<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 31, 1998
-------------
The Rouse Company
-----------------
(Exact name of registrant as specified in its charter)
Maryland 0-1743 52-0735512
-------------------- ------------ ------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
10275 Little Patuxent Parkway
Columbia, Maryland 21044-3456
- - -------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (410) 992-6000
--------------
Not Applicable
--------------
(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
The Rouse Company (the "Company") previously reported in its Current Report on
Form 8-K filed with the Securities and Exchange Commission on August 13, 1998,
that on April 6, 1998, the Company and Westfield America, Inc. entered into an
agreement to purchase a portfolio of interests in retail centers from TrizecHahn
Centers Inc. ("TrizecHahn"). Under the terms of the agreement, as amended, the
Company agreed to purchase ownership interests in eight retail centers for
approximately $1.3 billion in a series of transactions expected to be completed
during the third and fourth quarters of 1998. The agreement is subject to the
satisfaction of certain conditions and includes a provision for the substitution
of, or increase or decrease in the number of retail centers to be acquired.
On July 31, 1998 a wholly owned subsidiary of The Rouse Company purchased from
TrizecHahn retail property assets known as Park Meadows Mall. In a related
transaction on the same date, another wholly owned subsidiary of the Company, in
a joint venture with Westfield America, Inc. ("Westfield"), purchased from
TrizecHahn retail property assets known as Valley Fair. As a result, Company
subsidiaries now own Park Meadows Mall and a 50% joint venture ownership
interest in Valley Fair. The Company is holding for sale the 50% joint venture
ownership interest in Valley Fair.
Park Meadows Mall is a regional shopping center in Littleton, Colorado, which is
approximately 15 miles from Denver. The Mall contains approximately 593,000
square feet of leasable mall space and four department stores encompassing
875,000 square feet of space with a fifth department store encompassing 146,000
square feet of space under construction. Valley Fair Mall is a regional
shopping center in San Jose, California containing approximately 469,000 square
feet of leasable mall space and three department stores encompassing 669,000
square feet of space. Park Meadows Mall and Valley Fair Mall will continue to
operate as regional shopping centers.
The aggregate purchase price for the Company's interests in the properties was
approximately $445,435,000, including approximately $252,817,000 paid at closing
and approximately $192,618,000 of debt secured by the properties which was
assumed by subsidiaries of the Company. The purchase prices were determined on
an individual property basis by negotiation between the applicable parties. The
Company used available cash to pay approximately $42,817,000 of the purchase
price at closing. The balance of the purchase price paid at closing of
$210,000,000 was provided by borrowings under the Company's unsecured revolving
credit facility that was underwritten by The First National Bank of Chicago and
Bankers Trust Company.
<PAGE>
The Company is filing this Current Report on Form 8-K/A to include financial
statements required under Rule 3-14 of Regulation S-X of Park Meadows Mall and
Valley Fair and related pro forma financial information of the Company.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
The following financial statements and pro forma financial information are filed
as part of this report:
(a) Financial statements of real estate operations acquired specified by Rule 3-
14 of Regulation S-X. See Index to Financial Statements and Pro Forma
Financial Information (page F-1).
(b) Pro forma financial information required pursuant to Article 11 of
Regulation S-X. See Index to Financial Statements and Pro Forma Financial
Information (page F-1).
(c) Exhibits:
23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants
10.1 Credit Agreement (Bridge Loan) entered into as of July 29, 1998 by
and among The Rouse Company, The First National Bank of Chicago,
Bankers Trust Company, and Certain Banks identified on the signature
pages thereto.
10.2 First Amendment to Credit Agreement (Bridge Loan) made as of the
14th day of August, 1998, by and among The Rouse Company, The Howard
Hughes Corporation, Howard Hughes Properties, Inc., The Howard
Research And Development Corporation, The First National Bank of
Chicago, Bankers Trust Company, and the additional banks identified
on the signature pages thereto.
10.3 Amended and Restated Unsecured Revolving Credit Agreement dated as
of July 29, 1998 among The Rouse Company, The First National Bank of
Chicago, Bankers Trust Company, and Certain Other Banks identified on
the signature pages thereto.
10.4 First Amendment to Amended and Restated Unsecured Revolving Credit
Agreement made as of the 14th day of August, 1998, by and among The
Rouse Company, The Howard Hughes Corporation, Howard Hughes
Properties, Inc., The Howard Research And Development Corporation,
The First National Bank of Chicago, Bankers Trust Company, and the
additional banks identified on the signature pages thereto.
<PAGE>
Signatures
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE ROUSE COMPANY
Date: October 9, 1998 By /s/ Jeffrey H. Donahue
--------------- -----------------------
Jeffrey H. Donahue
Senior Vice-President and
Chief Financial Officer
Date: October 9, 1998 By /s/ George L. Yungmann
--------------- -----------------------
George L. Yungmann
Senior Vice-President and
Controller
<PAGE>
INDEX TO FINANCIAL STATEMENTS AND
PRO FORMA FINANCIAL INFORMATION
The following financial information is presented in accordance with Rule 3-14 of
Regulation S-X of the Securities and Exchange Commission. Accordingly, such
historical information has been audited only for the respective properties most
recent fiscal year as the transactions relating to Park Meadows Mall and 50%
joint venture ownership interest in Valley Fair (as described in the
registrant's Current Report on Form 8-K dated August 13, 1998) are not with
related parties and the registrant, after reasonable inquiry, is not aware of
any material factors related to the properties not otherwise disclosed that
would cause the reported financial information to not be necessarily indicative
of future operating results except as to interest expense related to new debt
issued by the Company to finance the acquisition of the Acquired Assets. A
discussion of material factors considered by the Company in assessing the
properties is included in the introductory language regarding the pro forma
financial statