financing - The Company intends to finance future acquisitions with the most
advantageous sources of capital available to the Company at the time, which may
include the sale of common stock, preferred stock or debt securities through
public offerings or private placements, the incurrence of additional
indebtedness through secured or unsecured borrowings, and the reinvestment of
proceeds from the disposition of assets. The Company may acquire properties
subject to seller financing, existing loans secured by mortgages, deeds of trust
or similar liens. The Company may obtain mortgage financing for properties it
acquires and refinance its existing properties. (See "Recent Developments" for
financing transactions completed in 1995).
Environmental Matters
Under various federal, state and local laws, ordinances and regulations, an
owner of real estate generally is liable for the costs of removal or remediation
of certain hazardous or toxic substances located on or in, or emanating from,
such property, as well as related costs of investigation and property damage.
Such laws often impose such liability without regard to whether the owner knew
of, or was responsible for, the presence of such hazardous or toxic substances.
The presence of such substances, or the failure to properly remediate such
substances, may adversely affect the owner's ability to sell or lease a property
or to borrow using such real estate as collateral. Other federal and state laws
require the removal or encapsulation of asbestos-containing material in poor
condition in the event of remodeling or renovation. Other statutes may require
the removal of underground storage tanks that are out of service or out of
compliance. Noncompliance with these and other environmental, health or safety
requirements may result in the need to cease or alter operations at a property,
which could affect the financial reliability of the property.
The Company seeks to protect itself from environmental liabilities associated
with properties it acquires in a number of ways. As part of its internal due
diligence process, the Company undertakes environmental site assessments prior
to purchasing a property. The Company will normally not purchase a property in
the event these assessments reveal potential environmental liabilities. The
Company may however, evaluate the risks and attempt to quantify the potential
costs associated with such liabilities, and then make a determination of whether
to acquire the property.
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If the Company chooses to acquire the property, it will typically require the
prospective seller/tenant to agree to remediate any environmental problems and
may obtain a letter of credit or other security to provide adequate assurance to
the Company that sufficient funds will be available to complete the work. The
Company will continue to obtain environmental reports on all properties it seeks
to acquire. Moreover, to protect itself against environmental liabilities that
were not discovered during its pre-purchase investigations as well as those that
were disclosed, the Company, in the purchase agreement and/or lease, will
typically require the seller/tenant to indemnify the Company against any and all
environmental liabilities arising from the property acquired.
Substantially all of the Company's properties have been subject to environmental
reports (which typically involve inspection without soil sampling or ground
water analysis) by independent environmental consultants. The environmental
reports have not revealed any material environmental liability, except for the
presence of certain asbestos-containing material at the Mesa, Arizona, Kmart
property. Although the asbestos discovered is thought to present no immediate
health hazard, its removal (at an estimated cost of $300,000 to $600,000) would
likely be required prior to commencing any improvements on the property. The
terms of the lease for such property require the tenant to assume the cost of
any required environmental remediation, including the removal of asbestos. The
Company is not aware of any other material environmental liability with respect
to any of its properties.
No assurance can be given that the environmental studies that were performed at
the properties would disclose all environmental liabilities thereon, that any
prior owner thereof did not create a material environmental condition not known
to the Company or that a material environmental condition does not otherwise
exist with respect to any of its properties.
Principal Tenants
Wal-Mart Stores, Inc. ("Wal-Mart") is the Company's largest tenant in terms of
both GLA and base rental revenues. Wal-Mart is the nation's largest retailer and
operates over 2,000 discount department stores, over 400 warehouse clubs and
four hypermarkets. Wal- Mart is listed on the New York Stock Exchange and as of
December 31, 1995, had credit ratings of AA from Standard and Poor's Corporation
("Standard and Poor's") and Aa2 from Moody's Investor Services, Inc.
("Moody's").
Kmart Corporation ("Kmart") is the Company's second largest tenant in terms of
both GLA and base rental revenues. Kmart's principal business is general
merchandise retailing through a chain of discount department stores. It is one
of the world's largest retailers based on sales volume. Kmart has experienced
flat or declining earnings in recent periods, and had announced plans to
eliminate a significant number of jobs and close certain of its existing stores.
In January 1996, Moody's lowered its rating on Kmart's long-term debt to Ba2.
Standard and Poor's rating on Kmart's long-term debt at December 31, 1995 was
BB. Kmart has closed five stores that were leased from the Company. The Company
negotiated receipt of lease termination fees on four of these properties, two of
which were subsequently sold. The Company is currently in the process of
re-leasing or selling the other two properties. Kmart has continued to make its
lease payments on the fifth closed property. Should Kmart in the future announce
additional store closures, the Company believes Kmart would continue its lease
payments for the term of the leases unless a lease termination fee is
negotiated, or the properties would be released at equal or greater rents.
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The table below sets forth information concerning the five largest tenants of
the Company and its subsidiaries at December 31, 1995:
<TABLE>
<CAPTION>
Percent of Percent of
Company Company Total
Number Total GLA Total GLA Scheduled Scheduled
Tenant Leases Under Lease Under Leases ABR ABR
- ------ ------ ----------- ------------ --- ---
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C>
Wal-Mart 18 1,543 20.9% $ 6,618 14.7%
Kmart 17 1,373 18.6% 6,501 14.5%
Kroger 14 504 6.8% 3,242 7.2%
Lucky 15 484 6.6% 2,796 6.2%
Food Lion 11 299 4.1% 1,669 3.7%
-- ----- ---- ------- ----
75 4,203 57.0% $20,826 46.3%
== ===== ==== ======= ====
</TABLE>
Certain leases related to the tenants in the table have either been subleased or
the leases relating thereto have been assigned to such party. Nevertheless, the
original tenant under the lease remains responsible for payment of all rents and
all other obligations due under such lease. An assignment of the lease would not
affect the terms of the lease. Generally, all subtenants are currently required
to pay the same rent to the tenant as the tenant is required to pay to the
Company and have been subleased for a term that is approximately the same as the
remaining term of the lease. In the event that the subtenant defaults under the
sublease and vacates the property, or in the event that the term of the sublease
expires earlier than the term of the lease, the property could remain unoccupied
until a new subtenant is located. In any event, the original tenant will remain
responsible for payment of all rents and all other obligations due under the
lease for the full remaining term of the lease.
Recent Developments
In May 1995, the Company filed with the Securities and Exchange Commission a
$250 million shelf registration statement. This registration statement was filed
for the purpose of issuing debt securities, preferred stock, depositary shares,
common stock or warrants. Subsequently in 1995, the Company issued from the
shelf, 2.14 million shares of common stock in a publicly underwritten offering
at a price of $20.125 per share. Net proceeds of approximately $40.5 million
from the offering were used to repay debt, purchase properties, and make loans
to facilitate the development of certain properties.
In December 1995, the Company received a two-year unsecured revolving credit
facility up to $150 million through December 1997 from a consortium of six banks
(the "Credit Facility"). The actual amount available to the Company is dependent
on certain covenants such as the value of unencumbered assets and the ratio of
earnings before interest, depreciation, and amortization to fixed charges. Upon
obtaining the Credit Facility, the Company borrowed $82.8 million, primarily to
repay existing secured debt on 52 properties.. With the Company's unsecured real
estate base at December 31, 1995, the Company had an additional $16 million
available under the Credit Facility. The Credit Facility carries an interest
rate of LIBOR plus 1.75% (7.5% at December 31, 1995).
In January 1995, the Company entered into master lease and option agreements
with respect to 11 shopping centers, containing approximately 1.4 million square
feet of GLA, located in North Carolina. The master leases required the payment
equal to eight percent of the lessor/sellers equity and gave the Company all
management and operating responsibilities for the shopping centers. Under the
master leases, the Company received all cash flow, if any, in excess of the
master lease payments. The option agreements gave the Company the option to
purchase the properties. In 1995, the Company purchased seven of the properties
under the option agreements. The Company terminated the master lease and
purchase option on one
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property on December 31, 1995. In January and February of 1996, the Company
purchased the three remaining properties.
In April 1995, the Company formed a Delaware limited partnership, Excel Realty
Partners, L.P. ("ERP") to own and manage certain real estate properties. The
Company is a 1% partner and the sole general partner of ERP. In May 1995, ERP
entered into an agreement for certain unaffiliated entities to contribute to the
partnership several shopping centers located in the southeastern United States.
The Company anticipates that a minimum of 13 properties will be contributed to
ERP under this agreement. The contributing partners will receive partnership
units which will be exchangeable into common shares of the Company at prices of
$21.50 and $20.70 per share. The units priced at $21.50 will be exchangeable
anytime after one year from closing and adjust to the existing market price, but
exchange on a basis of one partnership unit for one common share of the Company.
The units priced at $20.70 are exchangeable anytime after two years and do not
adjust to the prevailing market price of the common stock. As part of the
agreement, after the partners receive annual per unit distributions of $1.72 for
the $21.50 units and $1.78 for the $20.70 units, the Company will be entitled to
receive 99% of all remaining income and gains, if any. The Company is committed
to make loans to ERP to pay partner distributions in the event ERP is unable to.
In 1995, ERP's cash flows were sufficient to make the limited partner
distributions. The Company has initially contributed cash for a 1% equity
position in the partnership. In 1995, five real estate properties with a value
of $28.5 million subject to outstanding mortgages of $18 million, were
contributed to ERP for limited partnership units and cash. During 1995, the
Company loaned ERP approximately $6 million to help facilitate these
transactions. At December 31, 1995, the Company is committed to advance ERP an
additional $2 million under existing credit agreements and may advance
additional amounts in the future. The approximate value of the 8 additional
properties scheduled to be contributed to the partnership is $57 million of
which ERP would assume approximately $40 million of indebtedness and pay $17
million in a combination of cash and units. It is anticipated that the cash
requirements would be principally loaned to ERP by the Company. There is no
assurance that all or any of such properties will be contributed. In February
1996, one additional property was contributed to ERP. The Company primarily used
existing cash deposits to make advances to ERP of approximately $1.5 million to
facilitate this transaction.
In April 1995, ERT Development Corporation ("EDV"), a Delaware Corporation, was
organized. The Company owns 100% of the outstanding preferred shares of EDV. The
preferred shares receive 95% of the dividends, if any, from EDV. EDV was formed
to acquire, develop, hold, and sell real estate in the short-term for capital
gains and/or receive fee income. At December 31, 1995, the Company had notes
receivable outstanding to EDV of $12.6 million to facilitate certain
transactions.
The Company is currently in the process of evaluating other potential property
acquisitions and financing alternatives. The Company intends to continue to
emphasize the acquisition of shopping centers and other retail properties under
long-term lease to creditworthy national or regional tenants.
ITEM 2. PROPERTIES
General.
At December 31, 1995, the Company and its subsidiaries owned or master leased
112 operating properties in 27 states, principally in the southwestern,
midwestern and southeastern United States. Three of the properties were master
leased and managed by the Company at December 31, 1995 and were purchased in
January and February of 1996. The Company also purchased one additional shopping
center in February 1996 located in Georgia. Additionally, the Company owns one
real estate property located in Arizona which is held for sale and not included
in the schedule on the next page.
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Minimum base rental revenues and operating expense reimbursements accounted for
approximately 99.5% of the Company's total revenues for the year ended December
31, 1995. The Company's management believes that the average base rent per
square foot of the Company's existing leases are generally lower than the
prevailing market rate base rents for new leases in the geographical regions
where the Company operates, reflecting the potential for growth as leases renew.
At December 31, 1995, the Company owned a 100% interest in all of its properties
except eight properties in which it owned an undivided 50% or greater equity
interest. The Company's properties are either owned directly or through its
wholly-owned subsidiaries, or through partnerships or joint ventures. Six of the
properties with a net carrying value of $22,226,000 at December 31, 1995 are
owned by E.H. Properties, L.P., in which the Company is the sole general partner
and owns a 94.17% ownership and profit sharing percentage. The distribution of
the consolidated GLA and scheduled consolidated annual gross rental income of
the Company and its subsidiaries as of December 31, 1995 is as follows:
<TABLE>
<CAPTION>
Percent of
Number of Total GLA Percent of Scheduled Scheduled
State Properties (Square Feet) Total GLA ABR ABR
- ----- ---------- ------------- --------- --- ---
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C>
Alabama 3 94 1.2% $ 531 1.2%
Arizona 11 791 10.7% 5,694 12.7%
Arkansas 2 105 1.4% 529 1.2%
California 3 42 0.5% 743 1.6%
Colorado 3 157 2.1% 628 1.4%
Florida 6 543 7.4% 3,461 7.7%
Georgia 5 472 6.4% 3,230 7.2%
Illinois 9 397 5.4% 2,596 5.8%
Iowa 3 104 1.4% 563 1.2%
Indiana 13 490 6.6% 2,715 6.0%
Kentucky 4 613 8.3% 3,741 8.3%
Louisiana 1 41 0.6% 229 0.5%
Michigan 3 108 1.4% 553 1.2%
Minnesota 2 12 0.2% 166 0.4%
Missouri 4 189 2.6% 1,117 2.5%
Nebraska 3 71 1.0% 429 0.9%
New Jersey 1 56 0.8% 272 0.6%
North Carolina 12 1,363 18.5% 8,153 18.1%
North Dakota 1 56 0.8% 295 0.7%
Ohio 5 450 6.1% 2,324 5.2%
Oklahoma 1 46 0.6% 280 0.6%
Pennsylvania 3 180 2.5% 1,156 2.6%
South Carolina 3 148 2.0% 1,169 2.6%
Tennessee 3 293 4.0% 1,206 2.7%
Texas 6 301 4.1% 1,865 4.1%
Virginia 1 193 2.6% 1,115 2.5%
Wisconsin 1 59 0.8% 218 0.5%
--- ------ ----- -------- -----
TOTALS 112 7,374 100.0% $ 44,978 100.0%
=== ====== ===== ======== =====
</TABLE>
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The Shopping Centers
At December 31, 1995, the Company and its subsidiaries owned 38 Shopping
Centers. The Shopping Centers accounted for approximately 60% of the Company's
GLA and approximately 61% of the Company's ABR at December 31, 1995. The
Shopping Centers ranged in size from approximately 30,000 to 255,000 square
feet. The Company intends to maintain its policy of acquiring shopping centers
for long-term investment. The Company maintains an aggressive leasing program to
enhance the income potential of each property. It also follows a schedule of
regular physical maintenance with a view towards tenant expansion, renovations
and refurbishing to preserve and increase the value of its properties.
Renovations include upgrading of existing facades, updating signage, resurfacing
parking lots and improving parking lot and exterior building lighting.
The majority of the Shopping Centers are anchored by one or more national or
regional retailers. The remaining space is generally subject to shorter-term net
leases to smaller tenants. A substantial portion of the Company's income from
Shopping Centers consists of rent received under long-term leases. Most of these
leases provide for payment of fixed base rentals monthly in advance and for the
payment by tenants of their pro-rata share of real estate taxes, insurance,
utilities and common area maintenance of the shopping center. In general, the
Company's Shopping Center leases require the Company to make roof and structural
repairs as needed. However, certain of the tenant leases place that
responsibility on the tenant. The Company's standard small store lease provides
for roof repairs and exterior repairs to be reimbursed by the tenant as part of
the common area maintenance.
The Single Tenant Properties
At December 31, 1995, the Company and its subsidiaries owned 71 Single Tenant
Properties under long-term net leases to national or regional tenants. The GLA
of these properties ranged in size from approximately 3,000 square feet to
126,000 square feet and accounted for approximately 39% of the Company's total
GLA. At December 31, 1995, the Single Tenant Properties accounted for
approximately 38% of the Company's ABR. With few exceptions, the tenants are
required to pay all operating expenses including roof and structural repairs.
The Commercial Properties
At December 31, 1995, approximately 1% of the total GLA owned by the Company and
its subsidiaries was attributable to the 3 Commercial Properties under long-term
leases to single tenants or group of tenants. These properties accounted for
approximately 1% of the ABR of the Company and its subsidiaries at December 31,
1995 and the GLA ranged in size from approximately 8,700 square feet to the
21,560 square foot office building which is the headquarters of the Company.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any legal proceedings other than various claims
and lawsuits arising in the normal course of its business which, in the opinion
of the Company's management, are not individually or in the aggregate material
to its business.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's common stock is listed on the New York Stock Exchange under the
symbol "XEL". As of March 7, 1996 there were approximately 1,654 record
holders of the Company's common stock, plus those who hold their shares in
street name. The Company has paid regular distributions since its commencement
of operations in 1987 and intends to pay regular quarterly distributions in the
future. Payment of distributions depends upon a number of factors (including
primarily the Company's cash flow), and there can be no assurance that
distributions will be paid. The following table sets forth the high and low
sales price as reported by the New York Stock Exchange composite tape and the
distributions declared each calendar quarter during 1995 and 1994 with respect
to the Company's common stock:
<TABLE>
<CAPTION>
Distributions
Quarter Ended High Low Declared
------------- ---- --- --------
<S> <C> <C> <C>
March 31, 1994 22.250 18.125 0.415
June 30, 1994 20.875 19.500 0.430
September 30, 1994 20.375 18.000 0.430
December 31, 1994 18.375 15.625 0.430
March 31, 1995 19.125 16.375 0.430
June 30, 1995 20.750 18.125 0.000 [a]
September 30, 1995 20.125 19.000 0.445
December 31, 1995 21.125 18.250 0.445
</TABLE>
[a] In April 1995, the Company adopted a policy of declaring distributions to
stockholders of record on the first day of the succeeding quarter, instead
of the last day of the current quarter. The payment date of 15 days
following each quarter remained unchanged. In 1996, a distribution of
$0.445 per share was declared on January 1 and paid on January 15.
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ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
---------------------------------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
INCOME STATEMENT DATA
<S> <C> <C> <C> <C> <C>
Total revenue $ 55,229 $ 41,014 $ 22,525 $ 5,827 $ 2,472
Operating and G&A expenses 15,470 7,278 5,049 2,749 882
Total revenue less operating
and G&A expenses 39,759 33,736 17,476 3,078 1,590
Depreciation and amortization 6,933 6,887 4,186 608 280
Interest expense 22,458 14,190 9,360 2,218 1,340
Net income 18,192 13,796 3,232 454 65
Per share data:
Net income $ 1.51 $ 1.27 $ 0.55 $ 0.41 $ 0.11
Distributions 1.32[a] 1.71 1.42 1.14 1.02
Weighted average number of shares 12,084 10,883 5,878 1,110 615
BALANCE SHEET DATA
Net real estate $372,016 $349,255 $273,362 $112,971 $22,890
Total assets 428,307 375,100 290,226 116,621 24,768
Mortgages payable 123,813 201,157 113,487 89,442 14,582
Notes payable 86,984 15 6,575 1,102 16
Stockholders' equity 208,678 163,898 161,962 22,312 9,649
</TABLE>
- -------
[a] In April 1995, the Company adopted a policy of declaring distributions to
stockholders of record on the first day of the succeeding quarter, instead
of the last day of the current quarter. The payment date of 15 days
following each quarter remained unchanged. In 1996, a distribution of
$0.445 per share was declared on January 1 and paid on January 15. Had the
Company not changed its distribution declaration date, the distributions
would have been $1.77 in 1995.
11
<PAGE> 12
ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Consolidated
Financial Statements and the Notes thereto.
Comparison of year ended December 31, 1995 to year ended December 31, 1994.
On January 1, 1995, the Company entered into master lease and option agreements
to manage and/or purchase eleven shopping centers in North Carolina (the "North
Carolina Properties"). During 1995, seven of these properties were purchased.
Furthermore, the Company experienced a full year of operations on the 19 income
producing properties acquired during 1994 and almost a full year of operations
on one property sold in December 1995. In addition, the Company sold a total of
nine single tenant properties and one office building in 1995.
Total revenue increased $14,215,000 or 35%, to $55,229,000 in 1995 from
$41,014,000 in 1994 due to the acquisitions mentioned above. The North Carolina
Properties accounted for $9,041,000 of this revenue. Additionally, approximately
$3,855,000 of lease termination fees were recognized as base rents in 1995
compared to $988,000 in 1994. Two of the four properties the Company received
lease termination fees for in 1995 were sold. The Company is in the process of
selling or re-leasing the other two properties and is recognizing the fees as
base rents over the estimated time the Company will take to sell or re-lease
these properties at comparable rents. Expense reimbursements increased
$1,562,000 related to the increase in property related expenses as noted below.
Total operating expenses increased $8,192,000, or 113%, to $15,470,000 in 1995
from $7,278,000 in 1994. Operating expenses increased as a percentage of total
revenue to 28% in 1995 from 17% in 1994, primarily due to the master lease
expenses. Master lease expenses accounted for $4,681,000 and other expenses
related to the North Carolina Properties accounted for $1,141,000. General and
administrative expenses increased by $210,000 but decreased as a percentage of
total revenue from 6% in 1994 to 5% in 1995. General and administrative expenses
in 1995 did not include $655,000 which were paid by EDV which commenced
operations in 1995. Netted against this decrease in 1995 was an accrual for an
estimated state tax liability of $380,000. In the prior year, the Company made
an $80,000 accrual.
Interest expense increased from $14,190,000 in 1994 to $22,458,000 in 1995, or
58%. The increase is primarily attributable to additional outstanding debt and
loan costs written-off during 1995. In December 1995, upon obtaining a new
credit facility, the Company repaid its securitized mortgage financing known as
a real estate mortgage investment conduit (the "REMIC") and a former
bank line. The Company wrote-off loan costs of $2,806,000 related to the REMIC
debt, and $254,000 related to the former bank line. Total loan costs
written-off in 1995 including other REMIC debt repayments during the year
amounted to $3,663,000. Additionally, the Company wrote-down its interest rate
protection agreement by $790,000. Loan costs written off in 1994 and charged to
interest expense in 1994 were $88,000. Finally, overall mortgages and notes
payable increased. At December 31, 1995, mortgage and notes payable of
$210,797,000 were $9,625,000 greater than the debt of $201,172,000 outstanding
at December 31, 1994.
Depreciation expense for 1995 was $6,929,000 compared to $6,119,000 in 1994, or
a 13% increase. The increase is primarily due to a full period of depreciation
in 1995 on properties acquired in 1994, and the ten Shopping Centers acquired in
1995 which had greater carrying values than the properties sold during the year.
Amortization expense decreased by $764,000 in 1995 due to a management contract
which was fully amortized in 1994.
12
<PAGE> 13
Interest and other income increased $2,896,000 or 233% from 1994 primarily
related to additional cash invested and loans made to Excel Development
Corporation and other development companies. The Company had $22,850,000 in
notes receivable outstanding at December 31, 1995 compared to $9,099,000
outstanding at December 31, 1994.
The Company recognized a net gain of $3,683,000 on real estate sales in 1995
compared to a net loss of $108,000 in 1994. The gain was primarily associated
with the sale of an office building in Arizona.
Net income increased $4,396,000, or 32%, to $18,192,000 ($1.51 per share) in
1995 from $13,796,000 ($1.27 per share) in 1994. Quarterly distributions per
share increased from $0.43 to $0.445 in the third quarter of 1995.
Comparison of year ended December 31, 1994 to year ended December 31, 1993.
During 1994, the Company acquired 19 income producing properties. Additionally,
the Company experienced a full year of operations on the 59 properties acquired
in 1993 of which 54 were acquired in the second half of the year. Also, during
1993, the Company acquired all of the assets and liabilities of Excel Realty
Advisors, Inc. ("ERA"), an affiliate of the Company, and terminated the advisory
contract between ERA and the Company.
Total revenue increased $18,489,000 or 82%, to $41,014,000 in 1994 from
$22,525,000 in 1993. The increase was due to the increase in the Company's
property portfolio as mentioned above. Lease termination fees of $988,000 were
recognized as rental income in 1994. No lease termination fees were recognized
as income in 1993.
Total operating expenses increased $2,229,000, or 44%, to $7,278,000 in 1994
from $5,049,000 in 1993. Total operating expenses as a percentage of total
revenue decreased from 22% in 1993 to 17% in 1994. This was primarily due to
efficiencies gained in operations from the increase in the Company's portfolio.
Included in the increase were general and administrative expenses of $709,000
which decreased as a percentage of total revenue from 8% to 6%. This decrease
was also due to operational efficiencies gained from the increase in the
property portfolio. Of the increase in general and administrative expenses,
approximately $572,000 was attributable to salaries and wages. This increase
was primarily due to the payment and accrual of 1993 and 1994 bonuses to the
executive officers of the Company, and the hiring of additional personnel
needed to manage the Company's growth. The increase in other property expenses
was directly related to the increased property portfolio.
Interest expense increased 52% from $9,360,000 in 1993 to $14,190,000 in 1994.
The increase was primarily due to new mortgage debt incurred in 1994. Total
mortgage debt at December 31, 1994 was $201,157,000 or $87,670,000 higher than
the mortgage debt of $113,487,000 at December 31, 1993. The REMIC notes during
the year averaged approximately 5.6% while the mortgage debt which was replaced
of approximately $39,800,000 carried interest at 6.5% to 10.25%.
Depreciation and amortization expense increased $2,701,000 due to the new
properties acquired during 1994 and the recognition of a full year's
depreciation on the 59 properties acquired during 1993. The acquisition costs of
ERA, totaled approximately $1,655,000 and were charged to expense in 1993.
Net income increased $10,564,000, or 327%, to $13,796,000 ($1.27 per share) in
1994 from $3,232,000 ($0.55 per share) in 1993. Distributions per share
increased from $1.42 in 1993 to $1.71 in 1994.
13
<PAGE> 14
LIQUIDITY AND CAPITAL RESOURCES
Cash flow from operations has been the principal source of capital to fund the
Company's ongoing operations. The Company's issuance of common shares, use of
the Company's credit facilities, and long-term mortgage financing have been the
principal sources of capital required to fund its property acquisitions. In
order to continue to expand and develop its portfolio of properties, the Company
may seek to obtain funds through additional equity offerings or debt financing
in a manner consistent with its intention to operate with what it believes to be
an appropriate debt level with respect to prudent interest coverage ratios. In
April 1995, the Company increased its quarterly distributions from $0.43 per
share to $0.445 per share. The Company anticipates that adequate cash will be
available to fund its operating and administrative expenses, continuing debt
service obligations and payment of distributions in both the short and
long-term. During the year, property acquisitions were primarily funded through
property sales and the proceeds from an equity offering.
In May 1995, the Company filed with the Securities and Exchange Commission a
$250,000,000 shelf registration statement. This registration statement was filed
for the purpose of issuing debt securities, preferred stock, depositary shares,
common stock or warrants for general corporate purposes. In 1995, the company
issued from the shelf 2,140,000 shares of common stock in a publicly
underwritten offering at a price of $20.125 per share. Net proceeds of
approximately $40,500,000 from the offering were used to repay an existing loan
agreement, purchase properties, and make loans to ERT Development Corporation
(see below) and other development companies for the purpose of taking advantage
of short-term development opportunities.
In December 1995, the Company received a two-year unsecured revolving credit
facility for up to $150,000,000 through December 1997 from a consortium of six
banks (the "Credit Facility"). The actual amount available to the Company is
dependent on certain covenants such as the value of unencumbered assets and the
ratio of earnings before interest, depreciation, and amortization to fixed
charges. Upon obtaining the Credit Facility, the Company borrowed $82,800,000.
The proceeds were used primarily to repay the outstanding debt of $76,000,000,
to repay a former bank line, and to pay loan costs. With the Company's
unsecured real estate base at December 31, 1995, the Company had an additional
$16,000,000 available under the Credit Facility. The Credit Facility carries
an interest rate of LIBOR plus 1.75% (7.5% at December 31, 1995), while the
REMIC carried interest rates of LIBOR + 0.6% to 0.8%, plus a servicing fee of
0.1865%. Although the REMIC debt carried lower interest rates than the Credit
Facility, the Company believes that other capital resources may become
accessible at lower costs with the increase in the Company's unsecured real
estate portfolio. The Company also has a $4,000,000 line of credit due
September 1996 and an unsecured $1,000,000 revolving bank line. The amounts from
these facilities were primarily used to loan funds to ERT Development
Corporation (see results of operations). Approximately $800,000 in total is
available under these two facilities at December 31, 1995. During the year, the
Company also used other former loan agreements to make loans to ERP (see below)
and fund other operating costs.
In April 1995, the Company formed a Delaware limited partnership, Excel Realty
Partners, L.P. ("ERP") to own and manage certain real estate properties. At
December 31, 1995, the Company is committed to advance ERP an additional
$2,000,000 under existing credit agreements and may advance additional amounts
in the future. Also, the Company is committed to make loans to ERP to pay
partner distributions in the event ERP is unable to. The approximate value of
eight properties scheduled to be contributed to ERP in 1996 under existing
agreements is $57,000,000 of which ERP would assume approximately $40,000,000 of
indebtedness and pay $17,000,000 in a combination of cash and partnership units.
It is anticipated that the cash requirements would be principally loaned to ERP
by the Company. There is no assurance that all or any of the eight properties
will be contributed to ERP.
In 1996, the Company loaned $2,000,000 to a developer and is committed to loan
an additional $12,000,000 related to a development project in Florida.
14
<PAGE> 15
The Company has elected REIT status for federal income tax purposes and must
distribute at least 95% of its taxable income to its stockholders in order to
avoid income taxes. Although the Company receives most of its rental payments on
a monthly basis, it intends to make quarterly distribution payments. Amounts
accumulated for distributions will be invested by the Company in short-term
marketable instruments including deposits at commercial banks, money market
accounts, certificates of deposit, U.S. government securities or other liquid
investments (including GNMA, FNMA, and FHLMC mortgage-backed securities) as the
Board of Directors deems appropriate.
With $9,812,000 in cash and net accounts receivable of $2,156,000 at December
31, 1995, the Company had sufficient funds available to cover current accounts
payable and accrued liabilities of $4,806,000 and the January 1996 stockholders'
distribution payment of $5,861,000. The Company used escrow and other cash
deposits it had at December 31, 1995 to fund its four acquisitions made in
January and February 1996. The cash position of the Company at December 31, 1995
increased by a net $5,681,000 when compared to December 31, 1994.
Cash provided by operations amounted to $28,895,000, primarily related to net
income of $18,192,000, and depreciation and amortization of $13,350,000 which
did not require the use of cash, less the net gain on real estate sales of
$3,683,000. Amortization expenses included loan costs written-off and a
write-down of an interest rate protection agreement which both totaled
$4,200,000. Expenses included in net income which had not yet been paid due to
the increase in accounts payable of $2,213,000 and other liabilities of
$1,378,000 also added to the cash position of the Company. This was offset by
increases in accounts receivable of $1,121,000 and other assets of $1,843,000.
These increases in current assets and liabilities are primarily the result of
the Company's growth in operations.
Net cash used in investing activities amounted to $28,425,000. During 1995,
$36,881,000 was used to make loans to EDV ($23,315,000), ERP ($5,950,000) and
other development companies, $26,281,000 was used for real estate acquisitions,
and $17,146,000 were paid in escrow and other cash deposits of which $10,657,000
relates to proceeds from the sale of an office building and $4,000,000 relates
to deposits on the North Carolina Properties the Company purchased in 1995 and
1996. These escrow deposits are not listed as cash on the balance sheet but are
deposits which will be available to the Company in 1996 for property
acquisitions. Receipts of cash from investing activities include $29,397,000
obtained from the sale of ten properties in 1995, $23,130,000 received from
payments on notes receivable, and $4,751,000 in deposits collected.
Cash provided by financing activities amounted to $5,211,000. The net increase
is primarily due to the Company's offering of common stock as previously
described. Total cash received from stock issued was $44,451,000 less stock
selling and offering costs of $2,812,000. Additionally the Company received from
its credit facility $82,800,000 of which $76,000,000 was used to repay existing
mortgage debt. Total proceeds from notes payable amounted to $105,253,000 and
repayments on mortgage and notes payable totaled $118,516,000. The Company also
paid distributions of $20,949,000 in 1995.
15
<PAGE> 16
The Company calculates funds from operations ("FFO") as net income plus
depreciation, amortization, amortized loan and leasing commission costs and loan
costs written off, before gains or losses on real estate sales. FFO does not
represent cash flows from operations as defined by generally accepted accounting
principles. The Company believes however, that to facilitate a clear
understanding of its operating results, FFO should be examined in conjunction
with its net income as reductions for certain items are not meaningful in
evaluating income-producing real estate, which historically has not depreciated.
The following information is included to show the items included in the
Company's FFO for the past three years (in thousands except per share amounts):
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Net income $ 18,192 $13,796 $ 3,232
Depreciation:
Buildings 6,314 5,685 3,157
Tenant improvements 531 353 213
Amortization (1):
Leasing commissions 724 166 157
Management contract -- 766 766
Organization costs 4 2 --
Loan costs written off 4,453 88 110
Buy out of advisory contract -- -- 1,655
(Gain) loss on sale of buildings (3,682) 108 (399)
-------- ------- -------
Funds from operations - revised definition (2) 26,536 20,964 8,891
Loan cost amortization 1,240 824 117
Depreciation on furniture, equipment
and vehicles 85 81 50
-------- ------- -------
Funds from operations $ 27,861 $21,869 $ 9,058
======== ======= =======
Funds from operations per share $ 2.31 $ 2.01 $ 1.54
======== ======= =======
Other Information:
Leasing commissions paid $ 335 $ 329 $ 228
Tenant improvements paid 741 1,095 796
Building improvements paid 716 459 631
</TABLE>
(1) Only amortization of the management contract and organizational costs are
shown as amortization expense in the Consolidated Statements of Income. The
management contract was fully amortized in 1994. Loan cost amortization and loan
costs written-off are classified as interest expense and leasing commission
amortization is classified as other operating expenses in the Consolidated
Statements of Income.
(2) Beginning in 1996, the Company will revise its definition of FFO to exclude
the amortization of loan costs and depreciation of furniture, equipment and
vehicles as add-back items. Under this revised definition of FFO, the per share
amounts would have been $2.20, $1.93, and $1.51 for the years 1995, 1994, and
1993, respectively.
ECONOMIC CONDITIONS
The majority of the Company's leases contain provisions deemed to mitigate the
adverse impact of inflation. Such provisions include clauses enabling the
Company to receive percentage rents which generally increase as prices rise,
and/or escalation clauses which are typically related to increases in the
consumer price index or similar inflation indices. In addition, the Company
believes that many of its existing lease rates are below current market levels
for comparable space and that upon renewal or re-rental such rates may be
increased to current market rates. This belief is based upon an analysis of
relevant market conditions, including a
16
<PAGE> 17
comparison of comparable market rental rates, and upon the fact that
many of such leases have been in place for a number of years and may not contain
escalation clauses sufficient to match the increase in market rental rates over
such time. Most of the Company's leases require the tenant to pay its share of
operating expenses, including common area maintenance, real estate taxes and
insurance, thereby reducing the Company's exposure to increases in costs and
operating expenses resulting from inflation. In addition, the Company
periodically evaluates its exposure to interest rate fluctuations, and may enter
into interest rate protection agreements which mitigate, but do not eliminate,
the effect of changes in interest rates on its floating rate loans.
Many regions of the United States, including regions in which the Company owns
property, may experience economic recessions. Such recessions, or other adverse
changes in general or local economic conditions, could result in the inability
of some existing tenants of the Company to meet their lease obligations and
could otherwise adversely affect the Company's ability to attract or retain
tenants. The Company's shopping centers are typically anchored by discount
department stores, supermarkets and drug stores which usually offer day-to-day
necessities rather than high priced luxury items. These types of tenants, in the
experience of the Company, generally continue to maintain their volume of sales
despite a slowdown in economic conditions.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial statements required by this item appear with an Index to Financial
Statements and Schedules, starting on page F-1 of this report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There were no changes in or disagreement with accountants on accounting and
financial disclosure in 1995 or 1994.
ITEMS 10 THROUGH 13
Incorporated by reference to the Company's Proxy Statement for its 1996 annual
meeting to be filed subsequently hereto.
17
<PAGE> 18
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Financial Statements and Financial Statement Schedules:
<TABLE>
<CAPTION>
Page
----
<S> <C>
(1) (A) Report of Independent Accountants F-2
(B) Financial Statements
(i) Consolidated Balance Sheets
December 31, 1995 and 1994 F-3
(ii) Consolidated Statements of Income
Years Ended December 31, 1995, 1994 and 1993 F-4
(iii) Consolidated Statements of Changes in
Stockholders' Equity
December 31, 1995, 1994 and 1993 F-5
(iv) Consolidated Statements of Cash Flows
December 31, 1995, 1994, 1993 F-6
(v) Notes to Consolidated Financial Statements F-7
(2) Financial Statement Schedules:
Schedule Page
II Valuation and Qualifying Accounts
Years Ended December 31, 1995, 1994 and 1993 F-19
III Real Estate and Accumulated Depreciation F-20
December 31, 1995
</TABLE>
All other schedules are omitted since the required
information is not present or is not present in amounts
sufficient to require submission of the schedule or
because the information required is included in the
consolidated financial statements and notes thereto.
(b) No reports on Form 8-K were filed during the last quarter of
the period covered by this annual report.
(c) Exhibits:
Refer to Exhibit Index as follows.
18
<PAGE> 19
Exhibit Index
3.1 Articles of Incorporation of Excel Realty Trust, Inc., a Maryland
corporation (the "Company"), as amended. (1)
3.2 Bylaws of the Company. (1)
4.1 Trust and Servicing Agreement, dated as of March 1, 1994, by and among
Excel Credit Corporation ("ECC"), EQ Services ("EQ"), and State Street
Bank and Trust Company, as Trustee ("Trustee"), with respect to the
Commercial Mortgage Pass-Through Certificates, Series 1994-1, of ECC.
(3)
4.2 Indenture, dated as of March 1, 1994 by and among Excel Mortgage
Funding Corporation ("EMFC"), Wilmington Trust Company, as Trustee (the
"Indenture Trustee"), and EQ, with respect to the Collateralized
Floating Rate Notes due 2001 of EMFC (the "EMFC Notes"). (3)
4.3 Form of Mortgages entered into between Excel Mortgage Funding
Corporation and the Indenture Trustee, with respect to the EMFC Notes.
(3)
4.4 Interest Rate Cap Agreement, dated as of March 1, 1994, by and between
ECC, Trustee, and Deutsche Bank AG - New York (the "Cap Provider") .
(3)
4.5 Interest Rate Cap Agreement, dated as of March 1, 1994, by and between
ECC, Trustee, and the CAP provider. (3)
10.1 Amended Option and Contract for Purchase of Real Estate, dated as of
September 11, 1992, by and between Excel California and Horne
Properties, Inc., a Tennessee corporation ("Horne"). (1)
10.2 General Partnership Agreement of Horne & Excel Properties, a Tennessee
general partnership, dated as of October 13, 1992, by and between Horne
and Excel California. (1) Exhibit 10.2A
10.3 General Partnership Agreement of Horne & Excel Properties (Chapman), a
Tennessee general partnership, dated as of December 30, 1992, by and
between Horne and Excel California. (1) Exhibit 10.2B
10.4 Employment Contract, dated as of April 1, 1993, by and between Excel
California and Gary Sabin, an individual. (1) Exhibit 10.8
10.5 Employment Contract, dated as of April 1, 1993, by and between Excel
California and Richard Muir, an individual. (1) Exhibit 10.8A
10.6 Employment Contract, dated as of April 1, 1993, by and between Excel
California and Graham Bullick, an individual. (1) Exhibit 10.9
10.7 Employment Contract, dated as of April 1, 1993, by and between Excel
California and Ronald Sabin an individual. (1) Exhibit 10.9A
10.8 1993 Stock Option Plan of the Company. (1) Exhibit 10.10
10.9 Form of Incentive Stock Option Agreement under the Company's 1993 Stock
Option Plan. (1) Exhibit 10.11
19
<PAGE> 20
10.10 Form of Non-Qualified Stock Option Agreement under the Company's 1993
Stock Option Plan. (1) Exhibit 10.12
10.11 401(k) Retirement Plan of the Company. (1) Exhibit 10.13
10.12 Form of Common Stock Purchase Option, dated as of March 15, 1993 by and
between Excel California and each of seven directors thereof. (1)
Exhibit 10.27
10.13 Form of Common Stock Purchase Option, dated as of March 15, 1993, by
and between Excel California and each of the seven directors thereof.
(1) Exhibit 10.28
10.14 Form of 1993 Executive Officer Common Stock Purchase Option, dated as
of April 1, 1993 by and between Excel California and each of six
executive officers thereof. (1) Exhibit 10.29
10.15 Assignment of Beneficial Interest Under Existing Leases, Deed of Trust,
Collateral Assignment of Leases and Rent, and Other Loan Documents
between BG Development Corporation ('BG") and the Company, dated
September 29, 1993. (2) Exhibit 10.30
10.16 Master Lease between Excel Realty Trust, Inc. as landlord, and BG
Development Corporation ("BG") as tenant, dated September 29, 1993. (2)
Exhibit 10.31
10.17 Side Letter Agreement between Excel Realty Trust, Inc. and BG. (2)
Exhibit 10.32
10.18 Term Loan Agreement among EMFC, the Company, and Casco Northern Bank,
N.A. dated December 29, 1993. (2) Exhibit 10.33
10.19 Property Management Agreement, dated as of March 17, 1994, by and
between the Company and EMFC. (2) Exhibit 10.34
10.20 Agreement of Limited Partnership of EH Properties, L.P., a Delaware
limited partnership, dated as of March 25, 1994, by and between the
Company, as general partner, and Horne, as limited partner. (3) Exhibit
10.37
10.21 Partnership Contribution Closing Agreement dated as of March 28, 1994,
by and between Horne, the Company, and EH Properties, L.P., a Delaware
limited partnership. (3) Exhibit 10.38
10.22 1994 Director's Stock Plan of the Company. (3) Exhibit 10.39
10.23 Form of Stock Option Agreement under the 1994 Director's Stock Plan of
the Company. (3) Exhibit 10.40
10.24 Loan Agreement, dated as of December 29, 1994, by and among the Company
and the First National Bank of Boston ("FNBB"). (3) Exhibit 10.41
10.25 Note, dated as of December 29, 1994, executed by the Company in favor
of FNBB. (3) Exhibit 10.42
10.26 Unconditional Guaranty of Payment and Performance, dated as of December
29, 1994, executed by EH Properties, L.P. in favor of FNBB. (3) Exhibit
10.43
10.27 Collateral Assignment of Partnership Interests, dated as of December
29, 1994, executed by the Company in favor of FNBB. (3) Exhibit 10.44
20
<PAGE> 21
10.28 Master Agreement, dated as of January 1, 1995, by and among the Company
and the limited partnerships named therein (the "Tricor Partnerships").
(3) Exhibit 10.45
10.29 Closing Memorandum, dated as of January 20, 1995, by and among the
Company and the Tricor Partnerships. (3) Exhibit 10.46
10.30 Agreement, dated as of January 20, 1995, by and among the Company and
the Tricor Partnerships. (3) Exhibit 10.47
10.31 Loan modification agreement dated as of December 1994, by and amount
the Company and B.G. (3) Exhibit 10.48
10.32 Agreement of Limited Partnership of Excel Realty Partners, L.P., a
Delaware limited partnership ("ERP"). (4)
10.33 Contribution Agreement by and between each of the partnerships named
therein and ERP. (4)
10.34 Credit Agreement Among the Company, as Borrower, and the First National
Bank of Boston, Wells Fargo Bank, N.A., First Interstate Bank of
California, Dresdner Bank AG, and NBD Bank, as Lenders, and the First
National Bank of Boston, as Agent dated December 27, 1995. (4)
21.1 Subsidiaries of the Registrant. (4)
23.1 Consent of Coopers and Lybrand L.L.P. (4)
27.1 Financial data schedules. (4)
- -------------
(1) Incorporated by reference to the Company's Registration Statement on
Form S-11, File No. 33-063160, filed with the Commission on May 21,
1993, as amended, in which this exhibit bore the same number, unless
otherwise indicated.
(2) Incorporated by reference from the Company's report on Form 10-K dated
March 30, 1994 in which this exhibit bore the same number, unless
otherwise indicated.
(2) Incorporated by reference from the Company's report on Form 10-K dated
March 13, 1995 in which this exhibit bore the same number, unless
otherwise indicated.
(4) Filed herewith.
21
<PAGE> 22
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned there unto duly authorized.
EXCEL REALTY TRUST, INC.
DATED: March 7, 1996 By: /s/ Gary B. Sabin
-------------------------
GARY B. SABIN
President and
Chief Executive Officer
DATED: March 7, 1996 By: /s/ David A. Lund
-------------------------
DAVID A. LUND
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of Registrant and in
the capacities and on the dates indicated.
/s/ Gary B. Sabin March 7, 1996
- ------------------------------------- --------------------
GARY B. SABIN, Director, Date
President, Chief Executive Officer
and Chairman of the Board
/s/ Richard B. Muir March 7, 1996
- ------------------------------------- --------------------
RICHARD B. MUIR, Director Date
and Executive Vice President
/s/ Boyd A. Lindquist March 7, 1996
- ------------------------------------- --------------------
BOYD A. LINDQUIST, Director Date
/s/ Charles Marston March 7, 1996
- ------------------------------------- --------------------
D. CHARLES MARSTON, Director Date
/s/ Robert E. Parsons, Jr. March 7, 1996
- ------------------------------------- --------------------
ROBERT E. PARSONS, JR., Director Date
/s/ Bruce A. Staller March 7, 1996
- ------------------------------------- --------------------
BRUCE A. STALLER, Director Date
/s/ John H. Wilmot March 7, 1996
- ------------------------------------- --------------------
JOHN H. WILMOT, Director Date
22
<PAGE> 23
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
----------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
1. CONSOLIDATED FINANCIAL STATEMENTS:
Report of Independent Accountants .......................... F-2
Consolidated Balance Sheets
December 31, 1995 and 1994 .............................. F-3
Consolidated Statements of Income
Years Ended December 31, 1995, 1994 and 1993 ............ F-4
Consolidated Statements of Changes in Stockholders' Equity
Years Ended December 31, 1995, 1994 and 1993 ............ F-5
Consolidated Statements of Cash Flows
Years Ended December 31, 1995, 1994 and 1993 ............ F-6
Notes to Consolidated Financial Statements ................. F-7
2. CONSOLIDATED FINANCIAL STATEMENT SCHEDULES:
Schedule II - Valuation and Qualifying Accounts
Years Ended December 31, 1995, 1994 and 1993 ............ F-19
Schedule III - Real Estate and Accumulated Depreciation
December 31, 1995 ....................................... F-20
</TABLE>
F-1
<PAGE> 24
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders
of Excel Realty Trust, Inc.
We have audited the consolidated financial statements and the financial
statement schedules of Excel Realty Trust, Inc. and subsidiaries as listed in
the index on page F-1 of this Form 10-K. These financial statements and
financial statement schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and financial statement schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Excel
Realty Trust, Inc. and subsidiaries as of December 31, 1995 and 1994 and the
consolidated results of operations and their cash flows for the each of the
three years in the period ended December 31, 1995, in conformity with generally
accepted accounting principles. In addition, in our opinion, the financial
statement schedules referred to above, when considered in relation to the basic
financial statements taken as a whole, present fairly, in all material respects,
the information required to be included therein.
COOPERS & LYBRAND, L.L.P.
San Diego, California
February 5, 1996
F-2
<PAGE> 25
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
----------
<TABLE>
<CAPTION>
1995 1994
--------- --------
<S> <C> <C>
ASSETS
Real estate:
Land $122,394 $115,614
Buildings 251,012 243,869
Less accumulated depreciation (14,909) (10,228)
Real estate held for sale 13,519 -
-------- --------
Net real estate 372,016 349,255
Cash 9,812 4,131
Escrow and other cash deposits 14,890 2,494
Accounts receivable, less allowance for bad debts of
$726 and $318 in 1995 and 1994, respectively 2,156 1,443
Notes receivable from affiliates 18,561 -
Notes receivable - other 4,289 9,099
Loan acquisition costs 2,662 5,060
Other assets 3,921 3,618
-------- --------
$428,307 $375,100
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgages payable $123,813 $201,157
Notes payable 86,984 15
Accounts payable and accrued liabilities 4,806 2,683
Distributions payable - 4,685
Deferred rental income 2,760 1,713
Other liabilities 1,266 949
-------- --------
Total liabilities 219,629 211,202
-------- --------
Commitments and contingencies - -
Stockholders' equity:
Preferred stock, $.01 par value, 10,000,000 shares authorized - -
Common stock, $.01 par value, 100,000,000 shares authorized,
13,171,352 and 10,883,570 shares issued and outstanding
in 1995 and 1994, respectively 132 109
Additional paid-in capital 218,531 175,702
Accumulated distributions in excess of net income (9,985) (11,913)
-------- --------
Total stockholders' equity 208,678 163,898
-------- --------
$428,307 $375,100
======== ========
</TABLE>
The accompanying notes are an integral
part of the financial statements.
F-3
<PAGE> 26
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
----------
<TABLE>
<CAPTION>
1995 1994 1993
----------- ------------ ---------
<S> <C> <C> <C>
Revenue:
Base rent $ 51,160 $ 38,603 $20,736
Percentage rent 293 197 519
Expense reimbursements 3,776 2,214 1,270
-------- -------- -------
Total revenue 55,229 41,014 22,525
-------- -------- -------
Operating expenses:
Master lease 4,681 -- --
Property taxes 2,877 1,822 1,199
General and administrative expenses 2,821 2,611 1,902
Repairs and maintenance 1,861 1,007 621
Utilities 923 752 577
Other property expenses 2,307 1,086 750
-------- -------- -------
Total operating expenses 15,470 7,278 5,049
-------- -------- -------
Operating income 39,759 33,736 17,476
Other income (expense):
Interest expense (22,458) (14,190) (9,360)
Depreciation and amortization (6,933) (6,887) (4,186)
Interest and other income 4,141 1,245 558
Buy out of advisory contract -- -- (1,655)
-------- -------- -------
Income before real estate sales 14,509 13,904 2,833
Gain (loss) on sale of real estate 3,683 (108) 399
-------- -------- -------
Net income $ 18,192 $ 13,796 $ 3,232
======== ======== =======
Net income per common share $ 1.51 $ 1.27 $ 0.55
======== ======== =======
</TABLE>
The accompanying notes are an integral
part of the financial statements.
F-4
<PAGE> 27
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993
(IN THOUSANDS, EXCEPT NUMBER OF SHARE AMOUNTS)
----------
<TABLE>
<CAPTION>
ACCUMULATED
DISTRIBUTIONS
IN EXCESS OF
NET INCOME ACCUMULATED
COMMON STOCK ADDITIONAL OTHER THAN UNDISTRIBUTED TOTAL
---------------------- PAID-IN GAIN ON SALE GAIN ON SALE STOCKHOLDERS'
NUMBER AMOUNT CAPITAL OF PROPERTIES OF PROPERTIES EQUITY
------ ------ ------- ------------- ------------- ------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1993 1,798,739 $ 23,439 $ - $ (1,127) $ - $ 22,312
Change in par value of common
stock - (23,421) 23,421 - - -
Common stock no longer subject
to repurchase 64,438 1 966 - - 967
Issuance of new shares of
common stock 8,606,128 86 155,630 - - 155,716
Redemption of common stock (3,662) - (61) - - (61)
Selling expenses - - (10,994) - - (10,994)
Net income - - - 2,833 399 3,232
Distributions declared - - - (8,811) (399) (9,210)
---------- -------- -------- -------- ------- --------
Balance at December 31, 1993 10,465,643 105 168,962 (7,105) - 161,962
Issuance of new shares of
common stock 462,927 5 7,476 - - 7,481
Repurchase of common stock (45,000) (1) (736) - - (737)
Net income - - - 13,796 - 13,796
Distributions declared - - - (18,604) - (18,604)
---------- -------- -------- -------- ------- --------
Balance at December 31, 1994 10,883,570 109 175,702 (11,913) - 163,898
Issuance of new shares of
common stock 2,287,783 23 45,641 - - 45,664
Selling expenses - - (2,812) - - (2,812)
Net income - - - 18,192 3,683 21,875
Distributions declared - - - (16,264) (3,683) (19,947)
---------- -------- -------- -------- ------- --------
Balance at December 31, 1995 13,171,353 $ 132 $218,531 $ (9,985) $ - $208,678
========== ======== ======== ======== ======= ========
</TABLE>
The accompanying notes are an integral
part of the financial statements.
F-5
<PAGE> 28
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993
(IN THOUSANDS)
----------
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 18,192 $ 13,796 $ 3,232
Adjustments to reconcile net income to net cash provided
by operations:
Depreciation 6,929 6,119 3,420
Amortization of loan costs and leasing commissions 6,417 1,085 386
Amortization 4 768 766
(Gain) loss on sale of real estate (3,683) 108 (399)
Provision for bad debts, net of accounts written off 409 19 250
Buy out of advisory contract - - 1,655
Changes in operating assets and liabilities:
(Increase) decrease in assets:
Accounts receivable (1,121) 2,401 (3,351)
Other assets (1,843) (380) (261)
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities 2,213 (10) 492
Other liabilities 1,378 746 73
--------- -------- ---------
Net cash provided by operating activities 28,895 24,652 6,263
--------- -------- ---------
Cash flows from investing activities:
Advances for notes receivable (36,881) (11,154) (3,710)
Proceeds from real estate sales 29,397 4,244 966
Real estate acquisitions and building improvements (26,281) (55,399) (109,315)
Principal payments on notes receivable 23,130 5,999 1,269
Escrow and other deposits paid (17,146) (8,020) (201)
Escrow and other deposits collected 4,751 5,717 1,131
Other (5,395) (259) (745)
--------- -------- ---------
Net cash used in investing activities (28,425) (58,872) (110,605)
--------- -------- ---------
Cash flows from financing activities:
Principal payments of mortgages and notes payable (118,516) (52,569) (31,667)
Proceeds from mortgages and notes payable 105,253 109,574 14,953
Issuance of common stock 44,451 891 143,965
Distributions paid (20,949) (18,240) (5,046)
Selling and offering costs (2,812) (36) (10,994)
Loan costs paid (2,216) (5,909) (1,869)
Repurchase and redemption of common stock - (736) (61)
--------- -------- ---------
Net cash provided by financing activities 5,211 32,975 109,281
--------- -------- ---------
Net increase (decrease) in cash 5,681 (1,245) 4,939
Cash at beginning of year 4,131 5,376 437
--------- -------- ---------
Cash at end of year $ 9,812 $ 4,131 $ 5,376
========= ======== =========
</TABLE>
The accompanying notes are an integral
part of the financial statements.
F-6
<PAGE> 29
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION
Excel Realty Trust, Inc. (the "Company") was formed in the State of
California in 1985 and reincorporated as a Maryland corporation in 1993.
The Company is in the business of purchasing and operating commercial real
estate. The Company is operated as a self-administered, self-managed real
estate investment trust (REIT).
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries, Excel Mortgage Funding Corporation,
Excel Credit Corporation, Excel Realty Trust NC, Excel Realty Trust - TX,
Excel Realty - NE, Inc., Excel Realty Trust - ST, Inc., and Excel Realty -
PA, Inc. Intercompany accounts and transactions have been eliminated.
INVESTMENTS
The equity method of accounting is used for investments in partnerships
which the Company owns less than 50% but is able to exercise significant
influence over the partnership's operations. These investments are
recorded initially at cost and subsequently adjusted for net equity in
income (loss) and cash contributions and distributions.
The cost method of accounting is used for the Company's investment in ERT
Development Corporation ("EDV") (see Note 8). Under this method, the
Company recognizes income from distributions received from net accumulated
earnings of the investee, if any.
INCOME TAXES
The Company has elected to be treated as a real estate investment trust
under Sections 856 through 860 of the Internal Revenue Code of 1986, as
amended. Under these provisions, the Company and its subsidiaries will not
be subject to federal income tax if 95% of its real estate investment
trust taxable income (before distributions paid deduction) is distributed
to shareholders and certain gross income, asset diversification, share
ownership and disclosure requirements are met. Accordingly, no provision
for federal income taxes is included in the accompanying consolidated
financial statements.
Continued F-7
<PAGE> 30
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
----------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
REAL ESTATE
Land, buildings and building improvements are recorded at cost.
Depreciation is computed using the straight-line method over estimated
useful lives of 40 years for buildings and 2 to 40 years for building
improvements. Expenditures for maintenance and repairs are charged to
expense as incurred and significant renovations are capitalized.
LEASE TERMINATION FEES
Revenue recognition of fees received for lease terminations are deferred
as deferred rental income and amortized using the straight line method
over the estimated time to re-lease the related property at comparable
rents, or until the property is sold, whichever comes first.
DEFERRED LEASING AND LOAN ACQUISITION COSTS
Costs incurred in obtaining tenant leases and long-term financing are
amortized to leasing commission expense and interest expense,
respectively, on the straight-line method over the terms of the related
leases or debt agreements.
REVENUE RECOGNITION
Base rental income attributable to leases is recorded when due from
tenants. Certain of the leases provide for additional rental revenue by
way of percentage rents to be paid based upon the level of sales achieved
by the lessee. These percentage rents are recorded on the accrual basis.
The leases also typically provide for tenant reimbursement of common area
maintenance and other operating expenses which are included in the
accompanying Consolidated Statements of Income as expense reimbursements.
NET INCOME PER COMMON SHARE
Net income per common share is based upon the weighted average number of
common shares and common share equivalents outstanding during each period.
Common share equivalents included in the computation represent shares
issuable upon assumed exercise of common stock options and warrants which
would have a dilutive effect. The weighted average shares outstanding for
the years ended December 31, 1995, 1994, and 1993 were 12,084,305,
10,882,728 and 5,877,500 respectively.
Continued F-8
<PAGE> 31
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
----------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues
and expenses during the period. Actual results could differ from those
estimates.
RECLASSIFICATIONS
Certain reclassifications have been made to the consolidated financial
statements for the years ended December 31, 1994 and 1993 in order to
conform with the current period's presentation. In July 1993, the Company
reincorporated in the State of Maryland and effected a one-for-three
reverse stock split. The 1993 share information has been changed to give
effect to the reverse stock split.
2. REGISTRATION STATEMENT:
In May 1995, the Company filed with the Securities and Exchange Commission
a $250,000,000 shelf registration statement. This registration statement
was filed for the purpose of issuing debt securities, preferred stock,
depositary shares, common stock or warrants for general corporate
purposes.
In 1995, the Company issued from the shelf 2,140,000 shares of common
stock in a publicly underwritten offering at a price of $20.125 per share.
Net proceeds of approximately $40,500,000 from the offering were used to
repay debt, purchase properties, and to make loans to EDV to facilitate
the development of certain properties (see Note 8 and 16).
3. REAL ESTATE ACQUISITIONS:
In 1995, the Company acquired, in separate transactions, seven shopping
centers in North Carolina (see Note 6), two shopping centers in Tennessee,
and one shopping center in South Carolina. The total cost of the ten
properties was approximately $47,583,000 of which the Company assumed
$22,888,000 in mortgage debt. Also in 1995, five properties were
contributed to Excel Realty Partners, L.P. (see Note 8).
In 1994, the Company purchased six shopping centers, six single tenant
buildings, and one office building. The total cost of the 13 properties
was approximately $62,565,000 of which the Company assumed $17,498,000 in
mortgage debt. Additionally in 1994, the Company contributed $14,753,000
for a 93.16% general partnership interest in E.H. Properties, L.P., a
Delaware limited partnership. The partnership owns six shopping centers
valued at $22,226,000. In 1995, the limited partner converted a portion of
its equity interest into common stock of the Company at $22.25 per share.
At December 31, 1995, the Company owned 94.17% of the partnership.
Continued F-9
<PAGE> 32
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
----------
4. SALES OF REAL ESTATE PROPERTIES:
In 1995, the Company sold nine single tenant properties and one office
building. The net sales prices of the ten properties totaled $29,397,000.
Of this amount, the net sales price of the office building was $16,310,000
which resulted in a gain of $4,960,000. In 1995, a net gain of $3,683,000
was recognized on all real estate sales. In 1994, five single tenant
properties and a parcel of land were sold for $4,232,000. A net loss of
$108,000 was recognized on these sales.
On the above properties, lease termination fees totaling $2,419,000 and
$988,000 were received from tenants and recognized as revenue in 1995 and
1994, respectively, prior to the sale of certain of the properties.
5. REAL ESTATE HELD FOR SALE
In preparation for the sale of an undeveloped shopping mall in Arizona,
the Company terminated a master lease to an unaffiliated developer on
August 1, 1995. As part of the termination agreement, the Company paid the
lessee $5,000,000 which was capitalized as part of the asset held for
sale. The property, net of accumulated depreciation, was reclassified to
real estate held for sale on the Company's Consolidated Balance Sheet.
Depreciation expense is no longer being charged to the property and costs
to hold the property until sale are being capitalized.
6. MASTER LEASE AND OPTION AGREEMENT:
In January 1995, the Company entered into master lease and option
agreements with respect to eleven shopping centers in North Carolina. The
master leases required the payment equal to eight percent of the
lessor/sellers equity in the properties and gave the Company all
management and operating responsibilities for the shopping centers. Under
the master leases, the Company received all cash flow, if any, in excess
of the master lease payments. The option agreements gave the Company the
option to purchase the properties. In 1995, the Company purchased seven of
the properties (see Note 3). The Company terminated the master lease and
purchase option on one property on December 31, 1995. In January and
February of 1996, the Company purchased the three remaining properties for
approximately $32,000,000 assuming mortgage debt of approximately
$22,000,000. Upon purchase of these properties, the Company received funds
of $3,225,000 it had on deposit in an escrow account related to the option
agreements and the remaining master leases were canceled.
Continued F-10
<PAGE> 33
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
----------
7. NOTES RECEIVABLE (IN THOUSANDS):
The Company had the following notes receivable at December 31, 1995 and
1994:
<TABLE>
<CAPTION>
1995 1994
------- ------
<S> <C> <C>
Notes from affiliates, interest on 12-14% per annum,
collateralized by real estate. Due on demand
(see Note 8 and 16) $18,561 $ -
Notes from development companies, monthly interest
from 10% - 14% per annum. Maturity dates vary
depending on the completion or sale of certain properties 3,500 8,306
Other 789 793
------- ------
Total $22,850 $9,099
======= ======
</TABLE>
8. INVESTMENTS:
In April 1995, Excel Realty Partners, L.P. ("ERP"), a Delaware Limited
partnership, was formed to own and manage certain real estate properties.
The Company is a 1% partner and the sole general partner of ERP. In May
1995, ERP entered into an agreement for certain unaffiliated entities to
contribute to the partnership shopping centers in the southeastern United
States. The Company anticipates that a minimum of 13 properties will be
contributed to ERP under this agreement. In 1995, five real estate
properties with a value of $28,500,000, with outstanding mortgages of
$20,700,000, were contributed to ERP for limited partnership units valued
at $4,500,000 and cash of approximately $3,300,000. ERP also repaid
$2,700,000 of mortgages payable on the properties at the time two of the
properties were contributed. The cash used in the transactions was funded
by the Company in exchange for notes from ERP and general partnership
contributions to ERP. The Company is entitled to receive 99% of all
earnings, if any, after the limited partners receive their distributions.
Annual distributions approximate $400,000 based on the limited partner
units held at December 31, 1995. The partnership had net income in 1995 of
$84,000. At December 31, 1995, the partnership had total assets of
$29,079,000 and total liabilities of $24,367,000 including mortgage debt
of $17,954,000. The Company's 1% investment in the partnership at December
31, 1995 was $139,000 (see Note 16) which is included in other assets on
the Consolidated Balance Sheet.
In April 1995, EDV, a Delaware Corporation, was organized. The Company
owns 100% of the outstanding preferred shares of EDV. The preferred shares
receive 95% of the dividends, if any, from EDV. EDV was formed to acquire,
develop, hold, and sell real estate in the short-term for capital gains
and/or receive fee income (see Note 16).
Continued F-11
<PAGE> 34
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
----------
9. MORTGAGES PAYABLE, (IN THOUSANDS):
The Company had the following mortgages payable at December 31, 1995 and
1994:
<TABLE>
<CAPTION>
1995 1994
---------- ---------
<S> <C> <C>
Mortgage notes at 6.86% to 10%, payable in installments through 2018
(monthly payments at December 31, 1995 of $1,153), collateralized by
real estate and an assignment of rents:
Pass through certificates/bonds:
Public $ - $ 96,486
Private 29,907 31,187
Insurance companies 67,356 68,622
Banks 23,602 1,914
Other 2,948 2,948
-------- --------
Total mortgages payable $123,813 $201,157
======== ========
The principal payments required to be made on mortgages payable are as
follows:
YEAR
1996 $ 6,493
1997 3,522
1998 6,149
1999 21,625
2000 8,916
Thereafter 77,108
--------
$123,813
========
</TABLE>
Mortgages of $55,903 are fully amortizing with the final monthly payments
to be made between the years 2004 and 2018. In March 1994, the Company's
wholly-owned subsidiary, Excel Mortgage Funding Corporation ("EMFC"), and
EMFC's wholly-owned subsidiary, Excel Credit Corporation ("ECC"),
completed a securitized mortgage financing known as a Real Estate Mortgage
Investment Conduit (a "REMIC"). Pursuant to this transaction, ECC issued
and sold publicly, in an underwritten offering, $100,000 aggregate
principal amount of its Commercial Mortgage Pass-Through Certificates. The
Certificates were originally collateralized by 65 retail commercial
properties. In December 1995, the REMIC was repaid with advances from the
Company's credit facility (see Note 10).
Continued F-12
<PAGE> 35
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
----------
10. NOTES PAYABLE (IN THOUSANDS):
The Company had the following notes payable at December 31, 1995 and 1994:
<TABLE>
<CAPTION>
1995 1994
-------- ------
<S> <C> <C>
Unsecured credit agreement of $150,000, interest
at LIBOR + 1.75% (7.5% at December 31, 1995) $82,800 $ -
Line of credit of $4,000 payable to a financial institution, interest at
the lender's base rate plus 1.25%
(8.91% at December 31, 1995) 3,184 -
Unsecured revolving line of credit of $1,000, interest
at 9.5% 1,000 -
Other - 15
------- --
Total notes payable $86,984 $15
======= ==
</TABLE>
In December 1995, the Company received a two-year revolving credit
facility up to $150,000 in unsecured advances through December 1997, from
a group of six banks. The actual amount available to the Company is
dependent on certain covenants such as the value of unencumbered assets
and the ratio of earnings before interest, depreciation, and amortization
to fixed charges. The principal amount outstanding is due in December
1997.
Upon obtaining the credit facility, the Company borrowed $82,800. The
Company used the proceeds primarily to repay the outstanding REMIC debt of
$76,000 (see Note 9), repay a former bank line of $5,100, and pay loan
costs. The Company wrote-off loan costs of $2,806 related to the REMIC
debt and $254 related to a former bank line. Total loan costs written-off
in 1995, including other REMIC debt repayments during the year and the
write-down of the interest rate protection agreement (see Note 12),
amounted to $4,453 which were charged to interest expense. The Company
also has a $4,000 line of credit due September 1996 that is collateralized
by certain notes receivable, and an unsecured $1,000 revolving bank line.
11. COMMITMENTS AND CONTINGENCIES
As part of an agreement with an unaffiliated developer to contribute
certain properties to ERP for limited partnership units and cash (see Note
8), the limited partners are guaranteed distributions as defined by the
contribution agreement. The Company is obligated to make advances to ERP
to pay the distributions in the event ERP is unable to make these
payments. In 1995, ERP's cash flows were sufficient to make the limited
partner distributions. At December 31, 1995, ERP mortgage debt of
$8,150,000 was guaranteed by the Company. Also, the Company is committed
to advance ERP up to $2,000,000 in additional advances in conjunction with
existing credit agreements with ERP.
Continued F-13
<PAGE> 36
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
----------
12. FINANCIAL INSTRUMENTS AND CREDIT RISK:
Financial instruments which potentially subject the Company to
concentrations of risk consist principally of cash, accounts receivable
and notes receivable. The following fair value disclosure was determined
by the Company, using available market information and discounted cash
flow analyses as of December 31, 1995. However, considerable judgement is
necessary to interpret market data and to develop the related estimates of
fair value. Accordingly, the estimates presented are not necessarily
indicative of the amounts that the Company could realize upon disposition.
The use of different estimation methodologies may have a material effect
on the estimated fair value amounts.
The Company believes that the carrying values reflected in the balance
sheet at December 31, 1995 approximates the fair values for cash, accounts
receivables and payables, notes receivable, and variable-rate debt. The
Company believes the market value of its real estate held for sale exceeds
the carrying value at December 31, 1995. At December 31, 1995, the
carrying value of the interest rate protection agreements were written
down to the estimated fair market value. The write down of $803,000 was
charged to interest expense. The Company estimates that the fair values of
its fixed-rate mortgage debt at December 31, 1995 is approximately $107
million which is $9 million lower than the historical carrying value of
approximately $116 million.
At December 31, 1995, the Company's largest and second largest tenants
each account for approximately 15% of the Company's scheduled annual base
rental revenue ("ABR"). The Company's next three largest tenants account
for approximately 18% in total, of the Company's ABR. At December 31,
1995, the Company owned or master leased 113 properties located in 27
states. There were 13 properties in Indiana, 12 properties in North
Carolina, 11 properties in Arizona, and 9 properties in Illinois.
Approximately 42% of the Company's ABR are derived from these four states.
13. DISTRIBUTIONS:
In April 1995, the Company adopted a policy of declaring distributions to
stockholders of record on the first day of the succeeding quarter, instead
of the last day of the current quarter. The payment date of 15 days
following each quarter remained unchanged. As such, in 1995, distributions
of $0.43 per share were declared on March 31 and paid on April 15 and
distributions of $0.445 per share were declared on July 1 and October 1
and paid on July 15 and October 15 respectively. In 1996, distributions of
$0.445 per share or $5,861,000 were declared on January 1 and paid on
January 15. Distributions of $0.415, $0.43, $0.43 and $0.43 per share were
declared for the four quarters in 1994, respectively and distributions of
$0.315, $0.315, $0.37 and $0.415 per share were declared for the four
quarters in 1993, respectively. For the years ended December 31 1995,
1994, and 1993, approximately 27%, 14% and 29%, respectively, of the
distributions received by shareholders were considered to be a return of
capital for tax purposes.
Continued F-14
<PAGE> 37
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
----------
14. STATEMENT OF CASH FLOWS - SUPPLEMENTAL DISCLOSURE (IN THOUSANDS):
The amounts paid for interest during the years ended December 31, 1995,
1994 and 1993 were $16,507, $13,236 and $9,040 respectively.
The Company acquired real estate properties and interests in partnerships,
without the use of cash, for the years ended December 31, 1995, 1994, and
1993 as summarized below:
<TABLE>
<CAPTION>
1995 1994 1993
-------- --------- -------
<S> <C> <C> <C>
Mortgage notes payable assumed $22,888 $24,106 $48,810
Common stock issued 1,213 6,626 6,221
Other assets received and payables assumed (104) 154 651
------- ------- -------
Net real estate acquired without cash $23,997 $30,886 $55,682
======= ======= =======
</TABLE>
15. MINIMUM FUTURE RENTALS:
The Company leases its shopping centers and single-tenant buildings to
tenants under noncancelable operating leases generally requiring the
tenant to pay a minimum rent adjusted by either (i) fixed increases, (ii)
a percentage of gross sales, or (iii) a CPI index. The leases either (i)
require the tenant to pay all expenses of operating the property such as
insurance, property taxes, and structural repairs and maintenance, or (ii)
require the tenant to reimburse the Company for the tenant's share of real
estate taxes and other common area maintenance expenses.
Minimum future rental revenue for the next five years for the commercial
real estate owned (or master leased) at December 31, 1995 and subject to
noncancelable operating leases is as follows (in thousands):
<TABLE>
<CAPTION>
YEAR
-----
<S> <C>
1996 $ 43,061
1997 41,103
1998 38,726
1999 36,162
2000 and thereafter 338,242
</TABLE>
Continued F-15
<PAGE> 38
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
----------
16. RELATED PARTY TRANSACTIONS:
Notes receivable at December 31, 1995 included $12,611,000 and $5,950,000
from EDV and ERP respectively (see Note 7). Total interest income
recognized in 1995 from EDV and ERP amounted to $1,628,000 and $135,000,
respectively. Also in 1995, the Company recognized as income, $344,000 in
development fees from EDV.
In April 1993, the Company terminated its management contract with its
real estate manager, Excel Management Corporation ("EMC"), and issued
110,000 shares of its common stock to Excel Interfinancial Corporation
("EIC"), the parent of EMC, in consideration for such termination. The
amount paid in connection with the termination of the management contract
was capitalized as an "other asset" and was amortized over an 18-month
period, ending in September 1994.
17. OPTIONS AND WARRANTS:
The Company has adopted the 1993 Stock Option Plan (the "1993 Stock Plan")
for executive officers and other key employees of the Company and its
subsidiaries. In May 1994, the Company also adopted the Directors 1994
Stock Option Plan (the "1994 Stock Plan") for directors options.
Options may be granted under the 1993 Stock Plan for a period through 2003
and under the 1994 Stock Plan through the year 2004. Options under these
plans are exercisable for 10 years from the date of grant. The exercise
price of stock options may not be less than 100% of the fair market value
of the stock on the date of grant. The aggregate number of shares issuable
upon exercise of options under the 1993 Stock Plan may not exceed the
greater of (a) 500,000 shares or (b) 5% of the outstanding shares minus
300,000 shares, but in no event exceeding 700,000 shares. The aggregate
number of shares issuable upon exercise of options under the 1994 Stock
Plan may not exceed 240,000 shares.
Continued F-16
<PAGE> 39
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
----------
17. OPTIONS AND WARRANTS, CONTINUED:
<TABLE>
<CAPTION>
Stock option and warrant activity is summarized below: EXERCISE PRICE
SHARES PER SHARE
------ ---------
<S> <C> <C>
Outstanding at January 1, 1993 11,662 $ 13.92
Stock options granted - 1993 11,662 $ 13.92
Stock options granted - 1993 325,000 $ 19.75
Stock options exercised - 1993 (9,996) $ 13.92
Warrants issued - 1993 253,591 $15.00 - $18.15
Stock options granted - 1994 14,000 $ 20.13
Stock options exercised - 1994 (3,332) $ 13.92
Stock options granted - 1995 3,000 $ 16.38
Stock options granted - 1995 14,000 $ 19.63
Stock options granted - 1995 131,250 $ 19.25
Warrants expired - 1995 (18,028) $ 18.15
Warrants exercised - 1995 (87,585) $15.00 - $18.15
------- ---------------
Outstanding December 31, 1995 645,224 $13.92 - $20.25
======= ===============
</TABLE>
At December 31, 1995, options were exercisable as follows: 9,996 shares at
$13.92 per share, 17,000 shares at $16.38 per share, 131,250 shares at
$19.25 per share, 300,000 shares at $19.75 per share and 14,000 shares at
$20.13 per share. Warrants exercisable at December 31, 1995 were 20,840 at
$15.00 per share, 5,750 at $18.00 per share, and 121,388 at $20.25 per
share. The options and warrants expire at various dates through May 2005.
Of the options and warrants, 472,246 were issued to officers, directors or
affiliates of the Company. Options for 365,750 shares are available for
granting under the 1993 Stock Plan at December 31, 1995.
18. DISTRIBUTION REINVESTMENT PLAN:
The Company has adopted a distribution reinvestment plan (the "Plan").
Shares purchased under the Plan will be, at the Company's discretion,
either newly issued shares of the Company, shares purchased in the open
market or a combination of the foregoing. Distributions may be invested in
newly issued shares at a 5% discount from the average closing price for
the five trading days prior to the distribution pay date or in shares
purchased in the open market without brokerage commissions or service
charges.
Continued F-17
<PAGE> 40
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
----------
19. 401(K) PLAN:
In 1993, the Company established and implemented a 401(k) retirement plan
(the "401(k) Plan") covering substantially all of the officers and
employees of the Company. The 401(k) Plan permits participants to defer,
until termination of employment with the Company, up to a maximum of 15%
of their compensation. In addition, contributions of participants are
matched by the Company in an amount equal to 50% of the participant's
contribution (up to a maximum of 3% of such person's compensation) plus an
annual discretionary contribution, to be determined by the Board of
Directors, based upon the performance of the Company. For the years ended
December 31, 1995, 1994 and 1993, the Company incurred costs of $46,000,
$32,000 and $27,000, respectively, in connection with the 401(k) Plan.
20. SUBSEQUENT EVENTS
In January 1996, the Company acquired, for cash, a real estate property in
Georgia for approximately $2,700,000. Additionally, the Company purchased
three properties in North Carolina which were previously master leased
(see Note 6).
21. QUARTERLY FINANCIAL DATA (UNAUDITED):
Summarized quarterly financial data for the periods ended December 31,
1995 and 1994 is as follows (in thousands except per share amounts):
<TABLE>
<CAPTION>
NET INCOME
REVENUES NET INCOME PER SHARE
-------- ---------- ---------
<S> <C> <C> <C>
1995:
December 31 $15,301 $5,048 $0.39
September 30 13,521 5,534 0.43
June 30 12,981 3,693 0.33
March 31 13,426 3,917 0.36
1994:
December 31 $11,095 $3,501 $0.32
September 30 10,648 3,537 0.33
June 30 10,144 3,514 0.32
March 31 9,127 3,244 0.30
</TABLE>
F-18
<PAGE> 41
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(IN THOUSANDS)
----------
<TABLE>
<CAPTION>
ADDITIONS DEDUCTIONS
ACCOUNTS
BALANCE AT CHARGED TO RECEIVABLE BALANCE AT
BEGINNING BAD DEBT WRITTEN END OF
DESCRIPTION OF YEAR EXPENSE OFF YEAR
----------- ------- ------- --- ----
<S> <C> <C> <C> <C>
Allowance for bad debts:
Year ended December 31, 1995 $318 $445 $37 $726
==== ==== === ====
Year ended December 31, 1994 $280 $ 67 $29 $318
==== ==== === ====
Year ended December 31, 1993 $128 $250 $98 $280
==== ==== === ====
</TABLE>
F-19
<PAGE> 42
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1995
(IN THOUSANDS)
----------
<TABLE>
<CAPTION>
COST
CAPITALIZED (SOLD)
SUBSEQUENT TO GROSS AMOUNT AT WHICH
INITIAL COST ACQUISITION CARRIED AT CLOSE OF PERIOD
------------------- -------------------- ------------------------------
BUILDINGS AND BUILDINGS AND BUILDINGS AND TOTAL
DESCRIPTION ENCUMBRANCES LAND IMPROVEMENTS LAND IMPROVEMENTS LAND IMPROVEMENTS [a]
----------- ------------ ---- ------------- ---- ------------- ---- ------------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Office Building $ - $2,610 $2,610 $ - $ - $2,610 $2,610 $ 5,220
Burbank, CA
Genetrix Building - 666 1,434 - - 666 1,434 2,100
Scottsdale, AZ
Shopping Center - 2,394 3,132 (14) 210 2,380 3,342 5,722
Mesa, AZ
Office Building 424 175 525 - 2 175 527 702
Stillwater, MN
Kinder Care #1182 - 170 397 - - 170 397 567
Kalamazoo, MI
Shopping Center - 7,312 8,995 - 961 7,312 9,956 17,268
Phoenix, AZ
Shopping Center - 1,559 7,711 315 140 1,874 7,851 9,725
Norton, VA
Shopping Center 7,514 2,025 8,075 - 469 2,025 8,544 10,569
Perry, GA
Shopping Center - 1,436 4,584 30 650 1,466 5,234 6,700
Leesburg, FL
Shopping Center (50)% 3,293 527 3,817 - 4 527 3,821 4,348
Knoxville, TN
Wal-Mart Building 1,776 680 1,586 - - 680 1,586 2,266
Berlin, WI
Wal-Mart Building 2,641 1,011 2,359 - - 1,011 2,359 3,370
Decatur, IN
Wal-Mart Building 2,620 1,052 2,455 (10) - 1,042 2,455 3,497
Big Rapids, MI
</TABLE>
<TABLE>
<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
ACCUMULATED INCOME
DEPRECIATION DATE OF DATE STATEMENTS
DESCRIPTION [b] CONSTRUCTION ACQUIRED IS COMPUTED*
----------- ------------ ------------ -------- -----------
<S> <C> <C> <C> <C>
Office Building $ 405 1988 1989-90 40 years
Burbank, CA
Genetrix Building 181 1971 1990 40 years
Scottsdale, AZ
Shopping Center 471 1970 1990 40 years
Mesa, AZ
Office Building 59 1985 1991 40 years
Stillwater, MN
Kinder Care #1182 48 1990 1991 40 years
Kalamazoo, MI
Shopping Center 1,194 1988 1991-92 40 years
Phoenix, AZ
Shopping Center 598 1989 1992 40 years
Norton, VA
Shopping Center 645 1992 1992 40 years
Perry, GA
Shopping Center 451 1986 1992 40 years
Leesburg, FL
Shopping Center (50)% 291 1990 1992 40 years
Knoxville, TN
Wal-Mart Building 120 1992 1992 40 years
Berlin, WI
Wal-Mart Building 179 1992 1992 40 years
Decatur, IN
Wal-Mart Building 187 1992 1992 40 years
Big Rapids, MI
</TABLE>
F-20
<PAGE> 43
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION, CONTINUED
DECEMBER 31, 1995
(IN THOUSANDS)
----------
<TABLE>
<CAPTION>
COST
CAPITALIZED (SOLD)
SUBSEQUENT TO GROSS AMOUNT AT WHICH
INITIAL COST ACQUISITION CARRIED AT CLOSE OF PERIOD
----------------------- ---------------------- ------------------------------
BUILDINGS AND BUILDINGS AND BUILDINGS AND TOTAL
DESCRIPTION ENCUMBRANCES LAND IMPROVEMENTS LAND IMPROVEMENTS LAND IMPROVEMENTS [a]
----------- ------------ ---- ------------- ---- ------------ ---- ------------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Wal-Mart Building 5,276 2,118 4,942 - - 2,118 4,942 7,060
Wyomissing, PA
Wal-Mart Building 2,663 1,069 2,494 - - 1,069 2,494 3,563
Brighton, CO
Wal-Mart Bldg. l4,888 1,963 4,580 30 - 1,993 4,580 6,573
and outparcel
Temple, TX
Wal-Mart Building 2,908 1,167 2,724 - - 1,167 2,724 3,891
Wabash, IN
Mtn. Jacks #210310 - 303 708 - - 303 708 1,011
Mentor, OH
Mtn. Jacks #210303 [1] 378 1,134 - - 378 1,134 1,512
Dearborn Heights, MI
Autoworks #125 [1] 105 332 - - 105 332 437
Hastings, NE
Autoworks #138 [1] 189 421 - - 189 421 610
Grand Island, NE
Kinder Care #125 [1] 63 146 - - 63 146 209
Indianapolis, IN
Kinder Care #126 [1] 63 146 - - 63 146 209
Indianapolis, IN
Kinder Care #577 [1] 60 238 - - 60 238 298
High Ridge, MO
Kinder Care #162 [1] 59 235 - - 59 235 294
Fenton, MO
</TABLE>
<TABLE>
<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
ACCUMULATED INCOME
DEPRECIATION DATE OF DATE STATEMENTS
DESCRIPTION [b] CONSTRUCTION ACQUIRED IS COMPUTED*
----------- ------------ ------------- -------- -------------
<S> <C> <C> <C> <C>
Wal-Mart Building 376 1992 1992 40 years
Wyomissing, PA
Wal-Mart Building 190 1992 1992 40 years
Brighton, CO
Wal-Mart Bldg. 348 1992 1992 40 years
and outparcel
Temple, TX
Wal-Mart Building 207 1992 1992 40 years
Wabash, IN
Mtn. Jacks #210310 60 1974 1992 40 years
Mentor, OH
Mtn. Jacks #210303 86 1980 1992 40 years
Dearborn Heights, MI
Autoworks #125 25 1988 1992 40 years
Hastings, NE
Autoworks #138 32 1988 1992 40 years
Grand Island, NE
Kinder Care #125 11 1975 1992 40 years
Indianapolis, IN
Kinder Care #126 11 1976 1992 40 years
Indianapolis, IN
Kinder Care #577 18 1980 1992 40 years
High Ridge, MO
Kinder Care #162 18 1977 1992 40 years
Fenton, MO
</TABLE>
F-21
<PAGE> 44
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION, CONTINUED
DECEMBER 31, 1995
(IN THOUSANDS)
----------
<TABLE>
<CAPTION>
COST
CAPITALIZED (SOLD)
SUBSEQUENT TO GROSS AMOUNT AT WHICH
INITIAL COST ACQUISITION CARRIED AT CLOSE OF PERIOD
----------------------- ----------------------- ------------------------------
BUILDINGS AND BUILDINGS AND BUILDINGS AND TOTAL
DESCRIPTION ENCUMBRANCES LAND IMPROVEMENTS LAND IMPROVEMENTS LAND IMPROVEMENTS [a]
----------- ------------ ---- ------------- ---- ------------ ---- ------------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Kinder Care #128 - 90 211 - - 90 211 301
Indianapolis, IN
Kinder Care #134 - 90 211 - - 90 211 301
Indianapolis, IN
Kinder Care #132 [1] 63 146 - - 63 146 209
Ft. Wayne, IN
Kinder Care #1075(61.36)% - 212 495 - - 212 495 707
Ventura, CA
DHG - 74 110 - - 74 110 184
Houston, TX
DHG - 103 155 - - 103 155 258
Houston, TX
Egghead Software - 172 258 - - 172 258 430
Maplewood, MN
United Artists - 247 576 - - 247 576 823
Pueblo, CO
Lowes Building 3,876 1,325 3,446 530 - 1,855 3,446 5,301
Terra Haute, IN
Wal-Mart Building 6,712 2,631 6,140 - - 2,631 6,140 8,771
Orland Hills, IL
Kmart Building - 698 1,297 - - 698 1,297 1,995
Durango, CO
Kmart Building - 1,033 1,918 - - 1,033 1,918 2,951
Albany, GA
Kmart Building - 951 1,767 - 152 951 1,919 2,870
DeSoto, TX
</TABLE>
<TABLE>
<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
ACCUMULATED INCOME
DEPRECIATION DATE OF DATE STATEMENTS
DESCRIPTION [b] CONSTRUCTION ACQUIRED IS COMPUTED*
----------- ------------ ------------ -------- ------------
<S> <C> <C> <C> <C>
Kinder Care #128 16 1976 1992 40 years
Indianapolis, IN
Kinder Care #134 16 1976 1992 40 years
Indianapolis, IN
Kinder Care #132 11 1976 1992 40 years
Ft. Wayne, IN
Kinder Care #1075(61.36)% 38 1989 1992 40 years
Ventura, CA
DHG 8 1985 1992 40 years
Houston, TX
DHG 12 1985 1992 40 years
Houston, TX
Egghead Software 20 1987 1992 40 years
Maplewood, MN
United Artists 44 1977 1992 40 years
Pueblo, CO
Lowes Building 219 1993 1992/1993 40 years
Terra Haute, IN
Wal-Mart Building 429 1992 1993 40 years
Orland Hills, IL
Kmart Building 77 1982 1993 40 years
Durango, CO
Kmart Building 114 1981 1993 40 years
Albany, GA
Kmart Building 124 1980 1993 40 years
DeSoto, TX
</TABLE>
F-22
<PAGE> 45
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION, CONTINUED
DECEMBER 31, 1995
(IN THOUSANDS)
----------
<TABLE>
<CAPTION>
COST
CAPITALIZED (SOLD)
SUBSEQUENT TO GROSS AMOUNT AT WHICH
INITIAL COST ACQUISITION CARRIED AT CLOSE OF PERIOD
----------------------- ----------------------- ------------------------------
BUILDINGS AND BUILDINGS AND BUILDINGS AND TOTAL
DESCRIPTION ENCUMBRANCES LAND IMPROVEMENTS LAND IMPROVEMENTS LAND IMPROVEMENTS [a]
----------- ------------ ---- ------------- ---- ------------- ---- ------------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Kmart Building - 912 1,693 - 19 912 1,712 2,624
Fargo, ND
Kmart Building - 924 1,715 - - 924 1,715 2,639
Omaha, NE
Kmart Building - 892 1,656 - - 892 1,656 2,548
Pine Bluff, AR
Kmart Building - 836 1,553 - - 836 1,553 2,389
Somerville, NJ
Kmart Building - 1,293 2,401 - - 1,293 2,401 3,694
Springfield, MO
Kmart Building - 936 1,738 - 182 936 1,920 2,856
St. Charles, MO
Kmart Building - 414 768 - 8 414 776 1,190
Waverly, OH
Lucky Building - 698 1,295 - - 698 1,295 1,993
Brandon, FL
Kroger Building - 731 1,357 - - 731 1,357 2,088
Clearfield, PA
Kroger Building - 639 1,186 - - 639 1,186 1,825
East Albany, GA
Kroger Building - 722 1,340 - - 722 1,340 2,062
James Island, SC
Safeway Building - 790 1,466 - - 790 1,466 2,256
Missouri City, TX
Kroger Building - 817 1,517 - - 817 1,517 2,334
Muscle Shoals, AL
</TABLE>
<TABLE>
<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
ACCUMULATED INCOME
DEPRECIATION DATE OF DATE STATEMENTS
DESCRIPTION [b] CONSTRUCTION ACQUIRED IS COMPUTED*
----------- ------------ ------------- -------- ------------
<S> <C> <C> <C> <C>
Kmart Building 105 1982 1993 40 years
Fargo, ND
Kmart Building 102 1981 1993 40 years
Omaha, NE
Kmart Building 98 1981 1993 40 years
Pine Bluff, AR
Kmart Building 92 1982 1993 40 years
Somerville, NJ
Kmart Building 143 1982 1993 40 years
Springfield, MO
Kmart Building 140 1981 1993 40 years
St. Charles, MO
Kmart Building 46 1981 1993 40 years
Waverly, OH
Lucky Building 77 1982 1993 40 years
Brandon, FL
Kroger Building 81 1982 1993 40 years
Clearfield, PA
Kroger Building 70 1982 1993 40 years
East Albany, GA
Kroger Building 80 1982 1993 40 years
James Island, SC
Safeway Building 87 1982 1993 40 years
Missouri City, TX
Kroger Building 90 1982 1993 40 years
Muscle Shoals, AL
</TABLE>
F-23
<PAGE> 46
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION, CONTINUED
DECEMBER 31, 1995
(IN THOUSANDS)
----------
<TABLE>
<CAPTION>
COST
CAPITALIZED (SOLD)
SUBSEQUENT TO GROSS AMOUNT AT WHICH
INITIAL COST ACQUISITION CARRIED AT CLOSE OF PERIOD
-------------------- ---------------------- ------------------------------
BUILDINGS AND BUILDINGS AND BUILDINGS AND TOTAL
DESCRIPTION ENCUMBRANCES LAND IMPROVEMENTS LAND IMPROVEMENTS LAND IMPROVEMENTS [a]
----------- ------------ ---- ------------- ---- ------------- ---- ------------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Kroger Building - 902 1,674 - - 902 1,674 2,576
Ottawa, IL
Kroger Building - 703 1,305 - - 703 1,305 2,008
Scottsboro, AL
Ben Franklin Building - 511 949 - - 511 949 1,460
Tucson, AZ
Payless Drug Building - 389 723 - - 389 723 1,112
Yuma, AZ
Lucky Building - 471 875 - - 471 875 1,346
Phoenix, AZ
Lucky Building - 558 1,037 - - 558 1,037 1,595
Coralville, IA
Lucky Building - 588 1,093 - - 588 1,093 1,681
Decatur, IL
Lucky Building - 744 1,382 - - 744 1,382 2,126
Dubuque, IA
Lucky Building - 617 1,145 - - 617 1,145 1,762
Hobart, IN
Lucky Building - 435 809 - - 435 809 1,244
Mesa, AZ
Lucky Building - 511 948 - - 511 948 1,459
Michigan City, IN
Lucky Building - 735 1,365 - - 735 1,365 2,100
Moline, IL
Lucky Building - 908 1,686 - - 908 1,686 2,594
New Lenox, IL
</TABLE>
<TABLE>
<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
ACCUMULATED INCOME
DEPRECIATION DATE OF DATE STATEMENTS
DESCRIPTION [b] CONSTRUCTION ACQUIRED IS COMPUTED*
----------- ------------ ------------ -------- ------------
<S> <C> <C> <C> <C>
Kroger Building 100 1982 1993 40 years
Ottawa, IL
Kroger Building 77 1981 1993 40 years
Scottsboro, AL
Ben Franklin Building 56 1984 1993 40 years
Tucson, AZ
Payless Drug Building 43 1980 1993 40 years
Yuma, AZ
Lucky Building 43 1981 1993 40 years
Phoenix, AZ
Lucky Building 62 1981 1993 40 years
Coralville, IA
Lucky Building 65 1983 1993 40 years
Decatur, IL
Lucky Building 82 1980 1993 40 years
Dubuque, IA
Lucky Building 68 1983 1993 40 years
Hobart, IN
Lucky Building 48 1982 1993 40 years
Mesa, AZ
Lucky Building 56 1983 1993 40 years
Michigan City, IN
Lucky Building 81 1981 1993 40 years
Moline, IL
Lucky Building 100 1982 1993 40 years
New Lenox, IL
</TABLE>
F-24
<PAGE> 47
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION, CONTINUED
DECEMBER 31, 1995
(IN THOUSANDS)
----------
<TABLE>
<CAPTION>
COST
CAPITALIZED (SOLD)
SUBSEQUENT TO GROSS AMOUNT AT WHICH
INITIAL COST ACQUISITION CARRIED AT CLOSE OF PERIOD
----------------------- ----------------------- ------------------------------
BUILDINGS AND BUILDINGS AND BUILDINGS AND TOTAL
DESCRIPTION ENCUMBRANCES LAND IMPROVEMENTS LAND IMPROVEMENTS LAND IMPROVEMENTS [a]
----------- ------------ ---- ------------- ---- ------------- ---- ------------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lucky Building - 673 1,249 - - 673 1,249 1,922
Peoria, IL
Kroger Building - 862 1,601 - - 862 1,601 2,463
Pittsburgh, PA
Lucky Building - 582 1,081 - - 582 1,081 1,663
Springfield, IL
Lucky Building - 744 1,382 - - 744 1,382 2,126
Sterling, IL
Lucky Building - 364 676 - - 364 676 1,040
Tucson, AZ
Kroger Building - 670 1,243 - - 670 1,243 1,913
Waterloo, IL
Safeway Building - 906 1,683 - - 906 1,683 2,589
Muskogee, OK
Safeway Building - 778 1,445 - - 778 1,445 2,223
Sherwood, AR
Safeway Building - 739 1,373 - - 739 1,373 2,112
West Monroe, LA
Rite Aid Building - 176 328 - - 176 328 504
East Albany, GA
Super X Building - 195 363 - - 195 363 558
Muscle Shoals, AL
Shopping Center 5,157 1,888 4,981 - 23 1,888 5,004 6,892
Elizabethtown, KY
Shopping Center 4,717 629 5,555 - 24 629 5,579 6,208
Glasgow, KY
</TABLE>
<TABLE>
<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
ACCUMULATED INCOME
DEPRECIATION DATE OF DATE STATEMENTS
DESCRIPTION [b] CONSTRUCTION ACQUIRED IS COMPUTED*
----------- ------------ ------------ -------- ------------
<S> <C> <C> <C> <C>
Lucky Building 74 1983 1993 40 years
Peoria, IL
Kroger Building 95 1982 1993 40 years
Pittsburgh, PA
Lucky Building 64 1982 1993 40 years
Springfield, IL
Lucky Building 82 1980 1993 40 years
Sterling, IL
Lucky Building 40 1983 1993 40 years
Tucson, AZ
Kroger Building 74 1982 1993 40 years
Waterloo, IL
Safeway Building 100 1981 1993 40 years
Muskogee, OK
Safeway Building 86 1981 1993 40 years
Sherwood, AR
Safeway Building 82 1981 1993 40 years
West Monroe, LA
Rite Aid Building 19 1982 1993 40 years
East Albany, GA
Super X Building 22 1982 1993 40 years
Muscle Shoals, AL
Shopping Center 360 1992 1993 40 years
Elizabethtown, KY
Shopping Center 391 1992 1993 40 years
Glasgow, KY
</TABLE>
F-25
<PAGE> 48
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION, CONTINUED
DECEMBER 31, 1995
(IN THOUSANDS)
----------
<TABLE>
<CAPTION>
COST
CAPITALIZED (SOLD)
SUBSEQUENT TO GROSS AMOUNT AT WHICH
INITIAL COST ACQUISITION CARRIED AT CLOSE OF PERIOD
----------------------- ----------------------- -------------------------------
BUILDINGS AND BUILDINGS AND BUILDINGS AND TOTAL
DESCRIPTION ENCUMBRANCES LAND IMPROVEMENTS LAND IMPROVEMENTS LAND IMPROVEMENTS [a]
----------- ------------ ---- ------------- ---- ------------- ---- ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shopping Center 8,743 3,469 8,125 - - 3,469 8,125 11,594
Deland, FL
Shopping Center 3,209 1,655 3,074 - 6 1,655 3,080 4,735
Irving, TX
Shopping Center - 2,689 4,994 35 144 2,724 5,138 7,862
Ashland, OH
Shopping Center - 3,188 5,921 - 23 3,188 5,944 9,132
Covington, GA
Kmart Building - 564 1,048 - - 564 1,048 1,612
Atlantic, IA
Kash N' Karry Building - 378 702 - - 378 702 1,080
Homosassa Springs, FL
Shopping Center (94.17)% - 1,779 3,305 44 159 1,823 3,464 5,287
Brooksville, FL
Shopping Center (94.17)% - 1,552 2,882 58 113 1,610 2,995 4,605
Celina, OH
Shopping Center (94.17)% 2,455 984 1,827 62 118 1,046 1,945 2,991
Albemarle, NC
Shopping Center (94.17)% - 656 1,219 21 40 677 1,259 1,936
Marion, IN
Shopping Center (94.17)% - 568 1,056 71 133 639 1,189 1,828
Warsaw, IN
Shopping Center (94.17)% 3,060 1,618 3,013 80 148 1,698 3,161 4,859
Terre Haute, IN
Office Building 1,889 753 1,762 - 5 753 1,767 2,520
San Diego, CA
</TABLE>
<TABLE>
<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
ACCUMULATED INCOME
DEPRECIATION DATE OF DATE STATEMENTS
DESCRIPTION [b] CONSTRUCTION ACQUIRED IS COMPUTED*
----------- ------------ ------------ -------- ---------- --
<S> <C> <C> <C> <C>
Shopping Center 521 1993 1993 40 years
Deland, FL
Shopping Center 177 1987 1993 40 years
Irving, TX
Shopping Center 294 1990 1993 40 years
Ashland, OH
Shopping Center 304 1991 1993 40 years
Covington, GA
Kmart Building 51 1980 1994 40 years
Atlantic, IA
Kash N' Karry Building 34 1982 1994 40 years
Homosassa Springs, FL
Shopping Center (94.17)% 156 1987 1994 40 years
Brooksville, FL
Shopping Center (94.17)% 132 1990 1994 40 years
Celina, OH
Shopping Center (94.17)% 84 1988 1994 40 years
Albemarle, NC
Shopping Center (94.17)% 56 1989 1994 40 years
Marion, IN
Shopping Center (94.17)% 50 1989 1994 40 years
Warsaw, IN
Shopping Center (94.17)% 139 1989 1994 40 years
Terre Haute, IN
Office Building 87 1988 1994 40 years
San Diego, CA
</TABLE>
F-26
<PAGE> 49
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION, CONTINUED
DECEMBER 31, 1995
(IN THOUSANDS)
----------
<TABLE>
<CAPTION>
COST
CAPITALIZED (SOLD)
SUBSEQUENT TO GROSS AMOUNT AT WHICH
INITIAL COST ACQUISITION CARRIED AT CLOSE OF PERIOD
----------------------- ----------------------- ------------------------------
BUILDINGS AND BUILDINGS AND BUILDINGS AND TOTAL
DESCRIPTION ENCUMBRANCES LAND IMPROVEMENTS LAND IMPROVEMENTS LAND IMPROVEMENTS [a]
----------- ------------ ---- ------------- ---- ------------ ---- ------------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shopping Center 4,398 2,431 4,515 - 14 2,431 4,529 6,960
Hilton Head, SC
Shopping Center - 2,028 3,767 - - 2,028 3,767 5,795
Lake Wales, FL
Shopping Center 8,165 3,882 7,209 - 6 3,882 7,215 11,097
Versailles, KY
Shopping Center - 1,300 2,415 - 257 1,300 2,672 3,972
Mesa, AZ
Shopping Center 5,389 3,351 6,223 - 18 3,351 6,241 9,592
London, KY
Q-Club Building - 1,822 3,385 - - 1,822 3,385 5,207
Scottsdale, AZ
Q-Club Building - 1,813 3,366 - - 1,813 3,366 5,179
Phoenix, AZ
Lowe's Building 4,265 2,187 4,061 - - 2,187 4,061 6,248
Middletown, OH
Shopping Center 2,265 1,035 1,924 69 127 1,104 2,051 3,155
Kannapolis, NC
Shopping Center 4,107 2,109 3,917 - - 2,109 3,917 6,026
Asheboro, NC
Shopping Center 2,634 1,100 2,043 - - 1,100 2,043 3,143
Kernersville, NC
Shopping Center 3,363 1,846 3,429 - - 1,846 3,429 5,275
Roxboro, NC
Shopping Center 5,462 2,335 4,337 - - 2,335 4,337 6,672
Siler City, NC
</TABLE>
<TABLE>
<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
ACCUMULATED INCOME
DEPRECIATION DATE OF DATE STATEMENTS
DESCRIPTION [b] CONSTRUCTION ACQUIRED IS COMPUTED*
----------- ------------ ------------ -------- ------------
<S> <C> <C> <C> <C>
Shopping Center 204 1994 1994 40 years
Hilton Head, SC
Shopping Center 153 1994 1994 40 years
Lake Wales, FL
Shopping Center 308 1994 1994 40 years
Versailles, KY
Shopping Center 136 1981 1994 40 years
Mesa, AZ
Shopping Center 263 1994 1994 40 years
London, KY
Q-Club Building 117 1994 1994 40 years
Scottsdale, AZ
Q-Club Building 136 1994 1994 40 years
Phoenix, AZ
Lowe's Building 190 1993 1994 40 years
Middletown, OH
Shopping Center 53 1992 1994 40 years
Kannapolis, NC
Shopping Center 69 1988 1995 40 years
Asheboro, NC
Shopping Center 27 1988 1995 40 years
Kernersville, NC
Shopping Center 47 1989 1995 40 years
Roxboro, NC
Shopping Center 59 1988 1995 40 years
Siler City, NC
</TABLE>
F-27
<PAGE> 50
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION, CONTINUED
DECEMBER 31, 1995
(IN THOUSANDS)
----------
<TABLE>
<CAPTION>
COST
CAPITALIZED (SOLD)
SUBSEQUENT TO GROSS AMOUNT AT WHICH
INITIAL COST ACQUISITION CARRIED AT CLOSE OF PERIOD
----------------------- ----------------------- ------------------------------
BUILDINGS AND BUILDINGS AND BUILDINGS AND TOTAL
DESCRIPTION ENCUMBRANCES LAND IMPROVEMENTS LAND IMPROVEMENTS LAND IMPROVEMENTS [a]
----------- ------------ ---- ------------- ---- ------------- ---- ------------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shopping Center - 2,267 4,211 - - 2,267 4,211 6,478
Wadesboro, NC
Shopping Center 1,916 824 1,531 - - 824 1,531 2,355
Jonesville, NC
Shopping Center - 2,876 5,341 - - 2,876 5,341 8,217
Kinston, NC
Shopping Center 2,500 1,157 2,149 - - 1,157 2,149 3,306
Hilton Head, SC
Shopping Center 2,580 1,325 2,461 - - 1,325 2,461 3,786
Hendersonville, TN
Shopping Center - 807 1,499 - - 807 1,499 2,306
Manchester, TN
All encompassing
mortgage debt on
properties marked
[1] above 2,948 - - - - - - -
-------- -------- -------- ------ ------- -------- -------- --------
$123,813 $121,073 $246,857 $1,321 $ 4,155 $122,394 $251,012 $373,406
======== ======== ======== ====== ======= ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
ACCUMULATED INCOME
DEPRECIATION DATE OF DATE STATEMENTS
DESCRIPTION [b] CONSTRUCTION ACQUIRED IS COMPUTED*
----------- ------------ ------------ -------- ------------
<S> <C> <C> <C> <C>
Shopping Center 39 1988 1995 40 years
Wadesboro, NC
Shopping Center 21 1988 1995 40 years
Jonesville, NC
Shopping Center 61 1991 1995 40 years
Kinston, NC
Shopping Center 11 1989 1995 40 years
Hilton Head, SC
Shopping Center 8 1989 1995 40 years
Hendersonville, TN
Shopping Center 2 1990 1995 40 years
Manchester, TN
All encompassing
mortgage debt on
properties marked
[1] above -
-------
$14,909
=======
</TABLE>
Listing does not include one real estate property held for sale in Scottsdale,
AZ. The net carrying cost of this property is $8,519.
* Tenant improvements and other costs capitalized subsequent to acquisition are
depreciated over 2 - 40 years.
F-28
<PAGE> 51
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION, CONTINUED
DECEMBER 31, 1995
(IN THOUSANDS)
----------
[a] Reconciliation of total real estate carrying value for the past three years
is as follows:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Balance at beginning of year $359,459 $277,412 $113,639
Acquisitions 47,583 84,926 163,768
Improvements and other additions 2,473 1,554 1,427
Cost of property sold (27,590) (4,433) (1,422)
-------- -------- --------
Balance at end of year $381,925 $359,459 $277,412
======== ======== ========
Total cost for federal income tax purposes
at the end of each year (difference is
from tax free exchanges) $381,062 $358,689 $276,642
======== ======== ========
</TABLE>
[b] Reconciliation of accumulated depreciation for the past three years is as
follows:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Balance at beginning of year $10,228 $ 4,270 $ 998
Depreciation expense 6,845 6,038 3,369
Deletions - property sold (1,918) (80) (97)
Reclass to real estate held for sale (246) -- --
------- ------- ------
Balance at end of year $14,909 $10,228 $4,270
======= ======= ======
</TABLE>
F-29
<PAGE> 1
EXHIBIT 10.32
================================================================================
AGREEMENT OF LIMITED PARTNERSHIP
OF
EXCEL REALTY PARTNERS, L.P.
a Delaware limited partnership
---------------------------
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP
AN OPINION OF COUNSEL SATISFACTORY TO THE PARTNERSHIP, IN
FORM AND SUBSTANCE SATISFACTORY TO THE PARTNERSHIP, TO THE
EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION
MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE ACT AND UNDER
APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS.
dated as of April 24, 1995
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1 DEFINED TERMS........................................................................ 1
ARTICLE 2 ORGANIZATIONAL MATTERS............................................................... 15
Section 2.1 Organization......................................................................... 15
Section 2.2 Name................................................................................. 15
Section 2.3 Registered Office and Agent; Principal Office........................................ 15
Section 2.4 Power of Attorney.................................................................... 15
Section 2.5 Term................................................................................. 16
ARTICLE 3 PURPOSE.............................................................................. 16
Section 3.1 Purpose and Business................................................................. 16
Section 3.2 Powers............................................................................... 17
Section 3.3 Partnership Only for Purposes Specified.............................................. 17
Section 3.4 Representations and Warranties by the Limited Partners............................... 17
ARTICLE 4 CAPITAL CONTRIBUTIONS................................................................ 18
Section 4.1 Capital Contributions of the Initial Partners........................................ 18
Section 4.2 Additional Limited Partners.......................................................... 19
Section 4.3 Loans by Third Parties............................................................... 19
Section 4.4 Additional Funding and Capital Contributions......................................... 19
A. General....................................................................................... 19
B. Notice of Additional Funds Requirement........................................................ 19
C. General Partner Loans......................................................................... 19
D. Additional General Partner Contributions; Additional Limited Partners......................... 20
Section 4.5 No Interest; No Return............................................................... 20
ARTICLE 5 DISTRIBUTIONS........................................................................ 20
Section 5.1 Requirement and Characterization of Distributions.................................... 20
Section 5.2 Distributions in Kind................................................................ 21
Section 5.3 Amounts Withheld..................................................................... 21
Section 5.4 Distributions Upon Liquidation....................................................... 21
Section 5.5 Restricted Distributions............................................................. 21
ARTICLE 6 ALLOCATIONS.......................................................................... 21
Section 6.1 Timing and Amount of Allocations of Net Income and Net Loss.......................... 21
Section 6.2 General Allocations.................................................................. 21
Section 6.3 Additional Allocation Provisions..................................................... 21
A. Special Allocations........................................................................... 22
B. Regulatory Allocations........................................................................ 22
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
(a) Minimum Gain Chargeback......................................................... 22
(b) Partner Minimum Gain Chargeback................................................. 22
(c) Nonrecourse Deductions and Partner Nonrecourse Deductions....................... 22
(d) Qualified Income Offset......................................................... 22
(e) Gross Income Allocation......................................................... 23
(f) Limitation on Allocation of Net Loss............................................ 23
(g) Section 754 Adjustment.......................................................... 23
(h) Curative Allocations............................................................ 23
C. Special Allocations Upon Liquidation.................................................. 23
D. Allocation of Excess Nonrecourse Liabilities.......................................... 23
Section 6.4 Tax Allocations.............................................................. 24
A. In General............................................................................ 24
B. Allocations Respecting Section 704(c) Revaluations.................................... 24
Section 6.5 Other Provisions............................................................. 24
A. Other Allocations Upon Change in Law.................................................. 24
B. Consistent Tax Reporting.............................................................. 24
ARTICLE 7 MANAGEMENT AND OPERATIONS OF BUSINESS........................................ 24
Section 7.1 Management................................................................... 24
Section 7.2 Certificate of Limited Partnership........................................... 27
Section 7.3 Restrictions on General Partner's Authority.................................. 27
Section 7.4 Reimbursement of the General Partner......................................... 29
Section 7.5 Other Business of General Partner............................................ 30
Section 7.6 Contracts with Affiliates.................................................... 30
Section 7.7 Indemnification.............................................................. 30
Section 7.8 Liability of the General Partner............................................. 32
Section 7.9 Other Matters Concerning the General Partner................................. 33
Section 7.10 Title to Partnership Assets.................................................. 33
Section 7.11 Reliance by Third Parties.................................................... 33
ARTICLE 8 RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS................................... 34
Section 8.1 Limitation of Liability...................................................... 34
Section 8.2 Management of Business....................................................... 34
Section 8.3 Outside Activities of Limited Partners....................................... 34
Section 8.4 Return of Capital............................................................ 34
Section 8.5 Rights of Limited Partners Relating to the Partnership....................... 35
Section 8.6 Redemption Rights of Qualifying Parties...................................... 35
Section 8.7 Partnership Right to Call Limited Partner Interests.......................... 39
Section 8.8 Other Redemptions............................................................ 39
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 9 BOOKS, RECORDS, ACCOUNTING AND REPORTS............................................... 39
Section 9.1 Records and Accounting............................................................... 39
Section 9.2 Fiscal Year.......................................................................... 40
Section 9.3 Reports.............................................................................. 40
ARTICLE 10 TAX MATTERS.......................................................................... 40
Section 10.1 Preparation of Tax Returns........................................................... 40
Section 10.2 Tax Elections........................................................................ 40
Section 10.3 Tax Matters Partner.................................................................. 40
Section 10.4 Withholding.......................................................................... 41
ARTICLE 11 TRANSFERS AND WITHDRAWALS............................................................ 42
Section 11.1 Transfer............................................................................. 42
Section 11.2 Transfer of General Partner's Partnership Interest................................... 42
Section 11.3 Limited Partners' Rights to Transfer................................................. 43
A. General....................................................................................... 43
(1) General Partner Right of First Refusal.................................................. 43
(2) Qualified Transferee.................................................................... 43
(3) Minimum Transfer Restriction............................................................ 43
(4) Transferee Agreement to Effect a Redemption............................................. 43
(5) No Further Transfers.................................................................... 44
(6) Exception for Permitted Transfers....................................................... 44
B. Incapacity.................................................................................... 44
C. Opinion of Counsel............................................................................ 44
D. Adverse Tax Consequences...................................................................... 44
Section 11.4 Substituted Limited Partners......................................................... 44
Section 11.5 Assignees............................................................................ 45
Section 11.6 General Provisions................................................................... 45
ARTICLE 12 ADMISSION OF PARTNERS................................................................ 47
Section 12.1 Admission of Successor General Partner............................................... 47
Section 12.2 Admission of Additional Limited Partners............................................. 47
Section 12.3 Amendment of Agreement and Certificate of Limited Partnership........................ 48
Section 12.4 Admission of Initial Limited Partners................................................ 48
Section 12.5 Limit on Number of Partners.......................................................... 48
ARTICLE 13 DISSOLUTION, LIQUIDATION AND TERMINATION............................................. 48
Section 13.1 Dissolution.......................................................................... 48
Section 13.2 Winding Up........................................................................... 49
Section 13.3 Deemed Distribution and Recontribution............................................... 50
Section 13.4 Rights of Limited Partners........................................................... 50
Section 13.5 Notice of Dissolution................................................................ 50
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 13.6 Cancellation of Certificate of Limited Partnership................................... 50
Section 13.7 Reasonable Time for Winding-Up....................................................... 50
ARTICLE 14 PROCEDURES FOR ACTIONS AND CONSENTS OF PARTNERS;
AMENDMENTS; MEETINGS......................................................................... 51
Section 14.1 Procedures for Actions and Consents of Partners...................................... 51
Section 14.2 Amendments........................................................................... 51
Section 14.3 Meetings of the Partners............................................................. 51
ARTICLE 15 GENERAL PROVISIONS................................................................... 52
Section 15.1 Addresses and Notice................................................................. 52
Section 15.2 Titles and Captions.................................................................. 52
Section 15.3 Pronouns and Plurals................................................................. 52
Section 15.4 Further Action....................................................................... 52
Section 15.5 Binding Effect....................................................................... 52
Section 15.6 Waiver............................................................................... 52
Section 15.7 Counterparts......................................................................... 53
Section 15.8 Applicable Law....................................................................... 53
Section 15.9 Entire Agreement..................................................................... 53
Section 15.10 Invalidity of Provisions............................................................. 53
Section 15.11 Limitation to Preserve REIT Status................................................... 53
Section 15.12 No Partition......................................................................... 54
Section 15.13 No Third-Party Rights Created Hereby................................................. 54
EXHIBIT A PARTNERS AND ADDRESSES............................................................... 56
EXHIBIT B EXAMPLES REGARDING ADJUSTMENT FACTOR................................................. 57
EXHIBIT C NOTICE OF REDEMPTION................................................................. 58
EXHIBIT D FORM OF PARTNER SCHEDULE............................................................. 60
EXHIBIT E FORM OF PARTNERSHIP UNIT CERTIFICATE................................................. 66
</TABLE>
iv
<PAGE> 6
AGREEMENT OF LIMITED PARTNERSHIP
OF
EXCEL REALTY PARTNERS, L.P.
THIS AGREEMENT OF LIMITED PARTNERSHIP OF EXCEL REALTY PARTNERS, L.P.,
dated as of April 24, 1995 (the "EFFECTIVE DATE"), is entered into by and among
Excel Realty Trust, Inc., a Maryland corporation, as the General Partner, and
the Persons whose names are set forth on Exhibit A as attached hereto, as the
Limited Partners, together with any other Persons who become Partners in the
Partnership as provided herein.
ARTICLE 1
DEFINED TERMS
The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
"ACT" means the Delaware Revised Uniform Limited Partnership Act, as it
may be amended from time to time, and any successor to such statute.
"ACTIONS" has the meaning set forth in Section 7.7 hereof.
"ADDITIONAL FUNDS" has the meaning set forth in Section 4.4.A hereof.
"ADDITIONAL LIMITED PARTNER" means a Person admitted to the Partnership
as a Limited Partner pursuant to Section 4.2 or Section 4.4.D and Section 12.2
hereof and who is shown as such on the books and records of the Partnership.
"ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant Fiscal Year, after giving effect to the following adjustments:
(a) decrease such deficit by any amounts that such Partner is
obligated to restore pursuant to this Agreement or by operation of law
upon liquidation of such Partner's Partnership Interest or is deemed to
be obligated to restore pursuant to the penultimate sentence of each of
Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and
(b) increase such deficit by the items described in
Regulations Section 1.704-1 (b)(2)(ii)(d)(4), (5) and (6).
The foregoing definition of "Adjusted Capital Account Deficit" is intended to
comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall
be interpreted consistently therewith.
"ADJUSTMENT FACTOR" means 1.0; provided, however, that in the event
that:
(a) the General Partner (i) declares or pays a dividend on its
outstanding REIT Shares in REIT Shares or makes a distribution to all
holders of its outstanding REIT Shares in REIT Shares, (ii) splits or
subdivides its outstanding REIT Shares or (iii) effects a reverse stock
split or otherwise combines its outstanding REIT Shares into a smaller
number of REIT Shares, the Adjustment Factor shall be adjusted by
multiplying the Adjustment Factor previously in effect by a fraction,
(1) the numerator of which shall be the number of REIT Shares issued
and outstanding
<PAGE> 7
on the record date for such dividend, distribution, split,
subdivision, reverse split or combination (assuming for such purposes
that such dividend, distribution, split, subdivision, reverse split
or combination has occurred as of such time) and (2) the denominator
of which shall be the actual number of REIT Shares (determined without
the above assumption) issued and outstanding on the record date for
such dividend, distribution, split, subdivision, reverse split or
combination;
(b) in the event that the General Partner distributes any
rights, options or warrants to all holders of its REIT Shares to
subscribe for or to purchase or to otherwise acquire REIT Shares (or
other securities or rights convertible into, exchangeable for or
exercisable for REIT Shares) at a price per share less than the Value
of a REIT Share on the record date for such distribution (each a
"DISTRIBUTED RIGHT"), then the Adjustment Factor shall be adjusted by
multiplying the Adjustment Factor previously in effect by a fraction,
(i) the numerator of which shall be the number of REIT Shares issued
and outstanding on the record date plus the maximum number of REIT
Shares purchasable under such Distributed Rights and (ii) the
denominator of which shall be the number of REIT Shares issued and
outstanding on the record date plus a fraction, (1) the numerator of
which is the maximum number of REIT Shares purchasable under such
Distributed Rights times the minimum purchase price per REIT Share
under such Distributed Rights and (2) the denominator of which is the
Value of a REIT Share as of the record date; provided, however, that,
if any such Distributed Rights expire or become no longer exercisable,
then the Adjustment Factor shall be adjusted, effective retroactive to
the date of distribution of the Distributed Rights, to reflect a
reduced maximum number of REIT Shares or any change in the minimum
purchase price for the purposes of the above fractions; and
(c) in the event that the General Partner shall, by dividend
or otherwise, distribute to all holders of its REIT Shares evidences of
its indebtedness or assets (including securities, but excluding any
dividend or distribution referred to in subsection (a) above), which
evidences of indebtedness or assets relate to assets not received by
the General Partner pursuant to a pro rata distribution by the
Partnership, then the Adjustment Factor shall be adjusted to equal the
amount determined by multiplying the Adjustment Factor in effect
immediately prior to the close of business on the date fixed for
determination of shareholders entitled to receive such distribution by
a fraction, (i) the numerator shall be such Value of a REIT Share on
the date fixed for such determination and (ii) the denominator shall be
the Value of a REIT Share on the dated fixed for such determination
less the then fair market value (as determined by the General Partner,
whose determination shall be conclusive) of the portion of the
evidences of indebtedness or assets so distributed applicable to one
REIT Share.
Any adjustments to the Adjustment Factor shall become effective immediately
after the effective date of such event, retroactive to the record date, if any,
for such event; provided, however, that any Limited Partner may waive, by
written notice to the General Partner, the effect of any adjustment to the
Adjustment Factor applicable to the Partnership Units held by such Limited
Partner, and, thereafter, such adjustment will not be effective as to such
Partnership Units. For illustrative purposes, examples of adjustments to the
Adjustment Factor are set forth on Exhibit B attached hereto.
"AFFILIATE" means, with respect to any Person, any Person directly or
indirectly controlling or controlled by or under common control with such
Person. For the purposes of this definition, "control" when used with respect to
any Person means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise, and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"AGREEMENT" means this Agreement of Limited Partnership of Excel Realty
Partners, L.P., as it may be amended, supplemented or restated from time to
time.
"APPLICABLE PERCENTAGE" has the meaning set forth in Section 8.6.B
hereof.
2
<PAGE> 8
"APPRAISAL" means, with respect to any assets, the written opinion of
an independent third party experienced in the valuation of similar assets,
selected by the General Partner in good faith. Such opinion may be in the form
of an opinion by such independent third party that the value for such property
or asset as set by the General Partner is fair, from a financial point of view,
to the Partnership.
"ASSIGNEE" means a Person to whom one or more Partnership Units have
been Transferred in a manner permitted under this Agreement, but who has not
become a Substituted Limited Partner, and who has the rights set forth in
Section 11.5 hereof.
"AVAILABLE CASH" means, with respect to any period for which such
calculation is being made,
(a) the sum, without duplication, of:
(1) the Partnership's Net Income or Net Loss (as the
case may be) for such period,
(2) Depreciation and all other noncash charges to the
extent deducted in determining Net Income or Net Loss for such
period,
(3) the amount of any reduction in reserves of the
Partnership referred to in clause (b)(6) below (including,
without limitation, reductions resulting because the General
Partner determines such amounts are no longer necessary),
(4) the excess, if any, of the net cash proceeds from
the sale, exchange, disposition, financing or refinancing of
Partnership property for such period over the gain (or loss,
as the case may be) recognized from such sale, exchange,
disposition, financing or refinancing during such period
(excluding Terminating Capital Transactions), and
(5) all other cash received (including amounts
previously accrued as Net Income and amounts of deferred
income) or any net amounts borrowed by the Partnership for
such period that was not included in determining Net Income or
Net Loss for such period;
(b) less the sum, without duplication, of:
(1) all principal debt payments made during such
period by the Partnership,
(2) capital expenditures made by the Partnership
during such period,
(3) investments in any entity (including loans made
thereto) to the extent that such investments are not otherwise
described in clause (b)(1) or clause (b)(2) above,
(4) all other expenditures and payments not deducted
in determining Net Income or Net Loss for such period
(including amounts paid in respect of expenses previously
accrued),
(5) any amount included in determining Net Income or
Net Loss for such period that was not received by the
Partnership during such period,
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(6) the amount of any increase in reserves
(including, without limitation, working capital reserves)
established during such period that the General Partner
determines are necessary or appropriate in its sole and
absolute discretion, and
(7) any amount distributed or paid in redemption of
any Limited Partner Interest or Partnership Units pursuant to
Section 8.6, Section 8.7 or Section 8.8 hereof, including,
without limitation, any Cash Amount paid.
Notwithstanding the foregoing, Available Cash shall not include (i) any cash
received or reductions in reserves, or take into account any disbursements made,
or reserves established, after dissolution and the commencement of the
liquidation and winding up of the Partnership or (ii) any Capital Contributions,
whenever received.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in San Diego, California, Los Angeles, California or New
York, New York are authorized or required by law to close.
"CAPITAL ACCOUNT" means, with respect to any Partner, the Capital
Account maintained by the General Partner for such Partner on the Partnership's
books and records in accordance with the following provisions:
(a) To each Partner's Capital Account, there shall be added
such Partner's Capital Contributions, such Partner's distributive share
of Net Income and any items in the nature of income or gain that are
specially allocated pursuant to Section 6.3 hereof, and the principal
amount of any Partnership liabilities assumed by such Partner or that
are secured by any property distributed to such Partner.
(b) From each Partner's Capital Account, there shall be
subtracted the amount of cash and the Gross Asset Value of any property
distributed to such Partner pursuant to any provision of this
Agreement, such Partner's distributive share of Net Losses and any
items in the nature of expenses or losses that are specially allocated
pursuant to Section 6.3 hereof, and the principal amount of any
liabilities of such Partner assumed by the Partnership or that are
secured by any property contributed by such Partner to the Partnership.
(c) In the event any interest in the Partnership is
Transferred in accordance with the terms of this Agreement, the
transferee shall succeed to the Capital Account of the transferor to
the extent that it relates to the Transferred interest.
(d) In determining the principal amount of any liability for
purposes of subsections (a) and (b) hereof, there shall be taken into
account Code Section 752(c) and any other applicable provisions of the
Code and Regulations.
(e) The provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Regulations
Sections 1.704-1(b) and 1.704-2, and shall be interpreted and applied
in a manner consistent with such Regulations. If the General Partner
shall determine that it is prudent to modify the manner in which the
Capital Accounts are maintained in order to comply with such
Regulations, the General Partner may make such modification provided
that such modification will not have a material effect on the amounts
distributable to any Partner without such Partner's Consent. The
General Partner also shall (i) make any adjustments that are necessary
or appropriate to maintain equality between the Capital Accounts of the
Partners and the amount of Partnership capital reflected on the
Partnership's balance sheet, as computed for book purposes, in
accordance with Regulations Section 1.704-1(b)(2)(iv)(q) and (ii) make
any appropriate modifications in the event that unanticipated events
might otherwise cause this Agreement not to comply with Regulations
Section 1.704-1(b) or Section 1.704-2.
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"CAPITAL CONTRIBUTION" means, with respect to any Partner, the amount
of money and the initial Gross Asset Value of any Contributed Property that such
Partner contributes to the Partnership pursuant to Section 4.1, Section 4.2 or
Section 4.4 hereof.
"CASH AMOUNT" means the lesser of (a) an amount of cash equal to the
product of (i) the Value of a REIT Share and (ii) the REIT Shares Amount
determined as of the applicable Valuation Date or (b) in the case of a
Declination followed by a Public Offering Funding, the Public Offering Funding
Amount.
"CERTIFICATE" means the Certificate of Limited Partnership of the
Partnership filed in the office of the Secretary of State of the State of
Delaware, as amended from time to time in accordance with the terms hereof and
the Act.
"CHARTER" means the Articles of Incorporation of the General Partner
filed with the Maryland State Department of Assessments and Taxation on May 13,
1993, as amended, supplemented or restated from time to time.
"CODE" means the Internal Revenue Code of 1986, as amended and in
effect from time to time or any successor statute thereto, as interpreted by the
applicable Regulations thereunder. Any reference herein to a specific section or
sections of the Code shall be deemed to include a reference to any corresponding
provision of future law.
"CONSENT" means the consent to, approval of, or vote on a proposed
action by a Partner given in accordance with Article 14 hereof.
"CONSENT OF THE LIMITED PARTNERS" means the Consent of a Majority in
Interest of the Limited Partners, which Consent shall be obtained prior to the
taking of any action for which it is required by this Agreement and, except as
otherwise provided in this Agreement, may be given or withheld by a Majority in
Interest of the Limited Partners, in their reasonable discretion.
"CONTRIBUTED PROPERTY" means each Property or other asset, in such form
as may be permitted by the Act, but excluding cash, contributed or deemed
contributed to the Partnership (or deemed contributed to the Partnership on
termination and reconstitution thereof pursuant to Code Section 708).
"CONTROLLED ENTITY" means, as to any Limited Partner, (a) any
corporation more than fifty percent (50%) of the outstanding voting stock of
which is owned by such Limited Partner or such Limited Partner's Family Members,
(b) any trust, whether or not revocable, of which such Limited Partner or such
Limited Partner's Family Members are the sole beneficiaries, (c) any partnership
of which such Limited Partner is the managing partner and in which such Limited
Partner or such Limited Partner's Family Members hold partnership interests
representing at least twenty-five percent (25%) of such partnership's capital
and profits and (d) any limited liability company of which such Limited Partner
is the manager and in which such Limited Partner or such Limited Partner's
Family Members hold membership interests representing at least twenty-five
percent (25%) of such limited liability company's capital and profits.
"CONTROLLING PERSON" means any Person, whatever his or her title, who
performs executive or senior management functions for the General Partner or its
Affiliates similar to those of directors, executive management and senior
management, or any Person who either holds a two percent (2%) or more equity
interest in the General Partner or its Affiliates, or has the power to direct or
cause the direction of the General Partner or its Affiliates, whether through
the ownership of voting securities, by contract or otherwise, or, in the absence
of a specific role or title, any Person having the power to direct or cause the
direction of the management-level employees and policies of the General Partner
or its Affiliates. It is not intended that every Person who carries a title such
as vice president, senior vice president, secretary or treasurer be included in
the definition of "Controlling Person."
"CUT-OFF DATE" means the twentieth (20th) calendar day (or, if such day
is not a Business Day, then the next following Business Day) after the General
Partner's receipt of a Notice of Redemption.
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<PAGE> 11
"DEBT" means, as to any Person, as of any date of determination, (i)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services; (ii) all amounts owed by such Person to banks or
other Persons in respect of reimbursement obligations under letters of credit,
surety bonds and other similar instruments guaranteeing payment or other
performance of obligations by such Person; (iii) all indebtedness for borrowed
money or for the deferred purchase price of property or services secured by any
lien on any property owned by such Person, to the extent attributable to such
Person's interest in such property, even though such Person has not assumed or
become liable for the payment thereof; and (iv) lease obligations of such Person
that, in accordance with generally accepted accounting principles, should be
capitalized.
"DECLINATION" has the meaning set forth in Section 8.6.D hereof.
"DEPRECIATION" means, for each Fiscal Year or other applicable period,
an amount equal to the federal income tax depreciation, amortization or other
cost recovery deduction allowable with respect to an asset for such year or
other period, except that, if the Gross Asset Value of an asset differs from its
adjusted basis for federal income tax purposes at the beginning of such year or
period, Depreciation shall be in an amount that bears the same ratio to such
beginning Gross Asset Value as the federal income tax depreciation, amortization
or other cost recovery deduction for such year or other period bears to such
beginning adjusted tax basis; provided, however, that, if the federal income tax
depreciation, amortization or other cost recovery deduction for such year or
period is zero, Depreciation shall be determined with reference to such
beginning Gross Asset Value using any reasonable method selected by the General
Partner.
"DESIGNATED PARTIES" means the Persons designated as such on the
Partner Schedules then in effect.
"DISTRIBUTED RIGHT" has the meaning set forth in the definition of
"Adjustment Factor."
"EFFECTIVE DATE" has the meaning set forth in the preamble to this
Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
"FAMILY MEMBERS" means, as to a Person that is an individual, (a) such
Person's spouse, (b) such Person's ancestors, (c) such Person's descendants
(whether by blood or by adoption), (d) such Person's brothers and sisters, (e)
inter vivos or testamentary trusts of which only such Person and/or his spouse,
ancestors, descendants (whether by blood or by adoption), brothers and/or
sisters are beneficiaries and (f) any partnership or limited liability company
all of whose partners or members consist of such Person and/or his spouse,
ancestors, descendants (whether by blood or by adoption), brothers and/or
sisters and/or inter vivos or testamentary trusts of which only such Person
and/or his spouse, ancestors, descendants (whether by blood or by adoption),
brothers and/or sisters are beneficiaries..
"FISCAL YEAR" means the fiscal year of the Partnership, which shall be
the calendar year.
"FUNDING DEBT" means any Debt incurred by or on behalf of the General
Partner for the purpose of providing funds to the Partnership.
"FUNDING NOTICE" has the meaning set forth in Section 4.4.B hereof.
"GENERAL PARTNER" means Excel Realty Trust, Inc., a Maryland
corporation, and its successors and assigns, as the general partner of the
Partnership in their capacities as general partner of the Partnership.
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<PAGE> 12
"GENERAL PARTNER INTEREST" means the Partnership Interest held by the
General Partner, which Partnership Interest is an interest as a general partner
under the Act. A General Partner Interest may be expressed as a number of
Partnership Units.
"GENERAL PARTNER LOAN" has the meaning set forth in Section 4.4.C
hereof.
"GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:
(a) The initial Gross Asset Value of any asset contributed by
a Limited Partner to the Partnership shall be set forth on the Partner
Schedule with respect to such Limited Partner.
(b) The Gross Asset Values of all Partnership assets
immediately prior to the occurrence of any event described in clause
(1), clause (2), clause (3), clause (4) or clause (5) hereof shall be
adjusted to equal their respective gross fair market values, as
determined by the General Partner using such reasonable method of
valuation as it may adopt, as of the following times:
(1) the acquisition of an additional interest in the
Partnership (other than in connection with the execution of
this Agreement but including, without limitation, acquisitions
pursuant to Section 4.4 hereof or contributions or deemed
contributions by the General Partner pursuant to Section 4.4
hereof) by a new or existing Partner in exchange for more than
a de minimis Capital Contribution, if the General Partner
reasonably determines that such adjustment is necessary or
appropriate to reflect the relative economic interests of the
Partners in the Partnership;
(2) the distribution by the Partnership to a Partner
of more than a de minimis amount of Partnership property as
consideration for an interest in the Partnership, if the
General Partner reasonably determines that such adjustment is
necessary or appropriate to reflect the relative economic
interests of the Partners in the Partnership;
(3) the liquidation of the Partnership within the
meaning of Regulations Section 1.704-1(b)(2)(ii)(g);
(4) upon the admission of a successor General Partner
pursuant to Section 12.1 hereof; and
(5) at such other times as the General Partner shall
reasonably determine necessary or advisable in order to comply
with Regulations Sections 1.704-1(b) and 1.704-2.
(c) The Gross Asset Value of any Partnership asset distributed
to a Partner shall be the gross fair market value of such asset on the
date of distribution as determined by the distributee and the General
Partner, provided that, if the distributee is the General Partner or if
the distributee and the General Partner cannot agree on such a
determination, such gross fair market value shall be determined by
Appraisal.
(d) The Gross Asset Values of Partnership assets shall be
increased (or decreased) to reflect any adjustments to the adjusted
basis of such assets pursuant to Code Section 734(b) or Code Section
743(b), but only to the extent that such adjustments are taken into
account in determining Capital Accounts pursuant to Regulations Section
1.704-1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall
not be adjusted pursuant to this subsection (d) to the extent
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<PAGE> 13
that the General Partner reasonably determines that an adjustment
pursuant to subsection (b) above is necessary or appropriate in
connection with a transaction that would otherwise result in an
adjustment pursuant to this subsection (d).
(e) If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to subsection (a), subsection (b) or
subsection (d) above, such Gross Asset Value shall thereafter be
adjusted by the Depreciation taken into account with respect to such
asset for purposes of computing Net Income and Net Losses.
"HOLDER" means either (a) a Partner or (b) an Assignee, owning a
Partnership Unit, that is treated as a member of the Partnership for federal
income tax purposes.
"INCAPACITY" or "INCAPACITATED" means, (i) as to any Partner who is an
individual, death, total physical disability or entry by a court of competent
jurisdiction adjudicating such Partner incompetent to manage his or her person
or his or her estate; (ii) as to any Partner that is a corporation or limited
liability company, the filing of a certificate of dissolution, or its
equivalent, for the corporation or limited liability company or the revocation
of its charter; (iii) as to any Partner that is a partnership, the dissolution
and commencement of winding up of the partnership; (iv) as to any Partner that
is an estate, the distribution by the fiduciary of the estate's entire interest
in the Partnership; (v) as to any trustee of a trust that is a Partner, the
termination of the trust (but not the substitution of a new trustee); or (vi) as
to any Partner, the bankruptcy of such Partner. For purposes of this definition,
bankruptcy of a Partner shall be deemed to have occurred when (a) the Partner
commences a voluntary proceeding seeking liquidation, reorganization or other
relief of or against such Partner under any bankruptcy, insolvency or other
similar law now or hereafter in effect, (b) the Partner is adjudged as bankrupt
or insolvent, or a final and nonappealable order for relief under any
bankruptcy, insolvency or similar law now or hereafter in effect has been
entered against the Partner, (c) the Partner executes and delivers a general
assignment for the benefit of the Partner's creditors, (d) the Partner files an
answer or other pleading admitting or failing to contest the material
allegations of a petition filed against the Partner in any proceeding of the
nature described in clause (b) above, (e) the Partner seeks, consents to or
acquiesces in the appointment of a trustee, receiver or liquidator for the
Partner or for all or any substantial part of the Partner's properties, (f) any
proceeding seeking liquidation, reorganization or other relief under any
bankruptcy, insolvency or other similar law now or hereafter in effect has not
been dismissed within one hundred twenty (120) days after the commencement
thereof, (g) the appointment without the Partner's consent or acquiescence of a
trustee, receiver or liquidator has not been vacated or stayed within ninety
(90) days of such appointment, or (h) an appointment referred to in clause (g)
above is not vacated within ninety (90) days after the expiration of any such
stay.
"INDEMNITEE" means (i) any Person made a party to a proceeding by
reason of its status as (A) the General Partner or (B) a director of the General
Partner or an officer or employee of the Partnership or the General Partner and
(ii) such other Persons (including Affiliates of the General Partner or the
Partnership) as the General Partner may designate from time to time (whether
before or after the event giving rise to potential liability), in its sole and
absolute discretion.
"INTEREST" means interest, original issue discount and other similar
payments or amounts paid by the Partnership for the use or forbearance of money.
"IRS" means the Internal Revenue Service, which administers the
internal revenue laws of the United States.
"LIMITED PARTNER" means any Person named as a Limited Partner in
Exhibit A attached hereto, as such Exhibit A may be amended from time to time,
or any Substituted Limited Partner or Additional Limited Partner, in such
Person's capacity as a Limited Partner in the Partnership.
"LIMITED PARTNER INTEREST" means a Partnership Interest of a Limited
Partner in the Partnership representing a fractional part of the Partnership
Interests of all Limited Partners and includes any and all benefits to which the
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<PAGE> 14
holder of such a Partnership Interest may be entitled as provided in this
Agreement, together with all obligations of such Person to comply with the terms
and provisions of this Agreement. A Limited Partner Interest may be expressed as
a number of Partnership Units.
"LIQUIDATING EVENT" has the meaning set forth in Section 13.1 hereof.
"LIQUIDATOR" has the meaning set forth in Section 13.2.A hereof.
"MAJORITY IN INTEREST OF THE LIMITED PARTNERS" means those Limited
Partners (other than any Limited Partner fifty percent (50%) or more of whose
equity is owned, directly or indirectly, by the General Partner) holding in the
aggregate more than fifty percent (50%) of the aggregate Partnership Units of
all Limited Partners (other than any Limited Partner fifty percent (50%) or more
of whose equity is owned, directly or indirectly, by the General Partner).
"NET INCOME" or "NET LOSS" means, for each Fiscal Year of the
Partnership, an amount equal to the Partnership's taxable income or loss for
such year, determined in accordance with Code Section 703(a) (for this purpose,
all items of income, gain, loss or deduction required to be stated separately
pursuant to Code Section 703(a)(1) shall be included in taxable income or loss),
with the following adjustments:
(a) Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Income
(or Net Loss) pursuant to this definition of "Net Income" or "Net Loss"
shall be added to (or subtracted from, as the case may be) such taxable
income (or loss);
(b) Any expenditure of the Partnership described in Code
Section 705(a)(2)(B) or treated as a Code Section 705(a)(2)(B)
expenditure pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and
not otherwise taken into account in computing Net Income (or Net Loss)
pursuant to this definition of "Net Income" or "Net Loss," shall be
subtracted from (or added to, as the case may be) such taxable income
(or loss);
(c) In the event that the Gross Asset Value of any Partnership
asset is adjusted pursuant to subsection (b) or subsection (c) of the
definition of "Gross Asset Value," the amount of such adjustment shall
be taken into account as gain or loss from the disposition of such
asset for purposes of computing Net Income or Net Loss;
(d) Gain or loss resulting from any disposition of property
with respect to which gain or loss is recognized for federal income tax
purposes shall be computed by reference to the Gross Asset Value of the
property disposed of, notwithstanding that the adjusted tax basis of
such property differs from its Gross Asset Value;
(e) In lieu of the depreciation, amortization and other cost
recovery deductions that would otherwise be taken into account in
computing such taxable income or loss, there shall be taken into
account Depreciation for such Fiscal Year;
(f) To the extent that an adjustment to the adjusted tax basis
of any Partnership asset pursuant to Code Section 734(b) or Code
Section 743(b) is required pursuant to Regulations Section
1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital
Accounts as a result of a distribution other than in liquidation of a
Partner's interest in the Partnership, the amount of such adjustment
shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases the basis of
the asset) from the disposition of the asset and shall be taken into
account for purposes of computing Net Income or Net Loss; and
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<PAGE> 15
(g) Notwithstanding any other provision of this definition of
"Net Income" or "Net Loss," any item that is specially allocated
pursuant to Section 6.3 hereof shall not be taken into account in
computing Net Income or Net Loss. The amounts of the items of
Partnership income, gain, loss or deduction available to be specially
allocated pursuant to Section 6.3 hereof shall be determined by
applying rules analogous to those set forth in this definition of "Net
Income" or "Net Loss."
"NONRECOURSE DEDUCTIONS" has the meaning set forth in Regulations
Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for a Fiscal
Year shall be determined in accordance with the rules of Regulations Section
1.704-2(c).
"NONRECOURSE LIABILITY" has the meaning set forth in Regulations
Section 1.752-1(a)(2).
"NOTICE OF REDEMPTION" means the Notice of Redemption substantially in
the form of Exhibit C attached to this Agreement.
"ORIGINAL LIMITED PARTNERS" means the Persons executing a Partner
Schedule together with the General Partner and being admitted to the Partnership
either as an initial Limited Partner or as an Additional Limited Partner;
provided, however, that "Original Limited Partners" does not include any
Assignee or other transferee, including, without limitation, any Substituted
Limited Partner succeeding to all or any part of the Partnership Interest of any
such Person. The initial Original Limited Partners are listed on Exhibit A
attached hereto.
"OWNERSHIP LIMIT" means the applicable restriction on ownership of
shares of the General Partner imposed under the Charter.
"PARTNER" means the General Partner or a Limited Partner, and
"PARTNERS" means the General Partner and the Limited Partners.
"PARTNER MINIMUM GAIN" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i)(3).
"PARTNER NONRECOURSE DEBT" has the meaning set forth in Regulations
Section 1.704-2(b)(4).
"PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i)(2), and the amount of Partner Nonrecourse
Deductions with respect to a Partner Nonrecourse Debt for a Fiscal Year shall be
determined in accordance with the rules of Regulations Section 1.704-2(i)(2).
"PARTNER SCHEDULE" means a schedule, substantially in the form attached
hereto as Exhibit D and executed by the General Partner and a Limited Partner
(including any Original Limited Partner and any Substituted Limited Partner),
that shall set forth, with respect to a Limited Partner to which Partnership
Units are issued pursuant to this Agreement, (a) the Gross Asset Values, as
determined by the General Partner and agreed to by the contributing Limited
Partner, for any Contributed Properties contributed by such contributing Limited
Partner, (b) the initial Partnership Units issued to such Limited Partner, (c)
the Preferred Return Per Unit, (d) the Specific Adjustment Factor and (e) any
Specific Adjustment Limitations.
"PARTNERSHIP" means the limited partnership formed under the Act and
pursuant to this Agreement, and any successor thereto.
"PARTNERSHIP INTEREST" means an ownership interest in the Partnership
representing a Capital Contribution by either a Limited Partner or the General
Partner and includes any and all benefits to which the holder of such a
Partnership Interest may be entitled as provided in this Agreement, together
with all obligations of such Person to
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<PAGE> 16
comply with the terms and provisions of this Agreement. A Partnership Interest
may be expressed as a number of Partnership Units.
"PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations
Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as
any net increase or decrease in Partnership Minimum Gain, for a Fiscal Year
shall be determined in accordance with the rules of Regulations Section
1.704-2(d).
"PARTNERSHIP RECORD DATE" means the record date established by the
General Partner for the distribution of Available Cash pursuant to Section 5.1.A
hereof, which record date shall generally be the same as the record date
established by the General Partner for a distribution to its shareholders of
some or all of its portion of such distribution.
"PARTNERSHIP UNIT" means a fractional share of the Partnership
Interests of all Partners issued pursuant to Section 4.1, Section 4.2 or Section
4.4 hereof; provided, however, that the General Partner Interest and the Limited
Partner Interests shall have the differences in rights and privileges as
specified in this Agreement. The ownership of Partnership Units may (but need
not, in the sole and absolute discretion of the General Partner) be evidenced by
the form of certificate for Partnership Units attached hereto as Exhibit E.
"PERMITTED TRANSFER" has the meaning set forth in Section 11.3.A
hereof.
"PERSON" means an individual or a corporation, partnership, trust,
unincorporated organization, association, limited liability company or other
entity.
"PLEDGE" has the meaning set forth in Section 11.3.A hereof.
"PREFERRED RETURN PER UNIT" means
(a) as to a Limited Partner or its Assignee (including,
without limitation, the General Partner following the acquisition of
Tendered Units pursuant to Section 8.6 hereof), the amount specified,
as an amount distributable quarterly (or upon such other frequency as
may be provided in the relevant Partner Schedule) from Available Cash
as provided in Section 5.1.1 hereof, as such on the Partner Schedule
with respect to such Limited Partner; or
(b) in the case of additional Partnership Units issued to the
General Partner in exchange for additional Capital Contributions as
provided in Section 4.4.D, an amount, distributable quarterly from
Available Case as provided in Section 5.1.1 hereof, equal to the then
current dividend yield on a REIT Share.
The Preferred Return Per Unit need not be the same amount for each Partnership
Limited Partner or Assignee or with respect to each Partnership Unit and, being
determined with regard to the Partnership's income, shall not constitute a
"guaranteed payment" under Code Section 707(c).
"PRIMARY OFFERING NOTICE" has the meaning set forth in Section 8.6.F(4)
hereof.
"PROPERTIES" means any assets and property of the Partnership such as,
but not limited to, interests in real property and personal property, including,
without limitation, fee interests, interests in ground leases, interests in
limited liability companies, joint ventures or partnerships, interests in
mortgages, and Debt instruments as the Partnership may hold from time to time.
"PUBLIC OFFERING FUNDING" has the meaning set forth in Section 8.6.D(2)
hereof.
"PUBLIC OFFERING FUNDING AMOUNT" means the dollar amount equal to (i)
the product of (x) the number of Registrable Shares sold in a Public Offering
Funding and (y) the public offering price per share of such
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<PAGE> 17
Registrable Shares in such Public Offering Funding, less (ii) the aggregate
underwriting discounts and commissions in such Public Offering Funding.
"QUALIFIED TRANSFEREE" means an "accredited investor" as defined in
Rule 501 promulgated under the Securities Act.
"QUALIFYING PARTY" means (a) an Original Limited Partner, (b) an
Additional Limited Partner (unless otherwise provided in the applicable Partner
Schedule), (c) a Designated Party that is either a Substituted Limited Partner
or an Assignee, (d) a Family Member, or a lending institution as the pledgee of
a Pledge, who is the transferee in a Permitted Transfer or (e) with respect to
any Notice of Redemption delivered to the General Partner within the time period
set forth in Section 11.3.A(4) hereof, a Substituted Limited Partner succeeding
to all or part of the Limited Partner Interest of (i) an Original Limited
Partner, (ii) an Additional Limited Partner (unless such Additional Limited
Partner was not a Qualifying Party), (iii) a Designated Party that is either a
Substituted Limited Partner or an Assignee or (iv) a Family Member, or a lending
institution as the pledgee of a Pledge, who is the transferee in a Permitted
Transfer.
"REDEMPTION" has the meaning set forth in Section 8.6.A hereof.
"REDEMPTION AMOUNT" has the meaning set forth in Section 5.1.B hereof.
"REGISTRABLE SHARES" has the meaning set forth in Section 8.6.D(2)
hereof.
"REGULATIONS" means the applicable income tax regulations under the
Code, whether such regulations are in proposed, temporary or final form, as such
regulations may be amended from time to time (including corresponding provisions
of succeeding regulations).
"REGULATORY ALLOCATIONS" has the meaning set forth in Section 6.3.B(h)
hereof.
"REIT" means a real estate investment trust qualifying under Code
Section 856.
"REIT PARTNER" means a Partner or Assignee that is, or has made an
election to qualify as, a REIT.
"REIT PAYMENT" has the meaning set forth in Section 15.11 hereof.
"REIT REQUIREMENTS" has the meaning set forth in Section 5.1.A hereof.
"REIT SHARE" means a share of the General Partner's Common Stock, par
value $.01 per share.
"REIT SHARES AMOUNT" means a number of REIT Shares equal to the product
of (a) the number of Tendered Units, (b) the Adjustment Factor and (c) the
applicable Specific Adjustment Factor, taking into account any applicable
Specific Adjustment Limitations; provided, however, that, in the event that the
General Partner issues to all holders of REIT Shares as of a certain record date
rights, options, warrants or convertible or exchangeable securities entitling
the General Partner's shareholders to subscribe for or purchase REIT Shares, or
any other securities or property (collectively, the "RIGHTS"), with the record
date for such Rights issuance falling within the period starting on the date of
the Notice of Redemption and ending on the day immediately preceding the
Specified Redemption Date, which Rights will not be distributed before the
relevant Specified Redemption Date, then the REIT Shares Amount shall also
include such Rights that a holder of that number of REIT Shares would be
entitled to receive, expressed, where relevant hereunder, in a number of REIT
Shares determined by the General Partner in good faith.
"RELATED PARTY" means, with respect to any Person, any other Person
whose ownership of shares of the General Partner's capital stock would be
attributed to the first such Person under Code Section 544 (as modified by Code
Section 856(h)(1)(B)).
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"RIGHTS" has the meaning set forth in the definition of "REIT Shares
Amount."
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"SINGLE FUNDING NOTICE" has the meaning set forth in Section 8.6.D(3)
hereof.
"SPECIFIC ADJUSTMENT FACTOR" means, as to a Limited Partner or its
Assignee, the amount specified as such on the Partner Schedule with respect to
such Limited Partner; provided, however, that, if no such amount is specified on
such Partner Schedule, the Specific Adjustment Factor shall be 1.0. The Specific
Adjustment Factor need not be the same for each Limited Partner and Assignee.
"SPECIFIC ADJUSTMENT LIMITATIONS" means, as to a Limited Partner or its
Assignee, the limitations and restrictions, if any, specified as such on the
Partner Schedule with respect to such Limited Partner. The Specific Adjustment
Limitations need not be the same for each Limited Partner and Assignee.
"SPECIFIED REDEMPTION DATE" means the later of (a) the thirtieth (30th)
calendar day (or, if such day is not a Business Day, the next following Business
Day) after the receipt by the General Partner of a Notice of Redemption or (b)
in the case of a Declination followed by a Public Offering Funding, the Business
Day next following the date of the closing of the Public Offering Funding;
provided, however, that no Specified Redemption Date shall occur during the
first Twelve-Month Period; provided, further, that the Specified Redemption
Date, as well as the closing of a Redemption, or an acquisition of Tendered
Units by the General Partner pursuant to Section 8.6.B hereof, on any Specified
Redemption Date, may be deferred, in the General Partner's sole and absolute
discretion, for such time (but in any event not more than one hundred fifty
(150) days in the aggregate) as may reasonably be required to effect, as
applicable, (i) a Public Offering Funding or other necessary funding
arrangements, (ii) compliance with the Securities Act or other law (including,
but not limited to, (a) state "blue sky" or other securities laws and (b) the
expiration or termination of the applicable waiting period, if any, under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended) and (iii)
satisfaction or waiver of other commercially reasonable and customary closing
conditions and requirements for a transaction of such nature.
"SUBSIDIARY" means, with respect to any Person, any corporation or
other entity of which a majority of (i) the voting power of the voting equity
securities or (ii) the outstanding equity interests is owned, directly or
indirectly, by such Person; provided, however, that, with respect to the
Partnership, "Subsidiary" means solely a partnership or limited liability
company (taxed, for federal income tax purposes, as a partnership and not as an
association or publicly traded partnership taxable as a corporation) of which
the Partnership is a member unless the General Partner has received an
unqualified opinion from independent counsel of recognized standing, or a ruling
from the IRS, that the ownership of shares of stock of a corporation or other
entity will not jeopardize the General Partner's status as a REIT, in which
event the term "Subsidiary" shall include the corporation or other entity which
is the subject of such opinion or ruling.
"SUBSTITUTED LIMITED PARTNER" means an Assignee who is admitted as a
Limited Partner to the Partnership pursuant to Section 11.4 hereof. The term
"Substituted Limited Partner" shall not include any Additional Limited Partner.
"TAX ITEMS" has the meaning set forth in Section 6.4.A hereof.
"TENDERED UNITS" has the meaning set forth in Section 8.6.A hereof.
"TENDERING PARTY" has the meaning set forth in Section 8.6.A hereof.
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"TERMINATING CAPITAL TRANSACTION" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.
"TRANSFER," when used with respect to a Partnership Unit or all or any
portion of a Partnership Interest, means any sale, assignment, bequest,
conveyance, devise, gift (outright or in trust), Pledge, encumbrance,
hypothecation, mortgage, exchange, transfer or other disposition or act of
alienation, whether voluntary or involuntary or by operation of law; provided,
however, that, when the term is used in Article 11 hereof, Transfer does not
include (a) any Redemption of Partnership Units by the Partnership, or
acquisition of Tendered Units from the Limited Partners by the General Partner,
pursuant to Section 8.6 hereof or (b) any redemption of Partnership Units
pursuant to Section 8.7 or Section 8.8 hereof. The terms "Transferred" and
"Transferring" have correlative meanings.
"TWELVE-MONTH PERIOD" means a twelve-month period (or, as to a
particular Qualifying Party, such shorter period as the General Partner may, in
its sole and absolute discretion, agree to in the relevant Partner Schedule)
ending on the day before the first (1st) anniversary of either (i) the admission
of such Qualifying Party as a Limited Partner in the Partnership or (ii) the
Transfer of Partnership Units to such Qualifying Party, or on the day before a
subsequent anniversary thereof (or, in the case of a period shorter than twelve
(12) months, such other period as may be provided in the relevant Partner
Schedule).
"UNITHOLDER" means the General Partner or a Holder of Partnership
Units.
"VALUATION DATE" means (a) in the case of a tender of Partnership Units
for Redemption, the date of receipt by the General Partner of a Notice of
Redemption or, if such date is not a Business Day, the immediately preceding
Business Day or (b) in any other case, the date specified in this Agreement.
"VALUE" means, on any Valuation Date with respect to a REIT Share, the
average of the daily market prices for twenty (20) consecutive trading days
immediately preceding the Valuation Date. The market price for any such trading
day shall be:
(1) if the REIT Shares are listed or admitted to trading on
any securities exchange or The Nasdaq Stock Market's National Market
System, the closing price, regular way, on such day, or if no such sale
takes place on such day, the average of the closing bid and asked
prices on such day, in either case as reported in the principal
consolidated transaction reporting system,
(2) if the REIT Shares are not listed or admitted to trading
on any securities exchange or The Nasdaq Stock Market's National Market
System, the last reported sale price on such day or, if no sale takes
place on such day, the average of the closing bid and asked prices on
such day, as reported by a reliable quotation source designated by the
General Partner, or
(3) if the REIT Shares are not listed or admitted to trading
on any securities exchange or The Nasdaq Stock Market's National Market
System and no such last reported sale price or closing bid and asked
prices are available, the average of the reported high bid and low
asked prices on such day, as reported by a reliable quotation source
designated by the General Partner, or if there shall be no bid and
asked prices on such day, the average of the high bid and low asked
prices, as so reported, on the most recent day (not more than ten (10)
days prior to the date in question) for which prices have been so
reported;
provided, however, that, if there are no bid and asked prices reported during
the ten (10) days prior to the date in question, the Value of the REIT Shares
shall be determined by the General Partner acting in good faith on the basis of
such quotations and other information as it considers, in its reasonable
judgment, appropriate. In the event that the REIT Shares Amount includes Rights
that a holder of REIT Shares would be entitled to receive, then the Value
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of such Rights shall be determined by the General Partner acting in good faith
on the basis of such quotations and other information as it considers, in its
reasonable judgment, appropriate.
ARTICLE 2
ORGANIZATIONAL MATTERS
SECTION 2.1 ORGANIZATION
The Partnership is a limited partnership organized pursuant to the
provisions of the Act and upon the terms and subject to the conditions set forth
in this Agreement. Except as expressly provided herein to the contrary, the
rights and obligations of the Partners and the administration and termination of
the Partnership shall be governed by the Act. The Partnership Interest of each
Partner shall be personal property for all purposes.
SECTION 2.2 NAME
The name of the Partnership is Excel Realty Partners, L.P. The
Partnership's business may be conducted under any other name or names deemed
advisable by the General Partner, including the name of the General Partner or
any Affiliate thereof. The words "Limited Partnership," "L.P.," "Ltd." or
similar words or letters shall be included in the Partnership's name where
necessary for the purposes of complying with the laws of any jurisdiction that
so requires. The General Partner in its sole and absolute discretion may change
the name of the Partnership at any time and from time to time and shall notify
the Partners of such change in the next regular communication to the Partners.
SECTION 2.3 REGISTERED OFFICE AND AGENT; PRINCIPAL OFFICE
The address of the registered office of the Partnership in the State of
Delaware is located at 32 Loockerman Square, Suite L-100, Dover, Delaware 19901,
and the registered agent for service of process on the Partnership in the State
of Delaware at such registered office is The Prentice-Hall Corporation System,
Inc. The principal office of the Partnership is located at 16955 Via Del Campo,
Suite 110, San Diego, California 92127, or such other place as the General
Partner may from time to time designate by notice to the Limited Partners. The
Partnership may maintain offices at such other place or places within or outside
the State of Delaware as the General Partner deems advisable.
SECTION 2.4 POWER OF ATTORNEY
A. Each Limited Partner and each Assignee hereby irrevocably
constitutes and appoints the General Partner, any Liquidator, and authorized
officers and attorneys-in-fact of each, and each of those acting singly, in each
case with full power of substitution, as its true and lawful agent and
attorney-in-fact, with full power and authority in its name, place and stead to:
(1) execute, swear to, seal, acknowledge, deliver, file and
record in the appropriate public offices (a) all certificates,
documents and other instruments (including, without limitation, this
Agreement and the Certificate and all amendments, supplements or
restatements thereof) that the General Partner or the Liquidator deems
appropriate or necessary to form, qualify or continue the existence or
qualification of the Partnership as a limited partnership (or a
partnership in which the limited partners have limited liability to the
extent provided by applicable law) in the State of Delaware and in all
other jurisdictions in which the Partnership may conduct business or
own property; (b) all instruments that the General Partner deems
appropriate or necessary to reflect any amendment, change, modification
or restatement of this Agreement in accordance with its terms; (c) all
conveyances and other instruments or documents that the General Partner
or the Liquidator
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deems appropriate or necessary to reflect the dissolution and
liquidation of the Partnership pursuant to the terms of this Agreement,
including, without limitation, a certificate of cancellation; (d) all
conveyances and other instruments or documents that the General Partner
or the Liquidator deems appropriate or necessary to reflect the
distribution or exchange of assets of the Partnership pursuant to the
terms of this Agreement; (e) all instruments relating to the admission,
withdrawal, removal or substitution of any Partner pursuant to, or
other events described in, Article 11, Article 12 or Article 13 hereof
or the Capital Contribution of any Partner; and (f) all certificates,
documents and other instruments relating to the determination of the
rights, preferences and privileges relating to Partnership Interests;
and
(2) execute, swear to, acknowledge and file all ballots,
consents, approvals, waivers, certificates and other instruments
appropriate or necessary, in the sole and absolute discretion of the
General Partner, to make, evidence, give, confirm or ratify any vote,
consent, approval, agreement or other action that is made or given by
the Partners hereunder or is consistent with the terms of this
Agreement or appropriate or necessary, in the sole and absolute
discretion of the General Partner, to effectuate the terms or intent of
this Agreement.
Nothing contained herein shall be construed as authorizing the General Partner
to amend this Agreement except in accordance with Article 14 hereof or as may be
otherwise expressly provided for in this Agreement.
B. The foregoing power of attorney is hereby declared to be irrevocable
and a special power coupled with an interest, in recognition of the fact that
each of the Limited Partners and Assignees will be relying upon the power of the
General Partner to act as contemplated by this Agreement in any filing or other
action by it on behalf of the Partnership, and it shall survive and not be
affected by the subsequent Incapacity of any Limited Partner or Assignee and the
Transfer of all or any portion of such Limited Partner's or Assignee's
Partnership Units or Partnership Interest and shall extend to such Limited
Partner's or Assignee's heirs, successors, assigns and personal representatives.
Each such Limited Partner or Assignee hereby agrees to be bound by any
representation made by the General Partner, acting in good faith pursuant to
such power of attorney; and each such Limited Partner or Assignee hereby waives
any and all defenses that may be available to contest, negate or disaffirm the
action of the General Partner, taken in good faith under such power of attorney.
Each Limited Partner or Assignee shall execute and deliver to the General
Partner or the Liquidator, within fifteen (15) days after receipt of the General
Partner's or the Liquidator's request therefor, such further designation, powers
of attorney and other instruments as the General Partner or the Liquidator, as
the case may be, deems necessary to effectuate this Agreement and the purposes
of the Partnership.
SECTION 2.5 TERM
The term of the Partnership commenced on April 24, 1995, the date that
the original Certificate was filed in the office of the Secretary of State of
Delaware in accordance with the Act, and shall continue until December 31, 2093
unless the Partnership is dissolved sooner pursuant to the provisions of Article
13 hereof or as otherwise provided by law.
ARTICLE 3
PURPOSE
SECTION 3.1 PURPOSE AND BUSINESS
The purpose and nature of the Partnership is to conduct any business,
enterprise or activity permitted by or under the Act, including, but not limited
to, (i) to conduct the business of ownership, construction, development and
operation of shopping centers or other real estate rental properties, (ii) to
enter into any partnership, joint venture, business trust arrangement, limited
liability company or other similar arrangement to engage in any business
permitted by or under the Act, or to own interests in any entity engaged in any
business permitted by or under the Act, and (iii) to do anything necessary or
incidental to the foregoing; provided, however, such business and arrangements
and interests may be limited to and conducted in such a manner as to permit the
General Partner, in its sole and absolute discretion, at all times to be
classified as a REIT.
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SECTION 3.2 POWERS
A. The Partnership shall be empowered to do any and all acts and things
necessary, appropriate, proper, advisable, incidental to or convenient for the
furtherance and accomplishment of the purposes and business described herein and
for the protection and benefit of the Partnership.
B. Notwithstanding any other provision in this Agreement, the General
Partner may cause the Partnership not to take, or to refrain from taking, any
action that, in the judgment of the General Partner, in its sole and absolute
discretion, (i) could adversely affect the ability of the General Partner to
continue to qualify as a REIT, (ii) could subject the General Partner to any
additional taxes under Code Section 857 or Code Section 4981 or (iii) could
violate any law or regulation of any governmental body or agency having
jurisdiction over the General Partner, its securities or the Partnership, unless
such action (or inaction) under clause (i), clause (ii) or clause (iii) above
shall have been specifically consented to by the General Partner in writing.
SECTION 3.3 PARTNERSHIP ONLY FOR PURPOSES SPECIFIED
The Partnership shall be a limited partnership only for the purposes
specified in Section 3.1 hereof, and this Agreement shall not be deemed to
create a company, venture or partnership between or among the Partners with
respect to any activities whatsoever other than the activities within the
purposes of the Partnership as specified in Section 3.1 hereof. Except as
otherwise provided in this Agreement, no Partner shall have any authority to act
for, bind, commit or assume any obligation or responsibility on behalf of the
Partnership, its properties or any other Partner. No Partner, in its capacity as
a Partner under this Agreement, shall be responsible or liable for any
indebtedness or obligation of another Partner, nor shall the Partnership be
responsible or liable for any indebtedness or obligation of any Partner,
incurred either before or after the execution and delivery of this Agreement by
such Partner, except as to those responsibilities, liabilities, indebtedness or
obligations incurred pursuant to and as limited by the terms of this Agreement
and the Act.
SECTION 3.4 REPRESENTATIONS AND WARRANTIES BY THE LIMITED
PARTNERS
A. Each Limited Partner that is an individual (including, without
limitation, each Additional Limited Partner or Substituted Limited Partner as a
condition to becoming an Additional Limited Partner or a Substituted Limited
Partner) represents and warrants to the Partnership, the General Partner and
each other Limited Partner that (i) the consummation of the transactions
contemplated by this Agreement to be performed by such Limited Partner will not
result in a breach or violation of, or a default under, any material agreement
by which such Limited Partner or any of such Limited Partner's property is
bound, or any statute, regulation, order or other law to which such Limited
Partner is subject, (ii) such Limited Partner is neither a "foreign person"
within the meaning of Code Section 1445(f) nor a "foreign partner" within the
meaning of Code Section 1446(e), (iii) such Limited Partner does not own,
directly or indirectly, (a) nine and eight-tenths percent (9.8%) or more of the
total combined voting power of all classes of stock entitled to vote, or nine
and eight-tenths percent (9.8%) or more of the total number of shares of all
classes of stock, of any corporation that is a tenant of either (I) the General
Partner, (II) the Partnership or (III) any partnership, venture or limited
liability company of which the General Partner or the Partnership is a member or
(b) an interest of nine and eight-tenths percent (9.8%) or more in the assets or
net profits of any tenant of either (I) the General Partner, (II) the
Partnership or (III) any partnership, venture or limited liability company of
which the General Partner or the Partnership is a member and (iv) this Agreement
is binding upon, and enforceable against, such Limited Partner in accordance
with its terms.
B. Each Limited Partner that is not an individual (including, without
limitation, each Additional Limited Partner or Substituted Limited Partner as a
condition to becoming an Additional Limited Partner or a Substituted Limited
Partner) represents and warrants to the Partnership, the General Partner and
each other Limited Partner that (i) all transactions contemplated by this
Agreement to be performed by it have been duly authorized by all necessary
action, including, without limitation, that of its general partner(s),
committee(s), trustee(s), beneficiaries, directors and/or shareholder(s), as the
case may be, as required, (ii) the consummation of such transactions shall not
result in a breach or violation of, or a default under, its partnership or
operating agreement, trust agreement,
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charter or bylaws, as the case may be, any material agreement by which such
Limited Partner or any of such Limited Partner's properties or any of its
partners, members, beneficiaries, trustees or shareholders, as the case may be,
is or are bound, or any statute, regulation, order or other law to which such
Limited Partner or any of its partners, members, trustees, beneficiaries or
shareholders, as the case may be, is or are subject, (iii) such Limited Partner
is neither a "foreign person" within the meaning of Code Section 1445(f) nor a
"foreign partner" within the meaning of Code Section 1446(e), (iv) such Limited
Partner does not own, directly or indirectly, (a) nine and eight-tenths percent
(9.8%) or more of the total combined voting power of all classes of stock
entitled to vote, or nine and eight-tenths percent (9.8%) or more of the total
number of shares of all classes of stock, of any corporation that is a tenant of
either (I) the General Partner, (II) the Partnership or (III) any partnership,
venture or limited liability company of which the General Partner or the
Partnership is a member or (b) an interest of nine and eight-tenths percent
(9.8%) or more in the assets or net profits of any tenant of either (I) the
General Partner, (II) the Partnership or (III) any partnership, venture or
limited liability company of which the General Partner or the Partnership is a
member and (v) this Agreement is binding upon, and enforceable against, such
Limited Partner in accordance with its terms.
C. Each Limited Partner (including, without limitation, each
Substituted Limited Partner as a condition to becoming a Substituted Limited
Partner) represents, warrants and agrees that it has acquired and continues to
hold its interest in the Partnership for its own account for investment only and
not for the purpose of, or with a view toward, the resale or distribution of all
or any part thereof, nor with a view toward selling or otherwise distributing
such interest or any part thereof at any particular time or under any
predetermined circumstances. Each Limited Partner further represents and
warrants that it is a sophisticated investor, able and accustomed to handling
sophisticated financial matters for itself, particularly real estate
investments, and that it has a sufficiently high net worth that it does not
anticipate a need for the funds that it has invested in the Partnership in what
it understands to be a highly speculative and illiquid investment.
D. The representations and warranties contained in Sections 3.4.A,
3.4.B and 3.4.C hereof shall survive the execution and delivery of this
Agreement by each Limited Partner (and, in the case of an Additional Limited
Partner or a Substituted Limited Partner, the admission of such Additional
Limited Partner or Substituted Limited Partner as a Limited Partner in the
Partnership) and the dissolution, liquidation and termination of the
Partnership. The General Partner may, in its sole and absolute discretion on
behalf of the Partnership and its Partners, grant waivers and exceptions to the
representations and warranties contained in Sections 3.4.A, 3.4.B and 3.4.C
hereof, but any such waiver or exception must be in writing, must refer to this
Section 3.4.D and must describe with particularity the representation or
warranty as to which such waiver or exception shall apply.
E. Each Limited Partner (including, without limitation, each
Substituted Limited Partner as a condition to becoming a Substituted Limited
Partner) hereby acknowledges that no representations as to potential profit, tax
consequences of any sort (including, without limitation, the tax consequences
resulting from making a Capital Contribution, being admitted to the Partnership
or being allocated Tax Items), cash flows, funds from operations or yield, if
any, in respect of the Partnership or the General Partner have been made by any
Partner or any employee or representative or Affiliate of any Partner, and that
projections and any other information, including, without limitation, financial
and descriptive information and documentation, that may have been in any manner
submitted to such Limited Partner shall not constitute any representation or
warranty of any kind or nature, express or implied.
ARTICLE 4
CAPITAL CONTRIBUTIONS
SECTION 4.1 CAPITAL CONTRIBUTIONS OF THE INITIAL PARTNERS
At the time of the execution of this Agreement, each initial Limited
Partner shall make the Capital Contribution as set forth in the Partner Schedule
for such Partner, and the General Partner shall make the Capital Contribution
shown on Exhibit A attached hereto. Each initial Limited Partner shall own
Partnership Units in the amount set forth for such Partner in the Partner
Schedule with respect to such Partner, as the same may be amended
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from time to time. The General Partner shall initially own Partnership Units in
the amount set forth for the General Partner on Exhibit A attached hereto.
Except as provided in a particular Partner Schedule, by law or in Section 4.4.D
or Section 10.4 hereof, the Partners shall have no obligation or right to make
any additional Capital Contributions or loans to the Partnership.
SECTION 4.2 ADDITIONAL LIMITED PARTNERS
The General Partner is authorized to admit one or more Additional
Limited Partners to the Partnership from time to time, on terms and conditions
and for such Capital Contributions as may established by the General Partner in
its reasonable discretion. No action or consent by the Limited Partners shall be
required in connection with the admission of any Additional Limited Partner. In
the sole and absolute discretion of the General Partner, the Partnership may
acquire in the future additional Properties by means of Capital Contributions by
other Persons, which Capital Contributions shall be set forth in one or more
Partner Schedules. Persons making such Capital Contributions and executing such
Partner Schedules together with the General Partner shall be admitted to the
Partnership as Additional Limited Partners, with such number of Partnership
Units, Preferred Returns Per Unit, Specific Adjustment Factors and Specific
Adjustment Limitations as may be set forth in such Partner Schedules. To the
extent that the Partnership acquires in the future any property by the merger of
any other Person into the Partnership, Persons who receive Partnership Interests
in exchange for their interests in the Person merging into the Partnership shall
become Partners and shall be deemed to have made Capital Contributions as
provided in the applicable merger agreement and as set forth in one or more
Partner Schedules.
SECTION 4.3 LOANS BY THIRD PARTIES
The Partnership may incur or assume Debt, or enter into other similar
credit, guarantee, financing or refinancing arrangements, for any purpose
(including, without limitation, in connection with any further acquisition of
Properties from any Person), upon such terms as the General Partner determines
appropriate; provided, however, that the Partnership shall not incur or assume
any Debt under which a breach, violation or default would be deemed to occur by
virtue of the Transfer of any Limited Partner Interest or General Partner
Interest; provided, further, that any Debt shall be nonrecourse to the General
Partner unless the General Partner otherwise agrees.
SECTION 4.4 ADDITIONAL FUNDING AND CAPITAL CONTRIBUTIONS
A. GENERAL. The General Partner may, at any time and from time to time,
determine that the Partnership requires additional funds ("ADDITIONAL FUNDS")
for the acquisition or development of additional Properties or for such other
purposes as the General Partner may determine. Additional Funds may be raised by
the Partnership, at the election of the General Partner, in any manner provided
in, and in accordance with, the terms of this Section 4.4 or, alternatively, the
terms of Section 4.3 hereof. No Person, including, without limitation, any
Partner or Assignee, shall have any preemptive, preferential, participation or
similar right or rights to subscribe for or acquire any Partnership Interest.
B. NOTICE OF ADDITIONAL FUNDS REQUIREMENT. The General Partner may, but
shall not be required to, give written notice (the "FUNDING NOTICE") to the
Limited Partners of the need for Additional Funds and the anticipated source(s)
thereof.
C. GENERAL PARTNER LOANS. Whether or not a Funding Notice is given to
the Limited Partners, the General Partner may enter into a Funding Debt
(including, but not limited to, a Funding Debt that is convertible into REIT
Shares) and lend the Additional Funds to the Partnership (a "GENERAL PARTNER
LOAN"). If the General Partner enters into such a Funding Debt, the General
Partner Loan will consist of the net proceeds from such Funding Debt and, to the
extent permitted by law, will be on the same terms and conditions, including
interest rate and repayment schedule, and providing for the reimbursement of
costs and expenses, as shall be applicable with respect to or incurred in
connection with such Funding Debt. Otherwise, all General Partner Loans made
pursuant to this Section 4.4 shall be on terms and conditions no less favorable
to the Partnership than would be available to the Partnership from any third
party.
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D. ADDITIONAL GENERAL PARTNER CONTRIBUTIONS; ADDITIONAL LIMITED
PARTNERS. Whether or not a Funding Notice is given to the Limited Partners, the
General Partner on behalf of the Partnership may raise all or any portion of the
Additional Funds by making additional Capital Contributions and/or accepting
additional Capital Contributions from any other Partners and/or third parties
and either (a) in the case of Partners (including the General Partner),
increasing such Partner's Partnership Units or (b) in the case of a third party,
admitting such third party as an Additional Limited Partner as contemplated by
Section 4.2 of this Agreement. Subject to the terms of this Section 4.4 and to
the definition of "Gross Asset Value," the General Partner shall determine in
good faith the amount, terms and conditions of such additional Capital
Contributions; provided, however, that, in the case of an additional Capital
Contribution by the General Partner, the Partnership shall issue to the General
Partner the number of Partnership Units derived by dividing (1) the amount of
the additional Capital Contribution (net of any liabilities assumed or taken
subject to by the Partnership) by (2) the Value determined as of the date of
such Capital Contribution.
SECTION 4.5 NO INTEREST; NO RETURN
No Partner shall be entitled to interest on its Capital Contribution or
on such Partner's Capital Account. Except as provided herein or by law, no
Partner shall have any right to demand or receive the return of its Capital
Contribution from the Partnership.
ARTICLE 5
DISTRIBUTIONS
SECTION 5.1 REQUIREMENT AND CHARACTERIZATION OF DISTRIBUTIONS
The General Partner shall cause the Partnership to distribute quarterly
(or, with respect to a particular Holder of Partnership Units, in installments
upon such other frequency as may be provided in the relevant Partner Schedule)
all, or such portion as the General Partner may in its sole and absolute
discretion determine, of Available Cash generated by the Partnership during such
quarter (or other period) to the Unitholders on the Partnership Record Date with
respect to such quarter (or other period) as follows:
(1) First, to each Holder of Partnership Units, pari passu, an
amount equal to the sum of (a) the product of (i) the Preferred Return
Per Unit for such Holder (or its predecessor) for such quarter (or for
such other period as provided in the relevant Partner Schedule) and
(ii) the number of Partnership Units held by such Holder as of the
Partnership Record Date and (b) any unpaid amounts previously
distributable to such Holder (or its predecessor) under this Section
5.1.1; provided, however, that, except as may otherwise be provided in
a particular Partner Schedule, the amount distributable pursuant to
clause (a) to any Additional Limited Partner admitted to the
Partnership in the quarter immediately preceding and ending with such
Partnership Record Date shall be prorated based on the number of days
that such Additional Limited Partner was a Holder of Partnership Units
during such quarter; and
(2) Second, the balance, (a) ninety-nine percent (99%) to the
General Partner and (b) one percent (1%) to the Holders (including,
without limitation, the General Partner) in proportion to their
Partnership Units as of the Partnership Record Date.
The General Partner in its sole and absolute discretion may distribute to the
Unitholders Available Cash in accordance with foregoing priorities on a more
frequent basis and provide for an appropriate record date. The General Partner
shall take such reasonable efforts, as determined by it in its sole and absolute
discretion and consistent with the General Partner's qualification as a REIT, to
cause the Partnership to distribute sufficient amounts to enable the General
Partner to pay shareholder dividends that will (a) satisfy the requirements for
qualifying as a REIT under the Code and Regulations (the "REIT REQUIREMENTS")
and (b) avoid any federal income or excise tax liability of the General Partner.
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SECTION 5.2 DISTRIBUTIONS IN KIND
No right is given to any Unitholder to demand and receive property
other than cash as provided in this Agreement. The General Partner may
determine, in its sole and absolute discretion, to make a distribution in kind
of Partnership assets to the Unitholders, and, subject to Section 8.8 hereof,
such assets shall be distributed in such a fashion as to ensure that the fair
market value is distributed and allocated in accordance with Articles 5, 6 and
10 hereof.
SECTION 5.3 AMOUNTS WITHHELD
All amounts withheld pursuant to the Code or any provisions of any
state or local tax law and Section 10.4 hereof with respect to any allocation,
payment or distribution to any Unitholder shall be treated as amounts paid or
distributed to such Unitholder pursuant to Section 5.1 hereof for all purposes
under this Agreement.
SECTION 5.4 DISTRIBUTIONS UPON LIQUIDATION
Notwithstanding the other provisions of this Article 5, net proceeds
from a Terminating Capital Transaction, and any other cash received or
reductions in reserves made after commencement of the liquidation of the
Partnership, shall be distributed to the Unitholders in accordance with Section
13.2 hereof.
SECTION 5.5 RESTRICTED DISTRIBUTIONS
Notwithstanding any provision to the contrary contained in this
Agreement, neither the Partnership nor the General Partner, on behalf of the
Partnership, shall make a distribution to any Unitholder on account of its
Partnership Interest or interest in Partnership Units if such distribution would
violate Section 17-607 of the Act or other applicable law.
ARTICLE 6
ALLOCATIONS
SECTION 6.1 TIMING AND AMOUNT OF ALLOCATIONS OF NET INCOME AND
NET LOSS
Net Income and Net Loss of the Partnership shall be determined and
allocated with respect to each Fiscal Year of the Partnership as of the end of
each such year. Except as otherwise provided in this Article 6, and subject to
Section 11.6.C hereof, an allocation to a Unitholder of a share of Net Income or
Net Loss shall be treated as an allocation of the same share of each item of
income, gain, loss or deduction that is taken into account in computing Net
Income or Net Loss.
SECTION 6.2 GENERAL ALLOCATIONS
Except as otherwise provided in this Article 6 and subject to Section
11.6.C hereof, Net Income and Net Loss shall be allocated as follows:
(1) ninety-nine percent (99%) to the General Partner; and
(2) one percent (1%) to the Holders of Partnership Units in
accordance with their respective Partnership Units at the end of each
Fiscal Year.
SECTION 6.3 ADDITIONAL ALLOCATION PROVISIONS
Notwithstanding the foregoing provisions of this Article 6:
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A. SPECIAL ALLOCATIONS. Gross income and, if necessary, gain shall be
allocated to each Holder of Partnership Units for any Fiscal Year (and, if
necessary, subsequent Fiscal Years) to the extent that such Holder receives a
distribution of the Preferred Return Per Unit pursuant to Section 5.1.1 of this
Agreement.
B. REGULATORY ALLOCATIONS
(a) MINIMUM GAIN CHARGEBACK. Except as otherwise provided in
Regulations Section 1.704-2(f), notwithstanding the provisions of
Section 6.2 hereof, or any other provision of this Article 6, if there
is a net decrease in Partnership Minimum Gain during any Fiscal Year,
each Unitholder shall be specially allocated items of Partnership
income and gain for such year (and, if necessary, subsequent years) in
an amount equal to such Unitholder's share of the net decrease in
Partnership Minimum Gain, as determined under Regulations Section
1.704-2(g). Allocations pursuant to the previous sentence shall be made
in proportion to the respective amounts required to be allocated to
each Unitholder pursuant thereto. The items to be allocated shall be
determined in accordance with Regulations Sections 1.704-2(f)(6) and
1.704-2(j)(2). This Section 6.3.B(a) is intended to qualify as a
"minimum gain chargeback" within the meaning of Regulations Section
1.704-2(f) and shall be interpreted consistently therewith.
(b) PARTNER MINIMUM GAIN CHARGEBACK. Except as otherwise
provided in Regulations Section 1.704-2(i)(4) or in Section 6.3.B(a)
hereof, if there is a net decrease in Partner Minimum Gain attributable
to a Partner Nonrecourse Debt during any Fiscal Year, each Unitholder
who has a share of the Partner Minimum Gain attributable to such
Partner Nonrecourse Debt, determined in accordance with Regulations
Section 1.704-2(i)(5), shall be specially allocated items of
Partnership income and gain for such year (and, if necessary,
subsequent years) in an amount equal to such Unitholder's share of the
net decrease in Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(4). Allocations pursuant to the previous sentence shall be
made in proportion to the respective amounts required to be allocated
to each General Partner, Limited Partner and other Holder pursuant
thereto. The items to be so allocated shall be determined in accordance
with Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section
6.3.B(b) is intended to qualify as a "chargeback of partner nonrecourse
debt minimum gain" within the meaning of Regulations Section 1.704-2(i)
and shall be interpreted consistently therewith.
(c) NONRECOURSE DEDUCTIONS AND PARTNER NONRECOURSE DEDUCTIONS.
Any Nonrecourse Deductions for any Fiscal Year shall be specially
allocated to the Holders of Partnership Units in accordance with their
Partnership Units. Any Partner Nonrecourse Deductions for any Fiscal
Year shall be specially allocated to the Unitholder(s) who bears the
economic risk of loss with respect to the Partner Nonrecourse Debt to
which such Partner Nonrecourse Deductions are attributable, in
accordance with Regulations Section 1.704-2(i).
(d) QUALIFIED INCOME OFFSET. If any Unitholder unexpectedly
receives an adjustment, allocation or distribution described in
Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of
Partnership income and gain shall be allocated, in accordance with
Regulations Section 1.704-1(b)(2)(ii)(d), to such Unitholder in an
amount and manner sufficient to eliminate, to the extent required by
such Regulations, the Adjusted Capital Account Deficit of such
Unitholder as quickly as possible, provided that an allocation pursuant
to this Section 6.3.B(d) shall be made if and only to the extent that
such Unitholder would have an Adjusted Capital Account Deficit after
all other allocations provided in this Article 6 have been tentatively
made as if this Section 6.3.B(d) were not in the Agreement. It is
intended that this Section 6.3.B(d) qualify and be construed as a
"qualified income offset" within the meaning of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
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(e) GROSS INCOME ALLOCATION. In the event that any Unitholder
has a deficit Capital Account at the end of any Fiscal Year that is in
excess of the sum of (i) the amount (if any) that such Unitholder is
obligated to restore to the Partnership upon complete liquidation of
such Unitholder's Partnership Interest and (ii) the amount that such
Unitholder is deemed to be obligated to restore pursuant to the
penultimate sentences of Regulations Sections 1.704-2(g)(1) and
1.704-2(i)(5), each such Unitholder shall be specially allocated items
of Partnership income and gain in the amount of such excess to
eliminate such deficit as quickly as possible, provided that an
allocation pursuant to this Section 6.3.B(e) shall be made if and only
to the extent that such Unitholder would have a deficit Capital Account
in excess of such sum after all other allocations provided in this
Article 6 have been tentatively made as if this Section 6.3.B(e) and
Section 6.3.B(d) hereof were not in the Agreement.
(f) LIMITATION ON ALLOCATION OF NET LOSS. To the extent that
any allocation of Net Loss would cause or increase an Adjusted Capital
Account Deficit as to any Holder of Partnership Units, such allocation
of Net Loss shall be reallocated among the other Holders of Partnership
Units in accordance with their respective Partnership Units, subject to
the limitations of this Section 6.3.B(f).
(g) SECTION 754 ADJUSTMENT. To the extent that an adjustment
to the adjusted tax basis of any Partnership asset pursuant to Code
Section 734(b) or Code Section 743(b) is required, pursuant to
Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations Section
1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining
Capital Accounts as the result of a distribution to a Holder of
Partnership Units in complete liquidation of its interest in the
Partnership, the amount of such adjustment to the Capital Accounts
shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis),
and such gain or loss shall be specially allocated to the Holders in
accordance with their Partnership Units in the event that Regulations
Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Holders to whom such
distribution was made in the event that Regulations Section 1.704-
1(b)(2)(iv)(m)(4) applies.
(h) CURATIVE ALLOCATIONS. The allocations set forth in
Sections 6.3.B(a), (b), (c), (d), (e), (f) and (g) hereof (the
"REGULATORY ALLOCATIONS") are intended to comply with certain
regulatory requirements, including the requirements of Regulations
Sections 1.704-1(b) and 1.704-2. Notwithstanding the provisions of
Section 6.1 hereof, the Regulatory Allocations shall be taken into
account in allocating other items of income, gain, loss and deduction
among the Unitholders so that, to the extent possible without violating
the requirements giving rise to the Regulatory Allocations, the net
amount of such allocations of other items and the Regulatory
Allocations to each Unitholder shall be equal to the net amount that
would have been allocated to each such Unitholder if the Regulatory
Allocations had not occurred.
C. SPECIAL ALLOCATIONS UPON LIQUIDATION. Notwithstanding any provision
in this Article VI to the contrary, in the event that the Partnership disposes
of all or substantially all of its assets in a transaction that will lead to a
liquidation of the Partnership pursuant to Article XIII hereof, then any Net
Income or Net Loss realized in connection with such transaction and thereafter
(and, if necessary, constituent items of income, gain, loss and deduction) shall
be specially allocated among the Partners as required so as to cause liquidating
distributions pursuant to Section 13.2.A(4) hereof to be made in the same
amounts and proportions as would have resulted had such distributions instead
been made pursuant to Section 5.1.A hereof.
D. ALLOCATION OF EXCESS NONRECOURSE LIABILITIES. For purposes of
determining a Holder's proportional share of the "excess nonrecourse
liabilities" of the Partnership within the meaning of Regulations Section 1.752-
3(a)(3), each Holder's interest in Partnership profits shall be such Holder's
share of Partnership Units.
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SECTION 6.4 TAX ALLOCATIONS
A. IN GENERAL. Except as otherwise provided in this Section 6.4, for
income tax purposes under the Code and the Regulations each Partnership item of
income, gain, loss and deduction (collectively, "TAX ITEMS") shall be allocated
among the Unitholders in the same manner as its correlative item of "book"
income, gain, loss or deduction is allocated pursuant to Sections 6.2 and 6.3
hereof.
B. ALLOCATIONS RESPECTING SECTION 704(c) REVALUATIONS. Notwithstanding
Section 6.4.A hereof, Tax Items with respect to Property that is contributed to
the Partnership with a Gross Asset Value that varies from its basis in the hands
of the contributing Partner immediately preceding the date of contribution shall
be allocated among the Unitholders for income tax purposes pursuant to
Regulations promulgated under Code Section 704(c) so as to take into account
such variation. The Partnership shall account for such variation under any
method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). In the event that the
Gross Asset Value of any Partnership asset is adjusted pursuant to subsection
(b) of the definition of "Gross Asset Value" (provided in Article 1 hereof),
subsequent allocations of Tax Items with respect to such asset shall take
account of the variation, if any, between the adjusted basis of such asset and
its Gross Asset Value in the same manner as under Code Section 704(c) and the
applicable Regulations.
SECTION 6.5 OTHER PROVISIONS
A. OTHER ALLOCATIONS UPON CHANGE IN LAW. In the event that the Code or
any Regulations require allocations of items of income, gain, loss, deduction or
credit different from those set forth in this Article 6, the General Partner is
hereby authorized to make new allocations in reliance on the Code and such
Regulations, such new allocations shall be deemed to be made pursuant to the
fiduciary duty of the General Partner to the Partnership and the other Partners,
and no such new allocation shall give rise to any claim or cause of action by
any Partner.
B. CONSISTENT TAX REPORTING. The Partners acknowledge and are aware of
the income tax consequences of the allocations made by this Article 6 and hereby
agree to be bound by the provisions of this Article 6 in reporting their shares
of Net Income, Net Losses and other items of income, gain, loss, deduction and
credit for federal, state and local income tax purposes.
ARTICLE 7
MANAGEMENT AND OPERATIONS OF BUSINESS
SECTION 7.1 MANAGEMENT
A. Except as otherwise expressly provided in this Agreement, all
management powers over the business and affairs of the Partnership are and shall
be exclusively vested in the General Partner, and no Limited Partner shall have
any right to participate in or exercise control or management power over the
business and affairs of the Partnership. The General Partner may not be removed
by the Partners with or without cause, except with the Consent of the General
Partner. In addition to the powers now or hereafter granted a general partner of
a limited partnership under applicable law or that are granted to the General
Partner under any other provision of this Agreement, the General Partner,
subject to the other provisions hereof including Section 7.3, shall have full
power and authority to do all things deemed necessary or desirable by it to
conduct the business of the Partnership, to exercise all powers set forth in
Section 3.2 hereof and to effectuate the purposes set forth in Section 3.1
hereof, including, without limitation:
(1) the making of any expenditures, the lending or borrowing
of money (including, without limitation, making prepayments on loans
and borrowing money to permit the Partnership to make distributions to
its Partners in such amounts as will permit the General Partner (so
long as the General Partner qualifies as a REIT) to avoid the payment
of any federal income tax (including, for this purpose, any excise tax
pursuant to Code Section 4981) and to make
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distributions to its shareholders sufficient to permit the General
Partner to maintain REIT status or otherwise to satisfy the REIT
Requirements), the assumption or guarantee of, or other contracting
for, indebtedness and other liabilities, the issuance of evidences of
indebtedness (including the securing of same by deed to secure debt,
mortgage, deed of trust or other lien or encumbrance on the
Partnership's assets) and the incurring of any obligations that it
deems necessary for the conduct of the activities of the Partnership;
(2) the making of tax, regulatory and other filings, or
rendering of periodic or other reports to governmental or other
agencies having jurisdiction over the business or assets of the
Partnership;
(3) the acquisition, sale, transfer, exchange or other
disposition of any assets of the Partnership (including, but not
limited to, the exercise or grant of any conversion, option, privilege
or subscription right or any other right available in connection with
any assets at any time held by the Partnership) or the merger,
consolidation, reorganization or other combination of the Partnership
with or into another entity;
(4) the mortgage, pledge, encumbrance or hypothecation of any
assets of the Partnership (including, without limitation, any
Contributed Property), the use of the assets of the Partnership
(including, without limitation, cash on hand) for any purpose
consistent with the terms of this Agreement and on any terms that it
sees fit, including, without limitation, the financing of the
operations and activities of the General Partner, the Partnership or
any of the Partnership's Subsidiaries, the lending of funds to other
Persons (including, without limitation, the Partnership's Subsidiaries)
and the repayment of obligations of the Partnership, its Subsidiaries
and any other Person in which it has an equity investment, and the
making of capital contributions to and equity investments in the
Partnership's Subsidiaries;
(5) the management, operation, leasing, landscaping, repair,
alteration, demolition, replacement or improvement of any Property,
including, without limitation, any Contributed Property, or other asset
of the Partnership or any Subsidiary;
(6) the negotiation, execution and performance of any
contracts, leases, conveyances or other instruments that the General
Partner considers useful or necessary to the conduct of the
Partnership's operations or the implementation of the General Partner's
powers under this Agreement, including contracting with property
managers (including, without limitation, as to any Contributed Property
or other Property, contracting with the contributing or any other
Limited Partner or its Affiliates for property management services),
contractors, developers, consultants, accountants, legal counsel, other
professional advisors and other agents and the payment of their
expenses and compensation out of the Partnership's assets;
(7) the distribution of Partnership cash or other Partnership
assets in accordance with this Agreement, the holding, management,
investment and reinvestment of cash and other assets of the
Partnership, and the collection and receipt of revenues, rents and
income of the Partnership;
(8) the selection and dismissal of employees of the
Partnership or the General Partner (including, without limitation,
employees having titles or offices such as "president," "vice
president," "secretary" and "treasurer"), and agents, outside
attorneys, accountants, consultants and contractors of the Partnership
or the General Partner and the determination of their compensation and
other terms of employment or hiring;
(9) the maintenance of such insurance for the benefit of the
Partnership and the Partners as it deems necessary or appropriate;
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(10) the formation of, or acquisition of an interest in, and
the contribution of property to, any further limited or general
partnerships, limited liability companies, joint ventures or other
relationships that it deems desirable (including, without limitation,
the acquisition of interests in, and the contributions of property to,
any Subsidiary and any other Person in which it has an equity
investment from time to time); provided, however, that, as long as the
General Partner has determined to continue to qualify as a REIT, the
General Partner may not engage in any such formation, acquisition or
contribution that would cause the General Partner to fail to qualify as
a REIT;
(11) the control of any matters affecting the rights and
obligations of the Partnership, including the settlement, compromise,
submission to arbitration or any other form of dispute resolution, or
abandonment, of any claim, cause of action, liability, debt or damages,
due or owing to or from the Partnership, the commencement or defense of
suits, legal proceedings, administrative proceedings, arbitrations or
other forms of dispute resolution, and the representation of the
Partnership in all suits or legal proceedings, administrative
proceedings, arbitrations or other forms of dispute resolution, the
incurring of legal expense, and the indemnification of any Person
against liabilities and contingencies to the extent permitted by law;
(12) the undertaking of any action in connection with the
Partnership's direct or indirect investment in any Subsidiary or any
other Person (including, without limitation, the contribution or loan
of funds by the Partnership to such Persons);
(13) the determination of the fair market value of any
Partnership property distributed in kind using such reasonable method
of valuation as it may adopt, provided that such methods are otherwise
consistent with the requirements of this Agreement;
(14) the enforcement of any rights against any Partner
pursuant to representations, warranties, covenants and indemnities
relating to such Partner's contribution of property or assets to the
Partnership;
(15) the exercise, directly or indirectly, through any
attorney-in-fact acting under a general or limited power of attorney,
of any right, including the right to vote, appurtenant to any asset or
investment held by the Partnership;
(16) the exercise of any of the powers of the General Partner
enumerated in this Agreement on behalf of or in connection with any
Subsidiary of the Partnership or any other Person in which the
Partnership has a direct or indirect interest, or jointly with any such
Subsidiary or other Person;
(17) the exercise of any of the powers of the General Partner
enumerated in this Agreement on behalf of any Person in which the
Partnership does not have an interest, pursuant to contractual or other
arrangements with such Person;
(18) the making, execution and delivery of any and all deeds,
leases, notes, deeds to secure debt, mortgages, deeds of trust,
security agreements, conveyances, contracts, guarantees, warranties,
indemnities, waivers, releases or legal instruments or agreements in
writing necessary or appropriate in the judgment of the General Partner
for the accomplishment of any of the powers of the General Partner
enumerated in this Agreement;
(19) the issuance of additional Partnership Units, as
appropriate and in the General Partner's sole and absolute discretion,
in connection with Capital Contributions by Additional
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Limited Partners and additional Capital Contributions by Partners
pursuant to Article 4 hereof; and
(20) an election to dissolve the Partnership pursuant to
Section 13.1.C hereof.
B. Each of the Limited Partners agrees that, except as provided in
Section 7.3 hereof, the General Partner is authorized to execute, deliver and
perform the above-mentioned agreements and transactions on behalf of the
Partnership without any further act, approval or vote of the Partners,
notwithstanding any other provision of this Agreement (except as provided in
Section 7.3 hereof), the Act or any applicable law, rule or regulation. The
execution, delivery or performance by the General Partner or the Partnership of
any agreement authorized or permitted under this Agreement shall not constitute
a breach by the General Partner of any duty that the General Partner may owe the
Partnership or the Limited Partners or any other Persons under this Agreement or
of any duty stated or implied by law or equity.
C. At all times from and after the date hereof, the General Partner may
cause the Partnership to obtain and maintain (i) casualty, liability and other
insurance on the Properties of the Partnership and (ii) liability insurance for
the Indemnitees hereunder.
D. At all times from and after the date hereof, the General Partner may
cause the Partnership to establish and maintain working capital and other
reserves in such amounts as the General Partner, in its sole and absolute
discretion, deems appropriate and reasonable from time to time.
E. In exercising its authority under this Agreement, the General
Partner may, but shall be under no obligation to, take into account the tax
consequences to any Partner (including the General Partner) of any action taken
by it. The General Partner and the Partnership shall not have liability to a
Limited Partner under any circumstances as a result of an income tax liability
incurred by such Limited Partner as a result of an action (or inaction) by the
General Partner pursuant to its authority under this Agreement so long as the
action or inaction is taken in good faith.
SECTION 7.2 CERTIFICATE OF LIMITED PARTNERSHIP
To the extent that such action is determined by the General Partner to
be reasonable and necessary or appropriate, the General Partner shall file
amendments to and restatements of the Certificate and do all the things to
maintain the Partnership as a limited partnership (or a partnership in which the
limited partners have limited liability) under the laws of the State of Delaware
and each other state, the District of Columbia or any other jurisdiction in
which the Partnership may elect to do business or own property. Subject to the
terms of Section 8.5.A(4) hereof, the General Partner shall not be required,
before or after filing, to deliver or mail a copy of the Certificate or any
amendment thereto to any Limited Partner. The General Partner shall use all
reasonable efforts to cause to be filed such other certificates or documents as
may be reasonable and necessary or appropriate for the formation, continuation,
qualification and operation of a limited partnership (or a partnership in which
the limited partners have limited liability to the extent provided by applicable
law) in the State of Delaware and any other state, or the District of Columbia
or other jurisdiction in which the Partnership may elect to do business or own
property.
SECTION 7.3 RESTRICTIONS ON GENERAL PARTNER'S AUTHORITY
A. The General Partner may not take any action in contravention of this
Agreement. Specifically (but without limitation), the General Partner may not:
(1) take any action that would make it impossible to carry on
the ordinary business of the Partnership, except as otherwise provided
in this Agreement;
(2) possess Partnership property, or assign any rights in
specific Partnership property, for other than a Partnership purpose
except as otherwise provided in this Agreement;
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(3) admit a Person as a Partner, except as otherwise provided
in this Agreement;
(4) perform any act that would subject a Limited Partner to
liability as a general partner in any jurisdiction or any other
liability except as provided herein or under the Act; or
(5) enter into any contract, mortgage, loan or other agreement
that prohibits or restricts, or has the effect of prohibiting or
restricting, the ability of (a) the General Partner or the Partnership
from satisfying its obligations under Section 8.6 hereof in full or (b)
a Limited Partner from exercising its rights under Section 8.6 hereof
to effect a Redemption in full, except, in either case, with the
written consent of such Limited Partner affected by the prohibition or
restriction.
B. The General Partner shall not, without the prior Consent of the
Limited Partners, undertake, on behalf of the Partnership, any of the following
actions or enter into any transaction that would have the effect of such
transactions:
(1) except as provided in Section 7.3.C hereof, amend, modify
or terminate this Agreement other than to reflect the admission,
substitution, termination or withdrawal of Partners pursuant to Article
11 or Article 12 hereof;
(2) make a general assignment for the benefit of creditors or
appoint or acquiesce in the appointment of a custodian, receiver or
trustee for all or any part of the assets of the Partnership;
(3) institute any proceeding for bankruptcy on behalf of the
Partnership; or
(4) subject to the rights of Transfer provided in Section 11.2
hereof, approve or acquiesce to the Transfer of the Partnership
Interest of the General Partner, or admit into the Partnership any
additional or successor General Partners.
C. Notwithstanding Section 7.3.B hereof, the General Partner shall have
the power, without the Consent of the Limited Partners, to amend this Agreement
as may be required to facilitate or implement any of the following purposes:
(1) to add to the obligations of the General Partner or
surrender any right or power granted to the General Partner or any
Affiliate of the General Partner for the benefit of the Limited
Partners;
(2) to reflect the admission, substitution or withdrawal of
Partners or the termination of the Partnership in accordance with this
Agreement, and to amend Exhibit A in connection with such admission,
substitution or withdrawal;
(3) to reflect a change that is of an inconsequential nature
and does not adversely affect the Limited Partners in any material
respect, or to cure any ambiguity, correct or supplement any provision
in this Agreement not inconsistent with law or with other provisions,
or make other changes with respect to matters arising under this
Agreement that will not be inconsistent with law or with the provisions
of this Agreement;
(4) to satisfy any requirements, conditions or guidelines
contained in any order, directive, opinion, ruling or regulation of a
federal or state agency or contained in federal or state law;
(5) to reflect such changes as are reasonably necessary for
the General Partner to maintain its status as a REIT or to satisfy the
REIT Requirements; and
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(6) to modify the manner in which Capital Accounts are
computed (but only to the extent set forth in the definition of
"Capital Account" or contemplated by the Code or the Regulations).
The General Partner will provide notice to the Limited Partners when any action
under this Section 7.3.C is taken.
D. Notwithstanding Section 7.3.B and 7.3.C hereof, this Agreement shall
not be amended, and no action may be taken by the General Partner, without the
Consent of each Partner adversely affected, if such amendment or action would
(i) convert a Limited Partner Interest in the Partnership into a General Partner
Interest (except as a result of the General Partner acquiring such Partnership
Interest), (ii) modify the limited liability of a Limited Partner, (iii) alter
rights of the Partner to receive distributions pursuant to Article 5 or Section
13.2.A(4) hereof, or the allocations specified in Article 6 hereof (except in
any case as permitted pursuant to Sections 4.4 and 7.3.C hereof), (iv) alter or
modify the Redemption rights, Cash Amount or REIT Shares Amount as set forth in
Sections 8.6 and 11.2 hereof, or amend or modify any related definitions, or (v)
amend this Section 7.3.D. Further, no amendment may alter the restrictions on
the General Partner's authority set forth elsewhere in this Section 7.3 without
the Consent specified therein. Any such amendment or action consented to by any
Partner shall be effective as to that Partner, notwithstanding the absence of
such consent by any other Partner.
SECTION 7.4 REIMBURSEMENT OF THE GENERAL PARTNER
A. The General Partner shall not be compensated for its services as
general partner of the Partnership except as provided elsewhere in this
Agreement (including the provisions of Articles 5 and 6 hereof regarding
distributions, payments and allocations to which it may be entitled in its
capacity as the General Partner).
B. Subject to Sections 7.4.C and 15.11 hereof, the Partnership shall be
liable, and shall reimburse the General Partner on a monthly basis (or such
other basis as the General Partner may determine in its sole and absolute
discretion), for all sums expended in connection with the Partnership's
business. Any such reimbursements shall be in addition to any reimbursement of
the General Partner as a result of indemnification pursuant to Section 7.7
hereof.
C. To the extent practicable, Partnership expenses shall be billed
directly to and paid by the Partnership. Subject to Section 15.11 hereof,
reimbursements to the General Partner or any of its Affiliates by the
Partnership shall be allowed, however, for the actual cost to the General
Partner or any of its Affiliates of operating and other expenses of the
Partnership, including, without limitation, the actual cost of goods, materials
and administrative services related to (i) Partnership operations, (ii)
Partnership accounting, (iii) communications with Partners, (iv) legal services,
(v) tax services, (vi) computer services, (vii) risk management, (viii) mileage
and travel expenses and (ix) such other related operational and administrative
expenses as are necessary for the prudent organization and operation of the
Partnership. "Actual cost of goods and materials" means the actual cost to the
General Partner or any of its Affiliates of goods and materials used for or by
the Partnership obtained from entities not affiliated with the General Partner,
and "actual cost of administrative services" means the pro rata cost of
personnel (as if such persons were employees of the Partnership) providing
administrative services to the Partnership. The cost for such services to be
reimbursed to the General Partner or any Affiliate thereof shall be the lesser
of the General Partner's or Affiliate's actual cost, or the amount the
Partnership would be required to pay to independent parties for comparable
administrative services in the same geographic location. Notwithstanding the
foregoing, the Partner ship shall not reimburse the General Partner or any
Affiliate thereof under this Section 7.4 for:
(1) Any rent, depreciation, utilities or other administrative
items generally constituting the General Partner's or Affiliate's
overhead; or
(2) Any of the salaries or fringe benefits incurred or
allocated to any Controlling Person of any General Partner or any
Affiliate thereof.
Subject to Section 15.11 hereof, reimbursements to the General Partner or any of
its Affiliates by the Partnership pursuant to this Section 7.4 shall be treated
as "guaranteed payments" within the meaning of Code Section 707(c).
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SECTION 7.5 OTHER BUSINESS OF GENERAL PARTNER
The General Partner may engage independently or with others in other
business ventures of every nature and description, including, without
limitation, the ownership of other properties and the making or management of
other investments. Nothing in this Agreement shall be deemed to prohibit the
General Partner or any Affiliate of the General Partner from dealing, or
otherwise engaging in business with, Persons transacting business with the
Partnership, or from providing services related to the purchase, sale,
financing, management, development or operation of real or personal property and
receiving compensation therefor, not involving any rebate or reciprocal
arrangement that would have the effect of circumventing any restriction set
forth herein upon dealings with the General Partner or any Affiliate of the
General Partner. Neither the Partnership nor any Partner shall have any right by
virtue of this Agreement or the Partnership relationship created hereby in or to
such other ventures or activities or to the income or proceeds derived
therefrom, and the pursuit of such ventures, even if competitive with the
business of the Partnership, shall not be deemed wrongful or improper.
SECTION 7.6 CONTRACTS WITH AFFILIATES
A. The Partnership may lend or contribute funds or other assets to its
Subsidiaries or other Persons in which it has an equity investment, and such
Persons may borrow funds from the Partnership, on terms and conditions
established in the sole and absolute discretion of the General Partner. The
foregoing authority shall not create any right or benefit in favor of any
Subsidiary or any other Person.
B. The Partnership may transfer assets to joint ventures, limited
liability companies, partnerships, corporations, business trusts or other
business entities in which it is or thereby becomes a participant upon such
terms and subject to such conditions consistent with this Agreement and
applicable law as the General Partner, in its sole and absolute discretion,
believes to be advisable.
C. Except as expressly permitted by this Agreement, neither the General
Partner nor any of its Affiliates shall sell, transfer or convey any property to
the Partnership, directly or indirectly, except pursuant to transactions that
are determined by the General Partner in good faith to be fair and reasonable.
D. The General Partner is expressly authorized to enter into, in the
name and on behalf of the Partnership, a right of first opportunity arrangement
and other conflict avoidance agreements with various Affiliates of the
Partnership and the General Partner, on such terms as the General Partner, in
its sole and absolute discretion, believes are advisable.
SECTION 7.7 INDEMNIFICATION
A. To the fullest extent permitted by applicable law, the Partnership
shall indemnify each Indemnitee from and against any and all losses, claims,
damages, liabilities, joint or several, expenses (including, without limitation,
attorney's fees and other legal fees and expenses), judgments, fines,
settlements and other amounts arising from any and all claims, demands, actions,
suits or proceedings, civil, criminal, administrative or investigative, that
relate to the operations of the Partnership ("ACTIONS") as set forth in this
Agreement in which such Indemnitee may be involved, or is threatened to be
involved, as a party or otherwise; provided, however, that the Partnership shall
not indemnify an Indemnitee (i) for willful misconduct or a knowing violation of
the law or (ii) for any transaction for which such Indemnitee received an
improper personal benefit in violation or breach of any provision of this
Agreement. Without limitation, the foregoing indemnity shall extend to any
liability of any Indemnitee, pursuant to a loan guaranty or otherwise, for any
indebtedness of the Partnership or any Subsidiary of the Partnership (including,
without limitation, any indebtedness which the Partnership or any Subsidiary of
the Partnership has assumed or taken subject to), and the General Partner is
hereby authorized and empowered, on behalf of the Partnership, to enter into one
or more indemnity agreements consistent with the provisions of this Section 7.7
in favor of any Indemnitee having or potentially having liability for any such
indebtedness. It is the intention of this Section 7.7.A that the Partnership
indemnify each Indemnitee to the fullest extent permitted by law. The
termination of any proceeding by judgment, order or settlement does not create a
presumption that the Indemnitee
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did not meet the requisite standard of conduct set forth in this Section 7.7.A.
The termination of any proceeding by conviction of an Indemnitee or upon a plea
of nolo contendere or its equivalent by an Indemnitee, or an entry of an order
of probation against an Indemnitee prior to judgment, does not create a
presumption that such Indemnitee acted in a manner contrary to that specified in
this Section 7.7.A with respect to the subject matter of such proceeding. Any
indemnification pursuant to this Section 7.7 shall be made only out of the
assets of the Partnership, and neither the General Partner nor any Limited
Partner shall have any obligation to contribute to the capital of the
Partnership or otherwise provide funds to enable the Partnership to fund its
obligations under this Section 7.7.
B. To the fullest extent permitted by law, expenses incurred by an
Indemnitee who is a party to a proceeding or otherwise subject to or the focus
of or is involved in any Action shall be paid or reimbursed by the Partnership
as incurred by the Indemnitee in advance of the final disposition of the Action
upon receipt by the Partnership of (i) a written affirmation by the Indemnitee
of the Indemnitee's good faith belief that the standard of conduct necessary for
indemnification by the Partnership as authorized in this Section 7.7.A has been
met, and (ii) a written undertaking by or on behalf of the Indemnitee to repay
the amount if it shall ultimately be determined that the standard of conduct has
not been met.
C. The indemnification provided by this Section 7.7 shall be in
addition to any other rights to which an Indemnitee or any other Person may be
entitled under any agreement, pursuant to any vote of the Partners, as a matter
of law or otherwise, and shall continue as to an Indemnitee who has ceased to
serve in such capacity and shall inure to the benefit of the heirs, successors,
assigns and administrators of the Indemnitee unless otherwise provided in a
written agreement with such Indemnitee or in the writing pursuant to which such
Indemnitee is indemnified.
D. The Partnership may, but shall not be obligated to, purchase and
maintain insurance, on behalf of any of the Indemnitees and such other Persons
as the General Partner shall determine, against any liability that may be
asserted against or expenses that may be incurred by such Person in connection
with the Partnership's activities, regardless of whether the Partnership would
have the power to indemnify such Person against such liability under the
provisions of this Agreement.
E. Any liabilities which an Indemnitee incurs as a result of acting on
behalf of the Partnership or the General Partner (whether as a fiduciary or
otherwise) in connection with the operation, administration or maintenance of an
employee benefit plan or any related trust or funding mechanism (whether such
liabilities are in the form of excise taxes assessed by the IRS, penalties
assessed by the Department of Labor, restitutions to such a plan or trust or
other funding mechanism or to a participant or beneficiary of such plan, trust
or other funding mechanism, or otherwise) shall be treated as liabilities or
judgments or fines under this Section 7.7, unless such liabilities arise as a
result of (i) such Indemnitee's intentional misconduct or knowing violation of
the law, or (ii) any transaction in which such Indemnitee received a personal
benefit in violation or breach of any provision of this Agreement or applicable
law.
F. In no event may an Indemnitee subject any of the Partners to
personal liability by reason of the indemnification provisions set forth in this
Agreement.
G. An Indemnitee shall not be denied indemnification in whole or in
part under this Section 7.7 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.
H. The provisions of this Section 7.7 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons. Any
amendment, modification or repeal of this Section 7.7 or any provision hereof
shall be prospective only and shall not in any way affect the limitations on the
Partnership's liability to any Indemnitee under this Section 7.7 as in
effect immediately prior to such amendment, modification or repeal with respect
to claims arising from or relating
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to matters occurring, in whole or in part, prior to such amendment, modification
or repeal, regardless of when such claims may arise or be asserted.
I. It is the intent of the Partners that any amounts paid by the
Partnership to the General Partner pursuant to this Section 7.7 shall be treated
as "guaranteed payments" within the meaning of Code Section 707(c).
SECTION 7.8 LIABILITY OF THE GENERAL PARTNER
A. Notwithstanding anything to the contrary set forth in this
Agreement, neither the General Partner nor any of its directors or officers
shall be liable or accountable in damages or otherwise to the Partnership, any
Partners or any Assignees for losses sustained, liabilities incurred or benefits
not derived as a result of errors in judgment or mistakes of fact or law or of
any act or omission if the General Partner or such director or officer acted in
good faith.
B. The Limited Partners expressly acknowledge that the General Partner
is acting for the benefit of the Partnership, the Limited Partners and the
General Partner's shareholders collectively and that the General Partner is
under no obligation to give priority to the separate interests of the Limited
Partners or the General Partner's shareholders (including, without limitation,
the tax consequences to Limited Partners, Assignees or the General Partner's
shareholders) in deciding whether to cause the Partnership to take (or decline
to take) any actions.
C. Subject to its obligations and duties as General Partner set forth
in Section 7.1.A hereof, the General Partner may exercise any of the powers
granted to it by this Agreement and perform any of the duties imposed upon it
hereunder either directly or by or through its employees or agents (subject to
the supervision and control of the General Partner). The General Partner shall
not be responsible for any misconduct or negligence on the part of any such
agent appointed by it in good faith.
D. Any amendment, modification or repeal of this Section 7.8 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on the General Partner's, and its officers' and directors',
liability to the Partnership and the Limited Partners under this Section 7.8 as
in effect immediately prior to such amendment, modification or repeal with
respect to claims arising from or relating to matters occurring, in whole or in
part, prior to such amendment, modification or repeal, regardless of when such
claims may arise or be asserted.
E. Notwithstanding anything herein to the contrary, except for fraud,
willful misconduct or gross negligence, or pursuant to any express indemnities
given to the Partnership by any Partner pursuant to any other written
instrument, no Partner shall have any personal liability whatsoever, to the
Partnership or to the other Partner(s), for the debts or liabilities of the
Partnership or the Partnership's obligations hereunder, and the full recourse of
the other Partner(s) shall be limited to the interest of that Partner in the
Partnership. To the fullest extent permitted by law, no officer, director or
shareholder of the General Partner shall be liable to the Partnership for money
damages except for (i) active and deliberate dishonesty established by a
non-appealable final judgment or (ii) actual receipt of an improper benefit or
profit in money, property or services. Without limitation of the foregoing, and
except for fraud, willful misconduct or gross negligence, or pursuant to any
such express indemnity, no property or assets of any Partner, other than its
interest in the Partnership, shall be subject to levy, execution or other
enforcement procedures for the satisfaction of any judgment (or other judicial
process) in favor of any other Partner(s) and arising out of, or in connection
with, this Agreement. This Agreement is executed by the officers of the General
Partner solely as officers of the same and not in their own individual
capacities.
F. To the extent that, at law or in equity, the General Partner has
duties (including fiduciary duties) and liabilities relating thereto to the
Partnership or the Limited Partners, the General Partner shall not be liable to
the Partnership or to any other Partner for its good faith reliance on the
provisions of this Agreement. The provisions of this Agreement, to the extent
that they restrict the duties and liabilities of the General Partner otherwise
existing at law or in equity, are agreed by the Partners to replace such other
duties and liabilities of such General Partner.
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SECTION 7.9 OTHER MATTERS CONCERNING THE GENERAL PARTNER
A. The General Partner may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, debenture or other paper
or document believed by it in good faith to be genuine and to have been signed
or presented by the proper party or parties.
B. The General Partner may consult with legal counsel, accountants,
appraisers, management consultants, investment bankers, architects, engineers,
environmental consultants and other consultants and advisers selected by it, and
any act taken or omitted to be taken in reliance upon the opinion of such
Persons as to matters that the General Partner reasonably believes to be within
such Person's professional or expert competence shall be conclusively presumed
to have been done or omitted in good faith and in accordance with such opinion.
C. The General Partner shall have the right, in respect of any of its
powers or obligations hereunder, to act through any of its duly authorized
officers and a duly appointed attorney or attorneys-in-fact. Each such attorney
shall, to the extent provided by the General Partner in the power of attorney,
have full power and authority to do and perform all and every act and duty that
is permitted or required to be done by the General Partner hereunder.
D. Notwithstanding any other provisions of this Agreement or the Act,
any action of the General Partner on behalf of the Partnership or any decision
of the General Partner to refrain from acting on behalf of the Partnership,
undertaken in the good faith belief that such action or omission is necessary or
advisable in order (i) to protect the ability of the General Partner to continue
to qualify as a REIT, (ii) for the General Partner otherwise to satisfy the REIT
Requirements or (iii) to avoid the General Partner incurring any taxes under
Code Section 857 or Code Section 4981, is expressly authorized under this
Agreement and is deemed approved by all of the Limited Partners.
SECTION 7.10 TITLE TO PARTNERSHIP ASSETS
Title to Partnership assets, whether real, personal or mixed and
whether tangible or intangible, shall be deemed to be owned by the Partnership
as an entity, and no Partner, individually or collectively with other Partners
or Persons, shall have any ownership interest in such Partnership assets or any
portion thereof. Title to any or all of the Partnership assets may be held in
the name of the Partnership, the General Partner or one or more nominees, as the
General Partner may determine, including Affiliates of the General Partner. The
General Partner hereby declares and warrants that any Partnership assets for
which legal title is held in the name of the General Partner or any nominee or
Affiliate of the General Partner shall be held by the General Partner for the
use and benefit of the Partnership in accordance with the provisions of this
Agreement; provided, however, that the General Partner shall use its best
efforts to cause beneficial and record title to such assets to be vested in the
Partnership as soon as reasonably practicable. All Partnership assets shall be
recorded as the property of the Partnership in its books and records,
irrespective of the name in which legal title to such Partnership assets is
held.
SECTION 7.11 RELIANCE BY THIRD PARTIES
Notwithstanding anything to the contrary in this Agreement, any Person
dealing with the Partnership shall be entitled to assume that the General
Partner has full power and authority, without the consent or approval of any
other Partner or Person, to encumber, sell or otherwise use in any manner any
and all assets of the Partnership and to enter into any contracts on behalf of
the Partnership, and take any and all actions on behalf of the Partnership, and
such Person shall be entitled to deal with the General Partner as if it were the
Partnership's sole party in interest, both legally and beneficially. Each
Limited Partner hereby waives any and all defenses or other remedies that may be
available against such Person to contest, negate or disaffirm any action of the
General Partner in connection with any such dealing. In no event shall any
Person dealing with the General Partner or its representatives be obligated to
ascertain that the terms of this Agreement have been complied with or to inquire
into the necessity or expediency of any act or action of the General Partner or
its representatives. Each and every certificate, document or other instrument
executed on behalf of the Partnership by the General Partner or its
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representatives shall be conclusive evidence in favor of any and every Person
relying thereon or claiming thereunder that (i) at the time of the execution and
delivery of such certificate, document or instrument, this Agreement was in full
force and effect, (ii) the Person executing and delivering such certificate,
document or instrument was duly authorized and empowered to do so for and on
behalf of the Partnership and (iii) such certificate, document or instrument was
duly executed and delivered in accordance with the terms and provisions of this
Agreement and is binding upon the Partnership.
ARTICLE 8
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
SECTION 8.1 LIMITATION OF LIABILITY
The Limited Partners shall have no liability under this Agreement
except as expressly provided in this Agreement (including, without limitation,
Section 10.4 hereof) or under the Act.
SECTION 8.2 MANAGEMENT OF BUSINESS
No Limited Partner or Assignee (other than the General Partner, any of
its Affiliates or any officer, director, member, employee, partner, agent or
trustee of the General Partner, the Partnership or any of their Affiliates, in
their capacity as such) shall take part in the operations, management or control
(within the meaning of the Act) of the Partnership's business, transact any
business in the Partnership's name or have the power to sign documents for or
otherwise bind the Partnership. The transaction of any such business by the
General Partner, any of its Affiliates or any officer, director, member,
employee, partner, agent, representative, or trustee of the General Partner, the
Partnership or any of their Affiliates, in their capacity as such, shall not
affect, impair or eliminate the limitations on the liability of the Limited
Partners or Assignees under this Agreement.
SECTION 8.3 OUTSIDE ACTIVITIES OF LIMITED PARTNERS
Subject to any agreements entered into pursuant to Section 7.6.D hereof
and any other agreements entered into by a Limited Partner or its Affiliates
with the General Partner, the Partnership or a Subsidiary (including, without
limitation, any employment agreement), any Limited Partner and any Assignee,
officer, director, employee, agent, trustee, Affiliate or shareholder of any
Limited Partner shall be entitled to and may have business interests and engage
in business activities in addition to those relating to the Partnership,
including business interests and activities that are in direct or indirect
competition with the Partnership or that are enhanced by the activities of the
Partnership. Neither the Partnership nor any Partners shall have any rights by
virtue of this Agreement in any business ventures of any Limited Partner or
Assignee. Subject to such agreements, none of the Limited Partners nor any other
Person shall have any rights by virtue of this Agreement or the partnership
relationship established hereby in any business ventures of any other Person
(other than the General Partner, to the extent expressly provided herein), and
such Person shall have no obligation pursuant to this Agreement, subject to
Section 7.6.D hereof and any other agreements entered into by a Limited Partner
or its Affiliates with the General Partner, the Partnership or a Subsidiary, to
offer any interest in any such business ventures to the Partnership, any Limited
Partner or any such other Person, even if such opportunity is of a character
that, if presented to the Partnership, any Limited Partner or such other Person,
could be taken by such Person.
SECTION 8.4 RETURN OF CAPITAL
Except pursuant to the rights of Redemption set forth in Section 8.6
hereof, no Limited Partner shall be entitled to the withdrawal or return of its
Capital Contribution, except to the extent of distributions made pursuant to
this Agreement or upon termination of the Partnership as provided herein. Except
to the extent provided in Article 6 hereof or otherwise expressly provided in
this Agreement, no Limited Partner or Assignee shall have priority over any
other Limited Partner or Assignee either as to the return of Capital
Contributions or as to profits, losses or distributions.
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SECTION 8.5 RIGHTS OF LIMITED PARTNERS RELATING TO THE
PARTNERSHIP
A. In addition to other rights provided by this Agreement or by the
Act, and except as limited by Section 8.5.C hereof, each Limited Partner shall
have the right, for a purpose reasonably related to such Limited Partner's
interest as a limited partner in the Partnership, upon written demand with a
statement of the purpose of such demand and at such Limited Partner's own
expense:
(1) to obtain a copy of (i) the most recent annual and
quarterly reports filed with the SEC by the General Partner pursuant to
the Exchange Act and (ii) each report or other written communication
sent to the shareholders of the General Partner;
(2) to obtain a copy of the Partnership's federal, state and
local income tax returns for each Fiscal Year;
(3) to obtain a current list of the name and last known
business, residence or mailing address of each Partner;
(4) to obtain a copy of this Agreement and the Certificate and
all amendments thereto, together with executed copies of all powers of
attorney pursuant to which this Agreement, the Certificate and all
amendments thereto have been executed; and
(5) to obtain true and full information regarding the amount
of cash and a description and statement of any other property or
services contributed by each Partner and that each Partner has agreed
to contribute in the future, and the date on which each became a
Partner.
B. On written request, the Partnership shall notify any Limited Partner
that is a Qualifying Party of the then current Adjustment Factor or any change
made to the Adjustment Factor or to the REIT Shares Amount, Preferred Return Per
Unit or Specific Adjustment Factor applicable to such Limited Partner.
C. Notwithstanding any other provision of this Section 8.5, the General
Partner may keep confidential from the Limited Partners, for such period of time
as the General Partner determines in its sole and absolute discretion to be
reasonable, any information that (i) the General Partner believes to be in the
nature of trade secrets or other information the disclosure of which the General
Partner in good faith believes is not in the best interests of the Partnership
or the General Partner or (ii) the Partnership or the General Partner is
required by law or by agreements with unaffiliated third parties to keep
confidential.
SECTION 8.6 REDEMPTION RIGHTS OF QUALIFYING PARTIES
A. After the first Twelve-Month Period (or such shorter or longer
period as may be provided in a particular Partner Schedule), a Qualifying Party,
but no other Limited Partner or Assignee, shall have the right (subject to the
terms and conditions set forth herein) to require the Partnership to redeem all
or a portion of the Partnership Units held by such Tendering Party (such
Partnership Units being hereafter called "TENDERED UNITS") in exchange (a
"REDEMPTION") for the Cash Amount payable on the Specified Redemption Date. Any
Redemption shall be exercised pursuant to a Notice of Redemption delivered to
the General Partner by the Qualifying Party when exercising the Redemption right
(the "TENDERING PARTY"). The Partnership's obligation to effect a Redemption,
however, shall not arise or be binding against the Partnership (i) until and
unless there has been a Declination and (ii) before the first Business Day
following the Cut-Off Date. Regardless of the binding or non-binding nature of a
pending Redemption, a Tendering Party shall have no right to receive
distributions with respect to any Tendered Units (other than the Cash Amount)
paid after delivery of the Notice of Redemption, whether or not the Partnership
Record Date for such distribution precedes or coincides with such delivery of
the Notice of Redemption. In the event of a Redemption, the Cash Amount shall be
delivered as a certified check payable to the Tendering Party or, in the General
Partner's sole and discretion, in immediately available funds.
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B. Notwithstanding the provisions of Section 8.6.A hereof, on or before
the close of business on the CutOff Date, the General Partner may, in its sole
and absolute discretion but subject to the Ownership Limit and the transfer
restrictions and other limitations of the Charter, elect to acquire some or all
(such percentage being referred to as the "APPLICABLE PERCENTAGE") of the
Tendered Units from the Tendering Party in exchange for REIT Shares. If the
General Partner so elects, on the Specified Redemption Date the Tendering Party
shall sell such number of the Tendered Units to the General Partner in exchange
for a number of REIT Shares equal to the product of the REIT Shares Amount and
the Applicable Percentage. The Tendering Party shall submit (i) such
information, certification or affidavit as the General Partner may reasonably
require in connection with the application of the Ownership Limit and other
restrictions and limitations of the Charter to any such acquisition and (ii)
such written representations, investment letters, legal opinions or other
instruments necessary, in the General Partner's view, to effect compliance with
the Securities Act. In the event of a purchase of the Tendered Units pursuant to
this Section 8.6.B, the Tendering Party shall no longer have the right to cause
the Partnership to effect a Redemption of such Tendered Units, and, upon notice
to the Tendering Party by the General Partner, given on or before the close of
business on the Cut-Off Date, that the General Partner has elected to acquire
some or all of the Tendered Units pursuant to this Section 8.6.B, the obligation
of the Partnership to effect a Redemption of the Tendered Units as to which the
General Partner's notice relates shall not accrue or arise. The product of the
Applicable Percentage and the REIT Shares Amount, if applicable, shall be
delivered by the General Partner as duly authorized, validly issued, fully paid
and nonassessable REIT Shares and, if applicable, Rights, free of any pledge,
lien, encumbrance or restriction, other than the Ownership Limit and other
restrictions provided in the Charter, the Bylaws of the General Partner, the
Securities Act and relevant state securities or "blue sky" laws. Neither any
Tendering Party whose Tendered Units are acquired by the General Partner
pursuant to this Section 8.6.B, any other Partner, any Assignee nor any other
interested Person shall have any right to require or cause the General Partner
to register, qualify or list any REIT Shares owned or held by such Person,
whether or not such REIT Shares are issued pursuant to this Section 8.6.B, with
the SEC, with any state securities commissioner, department or agency, under the
Securities Act or the Exchange Act or with any stock exchange; provided,
however, that this limitation shall not be in derogation of any registration or
similar rights granted pursuant to any other written agreement between the
General Partner and any such Person. Notwithstanding any delay in such delivery,
the Tendering Party shall be deemed the owner of such REIT Shares and Rights for
all purposes, including, without limitation, rights to vote or consent, receive
dividends, and exercise rights, as of the Specified Redemption Date. REIT Shares
issued upon an acquisition of the Tendered Units by the General Partner pursuant
to this Section 8.6.B may contain such legends regarding restrictions under the
Securities Act and applicable state securities laws as the General Partner in
good faith determines to be necessary or advisable in order to ensure compliance
with such laws.
C. Notwithstanding the provisions of Sections 8.6.A and 8.6.B hereof,
no Tendering Party (i) where the Redemption would consist of less than all the
Partnership Units held by Partners other than the General Partner, shall be
entitled to elect or effect a Redemption to the extent that the aggregate
Partnership Units of the Limited Partners would be reduced, as a result of the
Redemption (or the acquisition of the Tendered Units by the General Partner
pursuant to Section 8.6.B hereof), to less than one percent (1%) of all
Partnership Units outstanding immediately prior to delivery of the Notice of
Redemption and (ii) shall have any rights under this Agreement that would
otherwise be prohibited under the Charter. To the extent that any attempted
Redemption or acquisition of the Tendered Units by the General Partner pursuant
to Section 8.6.B hereof would be in violation of this Section 8.6.C, it shall be
null and void ab initio, and the Tendering Party shall not acquire any rights or
economic interests in REIT Shares otherwise issuable by the General Partner
under Section 8.6.B hereof.
D. In the event that the General Partner declines or fails to exercise
its purchase rights pursuant to Section 8.6.B hereof following receipt of a
Notice of Redemption (a "DECLINATION"):
(1) The General Partner shall give notice of such Declination
to the Tendering Party on or before the close of business on the
Cut-Off Date. The failure of the General Partner to give notice of such
Declination by the close of business on the Cut-Off Date shall itself
constitute a Declination.
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(2) The Partnership may elect to raise funds for the payment
of the Cash Amount either (a) by requiring that the General Partner
contribute such funds from the proceeds of a registered public offering
(a "PUBLIC OFFERING FUNDING") of a number of REIT Shares ("REGISTRABLE
SHARES") equal to the REIT Shares Amount with respect to the Tendered
Units or (b) from any other sources (including, but not limited to, the
sale of any Property and the incurrence of additional Debt) available
to the Partnership.
(3) Promptly upon the General Partner's receipt of the Notice
of Redemption and the General Partner giving notice of its Declination,
the General Partner shall give notice (a "SINGLE FUNDING NOTICE") to
all Qualifying Parties then holding a Partnership Interest (or an
interest therein) and having Redemption rights pursuant to this Section
8.6 and require that all such Qualifying Parties elect whether or not
to effect a Redemption of their Partnership Units to be funded through
such Public Offering Funding. In the event that any such Qualifying
Party elects to effect such a Redemption, it shall give notice thereof
and of the number of Partnership Units to be made subject thereto in
writing to the General Partner within ten (10) Business Days after
receipt of the Single Funding Notice, and such Qualifying Party shall
be treated as a Tendering Party for all purposes of this Section 8.6.
In the event that a Qualifying Party does not so elect, it shall be
deemed to have waived its right to effect a Redemption for the current
Twelve-Month Period; provided, however, that the General Partner shall
not be required to acquire Partnership Units pursuant to this Section
8.6.D more than twice within a Twelve-Month Period.
Any proceeds from a Public Offering Funding that are in excess of the Cash
Amount shall be for the sole benefit of the General Partner. The General Partner
may, but shall not be required to, make a Capital Contribution of such amounts
to the Partnership for an additional General Partner Interest.
E. Notwithstanding the provisions of Section 8.6.B hereof, the General
Partner shall not, under any circumstances, elect to acquire Tendered Units in
exchange for the REIT Shares Amount if such exchange would be prohibited under
the Charter.
F. Notwithstanding anything herein to the contrary (but subject to
Section 8.6.C hereof), with respect to any Redemption (or any tender of
Partnership Units for Redemption if the Tendered Units are acquired by the
General Partner pursuant to Section 8.6.B hereof) pursuant to this Section 8.6:
(1) All Partnership Units acquired by the General Partner
pursuant to Section 8.6.B hereof shall automatically, and without
further action required, be converted into and deemed to be General
Partner Interests comprised of the same number of Partnership Units.
(2) Subject to the Ownership Limit, no Tendering Party may
effect a Redemption for less than five hundred (500) Partnership Units
or, if such Tendering Party holds (as a Limited Partner or,
economically, as an Assignee) less than five hundred (500) Partnership
Units, all of the Partnership Units held by such Tendering Party.
(3) Each Tendering Party (a) may effect a Redemption only once
in each Twelve-Month Period (unless the restriction contained in this
Section 8.6.F(3)(a) is waived by the General Partner in its sole and
absolute discretion) and (b) may not effect a Redemption during the
period after the Partnership Record Date with respect to a distribution
and before the record date established by the General Partner for a
distribution to its shareholders of some or all of its portion of such
Partnership distribution.
(4) Notwithstanding anything herein to the contrary, with
respect to any Redemption or acquisition of Tendered Units by the
General Partner pursuant to Section 8.6.B hereof, in the event that the
General Partner gives notice to all Limited Partners (but excluding any
Assignees) then owning Partnership Interests (a "PRIMARY OFFERING
NOTICE") that it desires to effect a primary
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offering of its equity securities then, unless the General Partner
otherwise consents, commencement of the actions denoted in Section
8.6.E hereof as to a Public Offering Funding with respect to any Notice
of Redemption thereafter received, whether or not the Tendering Party
is a Limited Partner, may be delayed until the earlier of (a) the
completion of the primary offering or (b) ninety (90) days following
the giving of the Primary Offering Notice.
(5) Without the Consent of the General Partner (which may be
given or withheld in its sole and absolute discretion), no Tendering
Party may effect a Redemption within ninety (90) days following the
closing of any prior Public Offering Funding.
(6) The consummation of such Redemption (or an acquisition of
Tendered Units by the General Partner pursuant to Section 8.6.B hereof,
as the case may be) shall be subject to the expiration or termination
of the applicable waiting period, if any, under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended.
(7) The Tendering Party shall continue to own (subject, in the
case of an Assignee, to the provisions of Section 11.5 hereof) all
Partnership Units subject to any Redemption, and be treated as a
Limited Partner or an Assignee, as applicable, with respect such
Partnership Units for all purposes of this Agreement, until such
Partnership Units are either paid for by the Partnership pursuant to
Section 8.6.A hereof or transferred to the General Partner and paid
for, by the issuance of the REIT Shares, pursuant to Section 8.6.B
hereof on the Specified Redemption Date. Until a Specified Redemption
Date and an acquisition of the Tendered Units by the General Partner
pursuant to Section 8.6.B hereof, the Tendering Party shall have no
rights as a shareholder of the General Partner with respect to the REIT
Shares issuable in connection with such acquisition.
For purposes of determining compliance with the restrictions set forth in this
Section 8.6.F, all Partnership Units beneficially owned by a Related Party of a
Tendering Party shall be considered to be owned or held by such Tendering Party.
G. In connection with an exercise of Redemption rights pursuant to this
Section 8.6, the Tendering Party shall submit the following to the General
Partner, in addition to the Notice of Redemption:
(1) A written affidavit, dated the same date as, and
accompanying, the Notice of Redemption, (a) disclosing the actual and
constructive ownership, as determined for purposes of Code Sections
856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and
(ii) any Related Party and (b) representing that, after giving effect
to the Redemption or an acquisition of the Tendered Units by the
General Partner pursuant to Section 8.6.B hereof, neither the Tendering
Party nor any Related Party will own REIT Shares in excess of the
Ownership Limit;
(2) A written representation that neither the Tendering Party
nor any Related Party has any intention to acquire any additional REIT
Shares prior to the closing of the Redemption or an acquisition of the
Tendered Units by the General Partner pursuant to Section 8.6.B hereof
on the Specified Redemption Date; and
(3) An undertaking to certify, at and as a condition to the
closing of (i) the Redemption or (ii) the acquisition of the Tendered
Units by the General Partner pursuant to Section 8.6.B hereof on the
Specified Redemption Date, that either (a) the actual and constructive
ownership of REIT Shares by the Tendering Party and any Related Party
remain unchanged from that disclosed in the affidavit required by
Section 8.6.G(1) or (b) after giving effect to the Redemption or an
acquisition of the Tendered Units by the General Partner pursuant to
Section 8.6.B hereof, neither the Tendering Party nor any Related Party
shall own REIT Shares in violation of the Ownership Limit.
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SECTION 8.7 PARTNERSHIP RIGHT TO CALL LIMITED PARTNER INTERESTS
Notwithstanding any other provision of this Agreement, on and after the
date on which the aggregate Partnership Units of the Limited Partners are less
than five thousand (5,000), the Partnership shall have the right, but not the
obligation, from time to time and at any time to redeem any and all outstanding
Limited Partner Interests by treating any Limited Partner as a Tendering Party
who has delivered a Notice of Redemption pursuant to Section 8.6 hereof for the
amount of Partnership Units to be specified by the General Partner, in its sole
and absolute discretion, by notice to such Limited Partner that the Partnership
has elected to exercise its rights under this Section 8.7. Such notice given by
the General Partner to a Limited Partner pursuant to this Section 8.7 shall be
treated as if it were a Notice of Redemption delivered to the General Partner by
such Limited Partner. For purposes of this Section 8.7, (a) any Limited Partner
(whether or not otherwise a Qualifying Party) may, in the General Partner's sole
and absolute discretion, be treated as a Qualifying Party that is a Tendering
Party and (b) the provisions of Sections 8.6.C(i), 8.6.F(2), 8.6.F(3) and
8.6.F(5) hereof shall not apply, but the remainder of Section 8.6 hereof shall
apply with such adjustments as shall be necessary in the circumstances.
SECTION 8.8 OTHER REDEMPTIONS
Notwithstanding the provisions of Section 8.6 hereof, nothing in this
Agreement shall preclude the redemption of a Limited Partner Interest or
Partnership Units by the Partnership upon such terms and conditions as may be
negotiated between the Limited Partner or Assignee holding such Limited Partner
Interest or Partnership Units, on the one hand, and the General Partner, on the
other hand, in their sole and absolute discretion. Such a redemption may
include, without limitation, the payment of cash by the Partnership to the
Limited Partner or Assignee, in a lump sum or in installments, or the
distribution in kind of Partnership assets to such Limited Partner or Assignee
(which assets may be encumbered), including assets to be designated by the
Limited Partner or Assignee and acquired (with or without debt financing) by the
Partnership. Upon any such redemption, the Partnership Units and Limited Partner
Interest redeemed and the applicable Partner Schedule shall be cancelled and
Exhibit A shall be amended as appropriate to reflect such redemption. In
effecting any such redemption by negotiated agreement, none of the Partnership,
the General Partner, the Limited Partner and the Assignee, as the case may be,
shall incur any liability to any other Holder of Partnership Units or have any
duty to offer the same or similar terms for redemption of any other Limited
Partner Interest or Partnership Units.
ARTICLE 9
BOOKS, RECORDS, ACCOUNTING AND REPORTS
SECTION 9.1 RECORDS AND ACCOUNTING
A. The General Partner shall keep or cause to be kept at the principal
office of the Partnership those records and documents required to be maintained
by the Act and other books and records deemed by the General Partner to be
appropriate with respect to the Partnership's business, including, without
limitation, all books and records necessary to provide to the Limited Partners
any information, lists and copies of documents required to be provided pursuant
to Section 8.5.A or Section 9.3 hereof. Any records maintained by or on behalf
of the Partnership in the regular course of its business may be kept on, or be
in the form of, punch cards, magnetic tape, photographs, micrographics or any
other information storage device, provided that the records so maintained are
convertible into clearly legible written form within a reasonable period of
time.
B. The books of the Partnership shall be maintained, for financial and
tax reporting purposes, on an accrual basis in accordance with generally
accepted accounting principles, or on such other basis as the General Partner
determines to be necessary or appropriate. To the extent permitted by sound
accounting practices and principles, the Partnership and the General Partner may
operate with integrated or consolidated accounting records, operations and
principles.
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SECTION 9.2 FISCAL YEAR
The Fiscal Year of the Partnership shall be the calendar year.
SECTION 9.3 REPORTS
A. As soon as practicable, but in no event later than one hundred five
(105) days after the close of each Fiscal Year, the General Partner shall cause
to be mailed to each Limited Partner, of record as of the close of the Fiscal
Year, an annual report containing financial statements of the Partnership, or of
the General Partner if such statements are prepared solely on a consolidated
basis with the General Partner, for such Fiscal Year, presented in accordance
with generally accepted accounting principles. Such statements of the
Partnership need not be audited if such statements are consolidated with audited
financial statements of the General Partner.
B. As soon as practicable, but in no event later than one hundred five
(105) days after the close of each calendar quarter (except the last calendar
quarter of each year), the General Partner shall cause to be mailed to each
Limited Partner, of record as of the last day of the calendar quarter, a report
containing unaudited financial statements of the Partnership, or of the General
Partner, if such statements are prepared solely on a consolidated basis with the
General Partner, and such other information as may be required by applicable law
or regulation or as the General Partner determines to be appropriate.
ARTICLE 10
TAX MATTERS
SECTION 10.1 PREPARATION OF TAX RETURNS
The General Partner shall arrange for the preparation and timely filing
of all returns with respect to Partnership income, gains, deductions, losses and
other items required of the Partnership for federal and state income tax
purposes and shall use all reasonable efforts to furnish, within ninety (90)
days of the close of each taxable year, the tax information reasonably required
by Limited Partners for federal and state income tax reporting purposes. The
Limited Partners shall promptly provide the General Partner with such
information relating to the Contributed Properties, including tax basis and
other relevant information, as may be reasonably requested by the General
Partner from time to time.
SECTION 10.2 TAX ELECTIONS
Except as otherwise provided herein, the General Partner shall, in its
sole and absolute discretion, determine whether to make any available election
pursuant to the Code, including, but not limited to, the election under Code
Section 754 and the election to use the "recurring item" method of accounting
provided under Code Section 461(h) with respect to property taxes imposed on the
Partnership's Properties; provided, however, that, if the "recurring item"
method of accounting is elected with respect to such property taxes, the
Partnership shall pay the applicable property taxes prior to the date provided
in Code Section 461(h) for purposes of determining economic performance. The
General Partner shall have the right to seek to revoke any such election
(including, without limitation, any election under Code Sections 461(h) and 754)
upon the General Partner's determination in its sole and absolute discretion
that such revocation is in the best interests of the Partners.
SECTION 10.3 TAX MATTERS PARTNER
A. The General Partner shall be the "tax matters partner" of the
Partnership for federal income tax purposes. The tax matters partner shall
receive no compensation for its services. All third-party costs and expenses
incurred by the tax matters partner in performing its duties as such (including
legal and accounting fees and expenses) shall be borne by the Partnership in
addition to any reimbursement pursuant to Section 7.4 hereof. Nothing herein
shall be construed to restrict the Partnership from engaging an accounting firm
to assist the tax matters partner in discharging its duties hereunder, so long
as the compensation paid by the Partnership for such
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services is reasonable. At the request of any Limited Partner, the General
Partner agrees to consult with such Limited Partner with respect to the
preparation and filing of any returns and with respect to any subsequent audit
or litigation relating to such returns; provided, however, that the filing of
such returns shall be in the sole and absolute discretion of the General
Partner.
B. The tax matters partner is authorized, but not required:
(1) to enter into any settlement with the IRS with respect to
any administrative or judicial proceedings for the adjustment of
Partnership items required to be taken into account by a Partner for
income tax purposes (such administrative proceedings being referred to
as a "tax audit" and such judicial proceedings being referred to as
"judicial review"), and in the settlement agreement the tax matters
partner may expressly state that such agreement shall bind all
Partners, except that such settlement agreement shall not bind any
Partner (i) who (within the time prescribed pursuant to the Code and
Regulations) files a statement with the IRS providing that the tax
matters partner shall not have the authority to enter into a settlement
agreement on behalf of such Partner or (ii) who is a "notice partner"
(as defined in Code Section 6231) or a member of a "notice group" (as
defined in Code Section 6223(b)(2));
(2) in the event that a notice of a final administrative
adjustment at the Partnership level of any item required to be taken
into account by a Partner for tax purposes (a "final adjustment") is
mailed to the tax matters partner, to seek judicial review of such
final adjustment, including the filing of a petition for readjustment
with the United States Tax Court or the United States Claims Court, or
the filing of a complaint for refund with the District Court of the
United States for the district in which the Partnership's principal
place of business is located;
(3) to intervene in any action brought by any other Partner
for judicial review of a final adjustment;
(4) to file a request for an administrative adjustment with
the IRS at any time and, if any part of such request is not allowed by
the IRS, to file an appropriate pleading (petition or complaint) for
judicial review with respect to such request;
(5) to enter into an agreement with the IRS to extend the
period for assessing any tax that is attributable to any item required
to be taken into account by a Partner for tax purposes, or an item
affected by such item; and
(6) to take any other action on behalf of the Partners in
connection with any tax audit or judicial review proceeding to the
extent permitted by applicable law or regulations.
The taking of any action and the incurring of any expense by the tax matters
partner in connection with any such proceeding, except to the extent required by
law, is a matter in the sole and absolute discretion of the tax matters partner
and the provisions relating to indemnification of the General Partner set forth
in Section 7.7 hereof shall be fully applicable to the tax matters partner in
its capacity as such.
SECTION 10.4 WITHHOLDING
Each Limited Partner hereby authorizes the Partnership to withhold from
or pay on behalf of or with respect to such Limited Partner any amount of
federal, state, local or foreign taxes that the General Partner determines that
the Partnership is required to withhold or pay with respect to any amount
distributable or allocable to such Limited Partner pursuant to this Agreement,
including, without limitation, any taxes required to be withheld or paid by the
Partnership pursuant to Code Section 1441, Code Section 1442, Code Section 1445
or Code Section 1446. Any amount paid on behalf of or with respect to a Limited
Partner shall constitute a loan by the Partnership to such Limited Partner,
which loan shall be repaid by such Limited Partner within fifteen (15) days
after notice
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from the General Partner that such payment must be made unless (i) the
Partnership withholds such payment from a distribution that would otherwise be
made to the Limited Partner or (ii) the General Partner determines, in its sole
and absolute discretion, that such payment may be satisfied out of the Available
Funds of the Partnership that would, but for such payment, be distributed to the
Limited Partner. Each Limited Partner hereby unconditionally and irrevocably
grants to the Partnership a security interest in such Limited Partner's
Partnership Interest to secure such Limited Partner's obligation to pay to the
Partnership any amounts required to be paid pursuant to this Section 10.4. In
the event that a Limited Partner fails to pay any amounts owed to the
Partnership pursuant to this Section 10.4 when due, the General Partner may, in
its sole and absolute discretion, elect to make the payment to the Partnership
on behalf of such defaulting Limited Partner, and in such event shall be deemed
to have loaned such amount to such defaulting Limited Partner and shall succeed
to all rights and remedies of the Partnership as against such defaulting Limited
Partner (including, without limitation, the right to receive distributions). Any
amounts payable by a Limited Partner hereunder shall bear interest at the base
rate on corporate loans at large United States money center commercial banks, as
published from time to time in the WALL STREET JOURNAL, plus four (4) percentage
points (but not higher than the maximum lawful rate) from the date such amount
is due (i.e., fifteen (15) days after demand) until such amount is paid in full.
Each Limited Partner shall take such actions as the Partnership or the General
Partner shall request in order to perfect or enforce the security interest
created hereunder.
ARTICLE 11
TRANSFERS AND WITHDRAWALS
SECTION 11.1 TRANSFER
A. No part of the interest of a Partner shall be subject to the claims
of any creditor, to any spouse for alimony or support, or to legal process, and
may not be voluntarily or involuntarily alienated or encumbered except as may be
specifically provided for in this Agreement.
B. No Partnership Interest shall be Transferred, in whole or in part,
except in accordance with the terms and conditions set forth in this Article 11.
Any Transfer or purported Transfer of a Partnership Interest not made in
accordance with this Article 11 shall be null and void ab initio.
SECTION 11.2 TRANSFER OF GENERAL PARTNER'S PARTNERSHIP INTEREST
A. The General Partner may not Transfer any of its General Partner
Interest or withdraw from the Partnership except as provided in Sections 11.2.B
and 11.2.C hereof.
B. The General Partner shall not withdraw from the Partnership and
shall not Transfer all or any portion of its interest in the Partnership
(whether by sale, disposition, statutory merger or consolidation, liquidation or
otherwise) without the Consent of the Limited Partners, which Consent may be
given or withheld in the sole and absolute discretion of the Limited Partners.
Upon any Transfer of such a Partnership Interest pursuant to the Consent of the
Limited Partners and otherwise in accordance with the provisions of this Section
11.2.B, the transferee shall become a successor General Partner for all purposes
herein, and shall be vested with the powers and rights of the transferor General
Partner, and shall be liable for all obligations and responsible for all duties
of the General Partner, once such transferee has executed such instruments as
may be necessary to effectuate such admission and to confirm the agreement of
such transferee to be bound by all the terms and provisions of this Agreement
with respect to the Partnership Interest so acquired. It is a condition to any
Transfer otherwise permitted hereunder that the transferee assumes, by operation
of law or express agreement, all of the obligations of the transferor General
Partner under this Agreement with respect to such Transferred Partnership
Interest, and such Transfer shall relieve the transferor General Partner of its
obligations under this Agreement without the Consent of the Limited Partners. In
the event that the General Partner withdraws from the Partnership, in violation
of this Agreement or otherwise, or otherwise dissolves or terminates, or upon
the bankruptcy of the General Partner, a "majority in interest" (as such phrase
is used in Section 17-801(3) of the Act) of the remaining Partners may elect to
continue the Partnership business by selecting a successor General Partner in
accordance with the Act.
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SECTION 11.3 LIMITED PARTNERS' RIGHTS TO TRANSFER
A. GENERAL. Prior to the end of the first Twelve-Month Period, no
Limited Partner shall Transfer all or any portion of its Partnership Interest to
any transferee without the consent of the General Partner, which consent may be
withheld in its sole and absolute discretion; provided, however, that any
Limited Partner may, at any time, without the consent of the General Partner,
(i) Transfer all or part of its Partnership Interest to any Designated Party,
any Family Member, any Controlled Entity or any Affiliate, provided that the
transferee is, in any such case, a Qualified Transferee, or (ii) pledge (a
"PLEDGE") all or any portion of its Partnership Interest to a lending
institution, that is not an Affiliate of such Limited Partner, as collateral or
security for a bona fide loan or other extension of credit, and Transfer such
pledged Partnership Interest to such lending institution in connection with the
exercise of remedies under such loan or extension or credit (any Transfer or
Pledge permitted by this proviso is hereinafter referred to as a "PERMITTED
TRANSFER"). After such first Twelve-Month Period, each Limited Partner, and each
transferee of Partnership Units or Assignee pursuant to a Permitted Transfer,
shall have the right to Transfer all or any portion of its Partnership Interest
to any Person, subject to the provisions of Section 11.6 hereof and to
satisfaction of each of the following conditions:
(1) GENERAL PARTNER RIGHT OF FIRST REFUSAL. The transferring
Partner shall give written notice of the proposed Transfer to the
General Partner, which notice shall state (i) the identity of the
proposed transferee and (ii) the amount and type of consideration
proposed to be received for the Transferred Partnership Units. The
General Partner shall have ten (10) Business Days upon which to give
the Transferring Partner notice of its election to acquire the
Partnership Units on the proposed terms. If it so elects, it shall
purchase the Partnership Units on such terms within ten (10) Business
Days after giving notice of such election; provided, however, that in
the event that the proposed terms involve a purchase for cash, the
General Partner may at its election deliver in lieu of all or any
portion of such cash a note payable to the Transferring Partner at a
date as soon as reasonably practicable, but in no event later than one
hundred eighty (180) days after such purchase, and bearing interest at
an annual rate equal to the total dividends declared with respect to
one (1) REIT Share for the four (4) preceding fiscal quarters of the
General Partner, divided by the Value as of the closing of such
purchase; provided, further, that such closing may be deferred to the
extent necessary to effect compliance with the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, if applicable, and any other
applicable requirements of law. If it does not so elect, the
Transferring Partner may Transfer such Partnership Units to a third
party, on terms no more favorable to the transferee than the proposed
terms, subject to the other conditions of this Section 11.3.
(2) QUALIFIED TRANSFEREE. Any Transfer of a Partnership
Interest shall be made only to a single Qualified Transferee; provided,
however, that, for such purposes, all Qualified Transferees that are
Affiliates, or that comprise investment accounts or funds managed by a
single Qualified Transferee and its Affiliates, shall be considered
together to be a single Qualified Transferee; provided, further, that
each Transfer meeting the minimum Transfer restriction of Section
11.3.A(3) hereof may be to a separate Qualified Transferee.
(3) MINIMUM TRANSFER RESTRICTION. Any Transferring Partner
must Transfer not less than the lesser of (i) the greater of five
thousand (5,000) Partnership Units (or such lesser number as to which
the General Partner has consented in writing) or one-third (1/3) of the
number of Partnership Units owned by such Transferring Partner as of
the Effective Date or (ii) all of the remaining Partnership Units owned
by such Transferring Partner; provided, however, that, for purposes of
determining compliance with the foregoing restriction, all Partnership
Units owned by Affiliates of a Limited Partner shall be considered to
be owned by such Limited Partner.
(4) TRANSFEREE AGREEMENT TO EFFECT A REDEMPTION. Any proposed
transferee shall deliver to the General Partner a written agreement
reasonably satisfactory to the General Partner to the effect that the
transferee will, within six (6) months after consummation of the
Partnership
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Units Transfer, tender its Partnership Units for Redemption
in accordance with the terms of the Redemption rights provided in
Section 8.6 hereof.
(5) NO FURTHER TRANSFERS. The transferee (other than a
Designated Party) shall not be permitted to effect any further Transfer
of the Partnership Units, other than to the General Partner.
(6) EXCEPTION FOR PERMITTED TRANSFERS. The conditions of
Sections 11.3.A(1) through 11.3.A(5) hereof shall not apply in the case
of a Permitted Transfer.
It is a condition to any Transfer otherwise permitted hereunder (whether or not
such Transfer is a Permitted Transfer or is effected during or after the first
Twelve-Month Period) that the transferee assume by operation of law or express
agreement all of the obligations of the transferor Limited Partner under this
Agreement with respect to such Transferred Partnership Interest, and no such
Transfer (other than pursuant to a statutory merger or consolidation wherein all
obligations and liabilities of the transferor Partner are assumed by a successor
corporation by operation of law) shall relieve the transferor Partner of its
obligations under this Agreement without the approval of the General Partner, in
its sole and absolute discretion. Notwithstanding the foregoing, any transferee
of any Transferred Partnership Interest shall be subject to any and all
ownership limitations (including, without limitation, the Ownership Limit)
contained in the Charter that may limit or restrict such transferee's ability to
exercise its Redemption rights, including, without limitation, the Ownership
Limit. Any transferee, whether or not admitted as a Substituted Limited Partner,
shall take subject to the obligations of the transferor hereunder. Unless
admitted as a Substituted Limited Partner, no transferee, whether by a voluntary
Transfer, by operation of law or otherwise, shall have any rights hereunder,
other than the rights of an Assignee as provided in Section 11.5 hereof.
B. INCAPACITY. If a Limited Partner is subject to Incapacity, the
executor, administrator, trustee, committee, guardian, conservator or receiver
of such Limited Partner's estate shall have all the rights of a Limited Partner,
but not more rights than those enjoyed by other Limited Partners, for the
purpose of settling or managing the estate, and such power as the Incapacitated
Limited Partner possessed to Transfer all or any part of its interest in the
Partnership. The Incapacity of a Limited Partner, in and of itself, shall not
dissolve or terminate the Partnership.
C. OPINION OF COUNSEL. In connection with any Transfer of a Limited
Partner Interest, the General Partner shall have the right to receive an opinion
of counsel reasonably satisfactory to it to the effect that the proposed
Transfer may be effected without registration under the Securities Act and will
not otherwise violate any federal or state securities laws or regulations
applicable to the Partnership or the Partnership Interests Transferred. If, in
the opinion of such counsel, such Transfer would require the filing of a
registration statement under the Securities Act or would otherwise violate any
federal or state securities laws or regulations applicable to the Partnership or
the Partnership Units, the General Partner may prohibit any Transfer otherwise
permitted under this Section 11.3 by a Limited Partner of Partnership Interests.
D. ADVERSE TAX CONSEQUENCES. No Transfer by a Limited Partner of its
Partnership Interests (including any Redemption, any other acquisition of
Partnership Units by the General Partner or any acquisition of Partnership Units
by the Partnership) may be made to any person if (i) in the opinion of legal
counsel for the Partnership, it would result in the Partnership being treated as
an association taxable as a corporation, or (ii) such Transfer is effectuated
through an "established securities market" or a "secondary market (or the
substantial equivalent thereof)" within the meaning of Code Section 7704.
SECTION 11.4 SUBSTITUTED LIMITED PARTNERS
A. No Limited Partner shall have the right to substitute a transferee
(including any Designated Party or other transferees pursuant to Transfers
permitted by Section 11.3 hereof) as a Limited Partner in its place. A
transferee (including, but not limited to, any Designated Party) of the interest
of a Limited Partner may be admitted as a Substituted Limited Partner only with
the Consent of the General Partner, which Consent may be given or
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withheld by the General Partner in its sole and absolute discretion. The failure
or refusal by the General Partner to permit a transferee of any such interests
to become a Substituted Limited Partner shall not give rise to any cause of
action against the Partnership or the General Partner. Subject to the foregoing,
an Assignee shall not be admitted as a Substituted Limited Partner until and
unless it furnishes to the General Partner (i) evidence of acceptance, in form
and substance satisfactory to the General Partner, of all the terms, conditions
and applicable obligations of this Agreement, including, without limitation, the
power of attorney granted in Section 2.4 hereof, (ii) a Partner Schedule
executed by such Assignee and (iii) such other documents and instruments as may
be required or advisable, in the sole and absolute discretion of the General
Partner, to effect such Assignee's admission as a Substituted Limited Partner.
B. A transferee who has been admitted as a Substituted Limited Partner
in accordance with this Article 11 shall have all the rights and powers and be
subject to all the restrictions and liabilities of a Limited Partner under this
Agreement.
C. Upon the admission of a Substituted Limited Partner, the General
Partner shall amend Exhibit A to reflect the name and address of such
Substituted Limited Partner and to eliminate, if necessary, the name and address
of the predecessor of such Substituted Limited Partner. In addition, the
Substituted Limited Partner and the General Partner shall execute a Partner
Schedule with respect to such Substituted Limited Partner, which Partner
Schedule shall supersede, to the extent necessary, the Partner Schedule for the
predecessor of such Substituted Limited Partner.
SECTION 11.5 ASSIGNEES
If the General Partner, in its sole and absolute discretion, does not
consent to the admission of any permitted transferee under Section 11.3 hereof
as a Substituted Limited Partner, as described in Section 11.4 hereof, such
transferee shall be considered an Assignee for purposes of this Agreement. An
Assignee shall be entitled to all the rights of an assignee of a limited
partnership interest under the Act, including the right to receive
distributions from the Partnership and the share of Net Income, Net Losses and
other items of income, gain, loss, deduction and credit of the Partnership
attributable to the Partnership Units assigned to such transferee and the rights
to Transfer the Partnership Units provided in this Article 11, but shall not be
deemed to be a holder of Partnership Units for any other purpose under this
Agreement (other than as expressly provided in Section 8.6 hereof with respect
to a Qualifying Party that becomes a Tendering Party), and shall not be entitled
to effect a Consent or vote with respect to such Partnership Units on any matter
presented to the Limited Partners for approval (such right to Consent or vote,
to the extent provided in this Agreement or under the Act, fully remaining with
the transferor Limited Partner). In the event that any such transferee desires
to make a further assignment of any such Partnership Units, such transferee
shall be subject to all the provisions of this Article 11 to the same extent and
in the same manner as any Limited Partner desiring to make an assignment of
Partnership Units.
SECTION 11.6 GENERAL PROVISIONS
A. No Limited Partner may withdraw from the Partnership other than as a
result of a permitted Transfer of all of such Limited Partner's Partnership
Units in accordance with this Article 11, with respect to which the transferee
becomes a Substituted Limited Partner, or pursuant to a Redemption (or
acquisition by the General Partner) of all of its Partnership Units under
Section 8.6 hereof.
B. Any Limited Partner who shall Transfer all of its Partnership Units
in a Transfer (i) permitted pursuant to this Article 11 where such transferee
was admitted as a Substituted Limited Partner, (ii) pursuant to the exercise of
its rights to effect a Redemption of all of its Partnership Units under Section
8.6 hereof or (iii) to the General Partner, whether or not pursuant to Section
8.6.B hereof, shall cease to be a Limited Partner.
C. If any Partnership Unit is Transferred in compliance with the
provisions of this Article 11, or is redeemed by the Partnership or acquired by
the General Partner pursuant to Section 8.6 hereof, on any day other
than the first day of a Fiscal Year, then Net Income, Net Losses, each item
thereof and all other items of income,
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gain, loss, deduction and credit attributable to such Partnership Unit for such
Fiscal Year shall be allocated to the transferor Partner or the Tendering Party,
as the case may be, and, in the case of a Transfer or assignment other than a
Redemption, to the transferee Partner (including, without limitation, the
General Partner in the case of an acquisition of Partnership Units pursuant to
Section 8.6 hereof) or Assignee, by taking into account their varying interests
during the Fiscal Year in accordance with Code Section 706(d), using the "daily
proration" or "interim closing of the books" method or another permissible
method selected by the General Partner. Solely for purposes of making such
allocations, the General Partner, in its sole and absolute discretion, may
determine that each of such items for the calendar month in which a Transfer
occurs shall be allocated to the transferee Partner or Assignee and none of such
items for the calendar month in which a Transfer or a Redemption occurs shall be
allocated to the transferor Partner or the Tendering Party, as the case may be,
if such Transfer occurs on or before the fifteenth (15th) day of the month;
otherwise such items for such calendar month shall be allocated to the
transferor. All distributions of Available Cash attributable to such Partnership
Unit with respect to which the Partnership Record Date is before the date of
such Transfer, assignment or Redemption shall be made to the transferor Partner
or the Tendering Party, as the case may be, and, in the case of a Transfer other
than a Redemption, all distributions of Available Cash thereafter attributable
to such Partnership Unit shall be made to the transferee Partner or Assignee.
D. In addition to any other restrictions on Transfer herein contained,
in no event may any Transfer or assignment of a Partnership Interest by any
Partner (including any Redemption, any acquisition of Partnership Units by the
General Partner or any other acquisition of Partnership Units by the
Partnership) be made:
(a) to any person or entity who lacks the legal right, power
or capacity to own a Partnership Interest;
(b) in violation of applicable law;
(c) of any component portion of a Partnership Interest, such
as the Capital Account, or rights to distributions, separate and apart
from all other components of a Partnership Interest;
(d) in the event that such Transfer would cause the General
Partner to cease to comply with the REIT Requirements;
(e) if such Transfer would, in the opinion of counsel to the
Partnership or the General Partner, cause a termination of the
Partnership, in either case for federal or state income tax purposes
(except as a result of the Redemption (or acquisition by the General
Partner) of all Partnership Units held by all Limited Partners);
(f) if such Transfer would, in the opinion of legal counsel to
the Partnership, cause the Partnership either (i) to cease to be
classified as a partnership or (ii) to be classified as a publicly
traded partnership, in either case for federal income tax purposes
(except as a result of the Redemption (or acquisition by the General
Partner) of all Partnership Units held by all Limited Partners);
(g) if such Transfer would cause the Partnership to become,
with respect to any employee benefit plan subject to Title I of ERISA,
a "party-in-interest" (as defined in ERISA Section 3(14)) or a
"disqualified person" (as defined in Code Section 4975(c));
(h) if such Transfer would, in the opinion of legal counsel to
the Partnership, cause any portion of the assets of the Partnership to
constitute assets of any employee benefit plan pursuant to Department
of Labor Regulations Section 2510.2-101;
(i) if such Transfer requires the registration of such
Partnership Interest pursuant to any applicable federal or state
securities laws;
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(j) if such Transfer would cause the Partnership to have more
than five hundred (500) partners (including as partners those persons
indirectly owning an interest in the Partnership through a partnership,
limited liability company, subchapter S corporation or grantor trust);
(k) if such Transfer causes the Partnership (as opposed to the
General Partner) to become a reporting company under the Exchange Act;
or
(l) if such Transfer subjects the Partnership to regulation
under the Investment Company Act of 1940, the Investment Advisors Act
of 1940 or ERISA, each as amended.
ARTICLE 12
ADMISSION OF PARTNERS
SECTION 12.1 ADMISSION OF SUCCESSOR GENERAL PARTNER
A successor to all of the General Partner's General Partner Interest
pursuant to Section 11.2 hereof who is proposed to be admitted as a successor
General Partner shall be admitted to the Partnership as the General Partner,
effective immediately prior to such Transfer. Any such successor shall carry on
the business of the Partnership without dissolution. In each case, the admission
shall be subject to the successor General Partner executing and delivering to
the Partnership an acceptance of all of the terms, conditions and applicable
obligations of this Agreement and such other documents or instruments as may be
required to effect the admission.
SECTION 12.2 ADMISSION OF ADDITIONAL LIMITED PARTNERS
A. After the admission to the Partnership of the initial Limited
Partners on the date hereof, a Person (other than an existing Partner) who makes
a Capital Contribution to the Partnership in accordance with this Agreement
shall be admitted to the Partnership as an Additional Limited Partner only upon
furnishing to the General Partner (i) evidence of acceptance, in form and
substance satisfactory to the General Partner, of all of the terms, conditions
and applicable of this Agreement, including, without limitation, the power of
attorney granted in Section 2.4 hereof, (ii) a Partner Schedule executed by such
Person and (iii) such other documents or instruments as may be required in the
sole and absolute discretion of the General Partner in order to effect such
Person's admission as an Additional Limited Partner.
B. Notwithstanding anything to the contrary in this Section 12.2, no
Person shall be admitted as an Additional Limited Partner without the consent of
the General Partner, which consent may be given or withheld in the General
Partner's sole and absolute discretion. The admission of any Person as an
Additional Limited Partner shall become effective on the date upon which the
name of such Person is recorded on the books and records of the Partnership,
following the consent of the General Partner to such admission.
C. If any Additional Limited Partner is admitted to the Partnership on
any day other than the first day of a Fiscal Year, then Net Income, Net Losses,
each item thereof and all other items of income, gain, loss, deduction and
credit allocable among Partners and Assignees for such Fiscal Year shall be
allocated among such Additional Limited Partner and all other Partners and
Assignees by taking into account their varying interests during the Fiscal Year
in accordance with Code Section 706(d), using the "interim closing of the books"
method or another permissible method selected by the General Partner. Solely for
purposes of making such allocations, each of such items for the calendar month
in which an admission of any Additional Limited Partner occurs shall be
allocated among all the Partners and Assignees including such Additional Limited
Partner, in accordance with the principles described in Section 11.6.C hereof.
All distributions of Available Cash with respect to which the Partnership Record
Date is before the date of such admission shall be made solely to Partners and
Assignees other than the Additional Limited Partner, and all distributions of
Available Cash thereafter shall be made to all the Partners and Assignees
including such Additional Limited Partner.
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SECTION 12.3 AMENDMENT OF AGREEMENT AND CERTIFICATE OF LIMITED
PARTNERSHIP
For the admission to the Partnership of any Partner, the General
Partner shall take all steps necessary and appropriate under the Act to amend
the records of the Partnership and, if necessary, to prepare as soon as
practical an amendment of this Agreement (including an amendment of Exhibit A)
and, if required by law, shall prepare and file an amendment to the Certificate
and may for this purpose exercise the power of attorney granted pursuant to
Section 2.4 hereof.
SECTION 12.4 ADMISSION OF INITIAL LIMITED PARTNERS
The Persons listed on Exhibit A as limited partners of the Partnership
shall be admitted to the Partnership as Limited Partners upon their execution
and delivery of this Agreement.
SECTION 12.5 LIMIT ON NUMBER OF PARTNERS
No Person shall be admitted to the Partnership as a Substituted Limited
Partner or an Additional Limited Partner if the effect of such admission would
be to cause the Partnership to have more than five hundred (500) Partners,
including as Partners for this purpose those Persons indirectly owning an
interest in the Partnership through another partnership, a limited liability
company, a subchapter S corporation or a grantor trust, or otherwise cause the
Partnership to become a reporting company under the Exchange Act.
ARTICLE 13
DISSOLUTION, LIQUIDATION AND TERMINATION
SECTION 13.1 DISSOLUTION
The Partnership shall not be dissolved by the admission of Substituted
Limited Partners or Additional Limited Partners or by the admission of a
successor General Partner in accordance with the terms of this Agreement. Upon
the withdrawal of the General Partner, any successor General Partner shall
continue the business of the Partnership without dissolution. However, the
Partnership shall dissolve, and its affairs shall be wound up, upon the first to
occur of any of the following (each a "LIQUIDATING EVENT"):
A. the expiration of its term as provided in Section 2.5
hereof;
B. an event of withdrawal, as defined in the Act (including,
without limitation, bankruptcy), of the sole General Partner unless,
within ninety (90) days after the withdrawal, a "majority in interest"
(as such phrase is used in Section 17-801(3) of the Act) of the
remaining Partners agree in writing, in their sole and absolute
discretion, to continue the business of the Partnership and to the
appointment, effective as of the date of withdrawal, of a successor
General Partner;
C. an election to dissolve the Partnership made by the General
Partner, in its sole and absolute discretion, with or without the
Consent of the Limited Partners;
D. entry of a decree of judicial dissolution of the
Partnership pursuant to the provisions of the Act;
E. the occurrence of a Terminating Capital Transaction; or
F. the Redemption (or acquisition by the General Partner) of
all Partnership Units other than Partnership Units held by the General
Partner.
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SECTION 13.2 WINDING UP
A. Upon the occurrence of a Liquidating Event, the Partnership shall
continue solely for the purposes of winding up its affairs in an orderly manner,
liquidating its assets and satisfying the claims of its creditors and Partners.
After the occurrence of a Liquidating Event, no Partner shall take any action
that is inconsistent with, or not necessary to or appropriate for, the winding
up of the Partnership's business and affairs. The General Partner (or, in the
event that there is no remaining General Partner or the General Partner has
dissolved, become bankrupt within the meaning of the Act or ceased to operate,
any Person elected by a Majority in Interest of the Limited Partners (the
General Partner or such other Person being referred to herein as the
"LIQUIDATOR")) shall be responsible for overseeing the winding up and
dissolution of the Partnership and shall take full account of the Partnership's
liabilities and property, and the Partnership property shall be liquidated as
promptly as is consistent with obtaining the fair value thereof, and the
proceeds therefrom (which may, to the extent determined by the General Partner,
include shares of stock in the General Partner) shall be applied and distributed
in the following order:
(1) First, to the satisfaction of all of the Partnership's
debts and liabilities to creditors other than the Partners and their
Assignees (whether by payment or the making of reasonable provision for
payment thereof);
(2) Second, to the satisfaction of all of the Partnership's
debts and liabilities to the General Partner (whether by payment or the
making of reasonable provision for payment thereof), including, but not
limited to, amounts due as reimbursements under Section 7.4 hereof;
(3) Third, to the satisfaction of all of the Partnership's
debts and liabilities to the other Partners and any Assignees (whether
by payment or the making of reasonable provision for payment thereof);
and
(4) The balance, if any, to the General Partner, the Limited
Partners and any Assignees in accordance with and proportion to their
positive Capital Account balances, after giving effect to all
contributions, distributions and allocations for all periods.
The General Partner shall not receive any additional compensation for any
services performed pursuant to this Article 13.
B. Notwithstanding the provisions of Section 13.2.A hereof that require
liquidation of the assets of the Partnership, but subject to the order of
priorities set forth therein, if prior to or upon dissolution of the Partnership
the Liquidator determines that an immediate sale of part or all of the
Partnership's assets would be impractical or would cause undue loss to the
Partners, the Liquidator may, in its sole and absolute discretion, defer for a
reasonable time the liquidation of any assets except those necessary to satisfy
liabilities of the Partnership (including to those Partners as creditors) and/or
distribute to the Partners, in lieu of cash, as tenants in common and in
accordance with the provisions of Section 13.2.A hereof, undivided interests in
such Partnership assets as the Liquidator deems not suitable for liquidation.
Any such distributions in kind shall be made only if, in the good faith judgment
of the Liquidator, such distributions in kind are in the best interest of the
Partners, and shall be subject to such conditions relating to the disposition
and management of such properties as the Liquidator deems reasonable and
equitable and to any agreements governing the operation of such properties at
such time. The Liquidator shall determine the fair market value of any property
distributed in kind using such reasonable method of valuation as it may adopt.
C. In the event that the Partnership is "liquidated" within the meaning
of Regulations Section 1.704- 1(b)(2)(ii)(g), distributions shall be made
pursuant to this Article 13 to the Partners and Assignees that have positive
Capital Accounts in compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(2)
to the extent of, and in proportion to, positive Capital Account balances. If
any Partner has a deficit balance in its Capital Account (after giving effect
to all contributions, distributions and allocations for all taxable years,
including the year during which such
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liquidation occurs), such Partner shall have no obligation to make any
contribution to the capital of the Partnership with respect to such deficit, and
such deficit shall not be considered a debt owed to the Partnership or to any
other Person for any purpose whatsoever. In the sole and absolute discretion of
the General Partner or the Liquidator, a pro rata portion of the distributions
that would otherwise be made to the Partners pursuant to this Article 13 may be
withheld or escrowed to provide a reasonable reserve for Partnership liabilities
(contingent or otherwise) and to reflect the unrealized portion of any
installment obligations owed to the Partnership, provided that such withheld or
escrowed amounts shall be distributed to the General Partner and Limited
Partners in the manner and order of priority set forth in Section 13.2.A hereof
as soon as practicable.
SECTION 13.3 DEEMED DISTRIBUTION AND RECONTRIBUTION
Notwithstanding any other provision of this Article 13, in the event
that the Partnership is liquidated within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g), but no Liquidating Event has occurred, the Partnership's
Property shall not be liquidated, the Partnership's liabilities shall not be
paid or discharged and the Partnership's affairs shall not be wound up. Instead,
for federal income tax purposes the Partnership shall be deemed to have
distributed the Property in kind to the Partners and the Assignees, who shall be
deemed to have assumed and taken such Property subject to all Partnership
liabilities, all in accordance with their respective Capital Accounts.
Immediately thereafter, the Partners and the Assignees shall be deemed to have
recontributed the Partnership Property in kind to the Partnership, which shall
be deemed to have assumed and taken such Property subject to all such
liabilities; provided, however, that nothing in this Section 13.4 shall be
deemed to have constituted any Assignee as a Substituted Limited Partner without
compliance with the provisions of Section 11.4 hereof.
SECTION 13.4 RIGHTS OF LIMITED PARTNERS
Except as otherwise provided in this Agreement, (a) each Limited
Partner shall look solely to the assets of the Partnership for the return of its
Capital Contribution, (b) no Limited Partner shall have the right or power to
demand or receive property other than cash from the Partnership and (c) no
Limited Partner shall have priority over any other Limited Partner as to the
return of its Capital Contributions, distributions or allocations.
SECTION 13.5 NOTICE OF DISSOLUTION
In the event that a Liquidating Event occurs or an event occurs that
would, but for an election or objection by one or more Partners pursuant to
Section 13.1 hereof, result in a dissolution of the Partnership, the General
Partner shall, within thirty (30) days thereafter, provide written notice
thereof to each of the Partners and, in the General Partner's sole and absolute
discretion or as required by the Act, to all other parties with whom the
Partnership regularly conducts business (as determined in the sole and absolute
discretion of the General Partner), and the General Partner may, or, if required
by the Act, shall, publish notice thereof in a newspaper of general circulation
in each place in which the Partnership regularly conduct business (as determined
in the sole and absolute discretion of the General Partner).
SECTION 13.6 CANCELLATION OF CERTIFICATE OF LIMITED PARTNERSHIP
Upon the completion of the liquidation of the Partnership cash and
property as provided in Section 13.2 hereof, the Partnership shall be
terminated, a certificate of cancellation shall be filed with the State of
Delaware, all qualifications of the Partnership as a foreign limited partnership
or association in jurisdictions other than the State of Delaware shall be
cancelled, and such other actions as may be necessary to terminate the
Partnership shall be taken.
SECTION 13.7 REASONABLE TIME FOR WINDING-UP
A reasonable time shall be allowed for the orderly winding-up of the
business and affairs of the Partnership and the liquidation of its assets
pursuant to Section 13.2 hereof, in order to minimize any losses otherwise
attendant
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upon such winding-up, and the provisions of this Agreement shall remain in
effect between the Partners during the period of liquidation.
ARTICLE 14
PROCEDURES FOR ACTIONS AND CONSENTS
OF PARTNERS; AMENDMENTS; MEETINGS
SECTION 14.1 PROCEDURES FOR ACTIONS AND CONSENTS OF PARTNERS
The actions requiring consent or approval of Limited Partners pursuant
to this Agreement, including Section 7.3 hereof, or otherwise pursuant to
applicable law, are subject to the procedures set forth in this Article 14.
SECTION 14.2 AMENDMENTS
Amendments to this Agreement may be proposed by the General Partner or
by a Majority in Interest of the Limited Partners. Following such proposal, the
General Partner shall submit any proposed amendment to the Limited Partners. The
General Partner shall seek the written consent of the Limited Partners on the
proposed amendment or shall call a meeting to vote thereon and to transact any
other business that the General Partner may deem appropriate. For purposes of
obtaining a written consent, the General Partner may require a response within a
reasonable specified time, but not less than fifteen (15) days, and failure to
respond in such time period shall constitute a consent that is consistent with
the General Partner's recommendation with respect to the proposal; provided,
however, that an action shall become effective at such time as requisite
consents are received even if prior to such specified time.
SECTION 14.3 MEETINGS OF THE PARTNERS
A. Meetings of the Partners may be called by the General Partner and
shall be called upon the receipt by the General Partner of a written request by
a Majority in Interest of the Limited Partners. The call shall state the nature
of the business to be transacted. Notice of any such meeting shall be given to
all Partners not less than seven (7) days nor more than thirty (30) days prior
to the date of such meeting. Partners may vote in person or by proxy at such
meeting. Whenever the vote or Consent of Partners is permitted or required under
this Agreement, such vote or Consent may be given at a meeting of Partners or
may be given in accordance with the procedure prescribed in Section 14.3.B
hereof.
B. Any action required or permitted to be taken at a meeting of the
Partners may be taken without a meeting if a written consent setting forth the
action so taken is signed by Partners holding a majority of the Partnership
Units (or such other percentage as is expressly required by this Agreement for
the action in question). Such consent may be in one instrument or in several
instruments, and shall have the same force and effect as a vote of Partners
holding a majority of the Partnership Units (or such other percentage as is
expressly required by this Agreement). Such consent shall be filed with the
General Partner. An action so taken shall be deemed to have been taken at a
meeting held on the effective date so certified.
C. Each Limited Partner may authorize any Person or Persons to act for
him by proxy on all matters in which a Limited Partner is entitled to
participate, including waiving notice of any meeting, or voting or participating
at a meeting. Every proxy must be signed by the Limited Partner or its
attorney-in-fact. No proxy shall be valid after the expiration of eleven (11)
months from the date thereof unless otherwise provided in the proxy (or there is
receipt of a proxy authorizing a later date). Every proxy shall be revocable at
the pleasure of the Limited Partner executing it, such revocation to be
effective upon the Partnership's receipt of written notice of such revocation
from the Limited Partner executing such proxy.
D. Each meeting of Partners shall be conducted by the General Partner
or such other Person as the General Partner may appoint pursuant to such rules
for the conduct of the meeting as the General Partner or such
other Person deems appropriate in its sole and absolute discretion. Without
limitation, meetings of Partners may
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be conducted in the same manner as meetings of the General Partner's
shareholders and may be held at the same time as, and as part of, the meetings
of the General Partner's shareholders.
ARTICLE 15
GENERAL PROVISIONS
SECTION 15.1 ADDRESSES AND NOTICE
Any notice, demand, request or report required or permitted to be given
or made to a Partner or Assignee under this Agreement shall be in writing and
shall be deemed given or made when delivered in person or when sent by first
class United States mail or by other means of written communication (including
by telecopy, facsimile, or commercial courier service) (i) in the case of a
Partner, to such Partner at the address set forth in Exhibit A (or, if Exhibit A
has not been amended to reflect the address of any such Partner, the Partner
Schedule with respect to such Partner) or such other address of which the
Partner shall notify the General Partner in writing and (ii) in the case of an
Assignee, to the address of which such Assignee shall notify the General Partner
in writing.
SECTION 15.2 TITLES AND CAPTIONS
All article or section titles or captions in this Agreement are for
convenience only. They shall not be deemed part of this Agreement and in no way
define, limit, extend or describe the scope or intent of any provisions hereof.
Except as specifically provided otherwise, references to "Articles" or
"Sections" are to Articles and Sections of this Agreement.
SECTION 15.3 PRONOUNS AND PLURALS
Whenever the context may require, any pronouns used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the
singular form of nouns, pronouns and verbs shall include the plural and vice
versa.
SECTION 15.4 FURTHER ACTION
The parties shall execute and deliver all documents, provide all
information and take or refrain from taking action as may be necessary or
appropriate to achieve the purposes of this Agreement.
SECTION 15.5 BINDING EFFECT
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.
SECTION 15.6 WAIVER
A. No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach or any other covenant, duty, agreement or condition.
B. The restrictions, conditions and other limitations on the rights and
benefits of the Limited Partners contained in this Agreement, and the
representations, duties, covenants and other requirements of performance or
notice by the Limited Partners, are for the benefit of the Partnership and,
except for an obligation to pay money to the Partnership, may be waived or
relinquished by the General Partner, in its sole and absolute discretion, on
behalf of the Partnership in one or more instances from time to time and at any
time; provided, however, that any such waiver or relinquishment may not made if
it would have the effect of (i) creating liability for any other Limited
Partner, (ii) causing the Partnership to cease to qualify as a limited
partnership, (iii) reducing the amount of cash otherwise distributable to the
Limited Partners, (iv) resulting in the classification of the Partnership as
an association
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or publicly traded partnership taxable as a corporation or (v) violating the
Securities Act, the Exchange Act or any state "blue sky" or other securities
laws; provided, further, that any waiver relating to compliance with the
Ownership Limit or other restrictions in the Charter shall be made and shall be
effective only as provided in the Charter.
SECTION 15.7 COUNTERPARTS
This Agreement may be executed in counterparts, all of which together
shall constitute one agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart. Each party shall become bound by this Agreement immediately
upon affixing its signature hereto or upon execution of a Partner Schedule.
SECTION 15.8 APPLICABLE LAW
This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Delaware, without regard to the principles
of conflicts of law. In the event of a conflict between any provision of this
Agreement and any non-mandatory provision of the Act, the provisions of this
Agreement shall control and take precedence.
SECTION 15.9 ENTIRE AGREEMENT
This Agreement contains all of the understandings and agreements
between and among the Partners with respect to the subject matter of this
Agreement and the rights, interests and obligations of the Partners with respect
to the Partnership.
SECTION 15.10 INVALIDITY OF PROVISIONS
If any provision of this Agreement is or becomes invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.
SECTION 15.11 LIMITATION TO PRESERVE REIT STATUS
Notwithstanding anything else in this Agreement, to the extent that the
amount paid, credited, distributed or reimbursed by the Partnership to, for or
with respect to any REIT Partner or its officers, directors, employees or
agents, whether as a reimbursement, fee, expense or indemnity (a "REIT
PAYMENT"), would constitute gross income to the REIT Partner for purposes of
Code Section 856(c)(2) or Code Section 856(c)(3), then, notwithstanding any
other provision of this Agreement, the amount of such REIT Payments, as selected
by the General Partner in its discretion from among items of potential
distribution, reimbursement, fees, expenses and indemnities, shall be reduced
for any Fiscal Year so that the REIT Payments, as so reduced, to, for or with
respect to such REIT Partner shall not exceed the lesser of:
(a) an amount equal to the excess, if any, of (i) four and
nine-tenths percent (4.9%) of the REIT Partner's total gross income
(but excluding the amount of any REIT Payments) for the Fiscal Year
that is described in subsections (A) through (H) of Code Section
856(c)(2) over (ii) the amount of gross income (within the meaning of
Code Section 856(c)(2)) derived by the REIT Partner from sources other
than those described in subsections (A) through (H) of Code Section
856(c)(2) (but not including the amount of any REIT Payments); or
(b) an amount equal to the excess, if any, of (i) twenty-four
percent (24%) of the REIT Partner's total gross income (but excluding
the amount of any REIT Payments) for the Fiscal Year that is described
in subsections (A) through (I) of Code Section 856(c)(3) over (ii) the
amount of gross income (within the meaning of Code Section 856(c)(3))
derived by the REIT Partner from
53
<PAGE> 59
sources other than those described in subsections (A) through (I) of
Code Section 856(c)(3) (but not including the amount of any REIT
Payments);
provided, however, that REIT Payments in excess of the amounts set forth in
clauses (a) and (b) above may be made if the General Partner, as a condition
precedent, obtains an opinion of tax counsel that the receipt of such excess
amounts shall not adversely affect the REIT Partner's ability to qualify as a
REIT. To the extent that REIT Payments may not be made in a Fiscal Year as a
consequence of the limitations set forth in this Section 15.11, such REIT
Payments shall carry over and shall be treated as arising in the following
Fiscal Year. The purpose of the limitations contained in this Section 15.11 is
to prevent any REIT Partner from failing to qualify as a REIT under the Code by
reason of such REIT Partner's share of items, including distributions,
reimbursements, fees, expenses or indemnities, receivable directly or indirectly
from the Partnership, and this Section 15.11 shall be interpreted and applied to
effectuate such purpose.
SECTION 15.12 NO PARTITION
No Partner nor any successor-in-interest to a Partner shall have the
right while this Agreement remains in effect to have any property of the
Partnership partitioned, or to file a complaint or institute to any proceeding
at law or in equity to have such property of the Partnership partitioned, and
each Partner, on behalf of itself and its successors and assigns hereby waives
any such right. It is the intention of the Partners that the rights of the
parties hereto and their successors-in-interest to Partnership property, as
among themselves, shall be governed by the terms of this Agreement, and that the
rights of the Partners and their successors-in-interest shall be subject to the
limitations and restrictions as set forth in this Agreement.
SECTION 15.13 NO THIRD-PARTY RIGHTS CREATED HEREBY
The provisions of this Agreement are solely for the purpose of defining
the interests of the Partners, inter se; and no other person, firm or entity
(i.e., a party who is not a signatory hereto or a permitted successor to such
signatory hereto) shall have any right, power, title or interest by way of
subrogation or otherwise, in and to the rights, powers, title and provisions of
this Agreement. No creditor or other third party having dealings with the
Partnership shall have the right to enforce the right or obligation of any
Partner to make Capital Contributions or loans to the Partnership or to pursue
any other right or remedy hereunder or at law or in equity. None of the rights
or obligations of the Partners herein set forth to make Capital Contributions or
loans to the Partnership shall be deemed an asset of the Partnership for any
purpose by any creditor or other third party, nor may any such rights or
obligations be sold, transferred or assigned by the Partnership or pledged or
encumbered by the Partnership to secure any debt or other obligation of the
Partnership or any of the Partners.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
GENERAL PARTNER:
EXCEL REALTY TRUST, INC.
By /s/ GARY SABIN
-------------------------------
54
<PAGE> 60
INITIAL LIMITED PARTNER:
ERT DEVELOPMENT CORPORATION
By /S/ David A. Lund
-------------------------------
55
<PAGE> 61
EXHIBIT A
PARTNERS AND ADDRESSES
GENERAL PARTNER
Excel Realty Trust, Inc. Initial cash contribution: $99.00
16955 Via Del Campo, Suite 110 Initial Partnership Units: 99
San Diego, California 92127
LIMITED PARTNER
ERT Development Corporation Initial cash contribution: $1.00
16955 Via Del Campo, Suite 110
San Diego, California 92127
<PAGE> 62
EXHIBIT B
EXAMPLES REGARDING ADJUSTMENT FACTOR
For purposes of the following examples, it is assumed that (a) the
Adjustment Factor in effect on June 30, 1995 is 1.0 and (b) on July 1, 1995 (the
"Partnership Record Date" for purposes of these examples), prior to the events
described in the examples, there are 100 REIT Shares issued and outstanding.
Example 1
On the Partnership Record Date, the General Partner declares a dividend
on its outstanding REIT Shares in REIT Shares. The amount of the dividend is one
REIT Share paid in respect of each REIT Share owned. Pursuant to Paragraph (i)
of the definition of "Adjustment Factor," the Adjustment Factor shall be
adjusted on the Partnership Record Date, effective immediately after the stock
dividend is declared, as follows:
200
1.0 * --- = 2.0
100
Accordingly, the Adjustment Factor after the stock dividend is declared is 2.0.
Example 2
On the Partnership Record Date, the General Partner distributes options
to purchase REIT Shares to all holders of its REIT Shares. The amount of the
distribution is one option to acquire one REIT Share in respect of each REIT
Share owned. The strike price is $4.00 a share. The Value of a REIT Share on the
Partnership Record Date is $5.00 per share. Pursuant to Paragraph (ii) of the
definition of "Adjustment Factor," the Adjustment Factor shall be adjusted on
the Partnership Record Date, effective immediately after the options are
distributed, as follows:
(100 + 100)
1.0 * ------------------- = 1.1111
100 * $4.00
(100 + -----------)
$5.00
Accordingly, the Adjustment Factor after the options are distributed is 1.1111.
If the options expire or become no longer exercisable, then the retroactive
adjustment specified in Paragraph (ii) of the definition of "Adjustment Factor"
shall apply.
Example 3
On the Partnership Record Date, the General Partner distributes assets
to all holders of its REIT Shares. The amount of the distribution is one asset
with a fair market value (as determined by the General Partner) of $1.00 in
respect of each REIT Share owned. It is also assumed that the assets do not
relate to assets received by the General Partner pursuant to a pro rata
distribution by the Partnership. The Value of a REIT Share on the Partnership
Record Date is $5.00 a share. Pursuant to Paragraph (iii) of the definition of
"Adjustment Factor," the Adjustment Factor shall be adjusted on the Partnership
Record Date, effective immediately after the assets are distributed, as follows:
$5.00
1.0 * ------------- = 1.25
$5.00 - $1.00
Accordingly, the Adjustment Factor after the assets are distributed is 1.25.
<PAGE> 63
EXHIBIT C
NOTICE OF REDEMPTION
To: Excel Realty Trust, Inc.
16955 Via Del Campo, Suite 110
San Diego, California 92127
The undersigned Limited Partner or Assignee hereby irrevocably tenders
for Redemption __________ Partnership Units in Excel Realty Partners, L.P. in
accordance with the terms of the Agreement of Limited Partnership of Excel
Realty Partners, L.P., dated as of April 24, 1995, as amended (the "Agreement"),
and the Redemption rights referred to therein. The undersigned Limited Partner
or Assignee:
(a) undertakes (i) to surrender such Partnership Units and any
certificate therefor at the closing of the Redemption and (ii) to
furnish to the General Partner, prior to the Specified Redemption Date,
the documentation, instruments and information required under Section
8.6.G of the Agreement;
(b) directs that the certified check representing the Cash
Amount deliverable upon the closing of such Redemption be delivered to
the address specified below;
(c) represents, warrants, certifies and agrees that:
(1) the undersigned Limited Partner or Assignee is a
Qualifying Party,
(2) the undersigned Limited Partner or Assignee has,
and at the closing of the Redemption will have, good,
marketable and unencumbered title to such Partnership Units,
free and clear of the rights or interests of any other person
or entity,
(3) the undersigned Limited Partner or Assignee has,
and at the closing of the Redemption will have, the full
right, power and authority to tender and surrender such
Partnership Units as provided herein, and
(4) the undersigned Limited Partner or Assignee has
obtained the consent or approval of all persons and entities,
if any, having the right to consent to or approve such tender
and surrender; and
(d) acknowledges that he will continue to own such Partnership
Units until and unless either (1) such Partnership Units are acquired
by the General Partner pursuant to Section 8.6.B of the Agreement or
(2) such Redemption transaction closes.
All capitalized terms used herein and not otherwise defined shall have
the same meaning ascribed to them respectively in the Agreement.
Dated: ________________________
Name of Limited Partner
or Assignee:
__________________________________________
<PAGE> 64
(Signature of Limited Partner or Assignee)
__________________________________________
(Street Address)
__________________________________________
(City) (State) (Zip Code)
__________________________________________
Signature Guaranteed by:
__________________________________________
Issue Check Payable to: __________________________________________
Please insert social security
or identifying number: __________________________________________
<PAGE> 65
EXHIBIT D
FORM OF PARTNER SCHEDULE
[initial or Additional Limited Partner version]
PARTNER SCHEDULE
EXCEL REALTY PARTNERS, L.P.
THIS PARTNER SCHEDULE is executed by Excel Realty Trust, Inc., a
Maryland corporation (the "General Partner"), and the party named below (the
"New Partner") in respect of Excel Realty Partners, L.P., a Delaware limited
partnership (the "Partnership").
1. NAME, ADDRESS AND TAXPAYER IDENTIFICATION NUMBER OF NEW PARTNER
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
TIN:___________________________________________________________________
2. CAPITAL CONTRIBUTIONS BY NEW PARTNER
Cash contribution: $________________________
Contributed Properties:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
CONTRIBUTED PROPERTY Gross Asset Value Indebtedness Assumed Net Asset Value
or Taken Subject to
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
3. PARTNERSHIP UNITS, PREFERRED RETURN PER UNIT, SPECIFIC ADJUSTMENT
FACTOR AND SPECIFIC ADJUSTMENT LIMITATIONS
Partnership Units issued to New Partner: _____________
Preferred Return Per Unit: $________ per quarter
Specific Adjustment Factor: ____________
<PAGE> 66
Specific Adjustment Limitations:
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
4. ADMISSION OF NEW PARTNER
The New Partner is admitted to the Partnership as an Additional Limited
Partner. The General Partner hereby consents to such admission.
5. DESIGNATED PARTIES
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
6. AGREEMENT
The New Partner acknowledges receipt of a copy of, and agrees to be
bound by, the Agreement of Limited Partnership, as amended, for the Partnership.
The New Partner specifically confirms (a) the representations and warranties
contained in Section 3.4 of such Agreement of Limited Partnership, as amended,
for the Partnership and (b) the grant of the power of attorney set forth in
Section 2.4 of such Agreement.
7. ADDITIONAL TERMS AND CONDITIONS
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
<PAGE> 67
IN WITNESS WHEREOF, the parties have executed this Partner Schedule as
of the date indicated below.
Dated: _________________, 199__
"GENERAL PARTNER":
EXCEL REALTY TRUST, INC., as General Partner of
EXCEL REALTY PARTNERS, L.P.
By_____________________________________________
"NEW PARTNER":
_______________________________________________
<PAGE> 68
[Substituted Limited Partner version]
PARTNER SCHEDULE
EXCEL REALTY PARTNERS, L.P.
THIS PARTNER SCHEDULE is executed by Excel Realty Trust, Inc., a
Maryland corporation (the "General Partner"), and the party named below (the
"Substituted Partner") in respect of Excel Realty Partners, L.P., a Delaware
limited partnership (the "Partnership").
1. NAME, ADDRESS AND TAXPAYER IDENTIFICATION NUMBER OF SUBSTITUTED PARTNER
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
TIN:___________________________________________________________________
2. CAPITAL CONTRIBUTIONS BY PREDECESSOR PARTNER
The Substituted Partner has succeeded to the following Capital
Contributions made to the Partnership by its predecessor:
Name of Predecessor: ____________________________________________
Cash contribution: $________________________
Contributed Properties:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
CONTRIBUTED PROPERTY Gross Asset Value Indebtedness Assumed Net Asset Value
or Taken Subject to
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
3. PARTNERSHIP UNITS, PREFERRED RETURN PER UNIT, SPECIFIC ADJUSTMENT
FACTOR AND SPECIFIC ADJUSTMENT LIMITATIONS
Partnership Units held by
Substituted Partner: ____________
Preferred Return Per Unit: $_______ per quarter
<PAGE> 69
Specific Adjustment Factor: ____________
Specific Adjustment Limitations:
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
4. ADMISSION OF SUBSTITUTED PARTNER
The Substituted Partner is admitted to the Partnership as a Substituted
Limited Partner. The General Partner hereby consents to such admission.
5. DESIGNATED PARTIES
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
6. AGREEMENT
The Substituted Partner acknowledges receipt of a copy of, and agrees
to be bound by, the Agreement of Limited Partnership, as amended, for the
Partnership. The Substituted Partner specifically confirms (a) the
representations and warranties contained in Section 3.4 of such Agreement of
Limited Partnership, as amended, for the Partnership and (b) the grant of the
power of attorney set forth in Section 2.4 of such Agreement.
7. ADDITIONAL TERMS AND CONDITIONS
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
<PAGE> 70
IN WITNESS WHEREOF, the parties have executed this Partner Schedule as
of the date indicated below.
Dated: _________________, 199__
"GENERAL PARTNER":
EXCEL REALTY TRUST, INC., as General Partner of
EXCEL REALTY PARTNERS, L.P.
By_____________________________________________
"SUBSTITUTED PARTNER":
_______________________________________________
<PAGE> 71
EXHIBIT E
FORM OF PARTNERSHIP UNIT CERTIFICATE
<PAGE> 72
PARTNERSHIP UNIT CERTIFICATE
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP AN OPINION OF
COUNSEL SATISFACTORY TO THE PARTNERSHIP, IN FORM AND SUBSTANCE SATISFACTORY TO
THE PARTNERSHIP, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER
DISPOSITION MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE ACT AND UNDER
APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS. IN ADDITION, THE LIMITED
PARTNERSHIP INTEREST EVIDENCED BY THIS CERTIFICATE MAY BE SOLD OR OTHERWISE
TRANSFERRED ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN
THE AGREEMENT OF LIMITED PARTNERSHIP OF EXCEL REALTY PARTNERS, L.P., DATED
APRIL 24, 1995, A COPY OF WHICH MAY BE OBTAINED FROM EXCEL REALTY TRUST, INC.,
THE GENERAL PARTNER, AT ITS PRINCIPAL EXECUTIVE OFFICE.
Certificate No.
-----------
EXCEL REALTY PARTNERS, L.P.
FORMED UNDER THE LAWS OF THE STATE OF DELAWARE
This certifies that John Doe
is the owner of * * * One Thousand (1,000) * * *
FULLY PAID PARTNERSHIP UNITS
OF
EXCEL REALTY PARTNERS, L.P.,
transferable on the books of the Partnership in person or by duly authorized
attorney on the surrender of this Certificate properly endorsed. This
Certificate and the Partnership Units represented hereby are issued and shall
be held subject to all of the provisions of the Agreement of Limited
Partnership, as the same may be amended and/or supplemented from time to time.
IN WITNESS WHEREOF, the undersigned has signed this Certificate.
Dated: By
---------------------------------
<PAGE> 73
PARTNER SCHEDULE
EXCEL REALTY PARTNERS, L.P.
THIS PARTNER SCHEDULE is executed by Excel Realty Trust, Inc., a
Maryland corporation (the "General Partner"), and the party named below (the
"New Partner") in respect of Excel Realty Partners, L.P., a Delaware limited
partnership (the "Partnership").
1. NAME, ADDRESS AND TAXPAYER IDENTIFICATION NUMBER OF NEW PARTNER
ERT Development Corporation
16955 Via Del Campo, Suite 110
San Diego, California 92127
TIN: pending
2. CAPITAL CONTRIBUTIONS BY NEW PARTNER
Cash contribution: $1.00
Contributed Properties: None
3. PARTNERSHIP UNITS, PREFERRED RETURN PER UNIT, SPECIFIC ADJUSTMENT
FACTOR AND SPECIFIC ADJUSTMENT LIMITATIONS
Partnership Units issued to New Partner: One (1)
Preferred Return Per Unit: None
Specific Adjustment Factor: 1.0
Specific Adjustment Limitations: None
4. ADMISSION OF NEW PARTNER
The New Partner is admitted to the Partnership as the initial Limited
Partner. The General Partner hereby consents to such admission.
5. DESIGNATED PARTIES
None.
6. AGREEMENT
The New Partner acknowledges receipt of a copy of, and agrees to be
bound by, the Agreement of Limited Partnership, as amended, for the
Partnership. The New Partner specifically confirms (a) the representations and
warranties contained in Section 3.4 of such Agreement of Limited Partnership,
as amended, for the Partnership and (b) the grant of the power of attorney set
forth in Section 2.4 of such Agreement.
<PAGE> 74
7. ADDITIONAL TERMS AND CONDITIONS
None.
IN WITNESS WHEREOF, the parties have executed this Partner Schedule as of
the date indicated below.
Dated: April 24, 1995
"General Partner":
EXCEL REALTY TRUST, INC., as General Partner of
EXCEL REALTY PARTNERS, L.P.
By GARY SABIN
--------------------------------------------
"New Partner":
ERT DEVELOPMENT CORPORATION
By DAVID A. LUND
--------------------------------------------
<PAGE> 1
EXHIBIT 10.33
- --------------------------------------------------------------------------------
CONTRIBUTION AGREEMENT
By and Between
EACH OF THE PARTNERSHIPS IDENTIFIED ON SCHEDULE "1"
ATTACHED HERETO
and
EXCEL REALTY PARTNERS, L.P.
- --------------------------------------------------------------------------------
<PAGE> 2
CONTRIBUTION AGREEMENT
IN CONSIDERATION of the covenants herein contained, each of the
Transferors named in Schedule 1 attached hereto hereby agrees to
contribute to the Partnership, and the Partnership hereby agrees to acquire, the
Projects hereinafter described, upon the following terms and conditions.
RECITALS
A. Each of the Transferors is the fee owner of one of the
retail shopping centers described in Schedule 1 attached hereto and incorporated
herein by reference (individually, a "Project," and collectively, the
"Projects").
B. The parties intend that the Transferors will contribute the
Projects to the Partnership, in exchange for the issuance to the Transferors of
units of limited partnership interest in the Partnership ("Units") and the
payment of cash, all on the terms and subject to the conditions set forth
herein.
C. Each Transferor is entering into this Agreement only on its
own behalf. The Partnership acknowledges and agrees that there is no
joint and several liability of or among the Transferors, and that each
Transferor warrants, represents, covenants, and agrees, as set forth below, only
on its own behalf, and only with respect to the Project owned by such
Transferor. The liability of each Transferor shall only be for such warranties,
representations, covenants, agreements, and other matters set forth herein as
relate to such Transferor and the Project owned by such Transferor, and the
liability of each such Transferor hereunder shall not extend to the assets of
any of the other Transferors.
D. Schedule 2 attached hereto and incorporated herein by
reference sets forth certain fundamental provisions and definitions for purposes
of this Agreement.
AGREEMENTS
1. Contribution of Properties. Subject to the terms and conditions
contained in this Agreement, each Transferor agrees to contribute to the
Partnership, and the Partnership agrees to acquire from the Transferors, all of
the Transferors' right, title and interest in and to the Projects, each of which
includes the following described property:
1.1 Each parcel of real property described on Schedule 1 (individually,
a "Parcel" and collectively, the "Parcels");
1.2 All easements, rights-of-way, appurtenances, and other rights and
benefits belonging to each Parcel, and all public or private streets, roads,
avenues, alleys, or passways, open or proposed, on or abutting each Parcel, and
any award made to or to be made in lieu thereof, and any award for damage to any
Parcel by reason of a change of grade in any street, alley, road, or avenue, as
aforesaid (all of the foregoing being included within the term "Parcel");
1.3 All of the buildings, structures, fixtures, facilities,
installations, and other improvements of every kind and description now or
hereafter in, on, over and under each Parcel, and all plumbing, gas, electrical,
ventilating, lighting and other utility systems, ducts, hot water heaters, oil
burners, domestic water systems, elevators, escalators, canopies, signs, air
conditioning systems, carpeting, telephone systems, alarm systems and all other
building systems and fixtures attached to or comprising a part of all such
improvements (collectively, with respect to each Parcel, the "Improvements");
<PAGE> 3
1.4 Any and all leases, subleases, licenses, concessions, and other
forms of agreement, however denominated, written or oral, granting the right of
use or occupancy of any portion of the Improvements (each, a "Lease" and
collectively, the "Leases"), to any retail tenant or other such party (a
"Tenant"), and all renewals, modifications, amendments, guarantees, and other
agreements affecting the same;
1.5 All equipment, furnishings, materials, inventory, supplies and
other tangible personal property owned by the Transferors and placed or
installed on or about any Parcel or the Improvements thereon and used as part of
or in connection therewith (collectively, the "Personal Property"); and
1.6 All intangible personal property now or in the future owned by the
Transferors and used in connection with the Projects and not otherwise described
in the definition of Personal Property herein, including but not limited to any
"Warranties and Guaranties," "Licenses and Permits," "Service Contracts," (in
each case as defined herein), agreements or other contract rights, security
deposits, prepaid rentals, service contracts, and maintenance agreements
relating to the Projects (collectively, the "Intangible Property").
2. Consideration. As consideration for Transferors' contribution of the
Projects to the Partnership, the Partnership shall (a) issue to each Transferor
Units of the Partnership, (b) pay cash, and (c) assume or prepay the Existing
Indebtedness, in each case as set forth in Schedule 2 attached hereto.
Notwithstanding the foregoing, the consideration for the contribution of the
Palmetto Crossing Project in Hilton Head, SC, owned by English Hilton Head I
Associates Limited Partnership, shall be the assumption or prepayment of the
Existing Indebtedness with respect to such Project in an amount not to exceed
$3,250,000.
3. Pre-Closing Activities.
3.1 At any time prior to the consummation of the transactions
contemplated by this Agreement with respect to any Project (for each Project,
the "Closing"), the Partnership and its employees, agents, and licensees shall
have the right to enter on each Project for purposes of conducting soils,
environmental and other tests and of inspecting the Project and its components,
including, but not limited to, the condition of the Improvements and all
components thereof and the condition of the Personal Property. The Partnership
may, at its option, retain engineers or other consultants for the purposes of
performing or assisting in such tests and inspections. The Transferors agree to
cooperate reasonably with any such investigations, inspections, or tests. The
Partnership shall promptly repair and restore each Project or any part or
component thereof damaged by any inspection or test conducted by or at the
direction of the Partnership, and shall indemnify, protect, defend and hold each
Transferor harmless from any loss, cost, damage, expense or liability (including
reasonable attorneys' fees) arising out of investigations or tests conducted by
or at the direction of the Partnership under this Section 3.1. The Partnership's
obligations under the preceding sentence shall survive any termination of this
Agreement.
3.2 At any time prior to the Closing, the Partnership and its
employees, agents, and licensees shall have the right to inspect and copy,
during normal business hours, each Transferor's books and records with respect
to ownership, construction and operation of the Projects.
3.3 As promptly as is reasonably possible, and in any event on or
before the Document Delivery Date specified in Schedule 2, and subject
to the provisions of paragraph 1.16 of Schedule 2, each Transferor
shall, at its sole cost and expense, deliver to the Partnership the following
documents and materials:
3.3.1 For each Project, a title insurance commitment (a
"Commitment"), dated no earlier than the date of this Agreement, issued
by Chicago Title Insurance Company, or such other title
2
<PAGE> 4
insurance company as may be acceptable to the Partnership (the "Title
Company") and accompanied by copies of all documents, instruments and
other matters referred to therein as exceptions. Each Commitment shall
contain the Title Company's commitment to delete its standard printed
exceptions (including creditors' rights) upon issuance of the
applicable Title Policy and, to the extent legally permitted, the Title
Company's commitment to issue the Required Endorsements;
3.3.2 For each Project, a current survey (a "Survey") certified
to the Partnership and Title Company, prepared by Bock & Clark National
Surveyors Network located in Akron, Ohio or such other surveyor
licensed by the state in which the Project is located and acceptable to
the Partnership, which shall meet the requirements for an Urban Class
Survey as defined in the Minimum Standard Detail Requirements for
ALTA/ACSM Land Title Surveys, as adopted in 1992 and otherwise satisfy
the Partnership's standards;
3.3.3 For each Project, a current report of a search of
applicable Uniform Commercial Code financing statement filings with
respect to the Transferor and such Project;
3.3.4 For each Project, copies of the property tax bills and
receipts for the past three (3) calendar years;
3.3.5 For each Project, copies of all service, maintenance,
management, and other similar contracts to which the Transferor is a
party, by which the Transferor is bound, or of which the Transferor has
knowledge which pertain to the Projects, or any portion thereof (the
"Service Contracts"); all certificates of occupancy, zoning, building,
safety and health approvals and all other permits needed for or used in
connection with the operation of the Improvements (the "Licenses and
Permits"); all unexpired warranties and guaranties in effect with
respect to a Project or any portion or component thereof (the
"Warranties and Guaranties"); all soil, seismological, geological, and
drainage reports; and all other contracts or documents in the
Transferor's possession or control affecting or regarding the Project;
3.3.6 For each Project, copies of the plans and specifications
for the Improvements, bearing appropriate certifications indicating
that the plans and specifications have been approved by all
Governmental Authorities having authority to grant such approval;
3.3.7 For each Project, all sales reports that any Tenant may
have been required to submit to the Transferor pursuant to the
applicable Lease for the prior three (3) years.
3.3.8 For each Project, copies of all Leases, a current rent
roll certified by the Transferor as being true and correct showing the
names of all tenants under the Leases with respect to that Project, the
commencement and expiration dates of each such Lease, any renewal
option in any such Lease, the monthly rents under such Leases, the
amount of any rental concession or free rent for any period which has
not expired and the date to which rents under such Leases have been
paid, and, to the extent available, income statements and balance
sheets of the Tenants for the previous three (3) years;
3.3.9 For each Project, all operating statements for the
past three (3) calendar years;
3.3.10 For each Project, an inventory of the Personal
Property, certified by the Transferor as being true and
correct;
3
<PAGE> 5
3.3.11 For each Project, copies of all utility bills and
insurance claims for the past three (3) calendar years;
3.3.12 For each Project, an engineering and structural report
from a licensed engineer acceptable to the Partnership.
3.3.13 For each Project, a current Phase I Environmental Audit
meeting the requirements of American Society of Testing and Materials,
"Standard Practice Environmental Site Assessments: Phase I
Environmental Assessment Process (E 1527- 93)" (a "Phase I Audit")
performed by Building Diagnostics Ltd.;
3.3.14 For each Project, copies of all loan documentation with
respect to Existing Indebtedness, as described in Schedule 3
attached hereto;
3.3.15 For each Project, current certificates of insurance for
all liability or property insurance currently in effect; and
3.3.16 For each Project, any other material documents or
material information pertaining to the Project in the Transferor's
possession.
3.3.17 For each Project, a zoning certificate in substantially
the form of Exhibit "A" attached hereto.
3.4 At any time prior to the Closing, the Partnership and its
representatives, agents and independent contractors shall have the right to (a)
meet with all governmental agencies, and with other persons or entities with
whom a Transferor or others have contractual arrangements, in connection with or
relating to each Project, and (b) discuss with any such agencies, persons and
entities the terms of this Agreement, the terms of any contractual arrangements
between the Transferor and any such agency, person or entity, and the
Partnership's proposed acquisition of the Project.
3.5 At all times prior to the Closing, each Transferor shall, with
respect to each Project that has not previously been designated by the
Partnership as an Excluded Project pursuant to Section 5:
3.5.1 Cause each Project to be maintained in full compliance
with all applicable laws and regulations and in the ordinary and usual
course of business, and perform, or cause to be performed, in a timely
manner all of its or its affiliates' obligations under the Leases, the
Service Contracts, the Licenses and Permits and other agreements
affecting the Projects. In particular, each Transferor shall pay and
fully discharge (or provide indemnity or undertaking permitting Title
Company to insure against) all mechanic's or similar liens against the
Projects;
3.5.2 Keep in full force and effect all existing insurance
policies affecting the Projects or any portion thereof;
3.5.3 To the extent practicable, keep in effect, and renew when
necessary at the Transferor's expense (with a proration to be made as
of the Closing), all existing Licenses and Permits affecting the
Projects;
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3.5.4 Except as required pursuant to the terms and conditions
of this Agreement, not to do anything, nor permit anything to be done,
which would impair or modify the status of title as shown on the
Commitments or the Surveys;
3.5.5 Operate and maintain, or cause to be operated and
maintained, each Project in the same manner as heretofore operated and
maintained, in a professional manner and in at least as good a
condition as existed on the date of this Agreement, reasonable wear and
tear excepted;
3.5.6 Not enter into, or permit to be entered into, any Lease
or Service Contract or other contract which, following Closing, will be
binding upon the Partnership or a Project without, in each instance,
obtaining the prior written approval of the Partnership, which approval
shall not be unreasonably withheld (and to deliver to the Partnership,
upon execution thereof, copies of such new Leases and contracts).
4. Conditions Precedent. The Partnership's obligation to acquire the
Projects pursuant to this Agreement is subject to the satisfaction or waiver of
each of the following conditions precedent:
4.1 On or before the expiration of the Review Period specified in
Schedule 2 attached hereto, the Partnership shall have approved the
condition of title to each of the Projects, as described in the Commitments and
the Surveys. The Partnership shall be entitled to object to any exception
reported in a Commitment or a Survey, in its sole discretion, by a written
notice delivered to the Transferor on or before the expiration of the Review
Period. The Transferor shall have ten (10) days from the receipt of the
Partnership's notice of objections either to procure the issuance of an
endorsement to the appropriate Commitment removing such disapproved exceptions
or, if acceptable to the Partnership, to provide affirmative title insurance
protection for such exceptions satisfactory to the Partnership in the
Partnership's sole discretion. The Transferor shall have no obligation to
provide any such endorsement or affirmative title insurance protection. If the
Transferor is unable or unwilling so to provide for the removal of such
disapproved exceptions or to obtain affirmative title insurance protection for
such disapproved exceptions, then the Partnership may either waive its
objections or deliver to the Transferor a notice designating the affected
Project as an Excluded Project pursuant to Section 5. The Closing shall be
postponed, if necessary, by the number of days required to accommodate the
procedures set forth in this Section. For purposes of this Agreement, liens
encumbering a Project for the purpose of securing Existing Indebtedness
identified on Schedule 3 attached hereto which the Partnership elects to
assume at the Closing pursuant to Section 5.3 shall be deemed to be permitted
exceptions (subject to the provisions of Sections 4.4 and 8.3), and all other
monetary liens and encumbrances shall be deemed to be disapproved exceptions.
4.2 On or before the expiration of the Review Period, the Partnership
shall have approved a Phase I Audit with respect to each Project, in the
Partnership's sole discretion. The Partnership shall be entitled to object to
any Phase I Audit by written notice delivered to the Transferor on or before the
expiration of the Review Period. If the Partnership delivers a notice of
objections with respect to a Phase I Audit, then the Transferor shall either (a)
commit to cure all of the objections to the Partnership's satisfaction and, if
requested by the Partnership in the notice of objections, deliver to the
Partnership a Phase II Environmental Audit performed by EMG or another
consultant approved by the Partnership (the "Phase II Audit") prior to the
Closing, or (b) provisionally designate such Project as an Excluded Project. If
the Transferor provisionally designates the Project as an Excluded Project, or
if the Partnership disapproves the Transferor's cure or the Phase II Audit, then
the Partnership may either waive its objections or deliver to the Transferor a
notice designating the affected Project as an Excluded Project pursuant to
Section 5. The Closing shall be postponed, if necessary, by the number of days
required to accommodate the procedures set forth in this Section.
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4.3 On or before the expiration of the Review Period, the Partnership
shall have approved all of the characteristics and aspects of each Project which
may affect its ownership, operation, usage, development, marketability and/or
economic viability. If the Partnership disapproves any such aspect of a Project,
then the Partnership may deliver to the Transferor a notice designating the
affected Project as an Excluded Project pursuant to Section 5. Upon completion
of its physical inspection of a Project pursuant to Section 3.1, the Partnership
shall prepare a punchlist of deferred maintenance or other corrective measures
the Partnership desires the Transferor to complete prior to the Closing. So long
as the estimated cost of completing such work does not exceed $25,000, the
Transferor shall complete such work, at its expense, prior to the Closing. If
the estimated cost of such work exceeds $25,000, then the Transferor may elect
either to complete such work, at its expense, prior to the Closing, or
provisionally to designate such Project as an Excluded Project. If the
Transferor elects provisionally to designate such Project as an Excluded
Project, then the Partnership may revise its punchlist so that the estimated
cost of such work is reduced to $25,000 or less, in which case such Project
shall not be an Excluded Project, and Transferor shall complete the revised
scope or work, at its expense, prior to the Closing. If the Partnership does not
so revise its punchlist, then the Project shall be an Excluded Project.
4.4 Subject to the provisions of Section 5.3, on or before the
expiration of the Review Period, the Partnership shall have approved the terms
and conditions of all loan documents relating to Existing Indebtedness which the
Partnership elects to assume.
4.5 On or before the expiration of the Review Period, the Partnership
shall have approved the Leases and Service Contracts with respect to each
Project, in the Partnership's sole discretion. The Partnership shall be entitled
to object to any Service Contract by written notice delivered to the Transferor
on or before the expiration of the Review Period. At the Closing, the Transferor
shall have terminated those Service Contracts to which the Partnership has
objected.
4.6 At the Closing, Transferor shall have obtained consents and
estoppels satisfactory to the Partnership, as follows:
4.6.1 From all lenders holding Existing Indebtedness which
the Partnership elects to assume;
4.6.2 From the anchor Tenant(s);
4.6.3 From Tenants leasing at least seventy five percent (75%)
of the remainder of the leasable area of the Project that is then under
lease; and
4.6.4 From the Transferor with respect to any Leases for which
Tenant estoppels have not been obtained.
4.7 At the Closing, the Title Company shall have issued to the
Partnership an owner's policy of title insurance (a "Title Policy") for each
Project (other than the Excluded Projects, if any). Each Title Policy shall name
the Partnership as insured, and shall be in an amount equal to the sum of the
Transferor's Equity in the applicable Project plus the principal amount of any
indebtedness with respect to such Project that is assumed at the Closing by the
Partnership. Each Title Policy shall be an ALTA extended coverage owner's policy
with all of the Title Company's standard exceptions (including creditors'
rights) deleted, and shall insure the Partnership's fee title to the applicable
Parcel and Improvements free and clear from all liens, easements, rights-of-way,
and other encumbrances except only the exceptions approved by the Partnership in
the manner provided in Section 4.1 hereof. Each Title Policy shall include the
following American Land
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Title Association endorsements (unless the same are not generally
available in the jurisdiction where the Project is located) and such
additional endorsements as are reasonably required by the Partnership:
4.7.1 Assurance against loss from violations of any Covenants,
Conditions and Restrictions agreements or similar matters which
encumber any portion of the Project;
4.7.2 Assurance that the Parcels described in the policy are
contiguous parcels, if applicable;
4.7.3 Assurance that the Improvements do not encroach onto
any easement;
4.7.4 Assurance that each Parcel abuts on and has access to
a physically open street as identified in the endorsements;
4.7.5 Assurance that the insured Parcel is the same Parcel
that is shown on the Survey; and
4.7.6 Assurance that any knowledge of the Transferor with
respect to the status of title to the Project will not be imputed to
the Partnership and will not affect the Policies.
4.8 Prior to the Closing with respect to a Project, and prior to the
date on which any required consent to the sale or other transfer of all or
substantially all of the assets of a Transferor is solicited from the partners
of such Transferor, the general partner of such Transferor shall have obtained a
written agreement, in form acceptable to the Partnership, from each partner of
the Transferor who is not an "Accredited Investor," as defined in Rule 501 of
the General Rules and Regulations promulgated under the Securities Act of 1933,
as amended, whereby such partner(s) grant to such general partner an option to
purchase, for cash, the interests of such partner(s) in the Transferor. Prior to
or concurrently with the Closing with respect to the Project, the general
partner will exercise such option(s) and acquire such interests for cash.
5. Designation of Excluded Projects; Existing Indebtedness.
5.1 Any Project designated by the Partnership or a Transferor as an
"Excluded Project" in the manner provided in this Section 5 or in Sections 4.2
and 4.3 shall be excluded from the conveyance by the Transferors to the
Partnership pursuant to this Agreement, and the amount of cash paid to and the
number of Units issued to the Transferors by the Partnership shall be reduced
accordingly. In addition, if a Project is designated as an Excluded Project
pursuant to Section 4.2 and/or Section 4.3, above, then the Transferor shall pay
to the Partnership the liquidated sum of $2,500 to reimburse the Partnership for
due diligence expenses incurred with respect to such Excluded Project.
5.2 The Partnership may designate a Project as an Excluded Project, by
delivering written notice of its election to do so to the applicable Transferor
(a) at any time prior to the expiration of the Review Period, in the event that
the Partnership reasonably disapproves any of the matters described in Sections
4.1 through 4.5, or (b) at any time prior to the Closing, in the event of any
material adverse change in any of the matters described in Sections 4.1 through
4.5 following the expiration of the Review Period, or (c) at any time prior to
the Closing, in the event any of the conditions precedent to the Partnership's
obligation to acquire such Project have not been satisfied or waived on or
before the Closing Deadline specified in Schedule 2 attached hereto.
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5.3 On or before the expiration of the Review Period, the Partnership
shall notify each Transferor whether the Partnership wishes to assume the
Existing Indebtedness with respect to its Project at the Closing. In the event
the Partnership wishes to assume the Existing Indebtedness, the parties shall
cooperate to cause the holder of the Existing Indebtedness to consent to such
assumption by the Partnership. If the holder of the Existing Indebtedness is
unwilling to consent to such assumption, or imposes conditions to its consent
that are unacceptable to the Partnership, then the Partnership may either
designate the Project as an Excluded Project at any time prior to the Closing,
or elect to prepay such Existing Indebtedness at the Closing.
5.4 Evans Towne Center, L.P., the Transferor that owns the Evans Towne
Center Project in Augusta, Georgia, may designate such Project as an Excluded
Project, in the exercise of its sole discretion. The parties acknowledge that
until such time as such Transferor determines whether such Project will be an
Excluded Project, all obligations of the parties to deliver documents and
materials, conduct due diligence and otherwise proceed toward the Closing with
respect to such Project shall be tolled.
6. Escrow; Delivery of Funds and Documents.
6.1 Each Closing shall be accomplished through an escrow (the "Escrow")
established with the Escrow Agent identified in Schedule 2 attached
hereto. Concurrently with the execution and delivery hereof, the Partnership and
the Transferors shall open the Escrow by depositing a fully executed copy of
this Agreement with Escrow Agent. The Partnership and the Transferors each shall
execute and deliver such further escrow instructions or other instruments as may
be reasonably requested by the other party or by Escrow Agent from time to time,
so long as the same are consistent with this Agreement. If there is any
inconsistency between Escrow Agent's general provisions and any of the
provisions of this Agreement, the provisions of this Agreement shall control.
Escrow Agent shall not be concerned, liable or responsible for any
representations, warranties or indemnities as between the Partnership and the
Transferors. For purposes of complying with Internal Revenue Code Section
6045(e), as amended effective January 1, 1991, Escrow Agent is hereby designated
as the "person responsible" and the "reporting person" for purposes of filing
any information returns with the Internal Revenue Service concerning this
transaction, as may be required by law.
6.2 Prior to 3:00 p.m. on the last business day before the Closing
Deadline specified in Schedule 2 attached hereto, each Transferor shall
deliver to Escrow Agent each of the following, duly executed and acknowledged if
required:
6.2.1 A general warranty grant deed on the Title Company's
standard form conveying to the Partnership fee simple title to its
Project (other than Projects, if any, which the Partnership has
designated as Excluded Projects), subject only to the exceptions
approved by the Partnership pursuant to Section 4.1 hereof (the
"Deeds");
6.2.2 An Assignment of Leases in the form of Exhibit
"B" attached hereto for its Project (other than Projects, if any,
which the Partnership has designated as Excluded Projects), assigning
to the Partnership all Leases with respect to such Project;
6.2.3 A Bill of Sale in the form of Exhibit "C"
attached hereto for its Project (other than Projects, if any, which the
Partnership has designated as Excluded Projects), conveying to the
Partnership all of the Transferor's right, title, and interest in and
to all Personal Property and Intangible Property with respect to such
Project;
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6.2.4 An Assignment of Contracts in the form of Exhibit "D"
attached hereto for its Project (other than Projects, if any, which the
Partnership has designated as Excluded Projects), assigning to the
Partnership all Service Contracts which the Partnership elects to
assume;
6.2.5 An affidavit of the Transferor stating the Transferor's
United States taxpayer identification number and certifying that the
Transferor is not a foreign person as defined in Internal Revenue Code
Section 1445, together with affidavits of the Transferor complying with
any similar statutes enacted by the state in which its Project is
located;
6.2.6 A "Partner Schedule," to be attached to the agreement of
limited partnership of the Partnership in connection with the issuance
of Units to the Transferor, in the form of Exhibit "E" attached
hereto, executed by the Transferors;
6.2.7 Funds in the amount required pursuant to Section 8
hereof; and
6.2.8 All other documents affecting title to or possession of
the Projects and necessary to transfer or assign the same to the
Partnership.
6.3 Prior to 3:00 p.m. on the last business day before the Closing
Date, the Partnership shall deliver to Escrow Agent each of the following, duly
executed and acknowledged if required:
6.3.1 Subject to the provisions of Section 8.3, funds in an
amount sufficient to repay the Existing Indebtedness which the
Partnership does not elect to assume at the Closing pursuant to Section
5.3, or loan assumption documentation with respect to the Existing
Indebtedness which the Partnership does elect to assume at the Closing
pursuant to Section 5.3, as applicable;
6.3.2 Funds in an amount equal to the portion of the
Transferor's Equity that is payable in cash, determined as provided in
Schedule 2;
6.3.3 Funds in the amount required pursuant to Section 8
hereof;
6.3.4 Certificates evidencing the issuance to Transferor (or,
if directed by a Transferor, and subject to the provisions hereof, to
such Transferor's constituent partners)of the number of Units of the
Partnership computed as provided in Schedule 2 attached hereto;
and
6.3.5 The Partner Schedule, executed by the Partnership.
6.4 At the Closing, each Transferor shall deliver the following
documents to the Partnership, outside of Escrow:
6.4.1 Certificates addressed to the Partnership updating
through the Closing the representations and warranties set forth
herein;
6.4.2 Certified authorizing resolutions of the Transferor
approving this Agreement and the transactions contemplated hereby and
authorizing execution and delivery of all documents required pursuant
to this Agreement, together with such other documents as the
Partnership may reasonably request concerning the Transferor's
authority to complete the transactions and execute the documents and
instruments contemplated hereby;
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6.4.3 Such affidavit or affidavits as may be required by the
Partnership in order to establish that any person or entity which may
receive Units pursuant to this Agreement (i.e., as a result of a
Transferor's distribution of such Units to its constituent partners,
subject to the provisions hereof, at or followign the Closing) (i) is
an "accredited investor" as defined in Rule 501 of the General Rules
and Regulations promulgated under the Securities Act of 1933, as
amended, and (ii) is receiving such Units for investment and not with a
view to distribution;
6.4.4 All existing Guarantees and Warranties issued in
connection with the construction, improvement, alteration or repair of
the Improvements and in connection with the purchase or repair of any
Personal Property;
6.4.5 The consents and estoppel letters from lenders described
in Section 4.6 hereof;
6.4.6 Estoppels in substantially the form of Exhibit "F"
attached hereto from the Tenants and, if necessary, Transferor, as
described in Section 4.6 hereof;
6.4.7 All keys and entrance cards used on any part of the
Projects;
6.4.8 All marketing materials, brochures and other written
material used in connection with the marketing, leasing and/or
operation of the Projects;
6.4.9 Originals of all Leases;
6.4.10 Notices executed by the Transferor to each Tenant and
guarantor under the Leases notifying them of the transfers effected
hereunder;
6.4.11 Rent rolls as of a date not more than two (2) days prior
to the Closing certified by the Transferor as true and complete showing
no material adverse changes from the rent rolls delivered pursuant to
Section 3.3.8 hereof;
6.4.12 An opinion of the Transferor's legal counsel in form and
substance acceptable to the Partnership opining (a) that all
transactions contemplated hereby have been duly authorized, (b) that
this Agreement and all documents contemplated hereby have been duly
executed and delivered by the Transferor and are enforceable against
the Transferor in accordance with their terms, (c) that the Transferor
has been duly organized and formed and is in good standing in the state
of its incorporation or situs, and (d) as to such other matters as the
Partnership shall reasonably require; and
6.4.13 All original books and records maintained by the
Transferor with respect to its Project.
7. Closing.
7.1 As to each Project, Escrow Agent shall close the Escrow on the
Closing Deadline by (a) filing for record the Deeds and such other documents as
may be necessary to procure the Title Policies, and (b) delivering funds and
documents as set forth in Section 8, WHEN AND ONLY WHEN each of the following
conditions has been satisfied:
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7.1.1 All funds and documents required by Section 6 have been
delivered to Escrow Agent;
7.1.2 Each of the conditions precedent set forth in Section 4
has been, or upon such Closing will be, satisfied or waived; and
7.1.3 Escrow Agent has procured the Title Policies;
7.1.4 Escrow Agent is prepared to comply with any additional
closing instructions delivered by the Partnership or the Transferor
that are not inconsistent with the provisions of this Agreement.
7.2 If all of the conditions set forth in Section 7.1 become satisfied
at a date earlier than the Closing Deadline, then Escrow Agent shall close the
Escrow at such earlier date.
7.3 If Escrow Agent cannot close the Escrow on or before the Closing
Deadline, then it will, nevertheless, close the Escrow when all conditions have
been satisfied or waived, notwithstanding that one or more of such conditions
has not been timely performed, unless a notice of termination has already been
delivered to Escrow Agent by a party that is not then in default under this
Agreement. The right so to terminate the Escrow and this Agreement shall be
optional, not mandatory. No delay in the giving of such notice shall affect the
rights hereunder of the party giving the same. Notwithstanding the foregoing,
the Escrow must in any event close or be terminated by the Escrow Termination
Date specified in Schedule 2 attached hereto.
7.4 Escrow Agent shall have no liability or responsibility for
determining whether or not a party giving a notice of termination is or is not
in default hereunder. Within two working days after receipt of such notice from
one party, Escrow Agent shall deliver a copy of such notice to the other party.
Unless written objection to the termination of the Escrow is received by Escrow
Agent within ten (10) days after Escrow Agent delivers such notice to the other
party, (a) Escrow Agent shall forthwith terminate the Escrow and return all
funds, documents and other items held by it to the party depositing same, except
that Escrow Agent may retain such documents and other items usually retained by
escrow agents in accordance with standard escrow termination procedures and
practices, and (b) each party shall forthwith pay to Escrow Agent one-half of
Escrow Agent's reasonable escrow termination charges. If written objection to
the termination of the escrow is delivered to Escrow Agent within such 10-day
period, then Escrow Agent is authorized to hold all funds, documents and other
items delivered to it in connection with the escrow and may, in Escrow Agent's
sole discretion, take no further action until otherwise directed, either by the
parties' mutual written instructions or final order of a court of competent
jurisdiction.
7.5 Neither (a) the exercise of the right of termination, (b) delay in
the exercise of such right, nor (c) the return of funds, documents or other
items, shall affect the right of the party giving a notice of termination to
pursue legal remedies for the other party's breach of this Agreement (including
without limitation damages for the payment of all or any portion of Escrow
Agent's escrow termination charges). Nor shall (i) the giving of such notice,
(ii) the failure to object to termination of the Escrow, or (iii) the return of
funds, documents or other items affect the right of the other party to pursue
other legal remedies for the breach of the party who gives such notice.
8. Prorations and Post-Closing Payments.
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8.1 For each Project, rents, property taxes, assessments, tenant
security deposits and other refundable tenant deposits, utilities, and other
charges shall be prorated by the parties as of the Closing. Such prorations
shall be made on the basis of a 365-day year, with the day of the Closing
considered to be for the account of the Partnership, in accordance with the
following provisions, and shall operate to increase or decrease the amount of
cash and the number of Units to be paid or issued by the Partnership to the
Transferors at the Closing:
8.1.1 For each Project, all rentals, receipts and other
revenues which have been paid to the Transferor and which are allocable
to the period from and after the Closing shall be credited to the
Partnership. The Partnership shall be entitled to collect all rentals,
receipts and other revenues from the Property which are delinquent as
of the Closing or are due on or after the Closing. When collected by
the Partnership, the Partnership shall remit to the Transferor any such
delinquent rentals, receipts, and other revenues which relate to the
period prior to the Closing within thirty (30) days after their
collection, with any such collections to be applied first to the last
accruing obligations of the payors. Percentage rents attributable to
the entire calendar year or lease year, as applicable, in which the
Closing occurs shall be reprorated (effective as of the Closing) at the
end of such calendar year or lease year, as applicable, when all
required sales reports have been submitted.
8.1.2 For each Project, all real property taxes for the year
immediately preceding the year in which the Closing occurs which are
payable in the year the Closing occurs, and for years prior thereto,
shall be paid by the Transferor on or before the Closing. Real property
taxes for the year in which the Closing occurs shall be prorated on the
basis of the most recent assessment and levy. If the Transferor has
appealed the amount of any real property taxes or other ad valorem
taxes charged in connection with a Project, then the following
procedures shall apply. The cost of any such appeal for any year prior
to the year in which the Closing occurs shall be borne by the
Transferor, and the Transferor shall receive any and all refunds or
credits obtained. With respect to any appeal affecting taxes or
assessments charged for the year in which the Closing occurs, the cost
and benefit of such appeal shall be apportioned between the Partnership
and the Transferor in percentages equal to their proportionate tax and
assessment liability for the year in which the Closing occurs;
provided, however, that the Partnership's liability for the cost of
such appeal shall in no event exceed any refund or credit to which the
Partnership is entitled. The Partnership shall cooperate with the
Transferor, its attorneys and advisors, in processing any pending tax
appeal, provided that such cooperation is at no expense to the
Partnership.
8.1.3 For each Project, all installments of assessments,
special assessments and other like charges now or hereafter imposed
against the Project, or any part thereof, by reason of roadways,
utility lines, streets, alleys or other improvements in existence or
under construction as of the Closing, shall be prorated between the
Transferor and the Partnership. All such installments of assessments,
special assessments and other charges that are due and payable prior to
the Closing shall be paid by the Transferor prior to the Closing (or a
credit given to the Partnership therefor at Closing). All such
installments of assessments, special assessments and other charges due
and payable after Closing shall be prorated between the Transferor and
the Partnership.
8.1.4 For each Project, prepaid water, sewer, and other utility
charges shall be credited to the Transferor, and accrued water, sewer,
and other utility charges shall be credited to the Partnership. In the
event that the Transferor or its predecessor in title has delivered a
deposit to any utility provider, the Transferor shall be entitled to
obtain the return of such deposit and, if required, the Partnership
shall deliver to such provider a replacement deposit.
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8.1.5 For each Project, prepaid charges in connection with any
Service Contracts that the Partnership elects to assume, or Licenses or
Permits, shall be credited to the Transferor. Accrued charges in
connection with such Service Contracts, or Licenses or Permits shall be
credited to the Partnership.
8.1.6 For each Project, Tenant security deposits and other
refundable tenant deposits under the Leases shall be credited to the
Partnership.
8.2 If any of the prorations described in Section 8.1 cannot be
calculated accurately as of the Closing, then the same shall be calculated as
soon as possible thereafter, and if necessary the amount of cash and the number
of Units paid or issued to the Transferor shall be adjusted accordingly.
8.3 The Transferor shall pay all prepayment charges, assumption fees or
other similar charges arising in connection with the prepayment or assumption,
as the case may be, of the Existing Indebtedness.
8.4 The Transferor shall pay (a) documentary transfer, deed, stamp or
other similar taxes, in the amount Escrow Agent determines to be required by
law, (b) the premiums for the Title Policies and any survey costs necessary to
procure the same, (c) sales taxes, (d) one-half of Escrow Agent's escrow fee or
escrow termination charge, (e) fees for beneficiaries' statements, and (f) usual
seller's document drafting and recording charges.
8.5 Transferor shall pay and retain full responsibility for all
expenses connected with or arising out of the negotiation, execution and
delivery of the Leases executed prior to the Closing, including but not limited
to brokers' commissions, leasing fees and the cost of all tenant improvements
which are the landlord's obligations, remaining unpaid at the Closing.
8.6 The Partnership shall pay (a) one-half of Escrow Agent's escrow fee
or escrow termination charge, and (b) usual buyer's document drafting and
recording charges.
9. Distribution of Funds and Documents.
9.1 All cash received hereunder by Escrow Agent shall be, until the
close of Escrow, kept on deposit with other escrow funds in Escrow Agent's
general escrow account(s), in any state or national bank, and may be transferred
to any other such general escrow account(s).
9.2 Any interest payable with respect to cash deposited with Escrow
Agent shall be for the account of the party that deposited the cash.
9.3 All disbursements by Escrow Agent shall be made by wire
transfer.
9.4 Subject to the provisions of Section 8.3, Escrow Agent shall, at
the Closing, pay from funds deposited with Escrow Agent by the Partnership
pursuant to Section 6.3.1, the Existing Indebtedness which the Partnership does
not elect to assume at the Closing.
9.5 Escrow Agent shall cause the recorder's office to mail the Deeds
(and each other document which is herein expressed to be, or by general usage
is, recorded) after recordation, to the grantee, beneficiary or person (a)
acquiring rights under said document, or (b) for whose benefit said document was
acquired.
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9.6 Escrow Agent shall, at the Closing, deliver by United States mail
(or hold for personal pickup, if requested) each nonrecorded document received
hereunder by Escrow Agent, to the payee or person (a) acquiring rights under
said document, or (b) for whose benefit said document was acquired.
10. Representations, Warranties and Covenants of the Transferors. Each
Transferor hereby represents, warrants and covenants the following to the
Partnership, each of which is true and correct as of the date of this Agreement,
and shall be true and correct as of the Closing. Each Transferor acknowledges
that the execution of this Agreement by the Partnership has been made and the
acquisition by the Partnership of the Projects will have been made in material
reliance by the Partnership on such representations, warranties and covenants:
10.1 The Transferor is now, and as of the Closing will be (a) duly
formed and validly existing under the laws of its state of formation; and (b)
duly authorized, qualified, and licensed to do all things required of it under
or in connection with this Agreement.
10.2 This Agreement and all agreements, instruments, and documents
herein provided to be executed or to be caused to be executed by the Transferor
are (or will be) duly executed by and binding upon the Transferor.
10.3 Except as is set forth in Schedule 4, the Transferor has
received no notice of any litigation, investigation, condemnation or proceeding
of any kind pending or threatened affecting any of the Projects or the ability
of the Transferor to consummate the transaction contemplated by this Agreement.
10.4 All consents and approvals required of the constituent partners of
the Transferor for the consummation of the transactions contemplated hereby have
been obtained or will have been obtained as of the Closing.
10.5 To the best of its knowledge, there has not been used, installed,
generated, produced, stored, or released on, under or about any of the Parcels,
or transported to or from any of the Projects, or into any groundwater (other
than sanitary sewer systems established for such purpose), any underground
storage tanks, asbestos, PCBs, urea formaldehyde, oils, petroleum or by-products
thereof or any other toxic or hazardous waste, material or substance, as those
or any similar terms are now or in the future used or defined in any laws
(herein "Hazardous Substance") (except for cleaning agents, photocopying
chemicals and other substances used in the ordinary course of normal building
and maintenance operations on the Projects). The Transferor has not released any
other person or entity from any liability for any such environmental matters and
no liens have been or are imposed on any of the Projects under any environmental
laws.
10.6 The Transferor has received no notice or claim from any government
authority or any other private party relating to a breach or violation of any
laws or any permits or private covenants or restrictions relating to any
Hazardous Substance or other adverse environmental or other defective condition
respecting its Project or any ground water related thereto. To the best of its
knowledge, there are no pending or threatened legal or administrative
proceedings regarding its Project (including but not limited to any property
damage, public or personal liability claims, condemnation proceedings, future
public assessment or similar proceedings or charges, except as shown in
Schedule 4), or any physical defects, infestation or other conditions,
which would materially impair the use and operation of its Project in the manner
permitted under the zoning currently applicable to its Project. To the best of
its knowledge, the Improvements were built in accordance with the plans
therefor, the Licenses and Permits and all applicable laws, and their use and
operation now are and at the Closing will be in good operating condition
(subject to normal wear and tear) and in full compliance with all applicable
environmental, zoning and other laws.
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<PAGE> 16
10.7 The Transferor has not obligated itself to transfer, sell or offer
for transfer or sale any portion of its Project to any party other than the
Partnership. Except for the Existing Indebtedness identified in Schedule
3 attached hereto, the Transferor has not hypothecated or assigned any rents
or income from any Project.
10.8 Subject to the rights of Tenants under the Leases, complete and
unconditional possession of the Project shall be delivered to the Partnership as
of the Closing, free from any liens, bonded indebtedness or other assessments
for any water, sewer, traffic or other improvement district imposed by any
private or governmental entity, or otherwise.
10.9 All information and items regarding its Project provided by the
Transferor to the Partnership are, to the best of its knowledge, true, accurate
and complete in all respects and are fairly presented in a manner that is not
misleading.
10.10 The Transferor has no knowledge of the existence of any material
documents relating to its Project that were not delivered or made available to
the Partnership as provided herein. The Transferor is not in default under any
documents referred to in the Commitments or under any material contracts
comprising part of the Intangible Personal Property.
10.11 In accordance with Section 1445 of the Internal Revenue Code, the
Transferor is not now, and at the Closing will not be, a "foreign person" (as
defined therein). Accordingly, the Partnership need not withhold any federal tax
at the Closing as a result of the transactions contemplated by this Agreement.
10.12 In respect of each of the Leases, except as provided in the rent
roll for each of the Projects provided by the Transferor to the Partnership as
provided herein, the following information is true and correct: (a) each of the
Leases is in full force and effect according to the terms set forth therein and
in the rent roll and has not been further modified, amended, extended or
assigned by the Transferor, in writing or otherwise, and each Tenant under the
Leases is legally required to pay all sums and perform all obligations set forth
in the Leases, without further concessions, abatements, offsets, defenses or
other basis for relief or adjustment; (b) all obligations of the Transferor, as
landlord under the Leases, which have accrued prior to Closing will be performed
and, to the Transferor's best knowledge, no Tenant has asserted or has any
defense to, or any offsets, abatements, concessions, claims against, any rent
payable by it after the date hereof, or any calculation of rent, or the
performance of any other obligations under such Tenant's respective Lease; (c)
except as is set forth in Schedule 5, to the Transferor's best
knowledge, no Tenant is in default under or in arrears in the payment of any sum
payable or in the performance of any obligation required of it under its Lease,
including but not limited to all rent, taxes, assessments, repairs and
maintenance charges, insurance premiums, utilities or other charges or expenses,
and no Tenant has prepaid any rent or other charges; (d) to the Transferor's
best knowledge, no Tenant is unable or unwilling to perform any or all of its
material obligations under its Lease, whether for financial or legal reasons or
otherwise; (e) to the Transferor's best knowledge, no guarantor or any prior
tenant under any of the Leases has been released or discharged from any material
obligation under or in connection with any of the Leases; (f) the Transferor has
not applied and shall not apply any security deposit from a Tenant to rent or
any other obligation due from any Tenant without the Partnership's prior written
consent; (g) all work required to be done by the Transferor, as landlord under
each such Lease, has been or by the Closing will be done or furnished unless
otherwise agreed by the parties and no Tenant is entitled to any additional work
during the term of its Lease; (h) the Leases are assignable by the Transferor,
as landlord, without the necessity of consent of any third party; (i) neither
the Leases nor the rents nor any other amounts payable thereunder have been
assigned, pledged or encumbered by the Transferor except for such mortgages,
pledges or other encumbrances agreed to become or remain in effect at Closing;
and (j) except as is set forth in Schedule 4, the Transferor has not
received from any
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<PAGE> 17
Tenant written notice of any presently pending dispute regarding the calculation
or payment of rent, the terms of any Lease or any alleged default by the
Transferor, as lessor, under such Lease, or of any bankruptcy, receivership,
custodianship, reorganization, insolvency, assignment for benefit of creditors
or other proceeding of a similar nature respecting any Tenant, any Lease or the
Projects.
10.13 Upon consummation of the transfers hereunder, there will be no
brokerage or leasing fees or commissions or other compensation due or payable to
any person, firm, corporation, or other entity, with respect to or on account of
any of the Leases and no such fees, commissions or other compensation shall, by
reason of any existing agreement, become due during the terms of any of the
Leases or with respect to any renewal or extension thereof or the leasing of
additional space by any Tenant which are not subject to an arrangement for full
payment and satisfaction by the Transferor as described.
10.14 None of the employees of the Transferor at its Project are
employed pursuant to a written agreement and all employees may be terminated at
will. The Transferor has not entered into any union contacts pertaining to
employees at its Project nor is its Project subject to any union contract, nor
is the Transferor aware of any efforts to organize any or all of the employees
of the Transferor at its Project into a union or other collective bargaining
arrangement. Unless otherwise directed by the Partnership, the services of all
employees of the Transferor have been or will be terminated in connection with
the Projects effective as of Closing, the Transferor agreeing and representing
that the Partnership shall have no obligation whatsoever to any of the officers,
agents or employees of the Transferor relating to any employment with respect to
any Project or otherwise, and Transferor agrees to indemnify, defend and save
the Partnership harmless from any liability or obligation arising under any
claim to such employment.
10.15 The Transferor shall have paid for all work, labor and materials
furnished to it in connection with its Project prior to Closing, and will
indemnify and hold the Partnership harmless from any mechanic's or materialmen's
liens, filed or otherwise claimed, in connection with any such work, labor and
materials performed on or furnished in connection with its Project prior to
Closing, and any and all legal and related expenses incurred by the Partnership
by reason thereof.
10.16 All vehicle parking space requirements imposed by applicable laws
relating to its Project are satisfied solely by on-site parking, without the
necessity of any off-site parking arrangements.
10.17 It has received and reviewed the most current Prospectus of Excel
Realty Trust, Inc., a Maryland corporation (the "REIT") and the Registration
Statement, as amended, of which the Prospectus is a part, filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Act") and has had access to such additional financial and other
information, including without limitation the REIT's most current Form 10-Q and
Form 10-K, and has been afforded the opportunity to ask questions of
representatives of the Partnership and the REIT, and to receive answers to those
questions, as it has deemed necessary in connection with its acquisition of the
Units being issued to such Transferor pursuant to this Agreement.
10.18 The Transferor acknowledges that the Units being acquired
pursuant hereto are being acquired in a transaction not involving any public
offering within the meaning of the Act and that the Units and Common Stock
issuable by the REIT to acquire Units that may be tendered to the Partnership
for redemption have not been registered under the Act and agrees not to offer,
sell, transfer or otherwise dispose of the Units or such Common Stock in the
absence of registration under the Act unless the Transferor delivers to the
Partnership and the REIT an opinion of a lawyer reasonably satisfactory to the
Partnership and the REIT, in form and substance satisfactory to the Partnership
and the REIT, to the effect that the proposed sale, transfer or other
disposition may be effected without registration under the Act and under
16
<PAGE> 18
applicable state securities or blue sky laws. The Transferor acknowledges that
the Units and any Common Stock issued upon acquisition of Units tendered for
redemption will be in the form of physical certificates and that unless such
Common Stock shall have been registered under the Securities Act of 1933 as
amended, the certificates will bear a legend to the following effect:
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS
OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
IN THE ABSENCE OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO
THE COMPANY AN OPINION OF COUNSEL OR OTHER EVIDENCE REASONABLY
SATISFACTORY TO THE COMPANY, IN FORM AND SUBSTANCE SATISFACTORY TO THE
COMPANY, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER
DISPOSITION MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE ACT AND
UNDER APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS.
10.19 The Transferor represents and warrants that (a) it has such
knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of an acquisition of the Units and is able to
bear the economic risk of a loss of an investment in the Units, and (b) it is
not acquiring any Units with a view to the distribution of the Units or any
present intention of offering or selling any of the Units in a transaction that
would violate the Act or the securities laws of any State or any other
applicable jurisdiction.
10.20 Notwithstanding anything to the contrary herein, the effect of
any representations, warranties, covenants and agreements made by the Transferor
in this Agreement shall not be diminished or deemed to be waived by any
inspections, tests or investigations made by the Partnership or its agents.
10.21 The truth and correctness of all of the foregoing
representations, warranties and covenants and the representations, warranties
and covenants set forth in any documents delivered by the Transferors at Closing
shall be a condition precedent to any obligation of the Partnership to purchase
the Projects, which condition is intended solely for the benefit of the
Partnership, and the Partnership shall have the right at its sole election to
waive any such condition (if done in writing) and proceed with the purchase or,
in the alternative, to terminate this Agreement. The Partnership's election to
terminate this Agreement shall be without prejudice to any rights or remedies
the Partnership may otherwise have under this Agreement, at law or in equity
against any Transferor for any breach of this Agreement.
11. Representations and Warranties of the Partnership. The Partnership
hereby represents and warrants the following to the Transferors, each of which
is true and correct as of the date of this Agreement and shall be true and
correct on the Closing. The Partnership acknowledges that the execution of this
Agreement by the Transferors has been made, and the transfer by Transferor of
the Projects will have been made, in material reliance by the Transferors on
such representations and warranties:
11.1 The Partnership is now, and as of the Closing will be (a) duly
formed and validly existing under the laws of its state of formation, and (b)
duly authorized to do all things required of it under or in connection with this
Agreement.
11.2 This Agreement and all agreements, instruments and documents
herein provided to be executed or to be caused to be executed by the Partnership
are (or will be) duly executed by and binding upon the Partnership.
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<PAGE> 19
11.3 Except as set forth in the Partnership Agreement of the
Partnership, as amended, and subject to federal and state securities laws, none
of the Units to be delivered to Transferor at Closing, when delivered to
Transferor, will be subject to any lien, claim, encumbrance, preemption right or
other claim of any third party.
11.4 All consents and approvals required of the constituent partners of
the Partnership for the consummation of the transactions contemplated hereby
have been obtained or will have been obtained as of the Closing.
12. Parties' Obligation to Close. Neither Transferor nor the Partnership
shall be obligated to complete the transactions contemplated hereunder unless
the other shall have performed in all material respects all covenants and
obligations and complied in all material respects with all conditions required
by this Agreement to be performed or complied with by it on or before the
Closing Date.
13. Brokerage Commissions. Except for the brokers, if any, identified in
Schedule 2, whose commissions shall be paid by the Transferors, each
party hereto warrants and represents that it has not incurred any liability for
the payment of any brokerage fee or commission in connection with the
transaction contemplated herein, and agrees to protect, indemnify, and defend
against the other party and hold the other party harmless from and against any
damage, liability, loss, claim, or expense, including reasonable attorneys'
fees, suffered by the other party as a result of a breach of the foregoing
warranty.
14. Default and Remedies. Time is of the essence of this Agreement. If a
Transferor is in default, then the Partnership may elect to treat this Agreement
as terminated, or to treat this Agreement as being in full force and effect, and
the Partnership shall have the right to an action for specific performance or
damages, or both. The remedies set forth above shall be cumulative with and in
addition to all other rights and remedies provided to the Partnership at law or
in equity.
15. Obligations to Third Parties. The Partnership is not assuming any of
the obligations or liabilities incurred by Transferor in the ownership, use,
operation, service, or maintenance of the Property, except for obligations
arising from and after Closing under (a) those Service Contracts which the
Partnership has expressly elected to assume in writing, (b) the Leases and (c)
any Existing Indebtedness which the Partnership elects to assume or subject to
which the Partnership elects to take title as provided herein. The acceptance by
the Partnership of the Leases and certain of the Service Contracts shall not
create any obligations on the part of the Partnership to third parties which
have or may have claims of any kind whatsoever against the Transferors with
respect to the Projects. The Partnership does not assume or agree to discharge
any such claims or liabilities which occurred prior to the Closing. No person
not a party to this Agreement shall have any third-party-beneficiary or other
rights hereunder.
16. Pre-Closing and Post-Closing Liabilities. The Partnership shall be
liable for all liabilities and obligations relating to the Projects which arise
from events and circumstances from and after the Closing, and shall indemnify,
protect, defend with counsel reasonably satisfactory to the Transferor, and hold
harmless, the Transferors and their affiliates from and against any and all such
liabilities and obligations. The Transferors shall be liable for all liabilities
and obligations relating to the Projects which arise from events and
circumstances occurring or existing prior to the Closing, and shall indemnify,
protect, defend with counsel reasonably satisfactory to the Partnership, and
hold harmless, the Partnership and its affiliates from and against any and all
such liabilities and obligations. Notwithstanding the foregoing, the Transferors
shall not be liable for liabilities for which the Partnership received a
proration credit hereunder (to the extent thereof). The provisions of this
Section shall survive the Closing.
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<PAGE> 20
17. Casualty; Condemnation. If, prior to the Closing, any Project is
destroyed, damaged, subjected to a threat of condemnation, or shall become the
subject of any proceedings, judicial, administrative, or otherwise, with respect
to a taking by eminent domain or condemnation, then the Transferor shall
promptly notify the Partnership thereof. If the cost to repair the damage, or
the value of the property to be condemned, as applicable, exceeds $50,000, then
the Partnership, at its option, may elect to designate such Project as an
Excluded Project. If under such circumstances the Partnership does not elect to
designate such Project as an Excluded Project, or if the cost to repair the
damage, or the value of the property to be condemned, as applicable, does not
exceed $50,000, then at the Closing, the Transferor shall assign, transfer, and
set over to the Partnership all of the right, title, and interest of the
Transferor in and to any insurance proceeds resulting from any casualty or any
awards that have been or may thereafter be made for any taking or condemnation.
18. Miscellaneous.
18.1 Notices. Any notice required or permitted to be given
under this Agreement shall be in writing and shall be deemed to have been given
(a) when delivered by hand, (b) on the date delivered by a courier service, or
(c) on the third business day after mailing by registered or certified mail,
postage prepaid, return receipt required, in any case addressed as set forth in
Schedule 2.
18.2 Successors and Assigns. This Agreement shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns.
18.3 Amendments and Termination. This Agreement may be amended,
modified or terminated only by a written instrument executed by the Transferors
and the Partnership.
18.4 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the state of California.
18.5 Merger of Prior Agreements. This Agreement supersedes all
prior and contemporaneous agreements and understandings between the parties
hereto relating to the subject matter hereof. The parties do not intend to
confer any benefit on any person, firm, or corporation other than the parties to
this Agreement, except as and to the extent otherwise expressly provided herein.
18.6 Attorney Fees. In the event any party hereto fails to
perform any of its obligations under this Agreement or in the event a dispute
arises concerning the meaning or interpretation of any provision of this
Agreement, the defaulting party or the party not prevailing in such dispute, as
the case may be, shall pay any and all reasonable costs and expenses incurred by
the other party in enforcing or establishing its rights hereunder, including,
without limitation, court costs and reasonable attorneys' fees.
18.7 Captions. The section titles or captions in this Agreement
are for convenience only and shall not be deemed to be part of this Agreement.
18.8 Pronouns; Joint and Several Use of Certain Terms. All
pronouns and any variations of pronouns shall be deemed to refer to the
masculine, feminine, or neuter, singular or plural, as the identity of the
parties may require. Whenever the terms referred to herein are singular, the
same shall be deemed to mean the plural, as the context indicates, and vice
versa.
18.9 Waivers. No right under this Agreement may be waived except by
written instrument executed by the party waiving such right. No waiver of any
breach of any provision contained in this
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<PAGE> 21
Agreement shall be deemed a waiver of any preceding or succeeding breach of that
provision or of any other provision contained in this Agreement. No extension of
time for performance or any obligations or acts shall be deemed an extension of
the time for performance of any other obligations or acts.
18.10 Severability. If any term, covenant, condition, or
provision of this Agreement or the application thereof to any person or
circumstance shall, at any time or to any extent, be invalid or unenforceable,
the remainder of this Agreement, or the application of such term or provision to
persons or circumstances other than those to which it is held invalid or
unenforceable, shall not be affected thereby, and each provision of this
Agreement shall be valid and shall be enforced to the fullest extent permitted
by law.
18.11 Counterparts. This Agreement may be executed in any number of
identical counterparts.
18.12 Calculation of Time Periods. If any date herein set forth
for the performance of any obligation by a Transferor or the Partnership or for
the delivery of any instrument or notice herein provided should be a Saturday,
Sunday, or legal holiday, such performance or delivery may be made on the next
business day following such Saturday, Sunday, or legal holiday. As used herein,
the term "legal holiday," means any state or federal holiday for which financial
institutions or post offices are closed in the local jurisdiction in which the
Property is located, for observance thereof.
18.13 Judicial Interpretation. Should any provision of this
Agreement require judicial interpretation, it is agreed that a court
interpreting or construing the same shall not apply a presumption that the terms
hereof shall be more strictly construed against any party by reason of the rule
of construction that a document is to be construed more strictly against the
party who itself or through its agent prepared the same.
18.14 Survival. The representations and warranties of the parties set
forth herein shall survive the Closing.
18.15 Schedules and Exhibits. The schedules and exhibits
attached hereto are incorporated herein and made a part hereof by reference. To
the extent any schedule attached hereto conflicts with any provision of this
Agreement, the schedule shall control.
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<PAGE> 22
SCHEDULE "1"
LIST OF THE PROJECTS
PART I
<TABLE>
<CAPTION>
GROSS CAPITALI-
LEASABLE PROFORMA ZATION
TRANSFEROR PROPERTY CITY/STATE AREA NOI RATE
---------- -------- ---------- ---- --- ----
<S> <C> <C> <C> <C> <C>
Cartersville Crossing Associates, Ltd. Cartersville Crossing Cartersville, GA 163,319 928,413 0.1025
Bright-Meyers Tullahoma Associates, L.P. Commerce Central Tullahoma, TN 185,401 1,186,469 0.1025
Hughes-Flatwoods Associates, Ltd., L.P. Collegedale Center Collegedale, TN 65,384 522,527 0.1025
Evans Towne Center, L.P. Evans Towne Center Augusta, GA 75,255 674,765 0.1025
Bright-Meyers Milledgeville Associates, Five Forks Corners Atlanta, GA 85,999 820,670 0.1025
L.P.
English Garden City Limited Partnership Garden Grove Shopping Center Garden City, SC 78,838 515,272 0.1025
Hughes-Campbellsville Associates, Limited Green River Plaza Campbellsville, KY 187,516 828,429 0.1025
Partnership and Bright Diversified
Properties, L.P.
Alford-Jasper, TN, Ltd. Kimbal Crossing Jasper, TN 139,455 640,449 0.1025
Alford-Dalton, Ltd. and Bright Diversified North Hills Plaza Dalton, GA 67,831 342,910 0.1025
Properties, L.P.
Shelby Associates, Ltd., L.P. Red Food Shopping Center Shelbyville, TN 52,335 281,581 0.1025
Alford-Gadsden, L.P. and Bright Diversified Riverview Plaza Gadsden, AL 147,615 762,591 0.1025
Properties, L.P.
St. Elmo Associates, L.P. St. Elmo Chattanooga, TN 70,884 535,801 0.1025
Bright-Meyers Winchester Associates, L.P. Winchester Shopping Center Winchester, TN 167,901 870,633 0.1025
Wisteria Associates, Ltd. and Bright Wisteria Village Snellville, GA 164,646 934,627 0.1025
Diversified Properties, L.P.
</TABLE>
<PAGE> 23
PART II
<TABLE>
<CAPTION>
GROSS CAPITALI-
LEASABLE PROFORMA ZATION
TRANSFEROR PROPERTY CITY/STATE AREA NOI RATE
---------- -------- ---------- ---- --- ----
<S> <C> <C> <C> <C> <C>
Charleston No. 1, L.P. . Bi Lo Center Charleston, SC 52,000 439,126 0.1025
Habersham Crossing Associates, L.P Habersham Crossing Cornelia, GA 129,510 625,816 0.1025
Somerset Associates Limited Partnership Cumberland Shopping Ctr. Somerset, KY 113,806 421,419 0.105
Farrar Place Limited Partnership Farrar Place Manchester, TN 39,220 196,429 0.105
Alford-Greensburg, Ltd. Greensburg Crossing Greensburg, IN 75,618 322,358 0.105
Hazel Path Partners, L.P. Hazelpath Shopping Center Hendersonville, TN 68,345 416,286 0.105
BPT Southeastern Centers II, Ltd. Monroe Plaza S.C. Monroe, GA 89,860 310,731 0.1075
Morristown Associates, Ltd. Morristown Morristown, TN 53,048 169,848 0.1075
Oceanway Plaza Associates, Ltd. Oceanway Shopping Center Jacksonville, FL 57,376 217,565 0.1075
Parkersburg-Kroger Associates Parkersburg Kroger Parkersburg, WV 61,185 337,779 0.1075
Powers Road Associates Powers Road S.C. Bristol, VA 51,085 276,300 0.1075
English Hilton Head I Associates Limited Palmetto Crossing Hilton Head, SC 40,920 289,378 N/A
Partnership
</TABLE>
<PAGE> 24
SCHEDULE "2"
FUNDAMENTAL PROVISIONS AND DEFINITIONS
The following fundamental provisions and definitions form a part of and are
incorporated by reference into the Contribution Agreement between Excel Realty
Partners, L.P., a Delaware limited partnership, and each of the Transferors
identified in Section 1.2, below, to which it is attached. In the event of any
conflict between the terms and conditions of this Schedule and the terms and
conditions of the balance of the Contribution Agreement to which it is attached,
the terms and conditions of this Schedule shall control.
1. Fundamental Provisions and Definitions.
1.1 Date of this Agreement: April __, 1995.
1.2 Transferors: Each of the partnerships identified in Schedule
"1."
1.3 The Partnership: Excel Realty Partners, L.P., a Delaware
limited partnership.
1.4 Escrow Agent: Chicago Title Insurance Company.
1.5 Document Delivery Date: May 30, 1995.
1.6 Review Period: For each Project that is not
identified on Schedule 6 attached hereto as a "Project Under
Development," the period commencing on the date of this Agreement and ending 60
days after the delivery of the documents and materials described in Section 3.3
of the Contribution Agreement, but in no event ending later than July 30, 1995.
For each Project that is identified on Schedule 6 attached hereto as a
"Project Under Development," the period commencing on the date of this Agreement
and ending 30 days after the date on which the construction of such Project has
been completed, a certificate of occupancy (or local equivalent) has been
issued, and the "Anchor Tenants" (defined as Tenants whose premises are 10,000
rentable square feet or more and who have at least ten (10) years remaining on
the term of their Lease as of the Closing) have taken possession of its leased
premises and commenced paying rent.
1.7 Closing Deadline: For each Project, 30 days following the
expiration of the Review Period with respect to that Project.
1.8 Escrow Termination Date: For each Project, 90 days following the
expiration of the Review Period with respect to that Project.
1.9 Address for Notices to the Transferors:
c/o Mr. George Bright
Fletcher Bright Company
1300 First Tennessee Building
Chattanooga, Tennessee 37402
i
<PAGE> 25
With a copy to:
Miller & Martin
832 Georgia Avenue, Suite 1000
Chattanooga, Tennessee 37402
Attn: Jeffrey W. Guild, Esq.
1.10 Address for Notices to the Partnership:
Excel Realty Partners, L.P.
16955 Via Del Campo
San Diego, California 92127
Attn: Mr. Gary Sabin
With a Copy to:
Latham & Watkins
701 "B" Street, Suite 2100
San Diego, California 92101
Attn: Jon D. Demorest, Esq.
1.11 Date of REIT's Most Current Prospectus: August, 1993
1.12 Transferor's Equity: For each Project (other than the
Palmetto Crossing Project in Hilton Head, SC owned by English Hilton Head I
Associates Limited Partnership), the Transferor's Equity shall be computed as of
the Closing in the manner set forth in this Section 1.12.
Step 1: Compute the aggregate annual effective (i.e.,
adjusted for free or reduced rent and other tenant concessions that relate to
periods following the date on which the tenant first begins to pay rent) gross
annual income payable with respect to all Leases in effect with respect to such
Project and pursuant to which the tenants have taken possession and commenced
paying rent and who are not in default.
Step 2: If the actual vacancy rate for the portion of
such Project that is available for lease to Tenants who are not Anchor Tenants
is less than five percent (5%) of the rentable area of such portion of the
Project, then deduct from the amount computed in Step 1 a vacancy reserve in an
amount equal to the difference between the actual vacancy rate and a five
percent (5%) vacancy rate for such portion of the Project.
Step 3: Subtract from the amount computed in Step 2 the
annual operating expenses of such Project, based on the most recent year's
actual operating expenses, maintenance costs, insurance costs and tax costs,
adjusted for any known increases (or, in the case of Projects Under Development,
based on a proforma mutually approved by the Partnership and the Transferor),
reserves for replacement in an amount equal to $0.10 per gross leasable square
foot times the aggregate gross leasable square footage of the Project, and
management fees equal to 4% of gross rents (except in the case of Commerce
Central, Tullahoma, TN and Winchester Shopping Center, Winchester, TN, as to
which the management fees shall equal 2% of gross rents).
Step 4: Divide the amount computed in Step 3 by the
capitalization rate shown for that Project on Schedule 1 attached hereto.
ii
<PAGE> 26
Step 5: Subtract from the amount computed in Step 4 the
outstanding balance (principal and accrued interest) of the Existing
Indebtedness with respect to such Project as of the Closing (including the
amount of any Existing Indebtedness prepaid at the Closing by the Partnership as
provided herein).
1.13 Payment of Consideration: For each Project (other than the
Palmetto Crossing Project in Hilton Head, SC owned by English Hilton Head I
Associates Limited Partnership), in addition to the prepayment or assumption of
the Existing Indebtedness, the Partnership will pay to the Transferor
consideration consisting in part of cash and in part of Units, as follows:
1.13.1 For each Transferor, the Transferor's Equity
shall be allocated between the general partner of the Transferor and
the individual limited partners of the Transferor (other than limited
partners who are not "Accredited Investors," whose interest in
Transferor shall have been previously purchased by the general partner,
as provided in Section 4.8 of the Contribution Agreement), in
proportion to their respective ownership interests in the Transferor.
Interests in the Transferor acquired by the general partner from
individual limited partners who are not "Accredited Investors," as
provided above, shall for purposes of this Section 1.13 and Section
1.14 below, be treated as ownership interests of the general partner.
1.13.2 An amount equal to the sum of (a) the amount of
cash previously paid by the general partner to purchase the interests
in the Transferor of the limited partners who are not "Accredited
Investors," as provided in Section 4.8 of the Contribution Agreement,
plus (b) ten percent (10%) of the portion of the Transferor's Equity
allocated to the general partner, shall be paid in cash at the Closing,
and the remaining portion of the Transferor's Equity allocated to the
general partner shall be paid by the issuance of Units valued at $20.70
per Unit.
1.13.3 Of the portion of the Transferor's Equity
allocated to the limited partners, fifty percent (50%) shall be paid in
cash at the Closing, and the remaining fifty percent (50%) shall be
paid by the issuance of Units valued at $21.50 per Unit.
1.14 Additional Consideration for Projects Under Development:
For any Project that is identified on Schedule 6 attached hereto as a
"Project Under Development," if within twelve (12) months following the Closing
with respect to such Project any new Lease with respect to space in the Project
(i) in excess of five percent (5%) of the gross leasable area of all space in
the Project that (ii) was vacant as of the Closing, is procured, regardless of
whether the Partnership or Transferor is the procuring cause for such new Lease,
then the consideration payable by the Partnership for the Project shall be
subject to adjustment as set forth in this Section 1.14.
1.14.1 On the first anniversary of the Closing for any such
Project that was not at least 95% leased on the Closing, the Transferor's Equity
in the Project shall be recomputed in the manner specified in Section 1.12,
above.
1.14.2 Any increase in the Transferor's Equity as computed on
the first anniversary of the Closing, as compared to the Transferor's Equity
computed as of the Closing, shall, at the Partnership's option, either (a) be
paid to the Transferor in cash within thirty (30) days, or (b) be paid by the
Partnership's issuance to the Transferor within thirty (30) days of Units of the
Partnership. If the Partnership elects so to issue Units, then the number of
Units shall be determined by allocating the increase in the Transferor's Equity
among the general partner and the limited partners of the Transferor, in
proportion to their respective ownership interests in the Transferor as of the
Closing. The portion of the increase in the Transferor's Equity allocated to the
general partner shall be paid by the issuance of Units valued at $20.70 per
Unit. The portion
iii
<PAGE> 27
of the increase in the Transferor's Equity allocated to the limited partners
shall be paid by the issuance of Units valued at $21.50 per Unit.
1.14.3 The Transferor shall pay all expenses relating to the
negotiation, execution and delivery of such new Leases, including but not
limited to brokers' commissions, leasing fees and the cost of all tenant
improvements which are the landlord's obligation.
1.15 Brokers: First Atlantic Realty (David Zisfien)
1.16 Inspection of Documents: Notwithstanding the provisions of
Section 3.3 of the Contribution Agreement:
1.16.1 The following documents shall not be delivered to the
Partnership, but instead shall be made available for inspection by the
Partnership at the Transferor's offices:
(a) Construction plans, drawings and
specifications;
(b) Property tax receipts;
(c) Operating statements for each Project for the
periods older than 12 months;
(d) General ledger and journal;
(e) Project correspondence files;
(f) Tenant correspondence files;
(g) Vendor files;
(h) Maintenance contractor files; and
(i) Certificates of Occupancy.
1.16.2 The Transferors shall deliver to the Partnership only
such engineering and structural reports and Phase I Environmental
Audits (referred to Sections 3.3.12 and 3.3.13 of the Contribution
Agreement) as the Transferors presently have in their possession or
control. The Partnership shall be free to procure engineering and
structural reports and Phase I Audits with respect to any Project, at
the Partnership's expense.
1.16.3 With respect to those Projects identified in Part II of
Schedule 1, the Transferor shall not be required to deliver a
Survey until fifteen (15) days following the Partnership's completion
of its physical inspection of the Project pursuant to Section 3.1 of
the Contribution Agreement and the determination, pursuant to Sections
4.2 and 4.3 of the Contribution Agreement, whether such Project will be
designated as an Excluded Project because of deferred maintenance
issues or environmental conditions.
1.16.4 The documents and materials described in Sections 3.3.5
and 3.3.6 of the Contribution Agreement shall be delivered to the
Partnership only to the extent the same exist and are in the possession
of the Transferor.
1.16.5 Each Transferor shall use diligent efforts to obtain,
but shall not be required to obtain, a zoning certificate for its
Project (described in Section 3.3.17 of the Contribution Agreement).
1.17 Construction Covenants. For each Project designated on
Schedule 6 attached hereto as a "Project Under Development," the
Transferor shall cause such Project to be constructed according to the
provisions of this Section 1.17.
iv
<PAGE> 28
1.17.1 Each Transferor agrees to commence and complete the
construction of the Project in a good and workmanlike manner, in
accordance with plans and specifications approved by the Partnership
and in compliance with all applicable laws, ordinances, rules and
regulations.
1.17.2 The Partnership is expressly authorized at all
reasonable times to enter the Project and inspect the improvements and
work of construction.
1.17.3 The Transferor shall be solely responsible for all
aspects of its business and conduct in connection with the Project and
the design and construction thereof, including but not limited to the
quality and suitability of the plans and specifications, their
compliance with all governmental requirements, permits and title
restrictions, the supervision of the work of construction, the
qualifications, financial condition and performance of all architects,
engineers, contractors, subcontractors, suppliers, consultants and
property managers, the accuracy of all applications for payment, and
the proper application of all disbursements. The Partnership is not
obligated to supervise, inspect or inform the Transferor or any third
party of any aspect of the construction of the Project or any other
matter referred to above. Any inspection or review by the Partnership
is to determine whether the Transferor is properly discharging its
obligations to the Partnership and may not be relied upon by the
Transferor or any third party.
1.18 Registration Rights. With respect to any unregistered
common stock of Excel Realty Trust, Inc. ("Excel") issued upon redemption of
Units of the Partnership, as provided in the partnership agreement of the
Partnership, the applicable Transferor shall have the right to require Excel to
register such common stock on the following terms and conditions: (a) Excel
shall file a registration statement with respect to such stock within thirty
(30) days following such exercise of the registration right or on such later
date which Excel determines, in Excel's reasonable and good faith judgment, to
be required by rulings, advice or interpretations of the Securities and Exchange
Commission; (b) registration of such stock shall be at Excel's expense; (c) the
Transferors must coordinate their exercise of registration rights such that all
such stock to be registered in any calendar year can be registered pursuant to a
single registration statement; (d) Excel shall take all reasonable steps
necessary to seek to have the registration statement declared effective by the
Securities and Exchange Commission, and (e) such Transferor's right to require
registration of such stock shall be subject to such other commercially
reasonable restrictions and limitations as are contained in a customary form of
registration rights agreement to be executed by Excel and such Transferor at the
time such stock is issued.
v
<PAGE> 29
SCHEDULE "3"
EXISTING INDEBTEDNESS
<TABLE>
<CAPTION>
Principal
Amount After
April, 1995
Project Lender Payment
------- ------ -------
<S> <C> <C>
1 Cartersville Crossing Protective Life Ins. Co. $7,160,000.00
Cartersville, GA
2 Commerce Central SouthTrust Bank of Georgia, $9,300,000.00
Tullahoma, TN(1) N.A.
3 Collegedale Center First Tennessee Bank $4,500,000.00
Collegedale, TN(1)
4 Evans Towne Center
Augusta, GA AmSouth Bank, N.A. $5,390,000
.5 Five Forks Corners
Atlanta, GA(1) First Tennessee $6,893,000.00
6 Garden Grove Shopping
Center Protective Life $ 235,318.00
Garden City, SC SouthTrust Bank of GA $4,624,285.00
7 Green River Plaza PNC Bank $7,554,521.60
Campbellsville, KY
8 Kimbal Crossing Protective Life $5,105,764.60
Jasper, TN
9 North Hills Plaza PNC Bank $2,448,750.00
Dalton, GA
10 Red Food Shopping Center Protective Life $1,720,734.45
Shelbyville, TN
11 Riverview Plaza Protective Life $5,848,053.98
Gadsden, AL
12 St. Elmo SouthTrust Bank of Georgia, $3,900,000.00
Chattanooga, TN(1) N.A.
13 Winchester Shopping SouthTrust Bank $8,050,000.00
Center of Georgia, N.A,
Winchester, TN(1)
</TABLE>
<PAGE> 30
<TABLE>
<S> <C> <C>
14 Wisteria Village
Snellville, GA SouthTrust Bank $8,683,608.00 (2)
15 Bi Lo Center
Charleston, SC(1) American National and $4,800,000.00
Trust Co.
16 Cumberland Shopping Ctr.
Somerset, KY Protective Life $2,576,875.53
17 Farrar Place
Manchester, TN First Tennessee Bank $1,878,583.54
18 Greensburg Crossing Protective Life $2,706,102.44
Greensburg, IN
19 Habersham Crossing Protective Life $5,315,919.00
Cornelia, GA
20 Hazelpath Shopping Center First Tennessee $3,695,995.95
Hendersonville, TN
21 Monroe Plaza, S.C. Protective Life $1,885,807.07
Monroe, GA
22 Morristown First Tennessee $1,356,794.74
Morristown, TN
23 Oceanway Shopping Center
Jacksonville, FL Protective Life $1,278,755.67
24 Palmetto Crossing American National Bank and $ 750,000.00
Hilton Head, SC Trust Co.
Providian/ National Home
Life $2,500,000.00
25 Parkersburg Kroger First Tennessee Bank $ 191,472.41
Parkersburg, WV United National Bank $ 203,443.88
26 Powers Road, S.C. First Tennessee Bank $1,873,457.07
Bristol, VA
</TABLE>
- -------------------
(1) - under construction
(2) - after March 1995 payment
<PAGE> 31
SCHEDULE "4"
TRANSFEROR'S DISCLOSURES
TO BE COMPLETED BY TRANSFEROR ON OR BEFORE APRIL 30, 1995.
<PAGE> 32
SCHEDULE "5"
TRANSFEROR'S LEASE-RELATED DISCLOSURES
TO BE COMPLETED BY TRANSFEROR ON OR BEFORE APRIL 30, 1995.
<PAGE> 33
SCHEDULE "6"
PROJECTS UNDER DEVELOPMENT
<TABLE>
<CAPTION>
Project Estimated Completion Date
------- -------------------------
<S> <C>
1. Commerce Central September 1995
Tullahoma, TN
2. Collegedale Center Fall 1996
Collegedale, TN
3. Five Forks Corners March 1996
Atlanta, GA
4. St. Elmo August 1995
Chattanooga, TN
5. Winchester Shopping Center September 1995
Winchester, TN
6. BiLo Center December 1995
Charleston, SC
</TABLE>
<PAGE> 34
Exhibit "A" to Contribution Agreement
ZONING CERTIFICATE
Date:
To: Excel Realty Partners, L.P.
Attn:___________________
16955 Via Del Campo, Suite 110
San Diego, CA 92127
Re: (Insert subject property & address)
Gentlemen:
The undersigned hereby certifies with respect to the property referred to above
as follows:
1. The zoning affecting the premises is _______ which allows for
2. The premises and its intended use as a (insert type of use or business)
complies with the applicable zoning codes.
3. The premises comply with subdivision ordinances affecting it and can be
conveyed without the filing of a plat or replat of the premises.
4. The applicable zoning requirements governing the premises regarding
parking are as follows: parking laws, setback requirements and
regulations.
5. There are no proposals for widening, closing, or realignment of the
access to the site.
6. All appropriate and required permits, and licenses and approvals have
been provided for its existing use.
7. The premises is not in a 100 year designated flood zone.
8. Additional comments or facts:
_____________________________ Date:_________________________
Signature
----------------------------- ------------------------------
Print Name Agency or Department
-----------------------------
Title
<PAGE> 35
Exhibit "B" to Contribution Agreement
RECORDING REQUESTED BY )
AND WHEN RECORDED MAIL TO: )
)
) [FORM]
)
)
)
- ------------------------------------------------------------------------------
Space above for Recorder's Use
ASSIGNMENT OF LEASES
This ASSIGNMENT OF LEASES ("Assignment") is made as of
_________________, 1994, by _____________________, a ___________________
("Assignor"), and Excel Realty Partners, L.P., a Delaware limited partnership
("Assignee"), in light of the following facts and circumstances:
RECITALS
A. Assignor and Assignee are the parties to a Contribution Agreement
dated as of _________________ (the "Agreement"), pursuant to which Assignor has
agreed to assign to Assignee the Leases (as defined below) relating to the real
property described on Exhibit "A" attached hereto (the "Property").
B. Assignor wishes to assign to Assignee, and Assignee wishes to
acquire from Assignor, all of the right, title and interest of Assignor in and
to the Leases.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Assignor and Assignee agree as follows:
Assignor hereby assigns, grants, transfers and conveys to Assignee all
of Assignor's right, title, and interest in and to any and all leases,
subleases, licenses and other forms of agreements granting the right to use or
occupy any portion of the Property (the "Leases"), including without limitation
the Leases described on Exhibit "B" attached hereto.
Assignor hereby delegates to Assignee, its successors and assigns, all
of the duties and obligations of Assignor under the Leases, except as
specifically provided herein.
Assignee hereby accepts the foregoing assignment and delegation and
agrees to be bound by all of the terms, covenants and conditions of the Leases,
except as specifically provided herein.
Assignor shall indemnify, defend by counsel reasonably acceptable to
Assignee, and hold harmless Assignee, its subsidiaries, affiliates, and assigns
and their respective directors, officers, employees, shareholders,
representatives and agents, from and against any loss, cost or liability arising
under the Leases prior to the date hereof. Assignee shall indemnify, defend by
counsel reasonably acceptable to Assignor, and hold harmless Assignor, its
subsidiaries, affiliates,
<PAGE> 36
and assigns and their respective directors, officers, employees,
shareholders, representatives and agents, from and against any loss, cost or
liability arising under the Leases on or after the date hereof.
This Assignment shall inure to the benefit of and bind the successors
and assigns of Assignor and Assignee.
This Assignment shall be governed and construed in accordance with the
laws of the state in which the Property is located.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
as of the date first written above.
ASSIGNOR -----------------------------------,
a
---------------------------------
By:
-------------------------------,
Name:
-------------------------------
Title:
-------------------------------
By:
-------------------------------,
Name:
-------------------------------
Title:
-------------------------------
ASSIGNEE EXCEL REALTY PARTNERS, L.P.,
a Delaware limited partnership
By: EXCEL REALTY TRUST, INC.,
a Maryland corporation, its
general partner
By:
-------------------------------,
Name:
-------------------------------
Title:
-------------------------------
By:
-------------------------------,
Name:
-------------------------------
Title:
-------------------------------
<PAGE> 37
Exhibit "C" to Contribution Agreement
BILL OF SALE [FORM]
This BILL OF SALE is made as of ___________________, by
____________________________________, a ________________ ("Transferor"), in
favor of Excel Realty Partners, L.P., a Delaware limited partnership ("the
Partnership"), in light of the following facts and circumstances:
RECITALS
A. Transferor and the Partnership are the parties to a Contribution
Agreement dated as of _________________, (the "Agreement"), pursuant to which
Transferor has agreed to transfer to the Partnership the tangible and intangible
personal property owned by Transferor and comprising, relating or otherwise
attendant to the real property described on Exhibit "A" attached hereto (the
"Property").
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Transferor and the Partnership agree as follows:
Transferor does hereby transfer, assign and deliver to the
Partnership, all of its right, title and interest in and to (i) all security
deposits and other refundable tenant deposits relating to the Property; (ii) the
tangible personal property located on the Property, including without limitation
the tangible personal property described on Exhibit "B" attached hereto; and
(iii) the contractual rights and other intangible personal property described on
Exhibit "C" attached hereto (collectively, the "Transferred Assets").
Transferor hereby warrants to the Partnership that Transferor is the
lawful owner of the Transferred Assets, that Transferor is conveying the same to
the Partnership free and clear of all liens, encumbrances and claims of others,
and that Transferor shall defend the Partnership's title thereto against all
persons whomsoever in order to perfect the conveyance and transfer intended to
be effected hereby.
This Bill of Sale shall be governed and construed in accordance with
the laws of the state in which the Property is located.
<PAGE> 38
Exhibit "D" to Contribution Agreement
ASSIGNMENT OF CONTRACTS
For value received, the receipt and adequacy of which is hereby
acknowledged, ___________________, a ______________________ ("Assignor") hereby
assigns to Excel Realty Partners, L.P., a Delaware limited partnership
("Excel"), all of Assignor's right, title and interest in and to the contracts
listed on Exhibit "A" attached hereto. By such assignment, Assignor delegates to
Excel all of Assignor's duties and obligations under such contracts arising from
and after the date hereof.
By executing this assignment, Excel agrees to assume and perform all
duties and obligations of Assignor under such contracts arising from and after
the date hereof and to indemnify and hold Assignor harmless from any liability
arising under such contracts with respect to events or conditions occurring
following the date hereof. Assignor agrees to indemnify and hold Excel harmless
from any liability arising under such contracts with respect to events or
conditions occurring prior to the date hereof.
Dated: ____________________, 19__.
By:
-------------------------------,
Name:
-------------------------------
Title:
-------------------------------
By:
-------------------------------,
Name:
-------------------------------
Title:
-------------------------------
EXCEL REALTY PARTNERS, L.P.
a Delaware limited partnership
By:
-------------------------------,
Name:
-------------------------------
Title:
-------------------------------
By:
-------------------------------,
Name:
-------------------------------
Title:
-------------------------------
<PAGE> 39
EXHIBIT "E"
PARTNER SCHEDULE
<PAGE> 40
Exhibit "F" to Contribution Agreement
FORM OF TENANT ESTOPPEL CERTIFICATE
Excel Realty Partners, L.P.
16955 Via Del Campo
San Diego, California 92127
Attn: ___________________
The undersigned, is the Tenant under that certain Lease dated
______________ and entered into between ____________________________ as Landlord
and ______________________ as Tenant, hereinafter referred to as the "Lease,"
covering the premises, commonly known and designed as Exhibit "A" attached
hereto and made a part hereof, hereinafter referred to as the "Premises," hereby
confirms to Excel Realty Partners, L.P., a Delaware limited partnership, as
Purchaser of the Premises, the following:
A. That the Landlord is __________________________;
B. That the Premises have been unconditionally accepted
by the undersigned;
C. That the date to which rent has been paid is
________________;
D. That no default exists under the Lease on the part of
either Landlord or Tenant, except as set forth below;
E. That is has no defense to enforcement of the Lease in
accordance with its terms, no right of setoff or
counterclaim with respect to the obligations
thereunder, except as set forth below:
F. That the Lease constitutes the entire Rental Agreement
and remains in full force and effect, unmodified and
unchanged, except for modifications dated as set forth
below;
G. That the rental has not been paid more than one month
in advance, and that the rental being paid is at the
rate of $_______ (rounded) per month;
H. That the Lease term is for ______ years and commenced
on __________ and terminates on ____________;
I. That the Lease contains the following renewal options:
_______ year(s) each;
J. The current balance of the security deposit under the
lease is $_________;
K. That it has no right of first refusal to purchase, or
option to purchase the Premises. In the event Tenant
has any such rights, Tenant hereby acknowledges and
agrees that it has
2
<PAGE> 41
waived said rights in their entirety to the extent said rights
relate to the transaction which has required this Estoppel
Certificate. Such right shall be retained by Tenant as they
relate to any future transaction if provided for by the terms
of the Lease.
This Certificate is made with knowledge by the undersigned that
reliance is being made upon this Certificate.
Dated: ____________________
Tenant:
---------------------
3
<PAGE> 42
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1. Contribution of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Issuance of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3. Pre-Closing Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
4. Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5. Designation of Excluded Projects . . . . . . . . . . . . . . . . . . . . . . . . . . 6
6. Escrow; Delivery of Funds and Documents . . . . . . . . . . . . . . . . . . . . . . 7
7. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
8. Prorations and Post-Closing Payments . . . . . . . . . . . . . . . . . . . . . . . . 10
9. Distribution of Funds and Documents . . . . . . . . . . . . . . . . . . . . . . . . 12
10. Representations, Warranties and Covenants of Transferor . . . . . . . . . . . . . . 12
11. Representations and Warranties of the Partnership . . . . . . . . . . . . . . . . . 16
12. Parties' Obligation to Close . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
13. Brokerage Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
14. Default and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
15. Obligations to Third parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
16. Pre-Closing and Post-Closing Liabilities . . . . . . . . . . . . . . . . . . . . . . 17
17. Casualty; Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
18. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
18.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
18.2 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
18.3 Amendments and Termination . . . . . . . . . . . . . . . . . . . . . . . . . 18
18.4 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
18.5 Merger of Prior Agreements . . . . . . . . . . . . . . . . . . . . . . . . . 18
18.6 Attorney Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
18.7 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
18.8 Pronouns; Joint and Several Use of Certain Terms . . . . . . . . . . . . . . 18
18.9 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
18.10 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
18.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
18.12 Calculation of Time Periods . . . . . . . . . . . . . . . . . . . . . . . . . 19
18.13 Judicial Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
18.14 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
18.15 Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
18.16 Schedules and Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>
i
<PAGE> 43
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
THE PARTNERSHIP: EXCEL REALTY PARTNERS, L.P.,
a Delaware limited partnership
By: EXCEL REALTY TRUST, INC.,
a Maryland corporation, its
general partner
By:
-------------------------------,
Name:
-------------------------------
Title:
-------------------------------
By:
-------------------------------,
Name:
-------------------------------
Title:
-------------------------------
TRANSFERORS:
CARTERSVILLE CROSSING ASSOCIATES, LTD.,
a Georgia limited partnership
By: RETAIL CENTERS/SOUTHEAST, LTD.,
a Georgia corporation,
general partner
By:
-------------------------------,
Name:
-------------------------------
Title:
-------------------------------
By:
-------------------------------,
Name:
-------------------------------
Title:
-------------------------------
By:
-------------------------------
Fletcher Bright, general partner
By:
-------------------------------
W. Michael Caldwell, general partner
<PAGE> 44
BRIGHT-MEYERS TULLAHOMA ASSOCIATES, L.P.,
a Tennessee limited partnership
By: BRIGHT-MEYERS DEVELOPMENT CORPORATION,
a Tennessee corporation, a general
partner
By:
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
By:
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
EVANS TOWNE CENTRE, L.P.,
a Tennessee limited partnership
By: CALLAWAY LAND COMPANY,
a Georgia corporation, general partner
By:
-------------------------------,
Name:
-------------------------------
Title:
-------------------------------
By:
-------------------------------,
Name:
-------------------------------
Title:
-------------------------------
By:
---------------------------------------
Fletcher Bright, general partner
<PAGE> 45
BRIGHT-MEYERS MILLEDGEVILLE ASSOCIATES, L.P.,
a Tennessee limited partnership
By: BRIGHT INTERESTS, INC.,
a Tennessee corporation, general partner
By:
-------------------------------,
Name:
-------------------------------
Title:
-------------------------------
By:
-------------------------------,
Name:
-------------------------------
Title:
-------------------------------
By:
------------------------------------------
George Bright, general partner
By:
------------------------------------------
William O. Meyers, general partner
ENGLISH GARDEN CITY LIMITED PARTNERSHIP,
a Tennessee limited partnership
By: BRIGHT INTERESTS, L.P.,
a Tennessee limited partnership, general
partner
By: BRIGHT INTERESTS, INC.,
a Tennessee corporation, general
partner
By:
-------------------------------,
Name:
-------------------------------
Title:
-------------------------------
By:
-------------------------------,
Name:
-------------------------------
Title:
-------------------------------
By:
-----------------------------------------
Mertland M. Hedges, III, general partner
<PAGE> 46
HUGHES-CAMPBELLSVILLE ASSOCIATES LIMITED
PARTNERSHIP, a Tennessee limited partnership, as
tenant in common
By: BRIGHT INTERESTS, L.P.,
a Tennessee limited partnership, general
partner
By: BRIGHT INTERESTS, INC.,
a Tennessee corporation,
By:
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
By:
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
ALFORD-JASPER, TN, LTD., L.P.,
a Tennessee limited partnership
By:
----------------------------------
BARRY ALFORD, general partner
By:
----------------------------------
FLETCHER BRIGHT, general partner
ALFORD-DALTON, LTD.,
a Tennessee limited partnership, as tenant in
common
By:
----------------------------------
BARRY ALFORD, general partner
By:
----------------------------------
FLETCHER BRIGHT, general partner
<PAGE> 47
SHELBY ASSOCIATES, LTD., L.P.,
a Tennessee limited partnership
By: FLETCHER BRIGHT COMPANY,
a Tennessee corporation, general partner
By:
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
By:
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
By:
----------------------------------------
Fletcher Bright, general partner
ALFORD-GADSDEN, L.P.,
a Tennessee limited partnership, as tenant in
common
By:
----------------------------------
BARRY ALFORD, general partner
By:
----------------------------------
FLETCHER BRIGHT, general
partner
ST. ELMO ASSOCIATES, L.P.,
a Tennessee limited partnership
By: BRIGHT INTERESTS, INC.,
a Tennessee corporation, general partner
By:
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
By:
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
<PAGE> 48
WISTERIA ASSOCIATES, LTD.,
a Georgia limited partnership, as tenant in
common
By:
------------------------------------
DONALD A. BARKLEY, general
partner
By:
------------------------------------
FLETCHER BRIGHT, general partner
SOMERSET ASSOCIATES LIMITED PARTNERSHIP,
a Tennessee limited partnership
By: FLETCHER BRIGHT COMPANY,
a Tennessee corporation
By:
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
By:
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
By:
----------------------------------------
John M. Martin, general partner
By:
----------------------------------------
Fletcher Bright, general partner
FARRAR PLACE LIMITED PARTNERSHIP,
a Tennessee limited partnership
By: S & E PARTNERS, INC.,
a Tennessee corporation, general partner
By:
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
By:
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
<PAGE> 49
ALFORD-GREENSBURG, LTD.,
a Tennessee limited partnership
By:
------------------------------------
BARRY ALFORD, general partner
By:
------------------------------------
FLETCHER BRIGHT, general partner
HABERSHAM CROSSING ASSOCIATES, L.P.,
a Georgia limited partnership
By:
------------------------------------
FLETCHER BRIGHT, general partner
By:
------------------------------------
W. MICHAEL CALDWELL, general partner
HAZEL PATH PARTNERS, L.P.,
a Tennessee limited partnership
By: S & E PARTNERS, INC.,
a Tennessee corporation, general partner
By:
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
By:
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
<PAGE> 50
MORRISTOWN ASSOCIATES, LTD.,
a Tennessee partnership
By:
------------------------------------
FLETCHER BRIGHT, general partner
By:
------------------------------------
DONALD A. BARKLEY, general
partner
OCEANWAY PLAZA ASSOCIATES, LTD.,
a Tennessee limited partnership
By:
------------------------------------
FLETCHER BRIGHT, general partner
ENGLISH HILTON HEAD I ASSOCIATES LIMITED
PARTNERSHIP, a Tennessee limited partnership
By:
------------------------------------
FLETCHER BRIGHT, general partner
PARKERSBURG-KROGER ASSOCIATES,
a Tennessee limited partnership
By: FLETCHER BRIGHT COMPANY,
a Tennessee corporation, general partner
By:
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
By:
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
<PAGE> 51
POWERS ROAD ASSOCIATES,
a Virginia limited partnership
By:
-----------------------------------
FLETCHER BRIGHT, general partner
By:
-----------------------------------
DONALD A. BARKLEY, general
partner
HUGHES-FLATWOODS ASSOCIATES, LTD., L.P.
a Tennessee limited partnership
By: BRIGHT INTERESTS, L.P.,
a Tennessee limited partnership, general
partner
By: BRIGHT INTERESTS, INC.,
a Tennessee corporation, general
partner
By:
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
By:
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
<PAGE> 52
BPT SOUTHEASTERN CENTERS II, LTD.
a Tennessee limited partnership
By: BRIGHT, POAG AND THOMASON, INC.,
a Tennessee corporation, managing general
partner
By:
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
By:
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
By:
-------------------------------------------
Fletcher Bright, general partner
By:
-------------------------------------------
G. Dan Poag, Jr., general partner
By:
-------------------------------------------
William H. Thomason, general partner
BRIGHT-MEYERS WINCHESTER ASSOCIATES, L.P.,
a Tennessee limited partnership
By: BRIGHT-MEYERS DEVELOPMENT CORPORATION,
a Tennessee corporation, general partner
By:
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
By:
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
<PAGE> 53
CHARLESTON NO. 1, L.P.,
a Tennessee limited partnership
By: BRIGHT INTERESTS, INC.,
a Tennessee corporation, general partner
By:
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
By:
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
BRIGHT DIVERSIFIED PROPERTIES, L.P.,
a Tennessee limited partnership, as tenant in
common
By:
-------------------------------------
Fletcher Bright, general partner
By: FLETCHER BRIGHT COMPANY,
a Tennessee corporation, general partner
By:
--------------------------------
Its:
--------------------------------
By:
--------------------------------
Its:
--------------------------------
<PAGE> 54
CONSENT OF ESCROW AGENT
The undersigned hereby consents to its appointment as the "Escrow Agent" under
the foregoing Agreement to Contribute Partnership Interests and Property and
agrees to act in accordance therewith.
Dated:__________________________________
CHICAGO TITLE INSURANCE COMPANY
By:
--------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
<PAGE> 1
EXHIBIT 10.34
- --------------------------------------------------------------------------------
CREDIT AGREEMENT
AMONG
EXCEL REALTY TRUST, INC.,
AS BORROWER,
AND
THE FIRST NATIONAL BANK OF BOSTON,
WELLS FARGO BANK, N.A., FIRST INTERSTATE BANK OF CALIFORNIA,
DRESDNER BANK AG, NBD BANK,
BHF-BANK AKTEINGESELLSCHAFT, SIGNET BANK,
TOGETHER WITH THOSE ASSIGNEES
BECOMING PARTIES HERETO PURSUANT
TO SECTION 11.12, AS LENDERS,
AND
THE FIRST NATIONAL BANK OF BOSTON,
AS AGENT
Dated as of December 27, 1995
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<C> <C> <C>
ARTICLE I
DEFINITIONS . . . . . . . . . . . . 1
1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Computation of Time Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
1.3 Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE II
LOANS . . . . . . . . . . . . . 26
2.1 Loan Advances and Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.2 Authorization to Obtain Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.3 Lenders' Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.4 Interest on the Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.5 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.6 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.7 Increased Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.8 Notice of Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE III
BORROWING BASE PROPERTIES . . . . . . . . 39
3.1 Designation of Borrowing Base Properties . . . . . . . . . . . . . . . . . . . . . . 39
3.2 Termination of Designation as a Borrowing Base Property . . . . . . . . . . . . . . . 40
3.3 Rejection of Borrowing Base Properties . . . . . . . . . . . . . . . . . . . . . . . 41
</TABLE>
-i-
<PAGE> 3
ARTICLE IV
<TABLE>
<CAPTION>
Page
----
<C> <C> <C>
CONDITIONS TO LOANS . . . . . . . . . . 41
4.1 Conditions to Initial Disbursement of Loans . . . . . . . . . . . . . . . . . . . . . 41
4.2 Conditions Precedent to All Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE V
REPRESENTATIONS AND WARRANTIES . . . . . . . 44
5.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE VI
REPORTING COVENANTS . . . . . . . . . . 51
6.1 Financial Statements and Other Financial and Operating Information . . . . . . . . . 51
6.2 Environmental Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
6.3 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE VII
AFFIRMATIVE COVENANTS . . . . . . . . . 57
7.1 Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.2 Qualification, Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.3 Compliance with Laws, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.4 Payment of Taxes and Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.5 Maintenance of Properties; Insurance . . . . . . . . . . . . . . . . . . . . . . . . 58
7.6 Inspection of Property; Books and Records; Discussions . . . . . . . . . . . . . . . 59
7.7 Maintenance of Permits, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<C> <C> <C>
7.8 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.9 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.10 Securities Law Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
7.11 Continued Status as a REIT; Prohibited Transactions . . . . . . . . . . . . . . . . . 60
7.12 NYSE Listed Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
7.13 Interest Rate Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
7.14 Ownership of Guarantor Partnerships . . . . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE VIII
NEGATIVE COVENANTS . . . . . . . . . . 60
8.1 With Respect to all Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
8.2 Amendment of Constituent Documents . . . . . . . . . . . . . . . . . . . . . . . . . 62
8.3 Disposal of Guarantor Partnership Interests . . . . . . . . . . . . . . . . . . . . . 62
8.4 Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
8.5 Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
8.6 Restrictions on Transactions Affecting Leasing . . . . . . . . . . . . . . . . . . . 63
8.7 Additional Unsecured Bank Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE IX
FINANCIAL COVENANTS . . . . . . . . . . 63
9.1 Borrowing Base Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
9.2 Borrowing Base Debt Service Coverage . . . . . . . . . . . . . . . . . . . . . . . . 63
9.3 Minimum Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
9.4 Borrower Debt to Fair Market Net Worth Ratio . . . . . . . . . . . . . . . . . . . . 64
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<C> <C> <C>
9.5 Maximum Recourse Borrower Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.6 Secured Debt to Total Assets Ratio . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.7 EBIDA to Interest Expense Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.8 EBIDA to Fixed Charges Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.9 Unencumbered NOI to Unsecured Interest Expense Ratio . . . . . . . . . . . . . . . . 64
9.10 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.11 Permitted Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.12 Development Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
9.13 Borrower-Investment Partnership Debt to Borrower-Investment Partnership Net Worth . . 66
9.14 Tenant Concentration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.15 Investment Grade Rated Tenants . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.16 Aggregate Borrowing Base Requirements . . . . . . . . . . . . . . . . . . . . . . . . 66
9.17 Calculation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE X
EVENTS OF DEFAULT; RIGHTS AND REMEDIES . . . . . 67
10.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
10.2 Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
10.3 Rescission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
ARTICLE XI
AGENCY PROVISIONS . . . . . . . . . . 72
11.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
</TABLE>
-iv-
<PAGE> 6
<TABLE>
<CAPTION>
Page
----
<C> <C> <C>
11.2 Nature of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
11.3 Loan Disbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
11.4 Distribution and Apportionment of Payments . . . . . . . . . . . . . . . . . . . . . 74
11.5 Rights, Exculpation, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
11.6 Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
11.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
11.8 Agent Individually . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
11.9 Successor Agent; Resignation of Agent; Removal of Agent . . . . . . . . . . . . . . . 77
11.10 Consent and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
11.11 Agency Provisions Relating to Certain Enforcement Actions . . . . . . . . . . . . . . 80
11.12 Assignments and Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
11.13 Ratable Sharing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
11.14 Delivery of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
11.15 Notice of Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
ARTICLE XII
MISCELLANEOUS . . . . . . . . . . . 85
12.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
12.2 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
12.3 Change in Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
12.4 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
12.5 Independence of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
</TABLE>
-v-
<PAGE> 7
<TABLE>
<CAPTION>
Page
----
<C> <C> <C>
12.6 Notices and Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
12.7 Survival of Warranties, Indemnities and Agreements . . . . . . . . . . . . . . . . . 89
12.8 Failure or Indulgence Not Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . 89
12.9 Payments Set Aside . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
12.10 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
12.11 Heading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
12.12 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
12.13 Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
12.14 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
12.15 Consent to Jurisdiction and Service of Process; Waiver of Jury Trial . . . . . . . . 90
12.16 Counterparts; Effectiveness; Inconsistencies . . . . . . . . . . . . . . . . . . . . 91
12.17 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
12.18 Obligations Unsecured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
12.19 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
</TABLE>
LIST OF EXHIBITS AND SCHEDULES
Exhibits:
A - Form of Assignment and Assumption
B - Form of Borrowing Base Property Designation Certificate
C - Form of Quarterly Operating Report
D - Form of Compliance Certificate
E - Form of Loan Notes
F - Form of Notice of Borrowing
G - Form of Fixed Rate Notice
-vi-
<PAGE> 8
Schedules:
1 - List of Borrowing Base Properties
1.1 - List of Portfolio Properties other than Borrowing Base
Properties and Setting Forth Approved Values for Non-income
Producing Properties
5.1.1 - Qualification to do Business
5.1.3 - Ownership of Subsidiaries and Partnerships
5.1.19 - Benefit Plans
5.1.23 - Environmental Matters
-vii-
<PAGE> 9
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of December 27, 1995 (as amended,
supplemented or modified from time to time, the "Agreement") and is among EXCEL
REALTY TRUST, INC., a Maryland corporation ("Borrower"), each of the Lenders, as
hereinafter defined, and THE FIRST NATIONAL BANK OF BOSTON, a national banking
association ("FNBB"), in its capacity as agent and as a Lender.
RECITALS
A. Pursuant to that certain Indenture dated as of March 1, 1994 Excel
Mortgage Funding Corporation, a Delaware corporation and a wholly-owned
subsidiary of Borrower ("EMFC") borrowed the proceeds of a certain Commercial
Mortgage Pass-Through Certificates in the aggregate principal amount of
$100,000,000 (the "REMIC").
B. Pursuant to that certain Loan Agreement dated as of December 29,
1994, among Borrower, as borrower, FNBB, as lender and as Agent, as amended,
FNBB agreed to provide Borrower with a secured revolving loan facility on the
terms and conditions set forth therein (the "Existing Revolver").
C. Borrower has requested that Lenders extend an unsecured revolving
loan facility to Borrower, the proceeds of which will be used in accordance with
the provisions of this Agreement (including that the proceeds of the initial
Loan hereunder be applied, as necessary, to the payment of all accrued and
unpaid obligations of EMFC under the REMIC and of Borrower under the Existing
Revolver), and Lenders are willing to extend the requested facility on the terms
and conditions set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
-1-
<PAGE> 10
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. The following terms used in this Agreement
shall have the following meanings (such meanings to be applicable, except to the
extent otherwise indicated in a definition of a particular term, both to the
singular and the plural forms of the terms defined):
"Accommodation Obligations", as applied to any Person, means
any Indebtedness or other contractual obligation or liability, contingent or
otherwise, of another Person in respect of which that Person is liable,
including, without limitation, any such Indebtedness, obligation or liability
directly or indirectly guaranteed, endorsed (otherwise than for collection or
deposit in the ordinary course of business), co-made or discounted or sold with
recourse by that Person, or in respect of which that Person is otherwise
directly or indirectly liable, including in respect of any Partnership in which
that Person is a general partner (excluding the Nonrecourse Indebtedness of such
Partnership), Contractual Obligations (contingent or otherwise) arising through
any agreement to purchase, repurchase or otherwise acquire such Indebtedness,
obligation or liability or any security therefor, or to provide funds for the
payment or discharge thereof (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain solvency, assets,
level of income, or other financial condition, or to make payment other than for
value received.
"Accountants" means Coopers & Lybrand, any other "big six"
accounting firm or another firm of certified public accountants of national
standing selected by Borrower and acceptable to Agent.
"Acquisition Price" means the aggregate purchase price for
an asset including bona fide purchase money financing provided by the seller and
all (or Borrower's Share of, as applicable) existing Indebtedness pertaining to
such asset.
"Adjusted Asset Value" means, as at any date of
determination, the sum (without duplication of any item) of (i) book value
determined in accordance with GAAP (except that deferred charges and prepaid
fees shall be treated as intangible
-2-
<PAGE> 11
assets) of tangible assets other than real estate, and (ii) an amount equal to
(A) (1) the Net Operating Income for the most recently ended Fiscal Quarter of
Properties owned by Borrower or any of its Wholly-Owned Subsidiaries, plus (2)
the Borrower's Share of the Net Operating Income for the most recently ended
Fiscal Quarter of Properties owned by any Majority Partnership, plus (3) the Net
Operating Income for the most recently ended Fiscal Quarter of any Property
owned by an Investment Partnership which is subject to a Lien securing
Indebtedness of such Investment Partnership which is included in Borrower Debt
by virtue of Borrower's guarantee or other Accommodation Obligation relating
thereto times (B) four (4), divided by (C) 0.10, and (iii) such value for
non-income producing Properties as may be determined based on either (A) the
sales price for such Property pursuant to a purchase and sale agreement approved
by the Agent or (B) some other evidence of value satisfactory to the Agent and
approved by the Requisite Lenders, including those values approved prior to the
date hereof as set forth on Schedule 1.1. The Agent shall not unreasonably
withhold approval of any purchase and sale agreement having a term of not more
than six (6) months and requiring that the full purchase price be paid in cash
at the closing thereunder.
"Adjusted Base Rents" means the total rentals from the
applicable Property or group of Properties which are denominated as base rent or
minimum rent under the applicable leases which shall in any event exclude all
percentage rent and reimbursements for operating expenses, taxes or insurance;
and shall be based on actual rents presently being paid without any rent
leveling adjustments.
"Adjusted Borrower-Investment Partnership Value" means, as
at any date of determination, the sum of (i) Adjusted Asset Value minus (ii)
book value determined in accordance with GAAP of Borrower's Investments in
Investment Partnerships (including notes receivable from Investment
Partnerships) to the extent included in Adjusted Asset Value, plus (iii)(A) the
Net Operating Income for the most recently ended Fiscal Quarter of Properties
owned by Investment Partnerships, times (B) four (4) divided by (C) 0.10 plus
(iv) cash and Cash Equivalents and other tangible assets (at book value
determined in accordance with GAAP) owned by Investment Partnerships.
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"Affiliates" as applied to any Person, means any other
Person directly or indirectly controlling, controlled by, or under common
control with, that Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as applied to any Person, means (i) the
possession, directly or indirectly, of the power to vote ten percent (10%) or
more of the Securities having voting power for the election of directors of such
Person or otherwise to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise, or (ii) the ownership of (A) a general partnership
interest or (B) a limited partnership interest or preferred stock (or other
ownership interest) representing ten percent (10%) or more of the outstanding
limited partnership interests, preferred stock or other ownership interests of
such Person.
"Agent" means FNBB in its capacity as agent for the Lenders
under this Agreement, and shall include any successor Agent appointed pursuant
hereto and shall be deemed to refer to FNBB or any such successor in its
individual capacity as a Lender where the context so requires.
"Aggregate Borrowing Base Requirements" means: (i) at least
85% of the Adjusted Base Rents from all of the Borrowing Base Properties are
from Borrowing Base Properties being operated for Retail Uses provided that
between the Closing Date and the date that the Borrower next receives Net
Offering Proceeds Borrowing Base Properties being operated for Service Retail
Uses may be counted in satisfying this requirement so long as during such period
at least 80% of Adjusted Base Rents are from Borrowing Base Properties being
operated for Retail Uses; (ii) at least 70% of the Adjusted Base Rents from the
Borrowing Base Properties are paid pursuant to Leases the tenant's interest in
which is currently held by National or Regional Tenants; (iii) at least 40% of
the Adjusted Base Rents from the Borrowing Base Properties are paid pursuant to
Leases the tenant's interest in which is currently held by an Investment Grade
Rated Company or Leases which are fully guaranteed by an Investment Grade Rated
Company, provided, however, that in the event that K-Mart Corporation ceases to
be an Investment Grade Rated Company the foregoing 40% requirement shall be
reduced to whatever percentage is actually being paid pursuant to such Leases
after the exclusion of the Leases to K-Mart Corporation; (iv) the Adjusted
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Base Rents payable by any single tenant (including all Subsidiaries of such
tenant or of a common parent company) shall not exceed 15% of the Adjusted Base
Rents from all Borrowing Base Properties, provided, however, that (a) with
respect to tenants which are Investment Grade Rated Companies (other than K-Mart
Corporation) the foregoing limit shall be increased to 20%, (b) with respect to
tenants which are Investment Grade Rated Companies rated A or higher, the
foregoing limit shall be increased to 25% and (c) with respect to K-Mart
Corporation and its Subsidiaries, the percentage shall not exceed the actual
percentage on the Closing Date; and (v) the Adjusted Base Rents from all
Borrowing Base Properties owned by any Guarantor which is not a Wholly-Owned
Subsidiary shall not exceed ten percent (10%) of the Adjusted Base Rents from
all Borrowing Base Properties.
"Applicable Base Rate Margin" means, as of any date of
determination: (i) 0.00%, if Borrower's senior long-term unsecured debt
obligations are rated at least BBB/Baa2 by both Rating Agencies, (ii) 0.25%, if
Borrower's senior long-term unsecured debt obligations are rated at least
BBB-/Baa3 by both Rating Agencies but the condition set forth in clause (i) of
this definition is not satisfied, or (iii) 0.50%, in any other case (including,
without limitation, if Borrower's senior long-term unsecured debt obligations
are not rated by either or both of the Rating Agencies). If one Rating Agency
assigns a lower rating to Borrower's senior long-term unsecured debt obligations
than does the other Rating Agency, the lower rating shall control for purposes
of determining the Applicable Base Rate Margin.
"Applicable LIBOR Rate Margin" means, as of any date of
determination: (i) 1.40%, if Borrower's senior long-term unsecured debt
obligations are rated at least BBB+ by both Rating Agencies, (ii) 1.50%, if
Borrower's senior long-term unsecured debt obligations are rated at least
BBB/Baa2 by both Rating Agencies but the condition set forth in clause (i) of
this definition is not satisfied, (iii) 1.625%, if Borrower's senior long-term
unsecured debt obligations are rated at least BBB-/Baa3 by both Rating Agencies
but neither the condition set forth in clause (i) of this definition, nor the
condition set forth in clause (ii) of this definition, is satisfied or (iv)
1.75%, in any other case (including, without limitation, if Borrower's senior
long-term unsecured debt obligations are not rated by either or both of the
Rating Agencies). If one Rating Agency
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assigns a lower rating to Borrower's senior long-term unsecured debt obligations
than does the other Rating Agency, the lower rating shall control for purposes
of determining the Applicable LIBOR Rate Margin.
"Assignment and Assumption" means an Assignment and
Assumption in the form of Exhibit A hereto (with blanks appropriately filled in)
delivered to Agent in connection with each assignment of a Lender's interest
under this Agreement pursuant to Section 11.12.
"Base Rate" means, on any day, the higher of (i) the base
rate of interest per annum established from time to time by FNBB at its
principal office in Boston, Massachusetts, and designated as its "base rate" as
in effect on such day, and (ii) the Federal Funds Rate in effect on such day
plus one-half percent (0.5%) per annum.
"Base Rate Loans" means those Loans bearing interest at the
Base Rate.
"Benefit Plan" means any employee pension benefit plan as
defined in Section 3(2) of ERISA (other than a Multiemployer Plan) in respect of
which a Person or an ERISA Affiliate is, or within the immediately preceding
five (5) years was, an "employer" as defined in Section 3(5) of ERISA.
"Borrower Construction Expenditures" means the total
expenditures made through any given date for project costs of all construction
projects on real estate owned by Borrower or any of its Subsidiaries which
expenditures with respect to any project shall be counted until occupancy of
substantially all of such project.
"Borrower Debt" means (without duplication) all Indebtedness
of Borrower or any Subsidiary of Borrower plus Borrower's Share of all
Indebtedness of Majority Partnerships (without offset or reduction in respect of
prepaid interest, restructuring fees or similar items) minus current liabilities
(not to exceed $5,000,000) which are not past due.
"Borrower-Investment Partnership Debt" means the sum of
Borrower Debt (excluding the portion thereof consisting of Accommodation
Obligations relating to Indebtedness of Investment
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Partnerships) plus all Indebtedness of Investment Partnerships other than notes
payable to Borrower.
"Borrower-Investment Partnership Net Worth" means Adjusted
Borrower-Investment Partnership Value less Total Borrower-Investment Partnership
Liabilities.
"Borrower's Share" means, in the case of a Partnership,
Borrower's percentage ownership interest in such Partnership.
"Borrowing" means a borrowing under the Facility.
"Borrowing Base Properties" means the Eligible Properties
owned by Borrower or a Guarantor listed on Schedule 1, as such Schedule 1 may be
amended from time to time to reflect the addition and deletion of Borrowing Base
Properties pursuant to Article III.
"Borrowing Base Property Designation Certificate" has the
meaning given to such term in Section 3.1.
"Borrowing Base Value" means, at any time, an amount equal
to (A) the aggregate Net Operating Income of the Borrowing Base Properties for
the most recently ended Fiscal Quarter, times (B) four (4) minus (C) the
Replacement Reserve Amount for the Borrowing Base Properties, divided by (D)
0.10.
"Business Day" means (i) with respect to any Borrowing,
payment or rate determination of LIBOR Loans, a day, other than a Saturday or
Sunday, on which Agent is open for business at its head office and on which
dealings in Dollars are carried on in the London interbank market, and (ii) for
all other purposes any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the Commonwealth of Massachusetts or the laws of
the State of California, or is a day on which banking institutions located in
Massachusetts are required or authorized by law or other governmental action to
close.
"Capital Leases", as applied to any Person, means any lease
of any property (whether real, personal or mixed) by that Person as lessee
which, in conformity with GAAP, is or should be
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accounted for as a capital lease on the balance sheet of that Person.
"Cash Equivalents" means (i) marketable direct obligations
issued or unconditionally guaranteed by the United States Government or issued
by an agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one (1) year after the date of acquisition
thereof; (ii) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof maturing within ninety (90) days after the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from any two of Standard & Poor's Corporation,
Moody's Investors Services, Inc., Duff and Phelps, or Fitch Investors (or, if at
any time no two of the foregoing shall be rating such obligations, then from
such other nationally recognized rating services as may be acceptable to Agent)
and not listed for possible down-grade in Credit Watch published by Standard &
Poor's Corporation; (iii) commercial paper, other than commercial paper issued
by Borrower or any of its Affiliates, maturing no more than ninety (90) days
after the date of creation thereof and, at the time of acquisition, having a
rating of at least A-1 or P-1 from either Standard & Poor's Corporation or
Moody's Investor's Service, Inc. (or, if at any time neither Standard & Poor's
Corporation nor Moody's Investor's Service, Inc. shall be rating such
obligations, then the highest rating from such other nationally recognized
rating services as may be acceptable to Agent); and (iv) domestic and Eurodollar
certificates of deposit or time deposits or bankers' acceptances maturing within
ninety (90) days after the date of acquisition thereof, overnight securities
repurchase agreements, or reverse repurchase agreements secured by any of the
foregoing types of securities or debt instruments issued, in each case, by (A)
any commercial bank organized under the laws of the United States of America or
any state thereof or the District of Columbia or Canada having combined capital
and surplus of not less than Two Hundred Fifty Million Dollars ($250,000,000) or
(B) any Lender.
"Closing Date" means the date on which this Agreement shall
become effective in accordance with Section 12.16.
"Co-Agent" means Wells Fargo Bank, N.A. and First Interstate
Bank provided that if any Co-Agent shall enter into
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one or more assignments pursuant to Section 11.12 having the effect of reducing
the amount of its Commitment to less than $20,000,000, it shall cease to be a
Co-Agent.
"Commission" means the Securities and Exchange Commission.
"Commitment" means, with respect to any Lender, such
Lender's Pro Rata Share of the Facility, which amount shall not exceed the
principal amount set out under such Lender's name under the heading "Loan
Commitment" on the signature pages attached to this Agreement or as set forth on
an Assignment and Assumption executed by such Lender, as assignee.
"Compliance Certificate" means a certificate in the form of
Exhibit D delivered to Agent by Borrower pursuant to Section 2.1.2, Section
6.1.4 or any other provision of this Agreement and covering Borrower's
compliance with the financial covenants contained in Article IX.
"Confidential Information" has the meaning ascribed to such
term in Section 6.3.
"Contaminant" means any pollutant (as that term is defined
in 42 U.S.C. 9601(33)) or toxic pollutant (as that term is defined in 33 U.S.C.
1362(13)), hazardous substance (as that term is defined in 42 U.S.C. 9601(14)),
hazardous chemical (as that term is defined by 29 CFR Section 1910.1200(c)),
toxic substance, hazardous waste (as that term is defined in 42 U.S.C. 6903(5)),
radioactive material, special waste, petroleum (including crude oil or any
petroleum-derived substance, waste, or breakdown or decomposition product
thereof), any constituent of any such substance or waste, including, but not
limited to, polychlorinated biphenyls and asbestos, or any other substance or
waste deleterious to the environment the release, disposal or remediation of
which is now or at any time becomes subject to regulation under any
Environmental Law.
"Contractual Obligation", as applied to any Person, means
any provision of any Securities issued by that Person or any indenture,
mortgage, deed of trust, lease, contract, undertaking, document or instrument to
which that Person is a party or by which it or any of its properties is bound,
or to which it or any of its properties is subject (including, without
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limitation, any restrictive covenant affecting such Person or any of its
properties).
"Court Order" means any judgment, writ, injunction, decree,
rule or regulation of any court or Governmental Authority binding upon or
applicable the Person in question.
"Debt Service" means, for any period, Interest Expense for
such period plus scheduled principal amortization (i.e., excluding any balloon
payment due at maturity) for such period on all Borrower Debt.
"December 31, 1994 Financials" has the meaning given to such
term in Section 5.1.7.
"Defaulting Lender" means any Lender which fails or refuses
to perform its obligations under this Agreement within the time period specified
for performance of such obligation or, if no time frame is specified, if such
failure or refusal continues for a period of five (5) Business Days after notice
from Agent.
"Developer Affiliates" means EDV and any other Affiliate of
Borrower engaged in the development of real estate or any entity in which EDV or
any such developer Affiliate has an ownership interest.
"Development Investments" means the aggregate of all
Investments by Borrower or any Subsidiary of Borrower in (i) Developer
Affiliates or (ii) any other Person (whether or not an Affiliate of Borrower)
directly or indirectly engaged in the development of real estate or in the
making of land acquisition or construction loans to other Persons engaged in the
development of real estate.
"Distributions" means the declaration or payment of any
dividend or distribution of cash or Cash Equivalents to the shareholders of
Borrower or to any limited partners of a Majority Partnership or any payments to
any of the Executive Officers of Borrower other than employee compensation
consistent with past practices.
"DOL" means the United States Department of Labor and any
successor department or agency.
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"Dollars" and "$" means the lawful money of the United
States of America.
"EBIDA" means, at any time, for the most recent Fiscal
Quarter, (i) (A) the sum of the amounts for such period of (1) Net Income, (2)
depreciation and amortization expense and other non-cash items deducted on the
Financial Statements in determining such Net Income, and (3) interest expense
deducted on the Financial Statements in determining Net Income, minus (B) the
sum for such period of (1) the net income of any Person in which Borrower has an
interest that is included in Net Income, except to the extent of the amount of
cash payments actually paid to Borrower or any Subsidiary of Borrower by such
Person during such period (whether such payments are in the form of dividends,
fees, distributions or other payments excepting principal repayments of notes
payable to Borrower), and (2) the income of any consolidated Subsidiary of
Borrower, to the extent that the declaration or payment of dividends or other
distributions by that Subsidiary of such income is not at the time permitted by
operation of any Contractual Obligation or Requirement of Law applicable to such
Subsidiary; (ii) minus gains (and plus losses) from extraordinary items or asset
sales or write-ups or forgiveness of Indebtedness.
"EDV" means ERT Development Corporation, a Delaware
corporation in which Borrower owns 100% of the preferred stock.
"Eligible Assignee" means (i) (A) (1) a commercial bank
organized under the laws of the United States or any state thereof; (2) a
savings and loan association or savings bank organized under the laws of the
United States or any state thereof; or (3) a commercial bank organized under the
laws of any other country or a political subdivision thereof, provided that (x)
such bank is acting through a branch or agency located in the United States, or
(y) such bank is organized under the laws of a country that is a member of the
Organization for Economic Cooperation and Development or a political subdivision
of such country; that (B) in each case, is (1) reasonably acceptable to Agent
and Borrower, and (2) has total assets in excess of $10,000,000,000 and a rating
on its (or its parent's) senior unsecured debt obligations of at least BBB by
one of the Rating Agencies; or (ii) any Lender or Affiliate of any Lender;
provided that no Affiliate of Borrower shall be an Eligible Assignee.
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"Eligible Property" means a Property owned by Borrower or a
Guarantor which (1) is an Unencumbered Property, (2) has an Occupancy Rate of at
least 85%, and (3) is free of all structural defects, title defects,
environmental conditions or other adverse matters except as may be described on
the Schedule of Exceptions to the most recent Borrowing Base Property
Designation Certificate for such Property or described in any Officer's
Certificate delivered pursuant to Section 6.1.6 which defects, conditions or
matters individually or collectively could, in the judgment of the Agent, have a
Material Adverse Effect on the Property.
"EMFC" means Excel Mortgage Funding Corporation, a Delaware
corporation.
"Environmental Laws" has the meaning set forth in Section
5.1.23.
"Environmental Lien" means a Lien in favor of any
Governmental Authority for (i) any liability under Environmental Laws, or (ii)
damages arising from, or costs incurred by such Governmental Authority in
response to, a Release or threatened Release of a Contaminant into the
environment.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA Affiliate" of any Person means any (i) corporation
which is, becomes, or is deemed to be a member of the same controlled group of
corporations (within the meaning of Section 414(b) of the Internal Revenue Code)
as such Person, (ii) partnership, trade or business (whether or not
incorporated) which is, becomes or is deemed to be under common control (within
the meaning of Section 414(c) of the Internal Revenue Code) with such Person,
(iii) other Person which is, becomes or is deemed to be a member of the same
"affiliated service group" (as defined in Section 414(m) of the Internal Revenue
Code) as such Person, or (iv) any other organization or arrangement described in
Section 414(o) of the Internal Revenue Code which is, becomes or is deemed to be
required to be aggregated pursuant to regulations issued under Section 414(o) of
the Internal Revenue Code with such Person pursuant to Section 414(o) of the
Internal Revenue Code.
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"Excluded Development Income" means such portion, if any, of
Net Income during any Fiscal Quarter which arises from Borrower's ownership
interest in Developer Affiliates or notes receivable from Developer Affiliates
in excess of ten percent (10%) of EBIDA.
"Executive Officers" mean Gary B. Sabin, Richard B. Muir,
Graham R. Bullick, David A. Lund and Ronald H. Sabin.
"Event of Default" means any of the occurrences set forth in
Article X after the expiration of any applicable grace period expressly provided
therein.
"Facility" means the loan facility of One Hundred Fifty
Million Dollars ($150,000,000) described in Section 2.1.1, subject, however, to
Borrower's right to reduce the Facility, in one or more increments, to an amount
not less than One Hundred Million Dollars ($100,000,000), in accordance with
Section 2.6.1(b).
"Fair Market Net Worth" means the Borrower's Adjusted Asset
Value less Total Liabilities less any minority interests set forth in the
Liabilities and Stockholders' Equity portion of Borrower's Financial Statements
prepared in accordance with GAAP.
"FDIC" means the Federal Deposit Insurance Corporation or
any successor thereto.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by Agent from three Federal Funds brokers of
recognized standing selected by Agent.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any governmental authority succeeding to its
functions.
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"Financial Statements" has the meaning given to such term in Section
6.1.2.
"Fiscal Quarter" means each three-month period ending on March 31, June
30, September 30 and December 31.
"Fiscal Year" means the fiscal year of Borrower which shall be the
twelve (12) month period ending on the last day of December in each year.
"Fixed Charges" means, for any period, the sum of (i) Debt Service for
such period, (ii) the Replacement Reserve Amount for such period for all
Portfolio Properties, and (iii) actual expenditures during such period for
tenant finish improvements and leasing commissions with respect to all Portfolio
Properties.
"Fixed Rate Notice" means, with respect to a Libor Loan pursuant to
Section 2.1.2, a notice substantially in the form of Exhibit G.
"Fixed Rate Prepayment Fee" has the meaning given to such term in
Section 2.4.8(c).
"Foreign Properties" means all Properties which are not located within
the boundaries of the United States.
"Free Cash Flow" means, for any period, Funds From Operations for such
period, minus scheduled payments of principal amortization (excluding balloon
payments) on all Borrower Debt, minus Borrower's consolidated capital
expenditures for such period, plus Net Offering Proceeds received during such
period plus net cash proceeds received by Borrower during such period from the
sale of Properties.
"Funding Date" means, with respect to any Loan made after the Closing
Date, the date of the funding of such Loan.
"Funds From Operations" means, for any period, the Borrower's Funds
From Operations determined in accordance with the definition approved by the
National Association of Real Estate Investment Trusts.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting
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<PAGE> 23
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board, or in
such other statements by such other entity as may be in general use by
significant segments of the accounting profession, which are applicable to the
circumstances as of the date of determination.
"Governmental Authority" means any nation or government, any federal,
state, local, municipal or other political subdivision thereof or any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guaranteed Construction Loans" means the maximum principal amount of
the Indebtedness of any Person for which the Borrower or any Subsidiary of
Borrower has guaranteed, co-made or otherwise become directly or contingently
liable if any material portion of the proceeds of such Indebtedness is to be
used to finance costs of construction, acquisition of land for development or
other development costs.
"Guarantor" means EMFC, EH Properties, L.P., Excel Realty - PA, Inc.,
Excel Realty Trust - ST, Inc., Excel Realty Trust - NC, Excel Realty - NE, Inc.,
and Excel Realty Trust - TX, L.P. which have executed a Guaranty of even date
herewith and any other Wholly-Owned Subsidiary or Guarantor Partnership approved
by the Requisite Lenders which may hereafter execute and deliver a Guaranty.
"Guarantor Partnership" means EH Properties, L.P., a Delaware limited
partnership, Excel Realty Trust - NC, a North Carolina general partnership,
Excel Realty Trust - TX, L.P., a Texas limited partnership and any other
Partnership approved by the Requisite Lenders in which the Borrower has at least
a 90% ownership interest and in which the Borrower has complete control over the
management, leasing, sale of or the granting of a Lien on the Borrowing Base
Properties owned by such Partnership; in any such case, which (1) owns a
Borrowing Base Property and (2) has executed and delivered a Guaranty.
"Guaranty" means the Guaranty of even date herewith executed by the
initial Guarantors and any Guaranty in substantially the same form which may be
hereafter executed by a Guarantor in favor of Agent and the Lenders.
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"Indebtedness", as applied to any Person (and without duplication),
means (i) all indebtedness, obligations or other liabilities of such Person for
borrowed money, (ii) all indebtedness, obligations or other liabilities of such
Person evidenced by Securities or other similar instruments, (iii) all
reimbursement obligations and other liabilities of such Person with respect to
letters of credit or banker's acceptances issued for such Person's account, (iv)
all obligations of such Person to pay the deferred purchase price of Property or
services, (v) all obligations in respect of Capital Leases of such Person, (vi)
all Accommodation Obligations of such Person, (vii) all indebtedness,
obligations or other liabilities of such Person or others secured by a Lien on
any asset of such Person, whether or not such indebtedness, obligations or
liabilities are assumed by, or are a personal liability of, such Person
(including, without limitation, the principal amount of any assessment or
similar indebtedness encumbering any property), (viii) all indebtedness,
obligations or other liabilities (other than interest expense liability) in
respect of Interest Rate Contracts and foreign currency exchange agreements, and
(ix) ERISA obligations currently due and payable.
"Interest Expense" means, for any period, total interest expense,
accrued in accordance with GAAP plus the amortization of loan acquisition costs
plus capitalized interest in respect of Borrower Debt.
"Interest Period" means, relative to any LIBOR Loans comprising part of
the same Borrowing, the period beginning on (and including) the date on which
such LIBOR Loans are made as, or converted into, LIBOR Loans, and ending on (but
excluding) the day which numerically corresponds to such date 1, 2, 3 or 6
months thereafter, in either case as Borrower may select in its relevant Notice
of Borrowing pursuant to Section 2.1.2; provided, however, that:
(a) if such Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall end on the next
following Business Day; and
(b) no Interest Period may end later than the then applicable
Termination Date.
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"Interest Rate Contracts" means, collectively, interest rate swap,
collar, cap or similar agreements providing interest rate protection.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time hereafter, and any successor statute.
"Investment" means, as applied to any Person, any direct or indirect
purchase or other acquisition by that Person of Securities, or of a beneficial
interest in Securities, of any other Person, and any direct or indirect loan,
advance (other than deposits with financial institutions available for
withdrawal on demand, prepaid expenses, advances to employees and similar items
made or incurred in the ordinary course of business), or capital contribution by
such Person to any other Person.
"Investment Grade Rated Company" means a corporation whose senior
long-term unsecured debt obligations are rated at least BBB- by Standard &
Poor's Corporation.
"Investment Mortgages" mean notes receivable or other indebtedness
secured by mortgages or other security interests directly or indirectly owned by
Borrower or any Subsidiary of Borrower, including certificates of interest in
real estate mortgage investment conduits.
"Investment Partnership" means any Partnership whose financial results
are not consolidated under GAAP in the Financial Statements including, without
limitation, ERP.
"IRS" means the Internal Revenue Service and any Person succeeding to
the functions thereof.
"Land" means unimproved real estate, including future phases of a
partially completed project, owned by Borrower or any Subsidiary of Borrower for
the purpose of future development of improvements. For purposes of the foregoing
definition, "unimproved" shall mean Land on which the construction of building
improvements has not commenced or has been discontinued for a continuous period
longer than sixty (60) days prior to completion.
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"Lease" means a tenant lease of a Borrowing Base Property.
"Lender Taxes" has the meaning given to such term in Section 2.4.7.
"Lenders" means FNBB and any other bank, finance company, insurance or
other financial institution which is or becomes a party to this Agreement by
execution of a counterpart signature page hereto or an Assignment and
Assumption, as assignee. With respect to matters requiring the consent to or
approval of all Lenders at any given time, all then existing Defaulting Lenders
will be disregarded and excluded, and, for voting purposes only, "all Lenders"
shall be deemed to mean "all Lenders other than Defaulting Lenders".
"Liabilities and Costs" means all claims, judgments, liabilities,
obligations, responsibilities, losses, damages (including lost profits),
punitive or treble damages, costs, disbursements and expenses (including,
without limitation, reasonable attorneys, experts' and consulting fees and costs
of investigation and feasibility studies), fines, penalties and monetary
sanctions, interest, direct or indirect, known or unknown, absolute or
contingent, past, present or future.
"LIBOR" means, relative to any Interest Period for any LIBOR Loan
included in any Borrowing, the per annum rate (reserve adjusted as hereinbelow
provided) of interest quoted by Agent, rounded upwards, if necessary, to the
nearest one-sixteenth of one percent (0.0625%) at which Dollar deposits in
immediately available funds are offered by Agent to leading banks in the
Eurodollar interbank market (based on Telerate quotes, page 3750, or such other
page as contains the same information as presently on page 3750) two (2)
Business Days prior to the beginning of such Interest Period, for delivery on
the first day of such Interest Period for a period approximately equal to such
Interest Period and in an amount equal or comparable to the LIBOR Loan to which
such Interest Period relates. The foregoing rate of interest shall be reserve
adjusted by dividing LIBOR by one (1.00) minus the LIBOR Reserve Percentage,
with such quotient to be rounded upward to the nearest whole multiple of
one-hundredth of one percent (0.01%). All references in this Agreement or other
Loan Documents to LIBOR shall mean and include the aforesaid reserve adjustment.
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"LIBOR Loan" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a fixed rate of interest determined
by reference to LIBOR.
"LIBOR Office" means, relative to any Lender, the office of such Lender
designated as such on the counterpart signature pages hereto or such other
office of a Lender as designated from time to time by notice from such Lender to
Agent, whether or not outside the United States, which shall be making or
maintaining LIBOR Loans of such Lender.
"LIBOR Reserve Percentage" means, relative to any Interest Period for
LIBOR Loans made by any Lender, the reserve percentage (expressed as a decimal)
equal to the actual aggregate reserve requirements (including all basic,
emergency, supplemental, marginal and other reserves and taking into account any
transactional adjustments or other scheduled changes in reserve requirements)
announced within Agent as the reserve percentage applicable to Agent as
specified under regulations issued from time to time by the Federal Reserve
Board. The LIBOR Reserve Percentage shall be based on Regulation D of the
Federal Reserve Board or other regulations from time to time in effect
concerning reserves for "Eurocurrency Liabilities" from related institutions as
though Agent were in a net borrowing position.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, security interest, encumbrance (including, but
not limited to, easements, rights-of-way, zoning restrictions and the like),
lien (statutory or other), preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever, including without
limitation 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, and the filing of any financing
statement or document having similar effect (other than a financing statement
filed by a "true" lessor pursuant to Section 9408 of the Uniform Commercial
Code) naming the owner of the asset to which such Lien relates as debtor, under
the Uniform Commercial Code or other comparable law of any jurisdiction.
"Loan Account" has the meaning given to such term in Section 2.3.
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"Loan Documents" means this Agreement, the Loan Notes, the Borrowing
Base Property Designation Certificates, the Guaranties and all other agreements,
instruments and documents (together with amendments and supplements thereto and
replacements thereof) now or hereafter executed by Borrower or any Guarantor,
which evidence or guaranty the Obligations.
"Loan Notes" means the promissory notes evidencing the Loans in the
aggregate original principal amount of One Hundred Fifty Million Dollars
($150,000,000) executed by Borrower in favor of Lenders, as they may be amended,
supplemented, replaced or modified from time to time. The initial Loan Notes and
any replacements thereof shall be substantially in the form of Exhibit E.
"Loans" means the loans made pursuant to the Facility.
"Majority Partnership" means any Partnership whose financial results
are consolidated (including proportionate consolidation) under GAAP in the
Financial Statements.
"Material Adverse Effect" means, with respect to a Person or Property,
a material adverse effect upon the condition (financial or otherwise),
operations, performance or properties of such Person or Property. The phrase
"has a Material Adverse Effect" or "will result in a Material Adverse Effect" or
words substantially similar thereto shall in all cases be intended to mean "has
resulted, or will or could reasonably be anticipated to result, in a Material
Adverse Effect", and the phrase "has no (or does not have a) Material Adverse
Effect" or "will not result in a Material Adverse Effect" or words substantially
similar thereto shall in all cases be intended to mean "does not or will not or
could not reasonably be anticipated to result in a Material Adverse Effect".
"Maximum Loan Amount" means, at any time, the lesser of (i) an amount
equal to the positive difference, if any, of (A) fifty percent (50%) of the
Borrowing Base Value, less (B) the Unsecured Loan Balance excluding the
outstanding principal of the Loans; (ii) an amount equal to the Maximum
Unsecured Loan Balance less the Unsecured Loan Balance excluding the outstanding
principal of the Loans; and (iii) the amount of the Facility from time to time,
provided, however, that after any Event of Default
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has occurred and until the same shall have been remedied or waived pursuant to
Section 12.4, the Maximum Loan Amount shall be zero.
"Maximum Unsecured Loan Balance" means the maximum principal amount
which would result in a Pro Forma Debt Service such that the Net Operating
Income for the Borrowing Base Properties during the most recent Fiscal Quarter
is equal to 160% of such Pro Forma Debt Service.
"Multiemployer Plan" means an employee benefit plan defined in Section
4001(a)(3) of ERISA which is, or within the immediately preceding six (6) years
was, contributed to by a Person or an ERISA Affiliate of such Person.
"National or Regional Tenant" means a tenant which operates at least
ten (10) stores in the same line of business as the store or stores operated by
such tenant on the Borrowing Base Properties provided that if a tenant's parent
corporation is a guarantor of the Lease, stores operated by such parent or by
other Subsidiaries of such parent may be counted toward said 10 store
requirement.
"Net Income" means, for any period, the net earnings (or loss) of the
Borrower, after Taxes and minority interests in consolidated Subsidiaries,
calculated for such period on a consolidated basis in conformity with GAAP.
"Net Offering Proceeds" means (i) all cash proceeds received by the
Borrower as a result of the sale of common, preferred or other classes of stock
in the Borrower (if and only to the extent reflected in stockholders' equity on
the consolidated balance sheet of the Borrower prepared in accordance with GAAP)
less customary costs and discounts of issuance paid by the Borrower.
"Net Operating Income" means, with respect to any Property, the net
operating income of such Property determined in accordance with GAAP, except
that Net Operating Income shall not include security or other deposits, late
fees, lease termination fees or other similar items, delinquent rent recoveries
from former tenants, unless previously reflected in reserves, or any other items
of a non-recurring nature.
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"Non Pro Rata Loan" means a Loan with respect to which fewer than all
Lenders have funded their respective Pro Rata Shares of such Loans and the
failure of the non-funding Lender or Lenders to fund its or their respective Pro
Rata Shares of such Loan constitutes a breach of this Agreement.
"Nonrecourse Indebtedness" means Indebtedness with respect to which
recourse for payment is contractually limited to specific assets encumbered by a
Lien securing such Indebtedness.
"Notice of Borrowing" means, with respect to a proposed Borrowing
pursuant to Section 2.1.2, a notice substantially in the form of Exhibit F.
"Obligations" means, from time to time, all Indebtedness of Borrower
owing to Agent, any Lender or any Person entitled to indemnification pursuant to
Section 12.2, or any of their respective successors, transferees or assigns, of
every type and description, whether or not evidenced by any note, guaranty or
other instrument, arising under or in connection with this Agreement or any
other Loan Document, whether or not for the payment of money, whether direct or
indirect (including those acquired by assignment), absolute or contingent, due
or to become due, now existing or hereafter arising and however acquired. The
term includes, without limitation, all interest, charges, expenses, fees,
reasonable attorneys' fees and disbursements, reasonable fees and disbursements
of expert witnesses and other consultants, and any other sum now or hereinafter
chargeable to Borrower under or in connection with this Agreement or any other
Loan Document.
"Occupancy Rate" means, with respect to each of the Properties at any
time, the ratio, as of such date, expressed as a percentage, of (i) the net
rentable square footage of such Property occupied by tenants paying rent
pursuant to binding leases as to which no monetary default has continued for
more than ninety (90) days, to (ii) the aggregate net rentable square footage of
such Property. With respect to the initial Borrowing Base Properties listed on
Schedule 1, premises which are no longer open for business may continue to be
counted as occupied until the tenant defaults under the applicable Lease. With
respect to Properties designated as Borrowing Base Properties after the Closing
Date only premises which are actually open for business on the date of the
applicable Borrowing Base Property
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Designation Certificate shall be counted as occupied in connection with the
determination pursuant to Section 3.1 as to whether the Property is an Eligible
Property. Any premises in such Borrowing Base Properties designated after the
Closing Date which are closed for business subsequent to such designation shall
cease to be counted as occupied on the earlier to occur of a default by the
tenant or the date which is one year after the date of closing unless such
premises are reopened prior to such date. With respect to determining whether
Properties are Opportunity Properties only premises which are actually open for
business shall be counted as occupied.
"Officer's Certificate" means a certificate signed by a specified
officer of a Person certifying as to the matters set forth therein.
"Opportunity Properties" means Properties which (i) are used for
purposes other than Retail Uses or Service Retail Uses or (ii) have an Occupancy
Rate of less than 50%.
"Partnership" means any general or limited partnership, joint venture,
limited liability company or limited liability partnership in which Borrower or
any Subsidiary of Borrower has an ownership interest and which is not a Wholly-
Owned Subsidiary.
"Partnership Agreement" means, with respect to any Partnership, on a
collective basis, its partnership agreement, its agreement of limited
partnership agreement and certificate of limited partnership (if any), its
operating or management agreement and articles or certificate of organization,
bylaws or other organizational or governance document(s).
"PBGC" means the Pension Benefit Guaranty Corporation or any Person
succeeding to the functions thereof.
"Permit" means any permit, approval, authorization, license, variance
or permission required from a Governmental Authority under an applicable
Requirement of Law.
"Permitted Investments" means Investments in Land, Foreign Properties,
Partnerships, Investment Mortgages and Repurchased Stock but only to the extent
permitted in Section 9.11.
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"Permitted Liens" means:
(a) Liens (other than Environmental Liens and any Lien imposed
under ERISA) for taxes, assessments or charges of any Governmental
Authority or claims not yet due;
(b) Liens (other than any Lien imposed under ERISA) incurred
or deposits made in the ordinary course of business (including without
limitation surety bonds and appeal bonds) in connection with workers'
compensation, unemployment insurance and other types of social security
benefits or to secure the performance of tenders, bids, leases,
contracts (other than for the repayment of Indebtedness), statutory
obligations;
(c) any laws, ordinances, easements, rights of way,
restrictions, exemptions, reservations, conditions, limitations,
covenants or other matters that, in the aggregate, do not (i)
materially interfere with the occupation, use and enjoyment of the
Property or other assets encumbered thereby, by the Person owning such
Property or other assets, in the normal course of its business or (ii)
materially impair the value of the Property subject thereto; and
(d) Liens imposed by laws, such as mechanics' liens and other
similar liens arising in the ordinary course of business which secure
payment of obligations not more than thirty (30) days past due.
"Person" means any natural person, employee, corporation, limited
partnership, general partnership, joint stock company, limited liability
company, joint venture, association, company, trust, bank, trust company, land
trust, business trust or other organization, whether or not a legal entity, or
any other non-governmental entity, or any Governmental Authority.
"Plan" means an employee benefit plan defined in Section 3(3) of ERISA
(other than a Multiemployer Plan) in respect of which Borrower or an ERISA
Affiliate, as applicable, is an "employer" as defined in Section 3(5) of ERISA.
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"Portfolio Properties" means real property improved with one or more
completed office, commercial or retail buildings that is owned directly or
indirectly, in whole or in part, by Borrower, any Subsidiary of Borrower or any
Investment Partnership, including the Borrowing Base Properties and the
Properties listed on Schedule 1.1, as such schedule may be updated from time to
time to reflect the acquisition or disposition of Portfolio Properties.
"Prepayment Date" has the meaning given to such term in Section
2.4.8(c).
"Pro Forma Debt Service" means, with respect to any given principal
amount, an amount equal to the sum of three (3) monthly principal and interest
payments under a 25-year mortgage style principal amortization schedule for such
principal amount at an interest rate which shall be the higher of (i) the actual
blended interest rate then in effect on the Facility or (ii) an interest rate
equal to the then current ten (10) year U.S. Treasury bond yield plus two and
one-quarter percent (2.25%) per annum.
"Pro Rata Share" means, with respect to any Lender, a fraction
(expressed as a percentage), the numerator of which shall be the amount of such
Lender's Commitment and the denominator of which shall be the aggregate amount
of all of the Lenders' Commitments.
"Proceedings" means, collectively, all actions, suits and proceedings
before, and investigations commenced or threatened by or before, any court or
Governmental Authority with respect to a Person.
"Property" means, as to any Person, all real or personal property
(including, without limitation, buildings, facilities, structures, equipment and
other assets, tangible or intangible) owned by such Person.
"Quarterly Operating Report" has the meaning given to such term in
Section 6.1.1.
"Rating Agency" means each of two of (i) Standard & Poor's Corporation
or (ii) Moody's Investors Services, Inc. or (iii) Duff and Phelps or (iv) Fitch
Investors as the Borrower may
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designate from time to time by notice to Agent, provided that at least one
Rating Agency must be either Standard & Poor's Corporation or Moody's Investors
Services, Inc.
"Recourse Borrower Debt" means Borrower Debt less the portion thereof
which is Nonrecourse Indebtedness.
"Regulations G, T, U and X" mean such Regulations of the Federal
Reserve Board as in effect from time to time.
"Release" means the release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment or into or out of any property, including the
movement of Contaminants through or in the air, soil, surface water, groundwater
or property.
"Remedial Action" means any action required by applicable Environmental
Laws to (i) clean up, remove, treat or in any other way address Contaminants in
the indoor or outdoor environment; (ii) prevent the Release or threat of Release
or minimize the further Release of Contaminants so they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment; or (iii) perform preremedial studies and investigations and
post-remedial monitoring and care.
"Replacement Reserve Amount" means, with respect to any Property or
group of Properties, a normalized annual reserve for recurring capital
expenditures which reserve shall initially be at the rate of $0.10 per year per
square foot of gross leasable area of such Property or Properties. Commencing in
1997 such rate may be adjusted by the Agent, with the approval of the Requisite
Lenders, based on the actual experienced rate of capital expenditures incurred
by Borrower with respect to the applicable Properties during 1996 and prior
years, but in no event shall such rate be adjusted to a rate higher than such
initial rate.
"Reportable Event" means any of the events described in Section 4043(b)
of ERISA, other than an event for which the thirty (30) day notice requirement
is waived by regulations.
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"Repurchased Stock" means any common or preferred stock issued by
Borrower which has been repurchased by Borrower or any of its Subsidiaries or
Investment Partnerships.
"Requirements of Law" mean, as to any Person, the charter and by-laws,
Partnership Agreement or other organizational or governing documents of such
Person, and any law, rule or regulation, Permit, or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject, including without limitation, the Securities
Act, the Securities Exchange Act, Regulations G, T, U and X, FIRREA and any
certificate of occupancy, zoning ordinance, building, environmental or land use
requirement or Permit or occupational safety or health law, rule or regulation.
"Requisite Lenders" mean, collectively, Lenders whose Pro Rata Shares,
in the aggregate, are at least sixty-six and two-thirds percent (66-2/3%),
provided that, in determining such percentage at any given time, all then
existing Defaulting Lenders will be disregarded and excluded and the Pro Rata
Shares of Lenders shall be redetermined, for voting purposes only, to exclude
the Pro Rata Shares of such Defaulting Lenders, and provided, further, that the
Agent must always be among the Requisite Lenders except that after an Event of
Default described in Section 10.1.1 decisions by the Requisite Lenders to
accelerate and/or exercise remedies pursuant to Section 10.2.1 shall be made
without regard to whether the Agent is among the Requisite Lenders.
"Retail Uses" means stores engaged in the sale of products directly to
consumers and shopping centers occupied primarily by such stores but which may
also include Service Retail Uses, movie cinemas, banks and office uses of the
type commonly located in shopping centers.
"Secretary's Certificate" means a certificate of a Person's secretary,
clerk or comparable officer with respect to organizational documents,
authorization and incumbency.
"Secured Borrower Debt" means all Borrower Debt that is secured by a
Lien on any Property.
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"Securities" means any stock, shares, voting trust certificates, bonds,
debentures, notes or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or in general any instruments commonly
known as "securities", or any certificates of interest, shares, or
participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire any of the
foregoing, but shall not include any evidence of the obligations, provided that
Securities shall not include Cash Equivalents, Investment Mortgages or interests
in Partnerships.
"Securities Act" means the Securities Act of 1933, as amended to the
date hereof and from time to time hereafter, and any successor statute.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended to the date hereof and from time to time hereafter, and any successor
statute.
"Senior Loans" has the meaning given to such term in Section 11.4.2.
"Service Retail Properties" means Properties which are used primarily
for Service Retail Uses.
"Service Retail Uses" means restaurants, health clubs, child care
facilities, automotive repair facilities, and other similar types of uses which
Agent may agree to designate as Service Retail Uses.
"Solvent" means, as to any Person at the time of determination, that
such Person (i) owns property the value of which (both at fair valuation and at
present fair saleable value) is greater than the amount required to pay all of
such Person's liabilities (including contingent liabilities and debts); (ii) is
able to pay all of its debts as such debts mature; and (iii) has capital
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage.
"Subsidiary" of a Person means any corporation, Partnership, trust or
other non-Partnership entity of which a majority of the stock (or equivalent
ownership or controlling interest) having voting power to elect a majority of
the Board of
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Directors (if a corporation) or to select the trustee or equivalent controlling
interest, shall, at the time such reference becomes operative, be directly or
indirectly owned or controlled by such Person.
"Tangible Net Worth" means, at any time, the Borrower's stockholders'
equity, as shown on its Financial Statements prepared in accordance with GAAP,
minus intangible assets which shall include, for purposes of this definition,
all deferred charges and prepaid fees.
"Taxes" means all federal, state, local and foreign income and gross
receipts taxes.
"Termination Date" has the meaning given to such term in Section 2.1.4.
"Termination Event" means (i) any Reportable Event, (ii) the withdrawal
of a Person, or an ERISA Affiliate from a Benefit Plan during a plan year in
which it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA,
(iii) the occurrence of an obligation arising under Section 4041 of ERISA of a
Person or an ERISA Affiliate to provide affected parties with a written notice
of an intent to terminate a Benefit Plan in a distress termination described in
Section 4041(c) of ERISA, (iv) the institution by the PBGC of proceedings to
terminate any Benefit Plan under Section 4042 of ERISA, (v) any event or
condition which constitutes grounds under Section 4042 of ERISA for the
appointment of a trustee to administer a Benefit Plan, (vi) the partial or
complete withdrawal of such Person or any ERISA Affiliate from a Multiemployer
Plan, or (vii) the adoption of an amendment by any Person or any ERISA Affiliate
to terminate any Benefit Plan.
"Termination of Designation" has the meaning given to such term in
Section 3.2.
"Total Assets" means Borrower's total assets as shown on its Financial
Statements prepared in accordance with GAAP.
"Total Borrower-Investment Partnership Liabilities" means the sum of
the Total Liabilities of Borrower and the Total Liabilities of all Investment
Partnerships, without duplication.
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"Total Liabilities" of any Person means (i) all Indebtedness of such
Person, whether or not such Indebtedness would be included as a liability on the
balance sheet of such Person in accordance with GAAP, plus (ii) all other
liabilities of every nature and kind of such Person that would be included as
liabilities on the balance sheet of such Person in accordance with GAAP, except
that deferred rental income shall not be treated as a liability.
"Unencumbered NOI" means, for any period, the aggregate Net Operating
Income for such period of all Borrowing Base Properties.
"Unencumbered Property" means real property (including ground leases)
improved with one or more completed office, commercial or retail buildings, that
is wholly-owned by Borrower, a Wholly-Owned Subsidiary or a Guarantor
Partnership, provided that neither such real property, nor any interest in the
Person owning such Property, is subject to any Lien (other than Permitted Liens)
or to any agreement (other than this Agreement or any other Loan Document) that
prohibits the creation of any Lien thereon as security for Indebtedness of the
Person owning such real property.
"Unmatured Event of Default" means an event which, with the giving of
notice or the lapse of time, or both, would constitute an Event of Default.
"Unsecured Interest Expense" means, for any period, (i) total Interest
Expense for such period, less (ii) Interest Expense attributable to any Secured
Borrower Debt for such period.
"Unsecured Loan Balance" means the outstanding balance of all
indebtedness, obligations or other liabilities for borrowed money of Borrower or
any Subsidiary of Borrower which is not secured by a Lien on any Property
including, without limitation, the Loans and any indebtedness evidenced by
Securities, plus the amount, if any, by which Borrower's current liabilities
less deferred rental income exceed $5,000,000.
"Unused Amount" has the meaning given to such term in Section 2.5.1.
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"Unused Facility Fee" has the meaning given to such
term in Section 2.5.1.
"Wholly-Owned Subsidiary" means a Subsidiary which is 100% owned by
Borrower.
1.2 Computation of Time Periods. In this Agreement, in the computation
of periods of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until" each mean "to
and including". Periods of days referred to in this Agreement shall be counted
in calendar days unless Business Days are expressly prescribed.
1.3 Terms.
1.3.1 Any accounting terms used in this Agreement which are not
specifically defined shall have the meanings customarily given them in
accordance with GAAP. All references herein to Borrower, or any other Person, in
connection with any financial or related covenant, representation or
calculation, shall be understood to mean and refer to Borrower and such other
Person on a consolidated basis in accordance with GAAP, unless otherwise
specifically provided and subject in all events to any adjustments herein set
forth.
1.3.2 Any time the phrase "to the best of Borrower's knowledge" or a
phrase similar thereto is used herein, it means: "to the actual knowledge of the
then executive or senior officers of Borrower, after reasonable inquiry of those
agents, employees or contractors of the Borrower who could reasonably be
anticipated to have knowledge with respect to the subject matter or
circumstances in question and after review of those documents or instruments
which could reasonably be anticipated to be relevant to the subject matter or
circumstances in question."
1.3.3 In each case where the consent or approval of Agent, all Lenders
and/or Requisite Lenders is required, or their non-obligatory action is
requested by Borrower, such consent, approval or action shall be in the sole and
absolute discretion of Agent and, as applicable, each Lender, unless otherwise
specifically indicated.
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1.3.4 Any time the word "or" is used herein, unless the context
otherwise clearly requires, it has the inclusive meaning represented by the
phrase "and/or". The words "hereof", "herein", "hereby", "hereunder" and similar
terms refer to this Agreement as a whole and not to any particular provision of
this Agreement. Article, section, subsection, clause, exhibit and schedule
references are to this Agreement unless otherwise specified. Any reference in
this Agreement to this Agreement or to any other Loan Document includes any and
all amendments, modifications, supplements, renewals or restatements thereto or
thereof, as applicable.
ARTICLE II
LOANS
2.1 Loan Advances and Repayment.
2.1.1 Maximum Loan Amount.
(a) Subject to the terms and conditions set forth in this
Agreement, Lenders hereby agree to make Loans to Borrower from time to time
during the period from the Closing Date to the Business Day next preceding the
Termination Date, in an aggregate outstanding principal amount which shall not
exceed the Maximum Loan Amount at any time. All Loans under this Agreement shall
be made by Lenders simultaneously and proportionately to their respective Pro
Rata Shares, it being understood that no Lender shall be responsible for any
failure by any other Lender to perform its obligation to make a Loan hereunder
and that the Commitment of any Lender shall not be increased or decreased as a
result of the failure by any other Lender to perform its obligation to make a
Loan. Loans may be voluntarily prepaid pursuant to Section 2.6.1 and, subject to
the provisions of this Agreement, any amounts so prepaid may be reborrowed under
this Section 2.1.1(a). The principal balance of the Loans shall be payable in
full on the Termination Date. The Loans will be evidenced by the Loan Notes.
(b) If at any time the outstanding principal balance of the
Loans exceeds the Maximum Loan
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Amount, as a result of a reduction in the Borrowing Base Value, the
incurrence of additional indebtedness which increases the Unsecured
Loan Balance or for any other reason whatsoever, Borrower shall, not
later than thirty (30) days following the date that Borrower receives
notice or otherwise obtains knowledge of such occurrence, (i) reduce
the Unsecured Loan Balance in such amounts and/or (ii) designate such
additional Borrowing Base Property(-ies) under Section 3.1 as are
necessary so that the outstanding principal balance of the Loans does
not exceed the Maximum Loan Amount. Failure by Borrower to have
complied with the foregoing in a timely manner shall constitute an
Event of Default without further notice or grace period hereunder. No
further Borrowings, or Termination of Designation with respect to any
Borrowing Base Property, shall be permitted so long as such excess
borrowing condition shall continue to exist. Nothing in this
subparagraph (b) shall excuse Borrower's compliance with all terms,
conditions, covenants and other obligations imposed upon it under the
Loan Documents during the period of such excess borrowing, nor in any
manner condition or impair Agent's or Lenders' rights thereunder in
respect of any such breach thereof by Borrower.
2.1.2 Notice of Borrowing.
(a) (i) Whenever Borrower desires to borrow
under this Section 2.1, but in no event more than three (3) times
during any one (1) calendar month, Borrower shall give Agent, at 115
Perimeter Center Place, N.E., Suite 500, Atlanta, GA 30346 Attn:
Deborah Parker (Fax No. (770)390-8434, with a copy to 700 N. Pearl,
Suite 1840, Dallas, TX 75201, Attn: Helen Delph (Fax No. (214)720-3836)
or such other address as Agent shall designate, an original or
facsimile Notice of Borrowing no later than 9:00 A.M. (Eastern time),
not less than three (3) nor more than five (5) Business Days prior to
the proposed Funding Date of each Loan. Each Notice of Borrowing shall
be accompanied by a Compliance Certificate demonstrating on a pro forma
basis compliance with the covenants set forth in Sections 9.1, 9.2, 9.4
and 9.13 after the advance of the requested Loan. Such pro forma
Compliance Certificate shall take into account all borrowings and loan
repayments, all Property acquisitions and sales, all additional
Borrowing Base
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Property designations and all Terminations of Designation which may
have occurred between the end of the last Fiscal Quarter and the
proposed Funding Date. The Agent shall notify each Lender by telephone
or facsimile with regard to each Notice of Borrowing not later than
11:00 A.M. (Eastern Time) on the second Business Day preceding the
proposed Funding Date.
(ii) Notwithstanding the foregoing or any
other provision hereof to the contrary: a Notice of Borrowing may be
given not less than two (2) Business Days prior to the proposed Funding
Date of a Loan if the Borrowing shall be requested as a Base Rate Loan
in which case the Agent shall provide such telephone or facsimile
notice to each Lender not later than 11:00 A.M. (Eastern Time) on the
Business Day preceding the proposed Funding Date.
(iii) Each Notice of Borrowing shall
specify (1) the Funding Date (which shall be a Business Day) in respect
of the Loan, (2) the amount of the proposed Loan, provided that the
aggregate amount of such proposed Loan shall equal One Million Dollars
($1,000,000) or integral multiples of One Hundred Thousand Dollars
($100,000) in excess thereof, (3) whether the Loan to be made
thereunder will be a Base Rate Loan or a LIBOR Loan and, if a LIBOR
Loan, the Interest Period, (4) to which account of Borrower the funds
are to be directed, and (5) the proposed use of such Loan. Any Notice
of Borrowing pursuant to this Section 2.1.2 shall be irrevocable.
(b) Borrower may elect (i) to convert LIBOR Loans
or any portion thereof into Base Rate Loans, (ii) to convert Base Rate
Loans or any portion thereof to LIBOR Loans, or (iii) to continue any
LIBOR Loans or any portion thereof for an additional Interest Period,
provided, however, that the aggregate amount of the Loans being
converted into or continued as LIBOR Loans shall equal One Million
Dollars ($1,000,000) or an integral multiple of One Hundred Thousand
Dollars ($100,000) in excess thereof. The applicable Interest Period
for the continuation of any LIBOR Loan shall commence on the day on
which the next preceding Interest Period expires. The conversion of a
LIBOR Loan to a Base Rate Loan shall only occur on the last Business
Day
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of the Interest Period relating to such LIBOR Loan; such conversion
shall occur automatically in the absence of an election under clause
(iii) above. Each election under clause (ii) or clause (iii) above
shall be made by Borrower giving Agent an original or facsimile Notice
of Borrowing no later than 9:00 A.M. (Eastern time), not less than
three (3) nor more than five (5) Business Days prior to the date of a
conversion to or continuation of a LIBOR Loan, specifying, in each case
(1) the amount of the conversion or continuation, (2) the Interest
Period therefor, and (3) the date of the conversion or continuation
(which date shall be a Business Day).
(c) Upon receipt of a Notice of Borrowing in
proper form requesting LIBOR Loans under subparagraph (a) or (b) above,
Agent shall determine the LIBOR applicable to the Interest Period for
such LIBOR Loans, and shall, two (2) Business Days prior to the
beginning of such Interest Period, give (by facsimile) a Fixed Rate
Notice in respect thereof to Borrower and Lenders; provided, however,
that failure to give such notice to Borrower shall not affect the
validity of such rate. Each determination by Agent of the LIBOR shall
be conclusive and binding upon the parties hereto in the absence of
manifest error.
2.1.3 Making of Loans. Subject to Section 11.3, Agent
shall make the proceeds of Loans available to Borrower on such Funding Date and
shall disburse such funds in Dollars in immediately available funds to
Borrower's commercial demand account at FNBB, or such other account specified
in written wiring instructions furnished with the Notice of Borrowing
acceptable to Agent.
2.1.4. Term. The outstanding balance of the Loans shall be
payable in full on the earliest to occur of (i) the second anniversary of the
Closing Date, (ii) the acceleration of the Loans pursuant to Section 10.2.1, or
(iii) Borrower's written notice to Agent (pursuant to Section 2.6.1) of
Borrower's election to prepay all accrued obligations and terminate all
Commitments (the "Termination Date").
2.2 Authorization to Obtain Loans. Borrower shall provide Agent
with documentation satisfactory to Agent indicating
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the names of those employees of Borrower authorized by Borrower to sign Notices
of Borrowing, and Agent and Lenders shall be entitled to rely on such
documentation until notified in writing by Borrower of any change(s) of the
persons so authorized. Agent shall be entitled to act on the instructions of
anyone identifying himself or herself as one of the Persons authorized to
execute a Notice of Borrowing, and Borrower shall be bound thereby in the same
manner as if such Person were actually so authorized. Borrower agrees to
indemnify, defend and hold Lenders and Agent harmless from and against any and
all Liabilities and Costs which may arise or be created by the acceptance of
instructions in any Notice of Borrowing, unless caused by the gross negligence
of the Person to be indemnified.
2.3 Lenders' Accounting. Agent shall maintain a loan account (the
"Loan Account") on its books in which shall be recorded (i) the names and
addresses and the Commitments of Lenders, and principal amount of Loans owing
to each Lender from time to time, and (ii) all advances and repayments of
principal and payments of accrued interest under the Loans, as well as payments
of the Unused Facility Fee, as provided in this Agreement. All entries in the
Loan Account shall be made in accordance with Agent's customary accounting
practices as in effect from time to time.
2.4 Interest on the Loans.
2.4.1 Base Rate Loans. Subject to Section 2.4.4, all Base
Rate Loans shall bear interest on the average daily unpaid principal amount
thereof from the date made until paid in full at a fluctuating rate per annum
equal to the sum of the Base Rate plus the Applicable Base Rate Margin. Base
Rate Loans shall be made in minimum amounts of One Million Dollars ($1,000,000)
or an integral multiple of One Hundred Thousand ($100,000) in excess thereof.
2.4.2 LIBOR Loans. Subject to Sections 2.4.4 and 2.4.8,
all LIBOR Loans shall bear interest on the unpaid principal amount thereof
during the Interest Period applicable thereto at a rate per annum equal to the
sum of LIBOR for such Interest Period plus the Applicable LIBOR Rate Margin.
LIBOR Loans shall be in tranches of One Million Dollars ($1,000,000) or One
Hundred Thousand Dollar ($100,000) increments in excess thereof. No more than
six (6) LIBOR Loan tranches shall be
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outstanding at any one time. Notwithstanding anything to the contrary
contained herein and subject to the Default Interest provisions contained in
Section 2.4.4, if an Event of Default occurs and as a result thereof the
Commitments are terminated, all LIBOR Loans will convert to Base Rate Loans
upon the expiration of the applicable Interest Periods therefor or the date all
Loans become due, whichever occurs first.
2.4.3 Interest Payments. Subject to Section 2.4.4,
interest accrued on all Loans shall be payable by Borrower, in the manner
provided in Section 2.6.2, in arrears on the first Business Day of the first
calendar month following the Closing Date, the first Business Day of each
succeeding calendar month thereafter, and on the Termination Date.
2.4.4 Default Interest. Notwithstanding the rates of
interest specified in Sections 2.4.1 and 2.4.2 and the payment dates specified
in Section 2.4.3, effective immediately upon the occurrence and during the
continuance of any Event of Default, the principal balance of all Loans then
outstanding and, to the extent permitted by applicable law, any interest
payments on the Loans not paid when due shall bear interest payable upon demand
at a rate which is five percent (5%) per annum in excess of the rate(s) of
interest otherwise payable from time to time under this Agreement. All other
amounts due Agent or Lenders (whether directly or for reimbursement) under this
Agreement or any of the other Loan Documents if not paid when due, or if no
time period is expressed, if not paid within ten (10) days after demand, shall
bear interest from and after demand at the rate set forth in this Section
2.4.4.
2.4.5 Late Fee. Borrower acknowledges that late payment to
Agent will cause Agent and Lenders to incur costs not contemplated by this
Agreement. Such costs include, without limitation, processing and accounting
charges. Therefore, if Borrower fails timely to pay any sum due and payable
hereunder through the Termination Date, unless waived by Agent pursuant to
Section 11.11.1, a late charge of four cents ($.04) for each dollar of any
principal payment, interest or other charge due hereon and which is not paid
within ten (10) days after such payment is due or five (5) Business Days after
the statement of the amount due is provided to Borrower, whichever is later,
shall be charged by Agent (for the benefit of Lenders) and paid by Borrower for
the purpose of defraying the expense incident to
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handling such delinquent payment; provided, however, that no late charges shall
be assessed with respect to any period during which Borrower is obligated to
pay interest at the rate specified in Section 2.4.4, or in respect of any
failure to pay all Obligations on the Termination Date. Borrower and Agent
agree that this late charge represents a reasonable sum considering all of the
circumstances existing on the date hereof and represents a fair and reasonable
estimate of the costs that Agent and Lenders will incur by reason of late
payment. Borrower and Agent further agree that proof of actual damages would
be costly and inconvenient. Acceptance of any late charge shall not constitute
a waiver of the default with respect to the overdue installment, and shall not
prevent Agent from exercising any of the other rights available hereunder or
any other Loan Document. Such late charge shall be paid without prejudice to
any other rights of Agent.
2.4.6 Computation of Interest. Interest shall be computed
on the basis of the actual number of days elapsed in the period during which
interest or fees accrue and a year of three hundred sixty (360) days. In
computing interest on any Loan, the date of the making of the Loan shall be
included and the date of payment shall be excluded; provided, however, that if
a Loan is repaid on the same day on which it is made, one (1) day's interest
shall be paid on that Loan. Notwithstanding any provision in this Section 2.4,
interest in respect of any Loan shall not exceed the maximum rate permitted by
applicable law. Changes in the Applicable Base Rate Margin or the Applicable
LIBOR Rate Margin shall take effect as of the date on which the condition set
forth in the relevant clause of the definition of each such term is satisfied.
2.4.7 Changes; Legal Restrictions. In the event that after
the Closing Date (i) the adoption of or any change in any law, treaty, rule,
regulation, guideline or determination of a court or Governmental Authority or
any change in the interpretation or application thereof by a court or
Governmental Authority, or (ii) compliance by Agent or any Lender with any
request or directive made or issued after the Closing Date (whether or not
having the force of law and whether or not the failure to comply therewith
would be unlawful) from any central bank or other Governmental Authority or
quasi-governmental authority:
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(a) subjects Agent or any Lender to any tax, duty
or other charge of any kind with respect to the Facility, this
Agreement or any of the other Loan Documents or the Loans, or changes
the basis of taxation of payments to Agent or such Lender of
principal, fees, interest or any other amount payable hereunder,
except for net income, gross receipts, gross profits or franchise
taxes imposed by any jurisdiction and not specifically based upon loan
transactions (all such non-excepted taxes, duties and other charges
being hereinafter referred to as "Lender Taxes");
(b) imposes, modifies or holds applicable, in the
determination of Agent or any Lender, any reserve, special deposit,
compulsory loan, FDIC insurance, capital allocation or similar
requirement (other than a requirement of the type described in Section
2.7) against assets held by, or deposits or other liabilities in or
for the account of, advances or loans by, or other credit extended by,
or any other acquisition of funds by, Agent or such Lender or any
applicable lending office; or
(c) imposes on Agent or any Lender any other
condition (other than one described in Section 2.7) materially more
burdensome in nature, extent or consequence than those in existence as
of the Closing Date,
and the result of any of the foregoing is to increase the cost to Agent or any
Lender of making, renewing, maintaining or participating in the Loans or to
reduce any amount receivable thereunder; then, in any such case, Borrower shall
promptly pay to Agent or such Lender, as applicable, upon demand, such amount
or amounts (based upon a reasonable allocation thereof by Agent or such Lender
to the financing transactions contemplated by this Agreement and affected by
this Section 2.4.7) as may be necessary to compensate Agent or such Lender for
any such additional cost incurred or reduced amounts received; provided,
however, that if the payment of such compensation may not be legally made
whether by modification of the applicable interest rate or otherwise, then
Lenders shall have no further obligation to make Loans that cause Agent or any
Lender to incur such increased cost, and all affected Loans shall become
immediately due and payable by Borrower. Agent or such Lender shall deliver to
Borrower and in the case of a delivery by Lender, such Lender shall also
deliver to Agent, a written statement of the claimed additional costs
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incurred or reduced amounts received and the basis therefor as soon as
reasonably practicable after such Lender obtains knowledge thereof. If Agent
or any Lender subsequently recovers any amount of Lender Taxes previously paid
by Borrower pursuant to this Section 2.4.7, whether before or after termination
of this Agreement, then, upon receipt of good funds with respect to such
recovery, Agent or such Lender will refund such amount to Borrower if no Event
of Default or Unmatured Event of Default then exists or, if an Event of Default
or Unmatured Event of Default then exists, such amount will be credited to the
Obligations in the manner determined by Agent or such Lender.
2.4.8 Certain Provisions Regarding LIBOR Loans.
(a) LIBOR Lending Unlawful. If any Lender shall
determine (which determination shall, upon notice thereof to Borrower
and Agent, be conclusive and binding on the parties hereto) that the
introduction of or any change in or in the interpretation of any law
makes it unlawful, or any central bank or other Governmental Authority
asserts that it is unlawful, for such Lender to make or maintain any
Loan as a LIBOR Loan, (i) the obligations of such Lenders to make or
maintain any Loans as LIBOR Loans shall, upon such determination,
forthwith be suspended until such Lender shall notify Agent that the
circumstances causing such suspension no longer exist, and (ii) if
required by such law or assertion, the LIBOR Loans of such Lender
shall automatically convert into Base Rate Loans.
(b) Deposits Unavailable. If Agent shall have
determined in good faith that adequate means do not exist for
ascertaining the interest rate applicable hereunder to LIBOR Loans,
then, upon notice from Agent to Borrower the obligations of all
Lenders to make or maintain Loans as LIBOR Loans shall forthwith be
suspended until Agent shall notify Borrower that the circumstances
causing such suspension no longer exist. Agent will give such notice
when it determines, in good faith, that such circumstances no longer
exist; provided, however, that Agent shall not have any liability to
any Person with respect to any delay in giving such notice.
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(c) Fixed Rate Prepayment Fee. Borrower
acknowledges that prepayment or acceleration of a LIBOR Loan during an
Interest Period shall result in Lenders incurring additional costs,
expenses and/or liabilities and that it is extremely difficult and
impractical to ascertain the extent of such costs, expenses and/or
liabilities. (For all purposes of this subparagraph (c), any Loan not
being made as a LIBOR Loan in accordance with the Notice of Borrowing
therefor, as a result of Borrower's cancellation thereof, shall be
treated as if such LIBOR Loan had been prepaid.) Therefore, on the
date a LIBOR Loan is prepaid or the date all sums payable hereunder
become due and payable, by acceleration or otherwise ("Prepayment
Date"), Borrower will pay to Agent, for the account of each Lender,
(in addition to all other sums then owing), an amount ("Fixed Rate
Prepayment Fee") determined by the Agent in the following manner:
(i) First, the Agent shall determine the amount
by which (A) the total amount of interest which would have
otherwise accrued hereunder on the principal so paid or not
borrowed, during the period beginning on the Prepayment Date
and ending on the last day of the Interest Period of the
prepaid LIBOR Loan (the "Reemployment Period"), exceeds (B)
the total amount of interest which would accrue, during the
Reemployment Period, on any readily marketable bond or other
obligation of the United States of America designated by the
Agent in its sole discretion at or about the time of such
payment, such bond or other obligation of the United States of
America to be in an amount equal (as nearly as may be) to the
amount of principal so paid or not borrowed and to have a
maturity comparable to the Reemployment Period, and the
interest to accrue thereon to take account of amortization of
any discount from par or accretion of premium above par at
which the same is selling at the time of designation. Each
sum amount is hereafter referred to as an "Installment
Amount".
(ii) Second, each Installment Amount shall be
treated as payable as of the last day of the Interest Period
of the prepaid LIBOR Loan.
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(iii) Third, the Fixed Rate Prepayment Fee shall be
the present value of the Installment Amount determined by
discounting the amount thereof from the date on which such
Installment Amount is to be treated as payable, at the same
annual interest rate as that payable upon the bond or other
obligation of the United States of America designated as
aforesaid by the Agent.
(d) Upon the written notice to Borrower from
Agent, Borrower shall immediately pay to Agent, for the account of
Lenders, the Fixed Rate Prepayment Fee. Such written notice (which
shall include calculations in reasonable detail) shall, in the absence
of manifest error, be conclusive and binding on the parties hereto.
(e) Borrower understands, agrees and acknowledges
the following: (i) no Lender has any obligation to purchase, sell
and/or match funds in connection with the use of LIBOR as a basis for
calculating the rate of interest on a LIBOR Loan or a Fixed Rate Price
Adjustment; (ii) LIBOR is used merely as a reference in determining
such rate; and (iii) Borrower has accepted LIBOR as a reasonable and
fair basis for calculating such rate and a Fixed Rate Prepayment Fee.
Borrower further agrees to pay the Fixed Rate Prepayment Fee and
Lender Taxes, if any, whether or not a Lender elects to purchase, sell
and/or match funds.
2.4.9 Withholding Tax Exemption. At least five (5)
Business Days prior to the first day on which interest or fees are payable
hereunder for the account of any Lender, each Lender that is not incorporated
under the laws of the United States of America, or a state thereof, agrees that
it will deliver to Agent and Borrower two (2) duly completed copies of United
States Internal Revenue Service Form 1001 or Form 4224, certifying in either
case that such Lender is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income taxes.
Each Lender which so delivers a Form 1001 or Form 4224 further undertakes to
deliver to Agent and Borrower two (2) additional copies of such form (or any
applicable successor form) on or before the date that such form expires
(currently, three (3) successive calendar years for Form 1001 and one (1)
calendar year for Form 4224) or becomes
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obsolete or after the occurrence of any event requiring a change in the most
recent forms so delivered by it, and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by Agent or Borrower, in each
case certifying that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes, unless an event (including without limitation any change in treaty, law
or regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such form with
respect to it and such Lender advises Agent that it is not capable of receiving
payments without any deduction or withholding of United States federal income
taxes. If any Lender cannot deliver such form, then Borrower may withhold from
such payments such amounts as are required by the Internal Revenue Code.
2.5 Fees.
2.5.1 Unused Facility Fee. From and after the Closing Date
and until the Obligations are paid in full and this Agreement is terminated or,
if sooner, the date the Commitments terminate, and subject to Section 11.4.2,
Borrower shall pay to Agent, for the account of each Lender, a fee equal to the
rate set forth below times an amount equal to (i) the average daily amount of
the Facility (as affected by any reductions pursuant to Section 2.6.1(b)) minus
(ii) the average daily principal balance of all Loans (said difference being
the "Unused Amount"), as determined for each Fiscal Quarter. The aforesaid fee
(the "Unused Facility Fee") shall accrue at the applicable rate set forth
below:
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<TABLE>
<CAPTION>
Average Daily Rate Per Annum
Unused Amount During Applicable to
Applicable Quarter Unused Amount
-------------------- -------------
<S> <C>
An amount equal to or
greater than 50% of the average
daily amount of the Facility 0.25%
An amount less than
50% of the average daily amount
of the Facility 0.125%
</TABLE>
The Unused Facility Fee shall be payable, in the manner provided in Section
2.6.2, in arrears on the first Business Day in each Fiscal Quarter, beginning
with the first Fiscal Quarter after the Closing Date, and on the date of
payment in full of all obligations to Lenders pursuant to Section 2.1.4 with
the Unused Facility Fee to be prorated to the date of such payment in such
case.
2.5.2 Agency Fees. Borrower shall pay Agent
such fees as are provided for in the agreement regarding fees between Agent and
Borrower, as in existence from time to time.
2.5.3 Payment of Fees. The fees described in
Section 4.1.11 and this Section 2.5 represent compensation for services
rendered and to be rendered separate and apart from the lending of money or the
provision of credit and do not constitute compensation for the use, detention
or forbearance of money, and the obligation of Borrower to pay the fees
described herein shall be in addition to, and not in lieu of, the obligation of
Borrower to pay interest, other fees and expenses otherwise described in this
Agreement. All fees shall be payable when due in immediately available funds
and shall be non-refundable when paid. If Borrower fails to make any payment
of fees or expenses specified or referred to in this Agreement due to Agent or
Lenders, including without limitation those referred to in this Section 2.5, in
Section 12.1, or otherwise under this Agreement or any separate fee agreement
between Borrower and Agent or any Lender relating to this Agreement, when due,
the amount due shall bear interest until paid at the Base Rate and, after ten
(10) days at the rate specified in Section 2.4.4 (but not to exceed the maximum
rate permitted by applicable law), and shall constitute part of the
Obligations. The Unused Facility Fee and
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the fees referred to in Section 2.5.2 which are expressed as a per annum charge
shall be calculated on the basis of the actual number of days elapsed in a
three hundred sixty (360) day year.
2.6 Payments.
2.6.1 Voluntary Prepayments; Reduction in
Facility.
(a) Borrower may, upon not less
than three (3) Business Days prior written notice to Agent not later
than 12:00 Noon (Eastern time) on the date given, at any time and from
time to time, prepay any Loans in whole or in part. Any such notice
shall specify the date of prepayment and the principal amount of the
prepayment. In the event of a prepayment of LIBOR Loans, other than in
connection with the prepayment of all accrued Obligations and
termination of all Commitments pursuant to a notice delivered under
this Section 2.6.1(a) within fifteen (15) days after a demand by Agent
or any Lender for payment or reimbursement pursuant to Section 2.7,
Borrower shall concurrently pay any Fixed Rate Prepayment Fee payable
in respect thereof. Agent shall provide to each Lender a confirming
copy of such notice on the same Business Day such notice is received.
(b) Reduction in Facility.
Borrower shall have the right, at any time and from time to time, to
reduce the Facility by up to $50,000,000 in the aggregate, in
increments of $10,000,000 or integral multiples of $10,000,000. No
reduction in the Facility may be reinstated. Each such reduction
shall become effective on the date both of the following conditions
have been satisfied:
(i) Borrower shall have given
written notice to Agent irrevocably and unconditionally
reducing the Facility in an amount equal to $10,000,000 or
an integral multiple of $10,000,000 not in excess of
$50,000,000; and
(ii) if the aggregate principal
balance of all Loans then outstanding exceeds the Facility
as
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so reduced, Borrower shall have made a voluntary prepayment
of principal under the Loans in an amount sufficient to
reduce the aggregate outstanding balance thereof to such
reduced amount of the Facility or less, together with
accrued and unpaid interest on the amount of such
prepayment and any applicable Fixed Rate Prepayment Fee.
Such prepayment shall be made in accordance with the
provisions of Section 2.6.1(a).
No such reduction of the Facility shall relieve Borrower of any
obligation in respect of any fees paid or accrued prior to the date of
such reduction. Upon the effectiveness of each such reduction, all
references to the "Facility" shall be understood to mean and refer to
a loan facility of an amount equal to $150,000,000 less the aggregate
amount of the reductions in the Facility that have been so effected
(including by reason of prior reductions, if any), and all references
to the "Commitment" of each Lender shall be understood to mean and
refer to such Lender's Pro Rata Share of the Facility, as so reduced.
2.6.2 Manner and Time of Payment. All payments
of principal, interest and fees hereunder payable to Agent or the Lenders shall
be made without condition or reservation of right and free of set-off or
counterclaim, in Dollars and by wire transfer (pursuant to Agent's written wire
transfer instructions) of immediately available funds, to Agent, for the
account of each Lender, not later than 12:00 Noon (Eastern time) on the date
due; and funds received by Agent after that time and date shall be deemed to
have been paid on the next succeeding Business Day.
2.6.3 Payments on Non-Business Days. Whenever
any payment to be made by Borrower hereunder shall be stated to be due on a day
which is not a Business Day, payments shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest hereunder and of any of the fees specified in Section
2.5, as the case may be.
2.7 Increased Capital. If either (i) the introduction of or
any change in or in the interpretation of any law or regulation or (ii)
compliance by Agent or any Lender with any guideline or request from any
central bank or other Governmental
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<PAGE> 55
Authority (whether or not having the force of law and whether or not the
failure to comply therewith would be unlawful) made or issued after the Closing
Date affects or would affect the amount of capital required or expected to be
maintained by Agent or such Lender or any corporation controlling Agent or such
Lender, and Agent or such Lender determines that the amount of such capital is
increased by or based upon the existence of Agent's obligations hereunder or
such Lender's Commitment, then, upon demand by Agent or such Lender, Borrower
shall immediately pay to Agent or such Lender, from time to time as specified
by Agent or such Lender, additional amounts sufficient to compensate Agent or
such Lender in the light of such circumstances, to the extent that Agent or
such Lender determines such increase in capital to be allocable to the
existence of Agent's obligations hereunder or such Lender's Commitment. A
certificate as to such amounts submitted to Borrower by Agent or such Lender
shall, in the absence of manifest error, be conclusive and binding for all
purposes.
2.8 Notice of Increased Costs. Each Lender agrees that, as
promptly as reasonably practicable after it becomes aware of the occurrence of
an event or the existence of a condition which would cause it to be affected by
any of the events or conditions described in Section 2.4.7 or 2.4.8 or Section
2.7, it will notify Borrower, and provide a copy of such notice to Agent, of
such event and the possible effects thereof, provided that the failure to
provide such notice shall not affect Lender's rights to reimbursement provided
for herein.
ARTICLE III
BORROWING BASE PROPERTIES
3.1 Designation of Borrowing Base Properties. On or before the
Closing Date with respect to the properties listed on Schedule 1 as Borrowing
Base Properties and at such future times as Borrower desires that an additional
property become a Borrowing Base Property, Borrower shall deliver to Agent a
Borrowing Base Property Designation Certificate in the form of Exhibit B
hereto. Each Borrowing Base Property Designation Certificate relating to
additional properties not listed on Schedule 1 shall be accompanied by the
following:
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3.1.1 A current operating statement for such
property audited or certified by Borrower as being true and correct in all
material respects and prepared in accordance with GAAP and comparative
operating statements for the current period and for the previous two (2) Fiscal
Years; provided, however, that, if Borrower shall have owned such property for
less than the period to be covered by such operating statements, then the audit
and certification requirements shall extend only to the period of ownership by
Borrower, and Borrower shall provide any available operating statements
prepared by the former owner(s) for the remainder of the period required
hereunder;
3.1.2 A current rent roll for such property in
form satisfactory to Agent, and certified by Borrower to be true and correct;
3.1.3 The most recent "Phase I" environmental
assessment (or summary thereof satisfactory to the Agent) of such property
which shall be dated not more than one year prior to the date of the Borrowing
Base Property Designation Certificate, and any additional environmental studies
or assessments in Borrower's possession or control that have been performed
with respect to such property;
3.1.4 A copy of the most recent owner's title
insurance policy or commitment relating to such Property.
3.1.5 Copies of any engineering, mechanical,
structural or maintenance studies performed with respect to such Property.
3.1.6 If the property is to be owned by a
Partnership or Subsidiary that has not previously qualified as a Guarantor
hereunder, copies of the Partnership Agreement of such Partnership and of such
other information regarding such Partnership or Subsidiary as may be reasonably
requested by Agent or any Lender; and
3.1.7 Such other documents and information as
may be reasonably requested by Agent relating to the potential Borrowing Base
Property.
If, following review of such Certificate, documents and information, Agent is
satisfied that (i) the proposed additional
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Property is an Eligible Property and (ii) such Property becoming a Borrowing
Base Property will not cause the Borrowing Base Properties to fail to satisfy
the Aggregate Borrowing Base Requirements and (iii) such Property becoming a
Borrowing Base Property will not have the effect of increasing the percentage
of Adjusted Base Rents from the Borrowing Base Properties paid pursuant to
Leases to K-Mart Corporation or its Subsidiaries, Agent will promptly so notify
Borrower, and upon execution and delivery of such items or documents as may be
appropriate under the circumstances, such property shall become a Borrowing
Base Property. If the proposed property fails to satisfy conditions (i), (ii)
or (iii) above in one or more respects, such property may become a Borrowing
Base Property upon acceptance by the Requisite Lenders. Agent shall distribute
to each Lender a copy of each Borrowing Base Property Designation Certificate
and shall provide a copy of the current operating statement, current rent roll
and summary of the environmental assessment to each Lender which shall request
the same. If any Lender shall request copies of any of the other documents or
information submitted to the Agent or any additional documents or information
as it may reasonably request relating to the potential Borrowing Base Property,
Borrower shall provide the requested documents or information to such Lender or
shall provide such Lender with access thereto at Borrower's offices.
3.2 Termination of Designation as a Borrowing Base Property.
From time to time Borrower may request, upon not less than thirty (30) days'
prior written notice to Agent (which shall promptly send a copy thereof to each
other Lender), that a Borrowing Base Property cease to be designated as such,
which termination of designation ("Termination of Designation") shall be
consented to by Agent if all of the following conditions are satisfied as of
the date of such Termination of Designation:
3.2.1 No Unmatured Event of Default or Event of
Default has occurred and is continuing; and
3.2.2 Borrower shall have delivered to Agent a
Compliance Certificate demonstrating on a pro forma basis, and Agent shall have
determined, that the outstanding principal balance of the Loans will not exceed
the Maximum Loan Amount and that the Borrowing Base Properties shall continue
to satisfy the Aggregate Borrowing Base Requirements after giving effect to
such Termination of Designation and any prepayment to be made and/or
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the acceptance of any property as an additional or replacement Borrowing Base
Property to be given concurrently with such Termination of Designation.
3.3 Rejection of Borrowing Base Properties. If at any time
Agent determines that any Borrowing Base Property is not an Eligible Property
it may reject a Borrowing Base Property by notice to the Borrower which
rejection notice shall have the same effect as a Termination of Designation
consented to by Agent.
ARTICLE IV
CONDITIONS TO LOANS
4.1 Conditions to Initial Disbursement of Loans. The
obligation of Lenders to make the initial disbursement of the Loans shall be
subject to satisfaction of each of the following conditions precedent on or
before the Closing Date:
4.1.1 Borrower and Guarantor Documents.
Borrower and/or each Guarantor shall have executed and/or delivered to Agent
each of the following, in form and substance acceptable to Agent and each other
Lender:
(a) this Agreement;
(b) the Loan Notes;
(c) a Guaranty from each
Guarantor;
(d) Borrowing Base Property
Designation Certificates for
each of the properties listed
on Schedule 1;
(e) Evidence of qualification and
good standing of Borrower and
each Guarantor in its state of
organization;
(f) Secretary's Certificate with
respect to authorization,
incumbency and organizational
documents of Borrower, each
Guarantor which is a
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corporation and each corporate
general partner of each
Guarantor Partnership.
(g) General Partner's Certificate
with respect to authorization
and partnership agreement of
each Guarantor Partnership.
4.1.2 Borrowing Base Property Documents. Agent
shall have received all required information with respect to each Borrowing
Base Property in form acceptable to Agent.
4.1.3 Compliance Certificate. Borrower shall
have delivered to Agent a Compliance Certificate evidencing a sufficient
Maximum Loan Amount to allow the Loans being requested and compliance with the
financial covenants in Article IX.
4.1.4 Notice of Borrowing. Borrower shall have
delivered to Agent a Notice of Borrowing, and, if applicable, Agent shall have
delivered to Borrower a Fixed Rate Notice, in each case in compliance with
Section 2.1.2.
4.1.5 Performance. Borrower and each Guarantor
shall have performed in all material respects all agreements and covenants
required by Agent to be performed by them on or before the Closing Date.
4.1.6 Solvency. Each of Borrower and each
Guarantor shall be Solvent.
4.1.7 Material Adverse Changes. No change, as
determined by Agent and Lenders, shall have occurred, during the period
commencing September 30, 1995, and ending on the Closing Date, which has a
Material Adverse Effect on Borrower or any Guarantor or the operating
performance of any Borrowing Base Property.
4.1.8 Litigation Proceedings. There shall not
have been instituted or threatened, during the period commencing September 30,
1995, and ending on the Closing Date, any litigation or proceeding in any court
or Governmental Authority affecting or threatening to affect Borrower or any
Guarantor
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which has a Material Adverse Effect, as reasonably determined by Agent.
4.1.9 Lien Discharges. Borrower shall have
delivered to Agent satisfactory evidence that all Liens other than Permitted
Liens (including, without limitation, the Liens securing the REMIC and the
Existing Revolver) shall be discharged upon the initial disbursement of the
Loans hereunder.
4.1.10 No Event of Default; Satisfaction of
Financial Covenants. On the Closing Date and after giving effect to the
initial disbursements of the Loans, no Event of Default or Unmatured Event of
Default shall exist and all of the financial covenants contained in Article IX
shall be satisfied.
4.1.11 Fees. Agent shall have received (i)
certain fees in the amount separately agreed to between Agent and Borrower, and
(ii) certain facility fees due to the Lenders in the amounts separately agreed
to by the Lenders and all expenses of Agent incurred prior to such Closing Date
in connection with this Agreement (including without limitation all attorneys'
fees and costs) shall have been paid by Borrower.
4.1.12 Obligations Under Existing Facilities.
Agent shall have received an amount (which may include proceeds of the initial
Loan hereunder) equal to all unpaid obligations of Borrower under the Existing
Revolver, together with instructions to apply such sum to the payment of such
obligations in full and satisfactory evidence that the initial disbursement of
the Loans hereunder shall result in the payment to the Trustee for the REMIC of
an amount equal to all unpaid obligations of EMFC under the REMIC and that all
documents required to terminate the REMIC have been appropriately executed and
delivered.
4.1.13 Opinion of Counsel. Agent shall have
received, on behalf of Agent and Lenders, favorable opinions of counsel for
Borrower and each Guarantor dated as of the Closing Date, in form and substance
satisfactory to Agent, Lenders and their respective counsel.
4.1.14 Consents and Approvals. All material
licenses, permits, consents, regulatory approvals and corporate action
necessary to enter into the financing transactions
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contemplated by this Agreement shall have been obtained by Borrower and each
Guarantor.
4.1.15 Due Diligence. Lenders shall have
completed such due diligence investigations as they deem necessary, and such
review and investigations shall provide Lenders with results and information
which, in each Lender's determination, are satisfactory to permit such Lender
to enter into this Agreement and fund the Loans.
4.1.16 Representations and Warranties. All
representations and warranties contained in this Agreement and the other Loan
Documents shall be true and correct in all material respects.
4.2 Conditions Precedent to All Loans. The obligation of each
Lender to make any Loan requested to be made by it, on any date, is subject to
satisfaction of the following conditions precedent as of such date:
4.2.1 Documents. With respect to a request for
a Loan, Agent shall have received, on or before the Funding Date and in
accordance with the provisions of Section 2.1.2, an original and duly executed
Notice of Borrowing.
4.2.2 Additional Matters. As of the Funding
Date for any Loan and after giving effect to the Loans being requested:
(a) Representations and
Warranties. All of the representations and warranties contained in
this Agreement and in any other Loan Document (other than
representations and warranties which expressly speak only as of a
different date and other than for changes permitted or contemplated by
this Agreement) shall be true and correct in all material respects on
and as of such Funding Date, as though made on and as of such date;
(b) No Default. No Event of
Default or Unmatured Event of Default shall have occurred and be
continuing or would result from the making of the requested Loan, and
all of the financial covenants contained in Article IX shall be
satisfied; and
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(c) No Material Adverse Change.
Since the Closing Date, no change shall have occurred which shall have
a Material Adverse Effect on Borrower or any Guarantor, as determined
by Agent, other than any such change the occurrence of which has been
waived by Requisite Lenders in connection with any prior Borrowing.
Each submission by Borrower to Agent of a Notice of Borrowing with respect to a
Loan and the acceptance by Borrower of the proceeds of each such Loan made
hereunder shall constitute a representation and warranty by Borrower as of the
Funding Date in respect of such Loan that all the conditions contained in this
Section 4.2.2 have been satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties. In order to induce Lenders
to make the Loans, Borrower hereby represents and warrants to Lenders as
follows:
5.1.1 Organization; Corporate and Partnership
Powers. Each of Borrower and each Guarantor (i) is a corporation or
Partnership duly organized, validly existing and in good standing under the
laws of the jurisdiction of its formation, (ii) except as set forth on Schedule
5.1.1 is duly qualified to do business as a foreign corporation or Partnership
and in good standing under the laws of each jurisdiction in which it owns or
leases real property or in which the nature of its business requires it to be
so qualified, and (iii) has all requisite power and authority to own and
operate its property and assets and to conduct its business as presently
conducted and as proposed to be conducted in connection with and following the
consummation of the Loans contemplated by the Loan Documents. All of the
capital stock of Borrower has been issued in compliance with all applicable
Requirements of Law.
5.1.2 Authority. Each of Borrower and each
Guarantor has the requisite power and authority to execute, deliver and perform
each of the Loan Documents to which it is or will be a party. The execution,
delivery and performance thereof, and the consummation of the transactions
contemplated
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thereby, have been duly approved by the applicable Board of Directors or
partners, and no other proceedings or authorizations on the part of Borrower or
any Guarantor are necessary to consummate such transactions. Each of the Loan
Documents to which Borrower or any Guarantor is a party has been duly executed
and delivered and constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms, subject to bankruptcy, insolvency and
other laws affecting creditors' rights generally.
5.1.3 Ownership of Subsidiaries and
Partnerships. Schedule 5.1.3 sets forth the stockholders, general partners and
limited partners (or other holders of ownership interests) of each Subsidiary
or Partnership in which Borrower holds any direct or indirect interest and
their respective ownership percentages and there are no other partnership (or
other ownership) interests outstanding. Except as set forth or referred to in
the Partnership Agreement of each Partnership, no partnership (or other
ownership) interest (or any securities, instruments, warrants, option or
purchase rights, conversion or exchange rights, calls, commitments or claims of
any character convertible into or exercisable for such interests) of any such
Person is subject to issuance under any security, instrument, warrant, option
or purchase rights, conversion or exchange rights, call, commitment or claim of
any right, title or interest therein or thereto. All of the stock or
partnership (or other ownership) interests in each Subsidiary and Partnership
have been issued in compliance with all applicable Requirements of Law.
5.1.4 No Conflict. The execution, delivery and
performance by Borrower and each Guarantor of the Loan Documents to which it is
or will be a party, and each of the transactions contemplated thereby, do not
and will not (i) conflict with or violate its articles of incorporation,
by-laws, Partnership Agreement or other organizational documents, as the case
may be, or (ii) conflict with, result in a breach of or constitute (with or
without notice or lapse of time or both) a default under any Requirement of
Law, Contractual Obligation or Court Order of or binding upon Borrower or any
Guarantor, or (iii) require termination of any Contractual Obligation, or (iv)
result in or require the creation or imposition of any Lien whatsoever upon any
of the properties or assets of Borrower or any Guarantor, other than Permitted
Liens, or (v) require any approval of the
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stockholders of Borrower or any holders of any ownership interest in any
Guarantor.
5.1.5 Consents and Authorizations. Borrower and
each Guarantor has obtained all consents and authorizations required pursuant
to its Contractual Obligations with any other Person, and shall have obtained
all consents and authorizations of, and effected all notices to and filings
with, any Governmental Authority, as may be necessary to allow Borrower to
lawfully execute, deliver and perform its obligations under the Loan Documents
to which it is a party.
5.1.6 Governmental Regulation. Neither Borrower
nor any Guarantor is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, the
Investment Company Act of 1940 or any other federal or state statute or
regulation such that its ability to incur indebtedness is limited or its
ability to consummate the transactions contemplated by the Loan Documents is
materially impaired.
5.1.7 Prior Financials. The December 31, 1994
Consolidated Balance Sheet, Statement of Operations and Statement of Cash Flows
of Borrower contained in Borrower's Form 10K (the "December 31, 1994
Financials") delivered to Agent prior to the date hereof were prepared in
accordance with GAAP and fairly present the assets, liabilities and financial
condition of Borrower on a consolidated basis, at such date and the results of
its operations and its cash flows, on a consolidated basis, for the period then
ended.
5.1.8 Financial Statements, Projections and
Forecasts. Each of the Financial Statements to be delivered to Agent pursuant
to Sections 6.1.2 and 6.1.3 (i) has been, or will be, as applicable, prepared
in accordance with the books and records of Borrower on a consolidated basis,
and (ii) either fairly present, or will fairly present, as applicable, the
financial condition of Borrower on a consolidated basis, at the dates thereof
(and, if applicable, subject to normal year-end adjustments) and the results of
its operations and cash flows, on a consolidated basis, for the period then
ended. Each of the projections and forecasts delivered to Agent prior to the
date hereof and the financial projections and forecasts to be delivered to
Agent pursuant to Section 6.1.5 (1) has been, or
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will be, as applicable, prepared by Borrower in light of the past business and
performance of Borrower on a consolidated basis and (2) represent, or will
represent, as of the date thereof, the reasonable good faith estimates of
Borrower's financial personnel.
5.1.9 Prior Operating Statements. Each of the
operating statements pertaining to each of the Borrowing Base Properties
delivered to Agent prior to the date hereof was prepared in accordance with
GAAP in effect on the date such operating statement of each Borrowing Base
Property was prepared and fairly presents the results of operations of such
Borrowing Base Property for the period then ended.
5.1.10 Quarterly Operating Reports and
Projections. Each of the Quarterly Operating Reports to be delivered to Agent
pursuant to Section 6.1.1 (i) has been or will be, as applicable, prepared in
accordance with the books and records of the applicable Borrowing Base
Property, and (ii) fairly presents or will fairly present, as applicable, the
results of operations of such Borrowing Base Property for the period then
ended. Each of the projections, financial plans and budgets delivered to Agent
prior to the date hereof and the projections to be delivered to Agent pursuant
to Section 6.1.5 (1) has been, or will be, as applicable, prepared for each
Borrowing Base Property in light of the past business and performance of such
Borrowing Base Property and (2) represents or will represent, as of the date
thereof, the reasonable good faith estimates of Borrower's financial personnel.
5.1.11 Litigation; Adverse Effects.
(a) There is no action, suit,
proceeding, governmental investigation or arbitration, at law or in
equity, or before or by any Governmental Authority, pending or, to the
best of Borrower's knowledge, threatened against Borrower, any
Affiliate of Borrower or any Portfolio Property (including any
Borrowing Base Property), which (i) result in a Material Adverse
Effect on Borrower, (ii) materially and adversely affect the ability
of any party to any of the Loan Documents to perform its obligations
thereunder, or (iii) materially and adversely affect the ability of
Borrower to perform its obligations contemplated in the Loan
Documents.
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(b) Neither Borrower nor any
Guarantor is (i) in violation of any applicable law, which violation
has a Material Adverse Effect on Borrower or on any Guarantor, or (ii)
subject to or in default with respect to any Court Order. There are
no material Proceedings pending or, to the best of Borrower's
knowledge, threatened against Borrower, any Guarantor or any Portfolio
Property, which, if adversely decided, would have a Material Adverse
Effect on Borrower.
5.1.12 No Material Adverse Change. Since
September 30, 1995, there has occurred no event which has a Material Adverse
Effect on Borrower, and no material adverse change in Borrower's or any
Guarantor's ability to perform its obligations under the Loan Documents to
which it is a party or the transactions contemplated thereby.
5.1.13 Payment of Taxes. All tax returns and
reports to be filed by Borrower and each Guarantor have been timely filed, and
all taxes, assessments, fees and other governmental charges shown on such
returns or otherwise payable by Borrower have been paid when due and payable
(other than real property taxes, which may be paid prior to delinquency so long
as no penalty or interest shall attach thereto), except such taxes, if any, as
are reserved against in accordance with GAAP and are being contested in good
faith by appropriate proceedings or such taxes, the failure to make payment of
which when due and payable will not have, in the aggregate, a Material Adverse
Effect on Borrower or any Guarantor. Borrower has no knowledge of any proposed
tax assessment against Borrower that will have a Material Adverse Effect on
Borrower or any Guarantor.
5.1.14 Material Adverse Agreements. Neither
Borrower nor any Guarantor is a party to or subject to any Contractual
Obligation or other restriction contained in its Charter, by-laws, Partnership
Agreement or similar governing documents which has a Material Adverse Effect on
Borrower or such Guarantor or the ability of the Borrower or such Guarantor to
perform its obligations under the Loan Documents to which it is a party.
5.1.15 Performance. Neither Borrower nor any
Guarantor is in default in the performance, observance or fulfillment of any of
the obligations, covenants or conditions
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contained in any Contractual Obligation applicable to it, and no condition
exists which, with the giving of notice or the lapse of time or both, would
constitute a default under such Contractual Obligation in each case, except
where the consequences, direct or indirect, of such default or defaults, if
any, will not have a Material Adverse Effect on Borrower or such Guarantor.
5.1.16 Federal Reserve Regulations. No part of
the proceeds of the Loan hereunder will be used to purchase or carry any
"margin security" as defined in Regulation G or for the purpose of reducing or
retiring any indebtedness which was originally incurred to purchase or carry
any margin security or for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of said Regulation G.
Neither Borrower nor any Guarantor is engaged primarily in the business of
extending credit for the purpose of purchasing or carrying out any "margin
stock" as defined in Regulation U. No part of the proceeds of the Loan
hereunder will be used for any purpose that violates, or which is inconsistent
with, the provisions of Regulation X or any other regulation of the Federal
Reserve Board.
5.1.17 Disclosure. The representations and
warranties of Borrower and the Guarantors contained in the Loan Documents and
all certificates, financial statements and other documents delivered to Agent
in connection therewith, do not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
contained herein or therein, in light of the circumstances under which they
were made, not misleading. Borrower has given to Agent true, correct and
complete copies of all organizational documents, Financial Statements and all
other documents and instruments referred to in the Loan Documents as having
been delivered to Agent. Borrower has not intentionally withheld any material
fact from Agent in regard to any matter raised in the Loan Documents.
Notwithstanding the foregoing, with respect to projections of Borrower's future
performance such representations and warranties are made in good faith and to
the best judgment of Borrower.
5.1.18 Requirements of Law. Borrower and each
Guarantor are in compliance with all Requirements of Law (including without
limitation the Securities Act and the Securities Exchange Act, and the
applicable rules and regulations
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thereunder, state securities law and "Blue Sky" laws) applicable to it and its
respective businesses, in each case, where the failure to so comply will have a
Material Adverse Effect on any such Person. Borrower has made all filings with
and obtained all consents of the Commission required under the Securities Act
and the Securities Exchange Act in connection with the execution, delivery and
performance by Borrower of the Loan Documents.
5.1.19 ERISA. Except as set forth on Schedule
5.1.19, neither Borrower nor any ERISA Affiliate thereof (including, for all
purposes under this Section 5.1.19, each Guarantor) has in the past five (5)
years maintained or contributed to or currently maintains or contributes to any
Benefit Plan. No Investment Partnership has or is likely to incur any
liability with respect to any Benefit Plan maintained or contributed to by such
Investment Partnership or its ERISA Affiliates, which would have a Material
Adverse Effect on Borrower. Neither Borrower nor any ERISA Affiliate thereof
has during the past five (5) years maintained or contributed to or currently
maintains or contributes to any employee welfare benefit plan within the
meaning of Section 3(1) of ERISA which provides benefits to retirees. Neither
Borrower nor any ERISA Affiliate thereof is now contributing nor has it ever
contributed to or been obligated to contribute to any Multiemployer Plan, no
employees or former employees of Borrower, or such ERISA Affiliate have been
covered by any Multiemployer Plan in respect of their employment by Borrower,
and no ERISA Affiliate of Borrower has or is likely to incur any withdrawal
liability with respect to any Multiemployer Plan which would have a Material
Adverse Effect on Borrower.
5.1.20 Status as a REIT. Borrower (i) is a real
estate investment trust as defined in Section 856 of the Internal Revenue Code
(or any successor provision thereto), (ii) has not revoked its election to be a
real estate investment trust, (iii) has not engaged in any "prohibited
transactions" as defined in Section 856(b)(6)(iii) of the Internal Revenue Code
(or any successor provision thereto), and (iv) for its current "tax year" (as
defined in the Internal Revenue Code) is and for all prior tax years subsequent
to its election to be a real estate investment trust has been entitled to a
dividends paid deduction which meets the requirements of Section 857 of the
Internal Revenue Code.
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5.1.21 NYSE Listing. The common stock of
Borrower is and will continue to be listed for trading and traded on either the
New York Stock Exchange or the American Stock Exchange.
5.1.22 Patents, Trademarks, Permits, Etc.
Borrower and each Guarantor own, are licensed or otherwise have the lawful
right to use, or have all permits and other governmental approvals, patents,
trademarks, trade names, copyrights, technology, know-how and processes used in
or necessary for the conduct of each such Person's business as currently
conducted, the absence of which would have a Material Adverse Effect upon such
Person. The use of such permits and other governmental approvals, patents,
trademarks, trade names, copyrights, technology, know-how and processes by each
such Person does not infringe on the rights of any Person, subject to such
claims and infringements as do not, in the aggregate, give rise to any
liability on the part of any such Person which would have a Material Adverse
Effect on any such Person.
5.1.23 Environmental Matters. Except as set
forth on Schedule 5.1.23, to the best of Borrower's knowledge, (i) the
operations of Borrower and each Guarantor comply in all material respects with
all applicable local, state and federal environmental, health and safety
Requirements of Law ("Environmental Laws"); (ii) none of Borrower's or
Guarantor's present Property or operations are subject to any Remedial Action
or other Liabilities and Costs arising from the Release or threatened Release
of a Contaminant into the environment in violation of any Environmental Laws,
which Remedial Action or other Liabilities and Costs would have a Material
Adverse Effect on any such Person; (iii) neither Borrower nor any Guarantor has
filed any notice under applicable Environmental Laws reporting a Release of a
Contaminant into the environment in violation of any Environmental Laws, except
as the same may have been heretofore remedied; (iv) there is not now on or in
any Portfolio Property (except in compliance in all material respects with all
applicable Environmental Laws): (A) any underground storage tanks, (B) any
asbestos-containing material, or (C) any polychlorinated biphenyls (PCB's) used
in hydraulic oils, electrical transformers or other equipment owned by such
Person; and (v) neither Borrower nor any Guarantor has received any notice or
claim to the effect that it is or may be liable to any
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Person as a result of the Release or threatened Release of a Contaminant into
the environment.
5.1.24 Borrowing Base Properties. Each of the
Properties listed on Schedule 1 qualifies as an Eligible Property. The
Borrowing Base Properties collectively satisfy the Aggregate Borrowing Base
Requirements.
5.1.25 Leases. Except as reflected on the most
current rent rolls delivered to Agent, all Leases are in full force and effect
and no default or event of default (or event or occurrence which upon with the
passage of time or the giving of notice, or both, will constitute a default or
event of default) exists or will exist thereunder as a result of the
consummation of the transactions contemplated by the Loan Documents.
5.1.26 Solvency. Borrower and each Guarantor is
and will be Solvent after giving effect to the disbursements of the Loans and
the payment and accrual of all fees then payable.
5.1.27 Title to Assets; No Liens. Borrower and
each of its Subsidiaries has good, indefeasible and merchantable title to all
Properties owned or leased by it, including, without limitation, any Borrowing
Base Properties, and each of the Borrowing Base Properties is free and clear of
all Liens, except Permitted Liens.
5.1.28 Use of Proceeds. Borrower's use of the
proceeds of the Loans are, and will continue to be, legal and proper uses (and
to the extent necessary, duly authorized by Borrower's partners) and such uses
are consistent with all applicable laws and statutes and Section 7.9.
ARTICLE VI
REPORTING COVENANTS
Borrower covenants and agrees that, on and after the date hereof,
until payment in full of all of the Obligations, the expiration of the
Commitments and termination of this Agreement:
6.1 Financial Statements and Other Financial and Operating
Information. Borrower shall maintain or cause to be
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maintained a system of accounting established and administered in accordance
with sound business practices and consistent with past practice to permit
preparation of quarterly and annual financial statements in conformity with
GAAP, and each of the financial statements described below shall be prepared on
a consolidated basis for Borrower from such system and records. Borrower shall
deliver or cause to be delivered to Agent (with copies sufficient for each
Lender):
6.1.1 Quarterly Operating Reports. As soon as
practicable, and in any event within forty-five (45) days after the end of each
Fiscal Quarter, operating statements in the form of Exhibit C or other form
approved by Agent for each Borrowing Base Property dated as of the last day of
such Fiscal Quarter (the "Quarterly Operating Reports"), in form and substance
satisfactory to Agent, certified by Borrower's chief financial officer.
6.1.2 Quarterly Financial Statements Certified
by CFO. As soon as practicable, and in any event within forty-five (45) days
after the end of each Fiscal Quarter, consolidated balance sheets, statements
of operations and statements of cash flow for Borrower ("Financial
Statements"), which may, in the case of the first three Fiscal Quarters, be in
the form provided to the Commission on Borrower's Form 10Q, and certified by
Borrower's chief financial officer.
6.1.3 Annual Financial Statements. Within
ninety (90) days after the close of each Fiscal Year, annual Financial
Statements of Borrower, on a consolidated basis (in the form provided to the
Commission on Borrower's Form 10K), audited and certified without qualification
by the Accountants and accompanied by (i) a statement that, in the course of
their audit (conducted in accordance with generally accepted auditing
standards), the Accountants obtained no knowledge that an Event of Default or
Unmatured Event of Default occurred, and (ii) a copy of a letter from the
Accountants to Borrower acknowledging that (A) Borrower intends to deliver such
Financial Statements and auditor's report to Lenders, (B) Lenders intend to
rely thereon, and (C) Borrower intends for Lenders to so rely, in substantially
the form delivered prior to the Closing Date. To the extent Agent desires
additional details or supporting information with respect to Majority
Partnerships, Investment Partnerships or individual Properties owned or leased
by
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Borrower, any Subsidiary of Borrower or any Investment Partnership not
contained in Borrower's Form 10K, Borrower shall promptly provide Agent with
such details or supporting information as Agent requests which is reasonably
available to Borrower. Without limiting the foregoing, within ninety (90) days
after the end of each Fiscal Year, Borrower shall provide to Agent operating
statements and a schedule setting forth the percentage of leasable area leased
to tenants in occupancy, with footnotes indicating which leases are in default
in rent payments by more than sixty (60) days (other than technical,
nonmaterial disputes concerning percentage rentals due or annual common area or
property tax billings) any other material provisions in respect of which the
landlord has issued a notice of default, for each Property owned or leased by
Borrower, any Subsidiary of Borrower or any Investment Partnership which is not
a Borrowing Base Property.
6.1.4 Officer's Certificate of Borrower. (i)
Together with each delivery of any Financial Statement pursuant to Sections
6.1.2 and 6.1.3, (A) an Officer's Certificate of Borrower, stating that the
executive officer who is the signatory thereto (which officer shall be the
chief executive officer, the chief operating officer or the chief financial
officer of Borrower) has reviewed, or caused under his supervision to be
reviewed, the terms of this Agreement and the other principal Loan Documents,
and has made, or caused to be made under his supervision, a review in
reasonable detail of the transactions and condition of Borrower and each
Guarantor, during the accounting period covered by such Financial Statements,
and that such review has not disclosed the existence during or at the end of
such accounting period, and that the signers do not have knowledge of the
existence as of the date of the Officer's Certificate, of any condition or
event which constitutes an Event of Default or Unmatured Event of Default, or,
if any such condition or event existed or exists, specifying the nature and
period of existence thereof and what action has been taken, is being taken and
is proposed to be taken with respect thereto; and (B) a Compliance Certificate
demonstrating in reasonable detail (which detail shall include actual
calculation and supporting information) compliance during and at the end of
such accounting periods with the financial covenants contained in Article IX.
6.1.5 Cash Flow Projections. Within thirty (30)
days after the end of each Fiscal Year, projections of Borrower,
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on a consolidated basis, detailing expected sources and uses of cash for the
next Fiscal Year. Borrower shall also provide such additional supporting
details as Agent may reasonably request.
6.1.6 Borrowing Base Compliance. Promptly upon
Borrower obtaining knowledge of any condition or event which (i) causes the
information set forth in any Borrowing Base Property Designation Certificate to
be outdated or inaccurate, (ii) may cause any Borrowing Base Property to no
longer be an Eligible Property, or (iii) causes the Borrowing Base Properties
to no longer conform with the Aggregate Borrowing Base Requirements, an
Officer's Certificate specifying the nature and period of existence of any such
condition or event and specifying what action the Borrower proposes to take
with respect thereto including designating an additional property to become a
Borrowing Base Property or a Termination of Designation with respect to the
non-complying property.
6.1.7 Knowledge of Event of Default. Promptly
upon Borrower obtaining knowledge (i) of any condition or event which
constitutes an Event of Default or Unmatured Event of Default, or becoming
aware that any Lender has given notice or taken any other action with respect
to a claimed Event of Default or Unmatured Event of Default or (ii) of any
condition or event which has a Material Adverse Effect on Borrower or any
Guarantor, an Officer's Certificate specifying the nature and period of
existence of any such condition or event, or specifying the notice given or
action taken by such Lender and the nature of such claimed Event of Default,
Unmatured Event of Default, event or condition, and what action Borrower or the
Guarantor has taken, is taking and proposes to take with respect thereto.
6.1.8 Litigation, Arbitration or Government
Investigation. Promptly upon Borrower or any Guarantor obtaining knowledge of
(i) the institution of, or threat of, any material action, suit, proceeding,
governmental investigation or arbitration against or affecting Borrower or any
Guarantor not previously disclosed in writing by Borrower to Agent pursuant to
this Section 6.1.8, including any eminent domain or other condemnation
proceedings affecting any Borrowing Base Property, or (ii) any material
development in any action, suit, proceeding, governmental investigation or
arbitration already disclosed, which, in either case, has a Material Adverse
Effect on Borrower or any Guarantor, a notice thereof to Agent and such other
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information as may be reasonably available to it to enable Agent, Lenders and
their counsel to evaluate such matters.
6.1.9 ERISA Termination Event. As soon as
possible, and in any event within thirty (30) days after Borrower knows or has
reason to know that a Termination Event has occurred, a written statement of
the chief financial officer of Borrower describing such Termination Event and
the action, if any, which Borrower or any ERISA Affiliate of any of them has
taken, is taking or proposes to take, with respect thereto, and, when known,
any action taken or threatened by the IRS, the DOL or the PBGC with respect
thereto.
6.1.10 Prohibited ERISA Transaction. As soon as
possible, and in any event within thirty (30) days, after Borrower, any
Guarantor or any ERISA Affiliate of any of them knows or has reason to know
that a prohibited transaction (defined in Section 406 of ERISA and Section 4975
of the Internal Revenue Code) has occurred, a statement of the chief financial
officer of Borrower describing such transaction.
6.1.11 Benefit Plan Annual Report. Within ten
(10) days after the filing thereof with the DOL, the IRS or the PBGC, copies of
each annual report, including Schedule B thereto, filed with respect to each
Benefit Plan of Borrower, any Guarantor or any ERISA Affiliate of any of them.
6.1.12 Benefit Plan Funding Waiver Request.
Within thirty (30) days after the filing thereof with the IRS, a copy of each
funding waiver request filed with respect to any Benefit Plan of Borrower or
any ERISA Affiliate of Borrower and all communications received by Borrower or
any ERISA Affiliate of Borrower with respect to such request.
6.1.13 Establishment of Benefit Plan and Increase
in Contributions to the Benefit Plan. Not less than ten (10) days prior to the
effective date thereof, a notice to Agent of the establishment of a Benefit
Plan (or the incurrence of any obligation to contribute to a Multiemployer
Plan) by Borrower, any Guarantor or any ERISA Affiliate of any of them. Within
thirty (30) days after the first to occur of an amendment of any then existing
Benefit Plan of Borrower, any Guarantor or any ERISA Affiliate of any of them
which will result in an increase in the benefits under such Benefit Plan or a
notification of any
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such increase, or the establishment of any new Benefit Plan by Borrower, any
Guarantor or any ERISA Affiliate of any of them or the commencement of
contributions to any Benefit Plan to which Borrower, any Guarantor or any ERISA
Affiliate of any of them was not previously contributing, a copy of said
amendment, notification or Benefit Plan.
6.1.14 Qualification of ERISA Plan. Promptly
upon, and in any event within thirty (30) days after, receipt by Borrower, any
Guarantor or any ERISA Affiliate of any of them of an unfavorable determination
letter from the IRS regarding the qualification of a Plan under Section 401(a)
of the Internal Revenue Code, a copy of said determination letter, if such
disqualification would have a Material Adverse Effect on Borrower.
6.1.15 Multiemployer Plan Withdrawal Liability.
Promptly upon, and in any event within thirty (30) days after receipt by
Borrower, any Guarantor or any ERISA Affiliate of any of them of a notice from
a Multiemployer Plan regarding the imposition of withdrawal liability, a copy
of said notice.
6.1.16 Failure to Make Section 412 Payment.
Promptly upon, and in any event within thirty (30) days after, Borrower, any
Guarantor or any ERISA Affiliate of any of them fails to make a required
installment under subsection (m) of Section 412 of the Internal Revenue Code or
any other payment required under Section 412 of the Internal Revenue Code on or
before the due date for such installment or payment, a notification of such
failure, if such failure could result in either the imposition of a Lien under
said Section 412 or otherwise have or could reasonably be anticipated to have a
Material Adverse Effect on Borrower or any Guarantor.
6.1.17 Failure of Borrower to Qualify as Real
Estate Investment Trust. Promptly upon, and in any event within forty-eight
(48) hours after Borrower first has actual knowledge of (i) Borrower failing to
continue to qualify as a real estate investment trust as defined in Section 856
of the Internal Revenue Code (or any successor provision thereof), (ii) any act
by Borrower causing its election to be taxed as a real estate investment trust
to be terminated, (iii) any act causing Borrower to be subject to the taxes
imposed by Section 857(b)(6) of the Internal Revenue Code (or any successor
provision thereto), or
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(iv) Borrower failing to be entitled to a dividends paid deduction which meets
the requirements of Section 857 of the Internal Revenue Code, a notice of any
such occurrence or circumstance.
6.1.18 Asset Acquisitions and Dispositions,
Indebtedness, Etc. Without limiting Article VIII or any other restriction in
the Loan Documents, not later than public disclosure of any material
Investments (other than in Cash Equivalents), material acquisitions,
dispositions, disposals, divestitures or similar transactions involving
Property, the raising of additional equity or the incurring or repayment of
material Indebtedness, by or with Borrower, any Partnership or any Subsidiary
of Borrower, if the total amount of such transaction exceeds ten percent (10%)
of Total Assets telephonic or facsimile notice thereof to Helen Delph or such
other person(s) as Agent may designate from time to time, and, promptly upon
consummation of such transaction, a Compliance Certificate demonstrating in
reasonable detail (which detail shall include actual calculations) compliance,
after giving effect to such proposed transaction(s), with the covenants
contained in Article IX.
6.1.19 Other Information. Such other
information, reports, contracts, schedules, lists, documents, agreements and
instruments in the possession of Borrower or a Guarantor with respect to (i)
the Borrowing Base Properties, (ii) any material change in Borrower's
investment, finance or operating policies, or (iii) Borrower's or any
Guarantor's business, condition (financial or otherwise), operations,
performance, properties or prospects as Agent or any Lender may from time to
time reasonably request, including, without limitation, annual information with
respect to cash flow projections, budgets, operating statements (current year
and immediately preceding year), rent rolls, lease expiration reports, leasing
status reports, note payable summaries, equity funding requirements, contingent
liability summaries, line of credit summaries, wrap note or note receivable
summaries, schedules of outstanding letters of credit, summaries of cash and
Cash Equivalents, projections of management and leasing fees and overhead
budgets. Provided that Agent gives Borrower reasonable prior notice and an
opportunity to participate, Borrower hereby authorizes Agent to communicate
with the Accountants and authorizes the Accountants to disclose to Agent any
and all financial statements and other information of
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any kind, including copies of any management letter or the substance of any
oral information, that such accountants may have with respect to Borrower's or
any Guarantor's condition (financial or otherwise), operations, properties,
performance and prospects. At Agent's request, Borrower shall deliver a
letter addressed to the Accountants instructing them to disclose such
information in compliance with this Section 6.1.19.
6.1.20 Press Releases; SEC Filings and Financial
Statements. Telephonic or telecopy notice to Agent concurrent with or prior to
issuance of any material press release concerning Borrower and, as soon as
practicable after filing with the Commission, all reports and notices, proxy
statements, registration statements and prospectuses of Borrower. All
materials sent or made available generally by Borrower to the holders of its
publicly-held Securities or to a trustee under any indenture or filed with the
Commission, including all periodic reports required to be filed with the
commission, will be delivered to Agent and Lenders as soon as available.
6.1.21 Accountant Reports. Copies of all reports
prepared by the Accountants and submitted to Borrower in connection with each
annual, interim or special audit or review of the financial statements or
practices of Borrower, including the comment letter submitted by the
Accountants in connection with their annual audit.
6.2 Environmental Notices. Borrower shall notify Agent, in
writing, as soon as practicable, and in any event within ten (10) days after
Borrower's learning thereof, of any: (i) written notice or claim to the effect
that Borrower or any Guarantor is or may be liable to any Person as a result of
any material Release or threatened Release of any Contaminant into the
environment; (ii) written notice that Borrower or any Guarantor is subject to
investigation by any Governmental Authority evaluating whether any Remedial
Action is needed to respond to the Release or threatened Release of any
Contaminant into the environment; (iii) written notice that any Property is
subject to an Environmental Lien; (iv) written notice of violation to Borrower
or any Guarantor or awareness of a condition which might reasonably result in a
notice of violation of any Environmental Laws by Borrower or any Guarantor; (v)
commencement or written threat of any judicial or administrative proceeding
alleging a violation of any Environmental Laws; (vi) written notice from a
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Governmental Authority of any changes to any existing Environmental Laws that
will have a Material Adverse Effect on the operations of Borrower or any
Guarantor ; or (vii) any proposed acquisition of stock, assets, real estate or
leasing of property, or any other action by Borrower that, to the best of
Borrower's knowledge, could subject Borrower or any Guarantor to environmental,
health or safety Liabilities and Costs that will have a Material Adverse Effect
on Borrower or any Guarantor.
6.3 Confidentiality. Confidential Information obtained by
Agent or Lenders pursuant to this Agreement or in connection with the Facility
shall not be disseminated by Agent or Lenders and shall not be disclosed to
third parties except to regulators, taxing authorities and other governmental
agencies having jurisdiction over Agent or such Lender or otherwise in response
to Requirements of Law, to their respective auditors and legal counsel and in
connection with regulatory, administrative and judicial proceedings as
necessary or relevant including enforcement proceedings relating to the Loan
Documents, and to any prospective assignee of or participant in a Lender's
interest under this Agreement or any prospective purchaser of the assets or a
controlling interest in any Lender, provided that such prospective assignee,
participant or purchaser first agrees to be bound by the provisions of this
Section 6.3. For purposes hereof, "Confidential Information" shall mean all
nonpublic information obtained by Agent or Lenders, unless and until such
information becomes publicly known, other than as a result of unauthorized
disclosure by Agent or Lenders of such information.
ARTICLE VII
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, on and after the date hereof,
until payment in full of all of the Obligations, the expiration of the
Commitments and termination of this Agreement:
7.1 Existence. Borrower and each Guarantor shall at all times
maintain its existence and preserve and keep in full force and effect its
rights and franchises.
7.2 Qualification, Name. Borrower and each Guarantor shall
qualify and remain qualified to do business in each
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jurisdiction in which the nature of its business requires it to be so
qualified. Borrower and each Guarantor will transact business solely in its
own name, in the name of any fictional or doing business name as may be
registered in the applicable jurisdiction, in the name of a Partnership or in
the commonly known name of a Property it owns.
7.3 Compliance with Laws, Etc. Borrower and each Guarantor
shall (i) comply with all Requirements of Law, and all restrictive covenants
affecting it or its properties, performance, prospects, assets or operations,
and (ii) obtain as needed all Permits necessary for its operations and maintain
such in good standing.
7.4 Payment of Taxes and Claims. Borrower and each Guarantor
shall pay (i) all taxes, assessments and other governmental charges imposed
upon it or on any of its properties or assets or in respect of any of its
franchises, business, income or property before any penalty or interest accrues
thereon, and (ii) all claims (including, without limitation, claims for labor,
services, materials and supplies) for sums which have become due and payable
and which by law have or may become a Lien other than a judgment lien upon any
of Borrower's properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto.
7.5 Maintenance of Properties; Insurance. Borrower and each
Guarantor shall maintain, or caused to be maintained, in good repair, working
order and condition, excepting ordinary wear and tear, all of its Properties
and all of the Borrowing Base Properties and will make or cause to be made all
appropriate repairs, renewals and replacements thereof. Borrower and each
Guarantor shall maintain, or cause other to maintain for its benefit,
commercially reasonable and appropriate amounts of property and "all risk"
casualty and liability insurance, which insurance shall include in any event:
(a) with respect to each Property:
(i) property and casualty insurance (including coverage for flood and
water damage for any Property located within an area designated as a
special flood hazard area by FEMA) in an amount not less than the
replacement costs of the improvements thereon, and (ii) loss of rental
insurance
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income in an amount not less than one year's gross revenues of such
Property; and
(b) comprehensive general
liability insurance in an amount not less than $20,000,000 per
occurrence.
At the request of Agent, Borrower shall provide, as to each Borrowing Base
Property evidence of insurance, including certificates of insurance and
binders.
7.6 Inspection of Property; Books and Records; Discussions.
Borrower shall permit, and shall cause each Guarantor to permit, any authorized
representative(s) designated by any Lender upon at least three (3) Business
Days advance notice to visit and inspect any of its properties, to inspect
financial and accounting records and leases, and to make copies (at such
Lender's expense except as provided in Section 12.1) and take extracts
therefrom, all at such times during normal business hours and as often as any
Lender may reasonably request. In connection therewith, Borrower shall pay all
expenses of the types described in Section 12.1. Borrower will keep proper
books of record and account in which entries, in conformity with GAAP and as
otherwise required by this Agreement and applicable Requirements of Law, shall
be made of all dealings and transactions in relation to its businesses and
activities and as otherwise required under Section 6.1.
7.7 Maintenance of Permits, Etc. Borrower and each Guarantor
will maintain in full force and effect all Permits, franchises, patents,
trademarks, trade names, copyrights, authorizations or other rights necessary
for the operation of its business; and notify Agent in writing, promptly after
learning thereof, of the suspension, cancellation, revocation or discontinuance
of or of any pending or threatened action or proceeding seeking to suspend,
cancel, revoke or discontinue any material Permit, patent, trademark, trade
name, copyright, governmental approval, franchise authorization or right.
7.8 Conduct of Business. Except for Permitted Investments
pursuant to Section 9.11 and Investments in cash and Cash Equivalents, Borrower
shall make no Investments and shall engage only in the business of direct
ownership, operation and development of commercial and retail Properties of the
general
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type owned by Borrower as of the Closing Date in the United States, and any
other business activities of Borrower will remain incidental thereto.
7.9 Use of Proceeds. Borrower shall use the proceeds of the
Loans only for predevelopment costs, development costs, acquisitions, working
capital, equity Investments and repayment of Indebtedness (including
Indebtedness under the REMIC and the Existing Revolver), including required
interest and/or principal payments thereon.
7.10 Securities Law Compliance. Borrower shall comply in all
material respects with all rules and regulations of the Commission and file all
reports required by the Commission relating to Borrower's publicly-held
Securities.
7.11 Continued Status as a REIT; Prohibited Transactions.
Borrower (i) will continue to be a real estate investment trust as defined in
Section 856 of the Internal Revenue Code (or any successor provision thereto),
(ii) will not revoke its election to be a real estate investment trust, (iii)
will not engage in any "prohibited transactions" as defined in Section
856(b)(6)(iii) of the Internal Revenue Code (or any successor provision
thereto), and (iv) will continue to be entitled to a dividend paid deduction
meeting the requirements of Section 857 of the Internal Revenue Code.
7.12 NYSE Listed Company. The common stock of Borrower shall at
all times be listed for trading and be traded on the New York Stock Exchange or
the American Stock Exchange.
7.13 Interest Rate Contracts. Borrower shall maintain in effect
Interest Rate Contracts which are satisfactory to the Agent. Initially, the
Interest Rate Contracts will cover at least $50,000,000 (to be increased to be
at least fifty percent (50%) of the Loans outstanding hereunder) and be at an
all-in rate of not more than ten percent (10%) per annum.
7.14 Ownership of Guarantor Partnerships. Borrower will cause
each Guarantor Partnership to be at least 90% owned, and continue to be at
least 90% owned, by Borrower and Borrower shall have and continue to have
complete control over the management, leasing, sale of and the creation of
Liens on, the Borrowing Base Properties owned by such Guarantor Partnership.
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ARTICLE VIII
NEGATIVE COVENANTS
Borrower covenants and agrees that, on and after the date hereof,
until payment in full of all of the Obligations, the expiration of the
Commitments and termination of this Agreement:
8.1 With Respect to all Parties: Neither Borrower nor any
Guarantor shall:
8.1.1 Liens. (i) Directly or indirectly create,
incur, assume or permit to exist any Lien, except for Permitted Liens, on or
with respect to all or any portion of (A) any Borrowing Base Property or (B)
any interest in any Person that owns any Borrowing Base Property; (ii) directly
or indirectly create, assume or permit to exist any agreement (other than the
Loan Documents) prohibiting the creation of any Lien on any Borrowing Base
Property, or any interest in any Person that owns any Borrowing Base Property,
as security for Indebtedness of Borrower; or (iii) directly or indirectly
create, incur, assume or permit to exist any Lien (other than Permitted Liens)
with respect to any portion of its Properties; or increase the outstanding
principal amount of any Secured Borrower Debt to the extent the creation of
such Lien or the increase of such principal amount would result in a violation
of Section 9.6.
8.1.2 Transfers of Borrowing Base Property.
Transfer, directly or indirectly, all or any interest in any Borrowing Base
Property.
8.1.3 Restrictions on Fundamental Changes.
(a) Enter into any merger or
consolidation or liquidate, wind-up or dissolve (or suffer any
liquidation or dissolution);
(b) Change its Fiscal Year;
(c) Except for Permitted
Investments, engage in any line of business other than as expressly
permitted under Section 7.8; or
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(d) Create or acquire any
Subsidiary or Partnership other than in the ordinary course of
business without the prior written consent of the Agent which shall
not be unreasonably withheld. Borrower shall promptly notify Agent
after the creation or acquisition of any Subsidiary or Partnership.
8.1.4 ERISA. Permit any ERISA Affiliates to do any of
the following to the extent that such act or failure to act would
result in the aggregate, after taking into account any other such acts
or failure to act, in a Material Adverse Effect on Borrower:
(a) Engage, or knowingly permit an
ERISA Affiliate to engage, in any prohibited transaction described in
Section 406 of the ERISA or Section 4975 of the Internal Revenue Code
which is not exempt under Section 407 or 408 of ERISA or Section
4975(d) of the Internal Revenue Code for which a class exemption is
not available or a private exemption has not been previously obtained
from the DOL;
(b) Permit to exist any
accumulated funding deficiency (as defined in Section 302 of ERISA and
Section 412 of the Internal Revenue Code), whether or not waived;
(c) Fail, or permit an ERISA
Affiliate to fail, to pay timely required contributions or annual
installments due with respect to any waived funding deficiency to any
Plan if such failure could result in the imposition of a Lien or
otherwise would have a Material Adverse Effect on Borrower;
(d) Terminate, or permit an ERISA
Affiliate to terminate, any Benefit Plan which would result in any
liability of Borrower or an ERISA Affiliate under Title IV of ERISA;
or
(e) Fail, or permit any ERISA
Affiliate to fail, to pay any required installment under section (m)
of Section 412 of the Internal Revenue Code or any other payment
required under Section 412 of the Internal Revenue Code on or before
the due date for such installment or other payment, if such failure
could result in the imposition of a
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Lien or otherwise would have a Material Adverse Effect on Borrower.
8.2 Amendment of Constituent Documents. Except for any such
amendment that is required (i) under any Requirement of Law imposed by any
Governmental Authority or (ii) in order to maintain compliance with Section
7.11: (1) no Guarantor Partnership shall amend its Partnership Agreement
(including, without limitation, as to the admission of any new partner,
directly or indirectly), and (2) neither Borrower nor any Guarantor shall amend
its articles of incorporation or by-laws; in any such case, except with the
prior written consent of the Agent.
8.3 Disposal of Guarantor Partnership Interests. Directly or
indirectly convey, sell, transfer, assign, pledge or otherwise encumber or
dispose of any of its partnership (or other ownership) interests in any
Guarantor Partnership at any time when any Property owned by such Guarantor
Partnership is a Borrowing Base Property.
8.4 Margin Regulations. No portion of the proceeds of any
Loans shall be used in any manner which might cause the extension of credit or
the application of such proceeds to violate Regulation G, U or X or any other
regulation of the Federal Reserve Board or to violate the Securities Exchange
Act or the Securities Act, in each case as in effect on the applicable Funding
Date.
8.5 Management. Except with the prior approval of the
Requisite Lenders, none of the Executive Officers shall cease to be active on a
full time, continuous basis in the senior management of Borrower (the
occurrence of an event described above, a "Discontinuity in Management");
provided that, upon a Discontinuity in Management, Borrower shall have up to
one hundred twenty (120) days to obtain the approval of Requisite Lenders to
additional executives, such that the remaining and new management executives,
as a group, have substantial and sufficient knowledge, experience and
capabilities in the management of a publicly-held company engaged in the
operation of a multi-asset real estate business of the type engaged in by
Borrower. In the event Borrower shall fail to obtain approval of Requisite
Lenders as aforesaid within said 120-day period, then Borrower shall, at the
election and upon the demand of Requisite
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Lenders, pay in full all Obligations under the Loan Documents not later than
sixty (60) days after the end of such 120-day period, whereupon this Agreement
and all Commitments hereunder shall be terminated. Upon the occurrence of a
Discontinuity in Management, no further Borrowings shall be permitted until
Borrower shall have obtained approval of Requisite Lenders under this Section
8.5.
8.6 Restrictions on Transactions Affecting Leasing. Neither
Borrower, nor any owner of any of the Portfolio Properties shall enter into any
lease, acquire any Property or consent to any assignment of a lease or any
subletting if the result of such transaction would be to (i) increase the
percentage of Adjusted Base Rents from all Portfolio Properties payable with
respect to premises leased to or occupied by K-Mart Corporation or any of its
Subsidiaries, (ii) increase the percentage of Adjusted Base Rates from all
Borrowing Base Properties payable with respect to premises leased to or
occupied by K-Mart Corporation or any of its Subsidiaries or (iii) cause a
violation of Section 9.14 or (iv) cause the Borrowing Base Properties to fail
to satisfy the Aggregate Borrowing Base Requirements.
8.7 Additional Unsecured Bank Debt. Neither Borrower nor any
Affiliates of Borrower shall create, incur, assume or otherwise become liable
for any unsecured line of credit or other unsecured loan from any bank or
financial institution, other than the Facility.
ARTICLE IX
FINANCIAL COVENANTS
Borrower covenants and agrees that, on and after the date of this
Agreement and until payment in full of all the Obligations, the expiration of
all Commitments and the termination of this Agreement:
9.1 Borrowing Base Value. The Unsecured Loan Balance shall not
exceed 50% of the Borrowing Base Value.
9.2 Borrowing Base Debt Service Coverage. The ratio of the Net
Operating Income for the most recently ended Fiscal Quarter of the Borrowing
Base Properties to Pro Forma Debt
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Service for the Unsecured Loan Balance shall not be less than 1.60:1.
9.3 Minimum Tangible Net Worth. Borrower will maintain a
Tangible Net Worth of not less than One Hundred Eighty-Five Million Dollars
($185,000,000) plus ninety percent (90%) of Net Offering Proceeds received by
Borrower after the Closing Date.
9.4 Borrower Debt to Fair Market Net Worth Ratio. The ratio of
Borrower Debt to Fair Market Net Worth shall not exceed (a) 1:1 during the
period from the Closing Date until Borrower next receives Net Offering
Proceeds; (b) 0.90:1 during the period from such receipt of Net Offering
Proceeds until the date that Borrower becomes an Investment Grade Rated Company
and (c) 1:1 after Borrower becomes an Investment Grade Rated Company.
9.5 Maximum Recourse Borrower Debt. Prior to the date that
Borrower has become an Investment Grade Rated Company, Recourse Borrower Debt
other than the Obligations shall not exceed 10% of Borrower Debt.
9.6 Secured Debt to Total Assets Ratio. After the date that
Borrower has become an Investment Grade Rated Company, the ratio of Secured
Borrower Debt to Total Assets shall not exceed 0.40:1.
9.7 EBIDA to Interest Expense Ratio. The ratio of EBIDA (less
any Excluded Development Income) to Interest Expense shall not be less than
2.00:1.
9.8 EBIDA to Fixed Charges Ratio. The ratio of EBIDA (less any
Excluded Development Income) to Fixed Charges shall not be less than 1.75:1.
9.9 Unencumbered NOI to Unsecured Interest Expense Ratio. The
ratio of Unencumbered NOI to Unsecured Interest Expense shall not be less than
2.25:1.
9.10 Distributions.
9.10.1 Subject to Section 9.10.2, (i) aggregate
Distributions during any Fiscal Quarter shall not exceed ninety-five percent
(95%) of Funds From Operations for such Fiscal Quarter and (ii) aggregate
distributions during any four
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consecutive Fiscal Quarters shall not exceed Free Cash Flow for such four
consecutive Fiscal Quarters.
9.10.2 Aggregate Distributions during the
continuance of any Event of Default shall not exceed the lesser of (i) the
aggregate amount permitted to be made during the continuance thereof under
Section 9.10.1, and (ii) the minimum amount that Borrower must distribute to
its shareholders in order to maintain compliance with Section 7.11. If the
Loans are not paid in full on the Termination Date no Distributions shall be
made thereafter except to the extent expressly authorized in advance by Agent.
9.11 Permitted Investments. Notwithstanding the limitations set
forth in Section 7.8, Borrower may make the following Permitted Investments, so
long as (i) the aggregate amount of all Permitted Investments (excluding
Investments in Opportunity Properties and Service Retail Properties) does not
exceed, at any time, twenty percent (20%) of Total Assets, and (ii) the
aggregate amount of each of the following categories of Permitted Investments
does not exceed the specified percentage of Total Assets, in each case as of
the date made:
<TABLE>
<CAPTION>
Maximum
Percentage
Permitted Investment of Total Assets
-------------------- ---------------
<S> <C>
Land: 5%
Foreign Properties: 10%
Repurchased Stock: 15%
Mortgages and notes receivable 15%
(including notes receivable from
Affiliates)
Affiliates other than 15%
Wholly-Owned Subsidiaries
Opportunity Properties: 10%
</TABLE>
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<TABLE>
<S> <C>
Total Opportunity Properties and 15%
Service Retail Properties
</TABLE>
For purposes of calculating compliance with the foregoing, the amount of each
Investment will be deemed to be the original Acquisition Price thereof plus in
the case of Investments in Partnerships or Subsidiaries, the amount of any
subsequent loans or capital contributions to such entity.
9.12 Development Activities. The sum of (i) Borrower
Construction Expenditures and (ii) Development Investments shall not exceed 10%
of Total Assets. In addition, the total amount of Guaranteed Construction Loans
shall not exceed Thirty Million Dollars ($30,000,000). Neither Borrower nor any
Developer Affiliates will commence construction of any construction project or
subordinate any land acquisition loan to construction financing for any
construction project, or make a loan to finance any construction project, unless
at least seventy percent (70%) of the gross leasable area of such project is
subject to a fully executed lease under which (i) occupancy by the tenant
thereunder is conditioned only upon completion of construction of the relevant
improvements and (ii) such tenant is otherwise unconditionally committed to take
occupancy upon completion of such construction. Neither Borrower nor any
Developer Affiliates will commence construction of any construction project,
make a loan to finance construction of any construction project or subordinate
any land acquisition loan to construction financing for any construction project
if the sum of Development Investments and Guaranteed Construction Loans relating
to such project exceeds $20,000,000 unless the Requisite Lenders have approved
such construction project prior to the start of construction.
9.13 Borrower-Investment Partnership Debt to Borrower-Investment
Partnership Net Worth. On and after the date that the aggregate Acquisition
Prices of assets owned by all Investment Partnerships exceeds fifteen percent
(15%) of Total Assets, the ratio of Borrower-Investment Partnership Debt to
Borrower-Investment Partnership Net Worth shall not exceed 1.15:1.
9.14 Tenant Concentration. The Adjusted Base Rents from any
single tenant (including all Subsidiaries of such tenant or of a common parent
company) shall not exceed fifteen percent (15%) of Adjusted Base Rents from all
Portfolio Properties
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provided however that: (a) with respect to tenants which are Investment Grade
Rated Companies (other than K-Mart Corporation) the foregoing limit shall be
increased to twenty percent (20%), (b) with respect to tenants which are
Investment Grade Rated Companies rated A or higher the foregoing limit shall be
increased to twenty-five percent (25%); and (c) with respect to K-Mart
Corporation and its Subsidiaries the foregoing limit shall be the actual
percentage on the Closing Date.
9.15 Investment Grade Rated Tenants. At least fifty percent
(50%) of Adjusted Base Rents from all Portfolio Properties shall be paid
pursuant to leases, the tenant's interest in which is currently held by an
Investment Grade Rated Company, or leases which are fully guaranteed by an
Investment Grade Rated Company.
9.16 Aggregate Borrowing Base Requirements. The Borrowing Base
Properties shall comply with the Aggregate Borrowing Base Requirements.
9.17 Calculation. Each of the foregoing ratios and financial
requirements shall be calculated as of the last day of each Fiscal Quarter, but
shall be satisfied at all times. Each of the foregoing ratios and financial
requirements which is affected by an increase in the outstanding balance of the
Loans or by a Termination of Designation shall also be recalculated as of the
time of such event. For purposes of determining compliance with Sections 9.2,
9.7, 9.8 and 9.9, the period covered thereby shall be the immediately preceding
Fiscal Quarter.
ARTICLE X
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
10.1 Events of Default. Each of the following occurrences shall
constitute an Event of Default under this Agreement:
10.1.1 Failure to Make Payments When Due.
Borrower shall fail to pay (i) any amount due on the Termination Date, (ii) any
principal when due, or (iii) any interest on any Loan, or any fee or other
amount payable under any Loan Documents, within five (5) days after the same
becomes due.
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10.1.2 Distributions. Borrower shall breach any
covenant set forth in Section 7.11 or 9.10.
10.1.3 Breach of Borrowing Base Requirements.
The Borrowing Base Properties shall fail to satisfy the Aggregate Borrowing
Base Requirements and such failure shall continue for thirty (30) days.
10.1.4 Other Defaults. Borrower or any Guarantor
shall fail duly and punctually to perform or observe any agreement, covenant or
obligation binding on Borrower or any Guarantor under this Agreement or under
any of the other Loan Documents (other than as described in any other provision
of this Section 10.1), and with respect to agreements, covenants or obligations
for which no time period for performance is otherwise provided, such failure
shall continue for fifteen (15) days after Borrower or any Guarantor knew of
such failure (or such lesser period of time as is mandated by applicable
Requirements of Law); provided, however, if such failure is not capable of cure
within such fifteen (15) day period, then if Borrower promptly undertakes
action to cure such failure and thereafter diligently prosecutes such cure to
completion within forty-five (45) days after Borrower or any Guarantor knew of
such failure, then Borrower shall not be in default hereunder.
10.1.5 Breach of Representation or Warranty. Any
representation or warranty made or deemed made by Borrower or any Guarantor to
Agent or any Lender herein or in any of the other Loan Documents or in any
statement, certificate or financial statements at any time given by Borrower
pursuant to any of the Loan Documents shall be false or misleading in any
material respect on the date as of which made.
10.1.6 Default as to Other Indebtedness. (i)
Borrower, any Subsidiary of Borrower, any Majority Partnership or any Investment
Partnership in which the Borrower or any Subsidiary of Borrower is a general
partner except that Nonrecourse Indebtedness of such Investment Partnership
shall be excluded for purposes of this Section shall have (A) failed to pay when
due (beyond any applicable grace period), any amount in respect of any
Indebtedness of such party other than the Obligations if the aggregate amount of
such other Indebtedness is Five Million Dollars ($5,000,000) or more; or (B)
otherwise defaulted (beyond any applicable grace period) under any
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Indebtedness of such party other than the Obligations if (1) the aggregate
amount of such other Indebtedness is Five Million Dollars ($5,000,000) or more,
and (2) the holder of such Indebtedness has accelerated such Indebtedness; or
(ii) any such other Indebtedness shall have otherwise become payable, or be
required to be purchased or redeemed, prior to its scheduled maturity; or (iii)
the holder(s) of any Lien, in any amount, commence foreclosure of such Lien
upon one or more Properties having an aggregate value in excess of Five Million
Dollars ($5,000,000).
10.1.7 Involuntary Bankruptcy; Appointment of Receiver, Etc.
(a) An involuntary case shall be
commenced against Borrower, any Guarantor or any Partnership in which
Borrower is a general partner (unless the Total Liabilities of such
Partnership are less than $5,000,000) and the petition shall not be
dismissed within sixty (60) days after commencement of the case, or a
court having jurisdiction shall enter a decree or order for relief in
respect of any such Person in an involuntary case, under any
applicable bankruptcy, insolvency or other similar law now or
hereinafter in effect; or any other similar relief shall be granted
under any applicable federal, state or foreign law; or
(b) A decree or order of a court
having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having
similar powers over Borrower, any Guarantor or any Partnership in
which Borrower is a general partner, or over all or a substantial part
of the property of any such Person, shall be entered; or an interim
receiver, trustee or other custodian of any such Person or of all or a
substantial part of the property of any such Person, shall be
appointed or a warrant of attachment, execution or similar process
against any substantial part of the property of any such Person, shall
be issued and any such event shall not be stayed, vacated, dismissed,
bonded or discharged within sixty (60) days of entry, appointment or
issuance.
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10.1.8 Voluntary Bankruptcy; Appointment of
Receiver, Etc. Borrower, any Guarantor or any Partnership in which Borrower is
a general partner (unless the Total Liabilities of such Partnership are less
than $5,000,000) shall have an order for relief entered with respect to it or
commence a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or shall consent to the entry of an
order for relief in an involuntary case, or to the conversion of an involuntary
case to a voluntary case, under any such law, or shall consent to the
appointment of or taking of possession by a receiver, trustee or other
custodian for all or a substantial part of its property; any such Person shall
make any assignment for the benefit of creditors or shall be unable or fail, or
admit in writing its inability, to pay its debts as such debts become due; or
the general partner (or Person(s) serving in a similar capacity) of Borrower,
any Guarantor or any Partnership in which Borrower is a general partner or
Borrower's Board of Directors (or any committee thereof) adopts any resolution
or otherwise authorizes any action to approve any of the foregoing.
10.1.9 Judgments and Attachments. (i) Any money
judgment (other than a money judgment covered by insurance but only if the
insurer has admitted liability with respect to such money judgment), writ or
warrant of attachment, or similar process involving in any case an amount in
excess of One Million Dollars ($1,000,000) shall be entered or filed against
Borrower, any Guarantor or any Partnership in which Borrower is a general
partner or their respective assets and shall remain undischarged, unvacated,
unbonded or unstayed for a period of thirty (30) days, or (ii) any judgment or
order of any court or administrative agency awarding material damages shall be
entered against any such Person in any action under the Federal securities laws
seeking rescission of the purchase or sale of, or for damages arising from the
purchase or sale of, any Securities, such judgment or order shall have become
final after exhaustion of all available appellate remedies and, in Agent's
judgment, the payment of such judgment or order would have a Material Adverse
Effect on such Person.
10.1.10 Dissolution. Any order, judgment or
decree shall be entered against Borrower, any Guarantor or any Partnership in
which Borrower is a general partner decreeing its involuntary dissolution or
split up and such order shall remain undischarged and unstayed for a period in
excess of thirty (30)
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days; or Borrower or any Guarantor Partnership shall otherwise dissolve or
cease to exist.
10.1.11 Loan Documents; Failure of Subordination.
If for any reason (i) any Loan Document shall cease to be in full force and
effect, or (ii) any Obligation shall be subordinated in right of payment to any
other liability of the Borrower.
10.1.12 ERISA Liabilities. Any Termination Event
occurs which will or is reasonably likely to subject Borrower or any Guarantor
or any ERISA Affiliate of any of them to a liability which Agent reasonably
determines will have a Material Adverse Effect on Borrower or any Guarantor, or
the plan administrator of any Benefit Plan applies for approval under Section
412(d) of the Internal Revenue Code for a waiver of the minimum funding
standards of Section 412(a) of the Internal Revenue Code and Agent reasonably
determines that the business hardship upon which the Section 412(d) waiver was
based will or would reasonably be anticipated to subject Borrower or any
Guarantor to a liability which Agent determines will have a Material Adverse
Effect on Borrower or any Guarantor.
10.1.13 Environmental Liabilities. Borrower or
any Guarantor becomes subject to any Liabilities and Costs which Agent
reasonably deems to have a Material Adverse Effect on such Person arising out
of or related to (i) the Release or threatened Release at any Property of any
Contaminant into the environment, or any Remedial Action in response thereto,
or (ii) otherwise any violation of any Environmental Laws.
10.1.14 Solvency; Material Adverse Change.
Borrower or any Guarantor shall cease to be Solvent, or there shall have
occurred any material adverse change in the business, operations, properties,
assets or condition (financial or otherwise) of Borrower or any Guarantor.
10.1.15 Breach of Guaranty. Any Guarantor shall
fail to duly and punctually perform or observe any agreement, covenant or
obligation under its Guaranty.
An Event of Default shall be deemed "continuing" until
cured or waived in writing in accordance with Section 12.4.
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10.2 Rights and Remedies.
10.2.1 Acceleration, Etc. Upon the occurrence of
any Event of Default described in the foregoing Section 10.1.7 or 10.1.8 with
respect to Borrower or any Guarantor or any Partnership in which Borrower is a
general partner, the Commitments shall automatically and immediately terminate
and the unpaid principal amount of and any and all accrued interest on the
Loans shall automatically become immediately due and payable, with all
additional interest from time to time accrued thereon and without presentment,
demand or protest or other requirements of any kind (including, without
limitation, valuation and appraisement, diligence, presentment, notice of
intent to demand or accelerate or notice of acceleration), all of which are
hereby expressly waived by Borrower, and the obligations of Lenders to make any
Loans hereunder shall thereupon terminate; and upon the occurrence and during
the continuance of any other Event of Default, Agent shall, at the request, or
may, with the consent of Requisite Lenders, by written notice to Borrower, (i)
declare that the Commitments are terminated, whereupon the Commitments and the
obligation of Lenders to make any Loan hereunder shall immediately terminate,
and/or (ii) declare the unpaid principal amount of, any and all accrued and
unpaid interest on the Loans and all of the other Obligations to be, and the
same shall thereupon be, immediately due and payable with all additional
interest from time to time accrued thereon and without presentment, demand, or
protest or other requirements of any kind (including without limitation,
valuation and appraisement, diligence, presentment, notice of intent to demand
or accelerate and of acceleration), all of which are hereby expressly waived by
Borrower. Without limiting Agent's authority hereunder, on or after the
Termination Date, Agent shall, at the request, or may, with the consent, of
Requisite Lenders exercise any or all rights and remedies under the Loan
Documents or applicable law. Upon the occurrence of and during the continuance
of an Event of Default, Agent shall be entitled to request and receive, by or
through Borrower or appropriate legal process, any and all information
concerning Borrower, any Guarantor or any property of any of them, which is
reasonably available to or obtainable by Borrower.
10.2.2 Waiver of Demand. Demand, presentment,
protest and notice of nonpayment are hereby waived by Borrower.
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Borrower also waives, to the extent permitted by law, the benefit of all
exemption laws.
10.2.3 Waivers, Amendments and Remedies. No
delay or omission of Agent or Lenders to exercise any right under any Loan
Document shall impair such right or be construed to be a waiver of any Event of
Default or an acquiescence therein, and any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in a writing signed by Agent after obtaining written approval thereof or the
signature thereon of those Lenders required to approve such waiver, amendment
or other variation, and then only to the extent in such writing specifically
set forth. All remedies contained in the Loan Documents or by law afforded
shall be cumulative and all shall be available to Agent and Lenders until the
Obligations have been paid in full, the Commitments have expired or terminated
and this Agreement has been terminated.
10.3 Rescission. If at any time after acceleration of the
maturity of the Loans, Borrower shall pay all arrears of interest and all
payments on account of principal of the Loans which shall have become due
otherwise than by acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this
Agreement) and all Events of Default and Unmatured Events of Default (other
than nonpayment of principal of and accrued interest on the Loans due and
payable solely by virtue of acceleration) shall be remedied or waived pursuant
to Section 12.4, then by written notice to Borrower, Requisite Lenders may
elect, in their sole discretion, to rescind and annul the acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Unmatured Event of Default or impair any right or remedy consequent thereon.
The provisions of the preceding sentence are intended merely to bind Lenders to
a decision which may be made at the election of Requisite Lenders; they are not
intended to benefit Borrower and do not give Borrower the right to require
Lenders to rescind or annul any acceleration hereunder, even if the conditions
set forth herein are met.
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ARTICLE XI
AGENCY PROVISIONS
11.1 Appointment.
11.1.1 Each Lender hereby (i) designates and
appoints FNBB as Agent of such Lender under this Agreement and the Loan
Documents, (ii) authorizes and directs Agent to enter into the Loan Documents
other than this Agreement for the benefit of Lenders, and (iii) authorizes
Agent to take such action on its behalf under the provisions of this Agreement
and the Loan Documents and to exercise such powers as are set forth herein or
therein, together with such other powers as are reasonably incidental thereto,
subject to the limitations referred to in Sections 11.10.1 and 11.10.2 and any
other limitations specifically set forth in this Agreement. Agent agrees to
act as such on the express conditions contained in this Article XI.
11.1.2 The provisions of this Article XI are
solely for the benefit of Agent and Lenders, and Borrower shall not have any
rights to rely on or enforce any of the provisions hereof (other than as
expressly set forth in Sections 11.3 and 11.9, provided, however, that the
foregoing shall in no way limit Borrower's obligations under this Article XI.
In performing its functions and duties under this Agreement, Agent shall act
solely as Agent of Lenders and does not assume and shall not be deemed to have
assumed any obligation toward or relationship of agency or trust with or for
Borrower or any other Person.
11.2 Nature of Duties. Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement or in the
Loan Documents. Subject to the provisions of Sections 11.5 and 11.7, Agent
shall administer the Loans in the same manner as it administers its own loans.
Promptly following the effectiveness of this Agreement, Agent shall send to
each Lender its originally executed Note and the executed original, to the
extent the same are available in sufficient numbers, of each other Loan
Document other than the Notes in favor of other Lenders. Agent shall not have
by reason of this Agreement a fiduciary relationship in respect of any Lender.
Nothing in this Agreement or any of the Loan Documents, expressed or implied,
is intended or shall be construed to impose upon Agent any obligation in
respect of this Agreement or any of the Loan
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Documents except as expressly set forth herein or therein. Each Lender shall
make its own independent investigation of the financial condition and affairs
of Borrower, each Guarantor and each Borrowing Base Property in connection with
the making and the continuance of the Loans hereunder and shall make its own
appraisal of the creditworthiness of Borrower and each Guarantor, and, except
as specifically provided herein, Agent shall not have any duty or
responsibility, either initially or on a continuing basis, to provide any
Lender with any credit or other information with respect thereto, whether
coming into its possession before the Closing Date or at any time or times
thereafter.
11.3 Loan Disbursements.
11.3.1 Not later than 1:00 P.M. (Eastern time) on
the next Business Day following receipt of a Notice of Borrowing, Agent shall
send a copy thereof by facsimile to each other Lender and shall otherwise
notify each Lender of the proposed Borrowing and the Funding Date. Agent shall
also send a copy of the Compliance Certificate delivered with the Notice of
Borrowing to each Lender which requests a copy of such Compliance Certificate.
Each Lender shall make available to Agent (or the funding bank or entity
designated by Agent), the amount of such Lender's Pro Rata Share of such
Borrowing in immediately available funds not later than the times designated in
Section 11.3.2. Unless Agent shall have been notified by any Lender prior to
such time for funding in respect of any Borrowing that such Lender does not
intend to make available to Agent such Lender's Pro Rata Share of such
Borrowing, Agent may assume that such Lender has made such amount available to
Agent. In any case where a Lender does not for any reason make available to
Agent such Lender's Pro Rata Share of such Borrowing, Agent, in its sole
discretion, may, but shall not be obligated to, fund to Borrower such Lender's
Pro Rata Share of such Borrowing. If the amount so funded by Agent is not in
fact made available to Agent by the responsible Lender, then Borrower agrees to
repay to Agent such amount, together with interest thereon at the Base Rate for
each day from the date such amount is made available to Borrower until the date
such amount is repaid to Agent, not later than three (3) Business Days
following Agent's demand to Borrower that such repayment be made. In addition,
such Lender agrees to pay to Agent forthwith on demand such corresponding
amount, together with interest thereon at the Federal Funds Rate. If such
Lender shall pay to Agent such corresponding amount, such amount so paid shall
constitute such
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Lender's Pro Rata Share of such Borrowing, and if both such Lender and Borrower
shall have paid and repaid, respectively, such corresponding amount, Agent
shall promptly return to Borrower such corresponding amount in same day funds;
interest paid by Borrower in respect of such corresponding amount shall be
prorated, as of the date of payment thereof by such Lender to Agent. In the
event that Agent shall not have funded such Lender's Pro Rata Share under this
Section 11.3.1, then Borrower shall not be obligated to accept a late funding
of such Lender's Pro Rata Share if such funding is made more than two (2)
Business Days following the applicable Funding Date. If Borrower declines to
accept such delinquent funding, Agent shall promptly return to such Lender the
amount of such funding. Nothing in this Section 11.3.1 shall alter the
respective rights and obligations of the parties hereunder in respect of a
Defaulting Lender or a Non-Pro Rata Loan.
11.3.2 Requests by Agent for funding by Lenders
of Loans will be made by telecopy. Each Lender shall make the amount of its
Loan available to Agent in Dollars and in immediately available funds, to such
bank and account, as Agent may designate, not later than 1:30 P.M. (Eastern
time) on the Funding Date designated in the Notice of Borrowing with respect to
such Loan provided that to the extent the Agent is late in providing any Lender
with notice the applicable time in advance of any Funding Date specified in
Section 2.1.2(a), such Lender shall not be obligated to make such amount
available to the Agent until said time on the Business Day which is the same
number of Business Days after the Funding Date as Agent was late in providing
such notice.
11.3.3 Nothing in this Section 11.3 shall be
deemed to relieve any Lender of its obligation hereunder to make its Pro Rata
Share of Loans on any Funding Date, nor shall any Lender be responsible for the
failure of any other Lender to perform its obligations to make any Loan
hereunder, and the Commitment of any Lender shall not be increased or decreased
as a result of the failure by any other Lender to perform its obligation to
make a Loan.
11.4 Distribution and Apportionment of Payments.
11.4.1 Subject to Section 11.4.2, payments
actually received by Agent for the account of Lenders shall be
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paid to them promptly after receipt thereof by Agent, but in any event within
two (2) Business Days, provided that Agent shall pay to Lenders interest
thereon, at the lesser of (i) Federal Funds Rate and (ii) the rate of interest
applicable to such Loans, from the Business Day following receipt of such funds
by Agent until such funds are paid in immediately available funds to Lenders.
Subject to Section 11.4.2, all payments of principal and interest in respect of
outstanding Loans, all payments of the fees described in this Agreement, and
all payments in respect of any other Obligations shall be allocated among such
of Lenders as are entitled thereto, in proportion to their respective Pro Rata
Shares or otherwise as provided herein. Agent shall promptly distribute, but
in any event within two (2) Business Days, to each Lender at its primary
address set forth on the appropriate signature page hereof or on the Assignment
and Assumption, or at such other address as a Lender may request in writing,
such funds as it may be entitled to receive, provided that Agent shall in any
event not be bound to inquire into or determine the validity, scope or priority
of any interest or entitlement of any Lender and may suspend all payments and
seek appropriate relief (including, without limitation, instructions from
Requisite Lenders or all Lenders, as applicable, or an action in the nature of
interpleader) in the event of any doubt or dispute as to any apportionment or
distribution contemplated hereby. The order of priority herein is set forth
solely to determine the rights and priorities of Lenders as among themselves
and may at any time or from time to time be changed by Lenders as they may
elect, in writing in accordance with Section 12.4, without necessity of notice
to or consent of or approval by Borrower or any other Person. All payments or
other sums received by Agent for the account of Lenders shall not constitute
property or assets of Agent and shall be held by Agent, solely in its capacity
as agent for itself and the other Lenders, subject to the Loan Documents.
11.4.2 Notwithstanding any provision hereof to
the contrary, until such time as a Defaulting Lender has funded its Pro Rata
Share of a Loan which was previously a Non Pro Rata Loan, or all other Lenders
have received payment in full (whether by repayment or prepayment) of the
principal and interest due in respect of such Non Pro Rata Loan, all of the
Obligations owing to such Defaulting Lender hereunder shall be subordinated in
right of payment, as provided in the following sentence, to the prior payment
in full of all principal, interest and fees in respect of all Non Pro Rata
Loans in which the Defaulting Lender
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has not funded its Pro Rata Share (such principal, interest and fees being
referred to as "Senior Loans"). All amounts paid by Borrower and otherwise due
to be applied to the Obligations owing to the Defaulting Lender pursuant to the
terms hereof shall be distributed by Agent to the other Lenders in accordance
with their respective Pro Rata Shares (recalculated for purposes hereof to
exclude the Defaulting Lender's Commitment), until all Senior Loans have been
paid in full. This provision governs only the relationship among Agent, each
Defaulting Lender, and the other Lenders; nothing hereunder shall limit the
obligation of Borrower to repay all Loans in accordance with the terms of this
Agreement. The provisions of this section shall apply and be effective
regardless of whether an Event of Default occurs and is then continuing, and
notwithstanding (i) any other provision of this Agreement to the contrary, (ii)
any instruction of Borrower as to its desired application of payments or (iii)
the suspension of such Defaulting Lender's right to vote on matters which are
subject to the consent or approval of Requisite Lenders or all Lenders. No
Unused Facility Fee shall accrue in favor of, or be payable to, such Defaulting
Lender from the date of any failure to fund Loans or reimburse Agent for any
Liabilities and Costs as herein provided until such failure has been cured, and
Agent shall be entitled to (1) withhold or setoff, and to apply to the payment
of the defaulted amount and any related interest, any amounts to be paid to
such Defaulting Lender under this Agreement, and (2) bring an action or suit
against such Defaulting Lender in a court of competent jurisdiction to recover
the defaulted amount and any related interest. In addition, the Defaulting
Lender shall indemnify, defend and hold Agent and each of the other Lenders
harmless from and against any and all Liabilities and Costs, plus interest
thereon at the Default Rate, which they may sustain or incur by reason of or as
a direct consequence of the Defaulting Lender's failure or refusal to abide by
its obligations under this Agreement.
11.5 Rights, Exculpation, Etc. Neither Agent, any Affiliate of
Agent, nor any of their respective officers, directors, employees, agents,
attorneys or consultants, shall be liable to any Lender for any action taken or
omitted by them hereunder or under any of the Loan Documents, or in connection
herewith or therewith, except that Agent shall be liable for its gross
negligence or willful misconduct, or willful misconduct in the performance of
its express obligations hereunder. In the absence of gross negligence or
willful misconduct, Agent shall
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not be liable for any apportionment or distribution of payments made by it in
good faith pursuant to Section 11.4, and if any such apportionment or
distribution is subsequently determined to have been made in error the sole
recourse of any Person to whom payment was due, but not made, shall be to
recover from the recipients of such payments any payment in excess of the
amount to which they are determined to have been entitled. Agent shall not be
responsible to any Lender for any recitals, statements, representations or
warranties herein or for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any of the
other Loan Documents, or any of the transactions contemplated hereby and
thereby; or for the financial condition of Borrower, any Guarantor or any of
their Affiliates. Agent shall not be required to make any inquiry concerning
either the performance or observance of any of the terms, provisions or
conditions of this Agreement or any of the Loan Documents or the financial
condition of Borrower, any Guarantor or any of their Affiliates, or the
existence or possible existence of any Unmatured Event of Default or Event of
Default.
11.6 Reliance. Agent shall be entitled to rely upon any written
notices, statements, certificates, orders or other documents, telecopies or any
telephone message believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person, and with respect to all
matters pertaining to this Agreement or any of the Loan Documents and its
duties hereunder or thereunder, upon advice of legal counsel (including counsel
for Borrower), independent public accountant and other experts selected by it.
11.7 Indemnification. To the extent that Agent is not
reimbursed and indemnified by Borrower, Lenders will reimburse, within ten (10)
Business Days after notice from Agent, and indemnify and defend Agent for and
against any and all Liabilities and Costs which may be imposed on, incurred by,
or asserted against it in any way relating to or arising out of this Agreement
or any of the other Loan Documents or any action taken or omitted by Agent or
under this Agreement or any of the other Loan Documents, in proportion to each
Lender's Pro Rata Share; provided that no Lender shall be liable for any
portion of such Liabilities and Costs resulting from Agent's gross negligence
or willful misconduct or in respect of normal administrative costs and expenses
incurred by Agent (prior to any Event of Default or
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any Unmatured Event of Default) in connection with its performance of
administrative duties under this Agreement and the other Loan Documents. The
obligations of Lenders under this Section 11.7 shall survive the payment in
full of all Obligations and the termination of this Agreement. In the event
that after payment and distribution of any amount by Agent to Lenders, any
Lender or third party, including Borrower, any creditor of Borrower or a
trustee in bankruptcy, recovers from Agent any amount found to have been
wrongfully paid to Agent or disbursed by Agent to Lenders, then Lenders, in
proportion to their respective Pro Rata Shares, shall reimburse Agent for all
such amounts. Notwithstanding the foregoing, Agent shall not be obligated to
advance Liabilities and Costs and may require the deposit by each Lender of its
Pro Rata Share of any material Liabilities and Costs anticipated by Agent
before they are incurred or made payable.
11.8 Agent Individually. With respect to its Pro Rata Share of
the Commitments hereunder and the Loans made by it, Agent shall have and may
exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender. The terms "Lenders", "Requisite Lenders" or any similar terms may
include Agent in its individual capacity as a Lender or one of the Requisite
Lenders. Agent and any Lender and its Affiliates may accept deposits from,
lend money to, and generally engage in any kind of banking, trust or other
business with Borrower or any of its Affiliates as if it were not acting as
Agent or Lender pursuant hereto.
11.9 Successor Agent; Resignation of Agent; Removal of Agent.
11.9.1 Agent may resign from the performance of
all its functions and duties hereunder at any time by giving at least thirty
(30) Business Days, prior written notice to Lenders and Borrower, and shall
automatically cease to be Agent hereunder in the event a petition in bankruptcy
shall be filed by or against Agent or the Federal Deposit Insurance Corporation
or any other Governmental Authority shall assume control of Agent or Agent's
interests under the Facility. Further, Lenders whose aggregate Commitments
constitute at least sixty-six and two-thirds percent (66-2/3%) of the
Commitments of all Lenders excluding the Agent may remove Agent for cause at
any time by
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giving at least thirty (30) Business Days' prior written notice to Agent,
Borrower and all other Lenders. If Agent enters into one or more assignments
pursuant to Section 11.12 having the effect of reducing its Commitment to less
than $20,000,000 (which number shall be proportionately decreased to the extent
Borrower has reduced the Facility pursuant to Section 2.6.1) then any Lender
whose Commitment exceeds that of Agent may remove Agent by notice given within
thirty (30) days after such Lender receives notice of the assignments which
reduce the Agent's Commitment below such level. Such resignation or removal
shall take effect upon the acceptance by a successor Agent of appointment
pursuant to Section 11.9.2 or 11.9.3.
11.9.2 Upon any such notice of resignation by or
removal of Agent, the Co-Agent with the largest Commitment shall become the
successor Agent unless (i) such Co-Agent refuses to become Agent, or (ii)
Lenders whose aggregate Commitments constitute at least 66-2/3% of the
Commitments of all Lenders excluding such Co-Agent vote that such Co-Agent not
become the successor Agent. If the Co-Agent with the largest Commitment does
not become successor Agent pursuant to the preceding sentence then the Co-Agent
with the next largest Commitment may become successor Agent subject to the same
conditions. If both Co-Agents have the same Commitment amount and both are
willing to become Agent, the successor Agent shall be chosen by a majority vote
(based on aggregate Commitment amounts) of the Lenders other than such two
Co-Agents. If no successor Agent is selected pursuant to the preceding
provisions of this Section 11.9.2, Requisite Lenders shall appoint a successor
Agent with the consent of Borrower, which consent shall not be unreasonably
withheld or delayed and which consent shall not be required if there shall then
exist any Event of Default. Any successor Agent must be a bank (i) the senior
debt obligations of which (or such bank's parent's senior unsecured debt
obligations) are rated not less than BBB by one of the Rating Agencies and (ii)
which has total assets in excess of Ten Billion Dollars ($10,000,000,000).
Such successor Agent shall separately confirm in writing with Borrower the fee
to be paid to such Agent pursuant to Section 2.5.2.
11.9.3 If a successor Agent shall not have been
so appointed within said thirty (30) Business Day period, the retiring or
removed Agent, shall then appoint a successor Agent who shall meet the
requirements described in Section 11.9.2 and
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who shall serve as Agent until such time, if any, as a successor Agent shall
have been appointed as provided above.
11.10 Consent and Approvals.
11.10.1 Each of the following shall require the
approval or consent of Requisite Lenders:
(a) Approval of value for
non-income producing Properties determined on a basis other than a
purchase and sale agreement pursuant to the definition of Adjusted
Asset Value (Section 1.1).
(b) Approval of each new Guarantor
or Guarantor Partnership (Section 1.1);
(c) Approval of any change in the
Replacement Reserve Amount (Section 1.1);
(d) Approval of each new Borrowing
Base Property which does not satisfy the conditions set forth in
Section 3.1 (Section 3.1);
(e) Approval of any material
amendment of organizational documents (Section 8.2);
(f) Approval of certain changes in
the Executive Officers (Section 8.5);
(g) Approval of certain
construction projects (Section 9.12);
(h) Acceleration following an
Event of Default (Section 10.2.1) or rescission of such acceleration
(Section 10.3);
(i) Approval of the exercise of
rights and remedies under the Loan Documents following an Event of
Default ( Section 10.2.1);
(j) Appointment of a successor
Agent (Section 11.9);
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(k) Except as referred to in
Section 11.10.2 or 11.11.1, approval of any amendment, modification or
termination of this Agreement, or waiver of any provision herein
(Section 12.4).
11.10.2 Each amendment, modification or waiver
specifically enumerated in Section 12.4.1 shall require the consent of all
Lenders and each amendment, modification or waiver specifically enumerated in
Section 12.4.2 shall require the consent of the number of Lenders described
therein.
11.10.3 In addition to the required consents or
approvals referred to in Section 11.10.1, Agent may at any time request
instructions from Requisite Lenders with respect to any actions or approvals
which, by the terms of this Agreement or of any of the Loan Documents, Agent is
permitted or required to take or to grant without instructions from any
Lenders, and if such instructions are promptly requested, Agent shall be
absolutely entitled to refrain from taking any action or to withhold any
approval and shall not be under any liability whatsoever to any Person for
refraining from taking any action or withholding any approval under any of the
Loan Documents until it shall have received such instructions from Requisite
Lenders. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against Agent as a result of Agent acting or refraining from
acting under this Agreement or any of the other Loan Documents in accordance
with the instructions of Requisite Lenders or, where applicable, all Lenders.
Agent shall promptly notify each Lender at any time that the Requisite Lenders
have instructed Agent to act or refrain from acting pursuant hereto.
11.10.4 Each Lender agrees that any action taken
by Agent at the direction or with the consent of Requisite Lenders in
accordance with the provisions of this Agreement or any Loan Document, and the
exercise by Agent at the direction or with the consent of Requisite Lenders of
the powers set forth herein or therein, together with such other powers as are
reasonably incidental thereto, shall be authorized and binding upon all
Lenders, except for actions specifically requiring the approval of all Lenders.
All communications from Agent to Lenders requesting Lenders' determination,
consent, approval or disapproval (i) shall be given in the form of a written
notice to each Lender, (ii) shall be accompanied by a description of the matter
or thing as to which such determination, approval, consent
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or disapproval is requested, or shall advise each Lender where such matter or
thing may be inspected, or shall otherwise describe the matter or issue to be
resolved, (iii) shall include, if reasonably requested by a Lender and to the
extent not previously provided to such Lender, written materials and a summary
of all oral information provided to Agent by Borrower in respect of the matter
or issue to be resolved, and (iv) may include Agent's recommended course of
action or determination in respect thereof. Each Lender shall reply promptly,
but in any event within ten (10) Business Days (the "Lender Reply Period").
Unless a Lender shall give written notice to Agent that it objects to the
recommendation or determination of Agent (together with a written explanation
of the reasons behind such objection) within the Lender Reply Period, such
Lender shall be deemed to have approved of or consented to such recommendation
or determination. With respect to decisions requiring the approval of
Requisite Lenders or all Lenders, Agent shall submit its recommendation or
determination for approval of or consent to such recommendation or
determination to all Lenders and upon receiving the required approval or
consent shall follow the course of action or determination recommended to
Lenders by Agent or such other course of action recommended by Requisite
Lenders, and each non-responding Lender shall be deemed to have concurred with
such recommended course of action.
11.11 Agency Provisions Relating to Certain Enforcement Actions.
11.11.1 Agent is hereby authorized on behalf of
all Lenders, without the necessity of any notice to or further consent from any
Lender, to waive the imposition of late fees provided for in Section 2.4.5 up
to a maximum of four (4) times during the term of this Agreement, including any
extensions.
11.11.2 Should Agent (i) employ counsel for advice
or other representation (whether or not any suit has been or shall be filed)
with respect to any of the Loan Documents, or (ii) commence any proceeding or
in any way seek to enforce its rights or remedies under the Loan Documents,
each Lender, upon demand therefor from time to time, shall contribute its share
(based on its Pro Rata Share) of the reasonable costs and/or expenses of any
such advice or other representation, enforcement or acquisition, including, but
not limited to, fees of receivers, court costs and fees and expenses of
attorneys to the extent not
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otherwise reimbursed by Borrower; provided that Agent shall not be entitled to
reimbursement of its attorneys' fees and expenses incurred in connection with
the resolution of disputes between Agent and other Lenders unless Agent shall
be the prevailing party in any such dispute. Any loss of principal and
interest resulting from any Event of Default shall be shared by Lenders in
accordance with their respective Pro Rata Shares.
11.12 Assignments and Participations.
11.12.1 Each Lender may assign, to one or more
Eligible Assignees, all or a portion of its rights and obligations under this
Agreement (including without limitation all or a portion of its Commitment and
the Loans owing to it) and other Loan Documents; provided, however, that (i)
each such assignment shall be of a constant, and not a varying, percentage of
the assigning Lender's rights and obligations under this Agreement and other
Loan Documents, and the assignment shall cover the same percentage of such
Lender's Commitment and Loans, (ii) unless Agent and Borrower otherwise
consent, the aggregate amount of the Commitment of the assigning Lender being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Assumption with respect to such assignment) shall in no event be
less than Ten Million Dollars ($10,000,000) and shall be an integral multiple
of One Million Dollars ($1,000,000), (iii) after giving effect to such
assignment, the aggregate amount of the Commitment retained by the assigning
Lender shall in no event be less than Fifteen Million Dollars ($15,000,000),
(iv) the parties to each such assignment shall execute and deliver to Agent,
for its approval and acceptance, an Assignment and Assumption, and (v) Agent
shall receive from the assignor a processing fee of Three Thousand Dollars
($3,000). Upon such execution, delivery, approval and acceptance, and upon the
effective date specified in the applicable Assignment and Assumption, (X) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Assumption, have the rights and obligations of a Lender hereunder, and (Y) the
assigning Lender thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Assumption,
relinquish its rights and be released from its obligations under this
Agreement.
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11.12.2 By executing and delivering an Assignment
and Assumption, the assigning Lender thereunder and the assignee thereunder
confirm to and agree with each other and the other parties hereto as follows:
(i) other than as provided in such Assignment and Assumption, such assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or any other Loan Document or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other Loan Document or any other instrument or document
furnished pursuant hereto; (ii) such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of Borrower or any Guarantor or the performance or observance by
Borrower or any Guarantor of any of their respective obligations under any Loan
Document or any other instrument or document furnished pursuant hereto; (iii)
such assignee confirms that it has received a copy of this Agreement, together
with copies of the financial statements referred to in Article V or delivered
pursuant to Article VI to the date of such assignment and such other Loan
Documents and other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment and
Assumption; (iv) such assignee will, independently and without reliance upon
Agent, such assigning Lender or any other Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement; (v)
such assignee appoints and authorizes Agent to take such action as Agent on its
behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to Agent by the terms hereof and thereof, together
with such powers as are reasonably incidental thereto; and (vi) such assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed
by it as a Lender.
11.12.3 Agent shall maintain, at its address
referred to on the counterpart signature pages hereof, a copy of each
Assignment and Assumption delivered to and accepted by it and shall record in
the Loan Account the names and addresses of each Lender and the Commitment of,
and principal amount of the Loans owing to, such Lender from time to time.
Borrower, Agent and Lenders may treat each Person whose name is recorded in the
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Loan Account as a Lender hereunder for all purposes of this Agreement.
11.12.4 Upon its receipt of an Assignment and
Assumption executed by an assigning Lender and an assignee, Agent shall, if
such Assignment and Assumption has been properly completed and is in
substantially the form of Exhibit A, (i) accept such Assignment and Assumption,
(ii) record the information contained therein in the Loan Account, and (iii)
give prompt notice thereof to Borrower. Upon request, Borrower will execute
and deliver to Agent an appropriate replacement promissory note or replacement
promissory notes in favor of each assignee (and assignor, if such assignor is
retaining a portion of its Commitment and Loans) reflecting such assignee's
(and assigner's) Pro Rata Share(s) of the Facility. Upon execution and
delivery of such replacement promissory notes the original promissory note or
notes evidencing all or a portion of the Commitments and Loans being assigned
shall be cancelled and returned to Borrower.
11.12.5 Each Lender may sell participations to one
or more banks or other entities in or to all or a portion of its rights and
obligations under this Agreement (including without limitation all or a portion
of its Commitment and the Loans owing to it) and other Loan Documents;
provided, however, that (i) such Lender's obligations under this Agreement
(including without limitation its Commitment to Borrower hereunder) shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) Borrower, Agent
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement and with regard to any and all payments to be made under this
Agreement, and (iv) the holder of any such participation shall not be entitled
to voting rights under this Agreement except for voting rights with respect to
(A) increases in the Facility; (B) extensions of the Termination Date; and (C)
decreases in the interest rates described in this Agreement. No participant
shall be entitled to vote on any matter until the Lender with which such
participant is participating in the Facility and the Loans confirms such
participant's status as a participant hereunder.
11.12.6 Borrower will use reasonable efforts to
cooperate with Agent and Lenders in connection with the
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assignment of interests under this Agreement or the sale of participations
herein.
11.12.7 Anything in this Agreement to the contrary
notwithstanding, and without the need to comply with any of the formal or
procedural requirements of this Agreement, including this Section 11.12, any
Lender may at any time and from time to time pledge and assign all or any
portion of its rights under all or any of the Loan Documents to a Federal
Reserve Bank; provided that no such pledge or assignment shall release such
Lender from its obligations thereunder. To facilitate any such pledge or
assignment, Agent shall, at the request of such Lender, enter into a letter
agreement with the Federal Reserve Bank in substantially the form of the
exhibit to Appendix C to the Federal Reserve Bank of New York Operating
circular No. 12.
11.12.8 Anything in this Agreement to the contrary
notwithstanding, any Lender may assign all or any portion of its rights and
obligations under this Agreement to another branch or Affiliate of such Lender,
provided that (i) at the time of such assignment such Lender is not a
Defaulting Lender, (ii) such Lender gives Agent and Borrower at least fifteen
(15) days' prior written notice of any such assignment, (iii) the parties to
each such assignment execute and deliver to Agent an Assignment and Assumption,
and (iv) Agent receives from assignor a processing fee of Three Thousand
Dollars ($3,000).
11.12.9 No assignee of any rights and obligations
under this Agreement shall be permitted to subassign such rights and
obligations.
11.12.10 No Lender shall be permitted to assign or
sell all or any portion of its rights and obligations under this Agreement to
Borrower or any Affiliate of Borrower.
11.13 Ratable Sharing. Subject to Sections 11.3 and 11.4,
Lenders agree among themselves that (i) with respect to all amounts received by
them which are applicable to the payment of the Obligations, equitable
adjustment will be made so that, in effect, all such amounts will be shared
among them ratably in accordance with their Pro Rata Shares, whether received
by voluntary payment, by counterclaim or cross action or by the enforcement of
any or all of the Obligations, (ii) if any of them shall by voluntary payment
or by the exercise of any right of
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counterclaim or otherwise, receive payment of a proportion of the aggregate
amount of the obligations held by it which is greater than its Pro Rata Share
of the payments on account of the Obligations, the one receiving such excess
payment shall purchase, without recourse or warranty, an undivided interest and
participation (which it shall be deemed to have done simultaneously upon the
receipt of such payment) in such Obligations owed to the others so that all
such recoveries with respect to such Obligations shall be applied ratably in
accordance with their Pro Rata Shares; provided, that if all or part of such
excess payment received by the purchasing party is thereafter recovered from
it, those purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to that party to the extent necessary to
adjust for such recovery, but without interest except to the extent the
purchasing party is required to pay interest in connection with such recovery.
Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 11.13 may, to the fullest extent permitted by
law, exercise all its rights of payment with respect to such participation as
fully as if such Lender were the direct creditor of Borrower in the amount of
such participation.
11.14 Delivery of Documents. Agent shall as soon as reasonably
practicable distribute to each Lender at its primary address set forth on the
appropriate counterpart signature page hereof, or at such other address as a
Lender may request in writing, (i) all documents to which such Lender is a
party or of which such Lender is a beneficiary set forth in Section 4.1, (ii)
all documents of which Agent receives copies from Borrower pursuant to Sections
6.1 and 12.6, (iii) all other documents or information which Agent is required
to send to Lenders pursuant to the terms of this Agreement; (iv) other
information or documents received by Agent at the request of any Lender, and
(v) all notices received by Agent pursuant to Section 6.2. In addition, within
fifteen (15) Business Days after receipt of a request in writing from a Lender
for written information or documents provided by or prepared by Borrower, Agent
shall deliver such written information or documents to such requesting Lender
if Agent has possession of such written information or documents in its
capacity as Agent or as a Lender.
11.15 Notice of Events of Default. Agent shall not be deemed to
have knowledge or notice of the occurrence of any
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Unmatured Event of Default or Event of Default (other than nonpayment of
principal of or interest on the Loans) unless Agent has received notice in
writing from a Lender or Borrower referring to this Agreement or the other Loan
Documents, describing such event or condition and expressly stating that such
notice is a notice of an Unmatured Event of Default or Event of Default.
Should Agent receive such notice of the occurrence of an Unmatured Event of
Default or Event of Default, or should Agent send Borrower a notice of
Unmatured Event of Default or Event of Default, Agent shall promptly give
notice thereof to each Lender.
ARTICLE XII
MISCELLANEOUS
12.1 Expenses.
12.1.1 Generally. Borrower agrees upon demand to
pay, or reimburse Agent for, all of Agent's external audit and legal, expenses
and for all other reasonable out-of-pocket costs and expenses of every type and
nature (including, without limitation, the reasonable fees, expenses and
disbursements of Agent's internal legal counsel and internal appraisers except
that such appraiser expenses shall not exceed $5,000 per year without
Borrower's prior consent) incurred by Agent at any time (whether prior to, on
or after the date of this Agreement) in connection with (i) its own audit and
investigation of Borrower and the Borrowing Base Properties; (ii) the
negotiation, preparation and execution of this Agreement (including, without
limitation, the satisfaction or attempted satisfaction of any of the conditions
set forth in Article IV) and the other Loan Documents and the making of the
Loans; (iii) the review and, if applicable, acceptance of additional Borrowing
Base Properties, including reasonable attorneys' fees and costs incurred in
connection therewith; (iv) administration of this Agreement, the other Loan
Documents and the Loans, including, without limitation, consultation with
attorneys in connection therewith; and (v) the protection, collection or
enforcement of any of the Obligations.
12.1.2 After Event of Default. Borrower further
agrees to pay, or reimburse Agent and Lenders, for all reasonable
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out-of-pocket costs and expenses, including without limitation reasonable
attorneys' fees and disbursements incurred by Agent or Lenders after the
occurrence of an Event of Default (i) in enforcing any Obligation or exercising
or enforcing any other right or remedy available by reason of such Event of
Default; (ii) in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or in
any insolvency or bankruptcy proceeding; (iii) in commencing, defending or
intervening in any litigation or in filing a petition, complaint, answer,
motion or other pleadings in any legal proceeding relating to Borrower or any
Guarantor and related to or arising out of the transactions contemplated
hereby; or (iv) in taking any other action in or with respect to any suit or
proceeding (whether in bankruptcy or otherwise).
12.2 Indemnity. Borrower further agrees to defend, protect,
indemnify and hold harmless Agent, each and all of the Lenders, each of their
respective Affiliates and participants and each of the respective officers,
directors, employees, agents, attorneys and consultants (including, without
limitation, those retained in connection with the satisfaction or attempted
satisfaction of any of the conditions set forth in Article IV) of each of the
foregoing (collectively called the "Indemnitees") from and against any and all
Liabilities and Costs imposed on, incurred by, or asserted against such
Indemnitees (whether based on any federal or state laws or other statutory
regulations, including, without limitation, securities and commercial laws and
regulations, under common law or in equity, and based upon contract or
otherwise, including any Liabilities and Costs arising as a result of a
"prohibited transaction" under ERISA to the extent arising from or in
connection with the past, present or future operations of Borrower or any
Guarantor or their respective predecessors in interest) in any manner relating
to or arising out of this Agreement or the other Loan Documents, or any act,
event or transaction related or attendant thereto, the making of and
participation in the Loans and the management of the Loans, or the use or
intended use of the proceeds of the Loans (collectively, the "Indemnified
Matters"); provided, however, that Borrower shall have no obligation to an
Indemnitee hereunder with respect to (i) matters for which such Indemnitee has
been compensated pursuant to or for which an exemption is provided in Section
2.4.7 or any other provision of this Agreement, and (ii) Indemnified Matters to
the extent caused by
-105-
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or resulting from the willful misconduct or gross negligence of that
Indemnitee, as determined by a court of competent jurisdiction. To the extent
that the undertaking to indemnify, pay and hold harmless set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, Borrower shall contribute the maximum portion which it is
permitted to pay and satisfy under applicable law, to the payment and
satisfaction of all Indemnified Matters incurred by the Indemnitees.
12.3 Change in Accounting Principles. Except as otherwise
provided herein, if any changes in accounting principles from those used in the
preparation of the most recent financial statements delivered to Agent pursuant
to the terms hereof are hereinafter required or permitted by the rules,
regulations, pronouncements and opinions of the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) and are adopted by Borrower or any
Guarantor Partnership with the agreement of its independent certified public
accountants and such changes result in a change in the method of calculation of
any of the financial covenants, standards or terms found herein, the parties
hereto agree to enter into negotiations in order to amend such provisions so as
to equitably reflect such changes with the desired result that the criteria for
evaluating the financial condition of Borrower shall be the same after such
changes as if such changes had not been made; provided, however, that no change
in GAAP that would affect the method of calculation of any of the financial
covenants, standards or terms shall be given effect in such calculations until
such provisions are amended pursuant to Section 12.4 to so reflect such change
in accounting principles.
12.4 Amendments and Waivers. (i) No amendment or modification
of any provision of this Agreement shall be effective without the written
agreement of Requisite Lenders (after notice to all Lenders) and Borrower
(except for amendments to Section 11.4.1 which do not require the consent of
Borrower), and (ii) no termination or waiver of any provision of this
Agreement, or consent to any departure by Borrower therefrom (except as
expressly provided in Section 11.11.1 with respect to waivers of late fees),
shall in any event be effective without the written concurrence of Requisite
Lenders (after notice to all
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Lenders), which Requisite Lenders shall have the right to grant or withhold at
their sole discretion, except that:
12.4.1 The following amendments, modifications or
waivers shall require the consent of all Lenders:
(a) increasing the Commitments or
Lender's Commitments;
(b) changing the principal amount
or final maturity of the Loans except as provided in Section 2.1.4;
(c) reducing the interest rates
applicable to the Loans;
(d) reducing the rates on which
fees payable pursuant hereto are determined;
(e) forgiving or delaying any
amount payable or receivable under Article II (other than late fees);
(f) changing the definition of
"Requisite Lenders" or "Pro Rata Shares";
(g) changing any provision
contained in this Section 12.4;
(h) releasing any obligor under any
Loan Document; or
(i) consent to assignment by
Borrower of all of its duties and Obligations hereunder pursuant to
Section 12.14.
12.4.2 The following amendments, modifications or
waivers shall require the consent of Lenders whose aggregate Commitments
constitute at least eighty-five percent (85%) of the Commitments of all
Lenders:
(a) changing the ratios set forth
in Sections 9.1, 9.2, 9.4 or 9.13.
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(b) changing the definitions of
"Borrowing Base Value" or "Maximum Loan Amount".
12.4.3 No amendment, modification, termination or
waiver of any provision of Article XI or any other provision referring to Agent
shall be effective without the written concurrence of Agent, but only if such
amendment, modification, termination or waiver alters the obligations or rights
of Agent.
Any waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given. No notice to or demand on
Borrower in any case shall entitle Borrower to any other further notice or
demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 12.4
shall be binding on each assignee, transferee or recipient of Agent's or any
Lender's Commitment under this Agreement or the Loans at the time outstanding.
12.5 Independence of Covenants. All covenants hereunder shall
be given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of an Event of Default or Unmatured Event of Default
if such action is taken or condition exists, and if a particular action or
condition is expressly permitted under any covenant, unless expressly limited
to such covenant, the fact that it would not be permitted under the general
provisions of another covenant shall not constitute an Event of Default or
Unmatured Event of Default if such action is taken or condition exists.
12.6 Notices and Delivery. Unless otherwise specifically
provided herein, any consent, notice or other communication herein required or
permitted to be given shall be in writing and may be personally served,
telecopied or sent by courier service or United States mail and shall be deemed
to have been given when delivered in person or by courier service, upon receipt
of a telecopy (or on the next Business Day if such telecopy is received on a
non-Business Day or after 5:00 p.m. (at the office of the recipient) on a
Business Day) or four (4) Business Days after deposit in the United States mail
(registered or certified, with postage prepaid and properly addressed).
Notices to Agent pursuant to Article II shall not be effective until received
by
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<PAGE> 117
Agent. For the purposes hereof, the addresses of the parties hereto (until
notice of a change thereof is delivered as provided in this Section 12.6) shall
be as set forth below each party's name on the signature pages hereof, or, as
to each party, at such other address as may be designated by such party in a
written notice to all of the other parties. All deliveries to be made to Agent
for distribution to the Lenders shall be made to Agent at the addresses
specified for notice on the signature page hereto and in addition, a sufficient
number of copies of each such delivery shall be delivered to Agent for delivery
to each Lender at the address specified for deliveries on the signature page
hereto or such other address as may be designated by Agent in a written notice.
12.7 Survival of Warranties, Indemnities and Agreements. All
agreements, representations, warranties and indemnities made or given herein
shall survive the execution and delivery of this Agreement and the other Loan
Documents and the making and repayment of the Loans hereunder and such
indemnities shall survive termination hereof.
12.8 Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of Agent or any Lender in the exercise of any
power, right or privilege under any of the Loan Documents shall impair such
power, right or privilege or be construed to be a waiver of any default or
acquiescence therein, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise thereof or of any
other right, power or privilege. All rights and remedies existing under the
Loan Documents are cumulative to and not exclusive of any rights or remedies
otherwise available.
12.9 Payments Set Aside. To the extent that Borrower makes a
payment or payments to Agent or the Lenders or Agent or the Lenders exercise
their rights of setoff, and such payment or payments or the proceeds of such
setoff or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, state or federal
law, common law or equitable cause, then to the extent of such recovery, the
Obligation or part thereof originally intended to be satisfied, and all rights
and remedies therefor, shall be revived and continued in full force and effect
-109-
<PAGE> 118
as if such payment had not been made or such setoff had not occurred.
12.10 Severability. In case any provision in or obligation under
this Agreement or the other Loan Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby,
provided, however, that if the rates of interest or any other amount payable
hereunder, or the collectibility thereof, are declared to be or become invalid,
illegal or unenforceable, Lenders' obligations to make Loans shall not be
enforceable.
12.11 Heading. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose or be given any substantive effect.
12.12 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS.
12.13 Limitation of Liability. To the extent permitted by
applicable law, no claim may be made by Borrower, any Lender or any other
Person against Agent or any Lender, or the affiliates, directors, officers,
employees, attorneys or agents of any of them, for any special, indirect,
consequential or punitive damages in respect of any claim for breach of
contract or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement, or any act, omission or event
occurring in connection therewith; and Borrower and each Lender hereby waive,
release and agree not to sue upon any claim for any such damages, whether or
not accrued and whether or not known or suspected to exist in its favor.
12.14 Successors and Assigns. This Agreement and the other Loan
Documents shall be binding upon the parties hereto and their respective
successors and assigns and shall inure to the benefit of the parties hereto and
the successors and permitted assigns of Agent and Lenders. The terms and
provisions of this Agreement shall inure to the benefit of any assignee or
transferee of the Loans and the Commitments of Lenders under this Agreement,
and in the event of such transfer or assignment, the rights and
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<PAGE> 119
privileges herein conferred upon Agent and Lenders shall automatically extend
to and be vested in such transferee or assignee, all subject to the terms and
conditions hereof. Borrower's rights or any interest therein hereunder, and
Borrower's duties and Obligations hereunder, shall not be assigned without the
consent of all Lenders.
12.15 Consent to Jurisdiction and Service of Process; Waiver of
Jury Trial. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST BORROWER WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE, AND ALL JUDICIAL PROCEEDINGS
BROUGHT BY BORROWER WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
SHALL BE, BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
HAVING SITUS WITHIN THE COMMONWEALTH OF MASSACHUSETTS, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, BORROWER ACCEPTS, FOR ITSELF AND IN CONNECTION WITH
ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY FINAL JUDGMENT
RENDERED THEREBY FROM WHICH NO APPEAL HAS BEEN TAKEN OR IS AVAILABLE. BORROWER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS NOTICE ADDRESS SPECIFIED
ON THE SIGNATURE PAGES HEREOF. BORROWER, AGENT AND LENDERS EACH IRREVOCABLY
WAIVES (i) TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, AND (ii) ANY OBJECTION (INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT IN ANY JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL
AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT OF AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST BORROWER IN
THE COURTS OF ANY OTHER JURISDICTION.
12.16 Counterparts; Effectiveness; Inconsistencies. This
Agreement and any amendments, waivers, consents or supplements may be executed
in counterparts, each of which when so executed and delivered shall be deemed
an original, but all such together shall constitute but one and the same
instrument. This Agreement shall become effective when Borrower, the initial
Lenders and Agent have duly executed and delivered execution pages of this
Agreement to each other (delivery by Borrower to Lenders and by
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<PAGE> 120
any Lender to Borrower and any other Lender being deemed to have been made by
delivery to Agent). Agent shall send written confirmation of the Closing Date
to Borrower and each other Lender promptly following the occurrence thereof.
Effective as of the Closing Date, the commitments under the Existing Facility
shall terminate, and all accrued and unpaid obligations of Borrower under the
Existing Facility shall be due and payable in full. This Agreement and each of
the other Loan Documents shall be construed to the extent reasonable to be
consistent one with the other, but to the extent that the terms and conditions
of this Agreement are actually and directly inconsistent with the terms and
conditions of any other Loan Document, this Agreement shall govern.
12.17 Construction. The parties acknowledge that each party and
its counsel have reviewed and revised this Agreement and that the normal rule
of construction to the effect that any ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation of this
Agreement or any amendments or exhibits hereto.
12.18 Obligations Unsecured. It is the intent of the parties
that the Obligations, and the obligations of the Guarantors under their
respective Guaranties, shall constitute unsecured obligations of Borrower and
each Guarantor, respectively. Neither the restrictions and prohibitions set
forth herein with respect to the creation, incurrence, assumption or existence
of any Lien on any Property of Borrower or any other Person (including, without
limitation, Borrowing Base Properties and interests in Persons owning any
Borrowing Base Property), nor those set forth in any other Loan Document, are
intended to create or constitute a Lien of any nature upon any Property of
Borrower or any other Person, and no such restriction or prohibition shall be
deemed to constitute any such Lien. This Section 12.18 shall not be deemed to
prevent the Agent or any Lender from obtaining a Lien as security for the
Obligations at any time hereafter pursuant to a mutual agreement among the
parties hereto expressly providing for such Lien or during the continuance of
any Event of Default.
12.19 Entire Agreement. This Agreement, taken together with all
of the other Loan Documents and all certificates and other documents delivered
by Borrower to Agent (including documents incorporating separate agreements
relating to the
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<PAGE> 121
payment of fees), embodies the entire agreement and supersede all prior
agreements, written and oral, relating to the subject matter hereof.
-113-
<PAGE> 122
IN WITNESS WHEREOF, this Agreement has been duly executed on the date
set forth above.
BORROWER: EXCEL REALTY TRUST, INC., a
Maryland corporation
By
----------------------------------
Its
-------------------------------
ADDRESS FOR NOTICE AND DELIVERY:
16955 Via Del Campo, Suite 110,
San Diego, CA 92127
Attn: Gary B. Sabin, President
Tel: (619)485-9400
Fax: (619)485-8530
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<PAGE> 123
AGENT/LENDER: THE FIRST NATIONAL BANK OF BOSTON
By
----------------------------------
Its
-------------------------------
ADDRESS FOR NOTICE AND DELIVERY:
Address:
115 Perimeter Center Place N.E.
Suite 500
Atlanta, GA 30346
Attn: William F. Hipp
Telephone: (770)390-6521
Telecopy: (770)390-8434
With a copy to: 100 Federal Street
Boston, Massachusetts 02110
Attn: Real Estate Division
With a copy to: 700 N. Pearl Street
Suite 1840
Dallas, TX 75201
Attn: Helen Delph, Vice President
Telephone: (214)720-3836
Telecopy: (214)871-7328
Pro Rata Share: 17.78%
Loan Commitment: $26,666,666.67
LIBOR OFFICE:
Address:
115 Perimeter Center Place N.E.
Suite 500
Atlanta, GA 30346
Attn: William F. Hipp
Telephone: (770)390-6521
Telecopy: (770)390-8434
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<PAGE> 124
OTHER LENDERS: WELLS FARGO BANK, N.A.
By
----------------------------------
Its
-------------------------------
ADDRESS FOR NOTICE AND DELIVERY:
Address:
2030 Main Street
Suite 800
Irvine, CA 92714
Attn: Pat Murphy
Telephone: (714)251-4359
Telecopy: (714)851-9815
Pro Rata Share: 17.78%
Loan Commitment: $26,666,666.67
LIBOR OFFICE:
Address:
2030 Main Street
Suite 800
Irvine, CA 92714
Attn: Pat Murphy
Telephone: (714)251-4359
Telecopy: (714)851-9815
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<PAGE> 125
FIRST INTERSTATE BANK OF CALIFORNIA
By
----------------------------------
Its
-------------------------------
ADDRESS FOR NOTICE AND DELIVERY:
Address:
401 B Street
Suite 304
San Diego, CA 92101
Telephone: (619)699-3056
Telecopy: (619)699-3105
Pro Rata share: 17.78%
Loan Commitment: $26,666,666.67
LIBOR OFFICE:
Address:
401 B Street
Suite 304
San Diego, CA 92101
Telephone: (619)699-3056
Telecopy: (619)699-3105
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<PAGE> 126
DRESDNER BANK AG
By
----------------------------------
Its
-------------------------------
By
----------------------------------
Its
-------------------------------
ADDRESS FOR NOTICE AND DELIVERY:
Address:
725 South Figueroa Street
Suite 3950
Los Angeles, CA 90017
Attn: Vitol B. Wiacek
Telephone: (213)630-5422
Telecopy: (213)627-3819
Pro Rata share: 16.67%
Loan Commitment: $25,000,000
LIBOR OFFICE:
Address:
75 Wall Street
New York, NY 10005
Attn: Robert Reddington
Telephone: (212)429-2269
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<PAGE> 127
NBD BANK
By
----------------------------------
Dennis C. Jacobs,
Vice President
ADDRESS FOR NOTICE AND DELIVERY:
Address: NBD Bank
900 Tower Drive
Suite 400
Troy, Michigan 48098
Attn: Dennis C. Jacobs
Telephone: (810)828-6768
Telecopy: (810)828-6401
Pro Rata share: 13.33%
Loan Commitment: $20,000,000
LIBOR OFFICE:
Address:
900 Tower Drive, Suite 400
Troy, Michigan 48098
Attn: Dennis C. Jacobs
Telephone: (810)828-6768
Telecopy: (810)828-6401
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<PAGE> 128
BHF-BANK AKTEINGESELLSCHAFT
By
----------------------------------
Its
-------------------------------
By
----------------------------------
Its
-------------------------------
ADDRESS FOR NOTICE AND DELIVERY:
Address:
590 Madison Avenue
New York, NY 10022
Attn: Krina Griffin
Telephone: (212)756-5581
Telecopy: (212)756-5536
Pro Rata share: 10%
Loan Commitment: $15,000,000
LIBOR OFFICE:
Address:
BHF-Bank AG
Grand Cayman Branch
590 Madison Avenue
New York, NY 10022
Telephone: (212)756-5581
Telecopy: (212)756-5536
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<PAGE> 129
SIGNET BANK
By
----------------------------------
Its
-------------------------------
ADDRESS FOR NOTICE AND DELIVERY:
Address:
Signet Bank
7799 Leesburg Pike
Falls Church, VA 22043
Attn: John A. Schissel
Telephone: (703)714-5145
Telecopy: (703)506-0284
Pro Rata share: 6.67%
Loan Commitment: $10,000,000
LIBOR OFFICE:
Address:
7799 Leesburg Pike
Falls Church, VA 22043
Attn: John A. Schissel
Telephone: (703)714-5145
Telecopy: (703)506-0284
-121-
<PAGE> 1
EXHIBIT 21.1
SUBSIDIARIES OF THE REGISTRANT
Excel Realty Trust - NC,
A North Carolina general partnership
NC Properties, #1, Inc.
A Delaware Corporation
NC Properties, #2, Inc.
A Delaware Corporation
Excel Realty Trust - TX
A Texas Limited partnership
TX Properties #1, Inc.
A Delaware Corporation
TX Properties #2, Inc.
A Delaware Corporation
Excel Realty - PA, Inc.
A Delaware corporation
Excel Realty - NE, Inc.
A Nebraska corporation
Excel Realty Trust - ST, Inc.
A Delaware corporation
Excel Mortgage Funding Corporation,
a Delaware corporation
Excel Credit Corporation,
a Delaware corporation
(a wholly-owned subsidiary of Excel Mortgage Funding Corporation)
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement of
Excel Realty Trust, Inc. and subsidiaries on Form S-8 (File No. 33-84982) of
our report dated February 5, 1996 on our audits of the consolidated financial
statements and financial statement schedules of Excel Realty Trust, Inc. and
subsidiaries as of December 31, 1995 and 1994, and for each of the three years
in the period ended December 31, 1995, which report is included in this Annual
Report on Form 10-K.
Coopers & Lybrand L.L.P.
San Diego, California
March 7, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 9,812,000
<SECURITIES> 0
<RECEIVABLES> 2,882,000
<ALLOWANCES> (726,000)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 386,925,000
<DEPRECIATION> (14,909,000)
<TOTAL-ASSETS> 428,307,000
<CURRENT-LIABILITIES> 6,072,000
<BONDS> 210,797,000
0
0
<COMMON> 208,678,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 428,307,000
<SALES> 0
<TOTAL-REVENUES> 55,229,000
<CGS> 0
<TOTAL-COSTS> 15,470,000
<OTHER-EXPENSES> 6,933,000
<LOSS-PROVISION> 409,000
<INTEREST-EXPENSE> 22,458,000
<INCOME-PRETAX> 18,192,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 18,192,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,192,000
<EPS-PRIMARY> 1.51
<EPS-DILUTED> 1.51
</TABLE>
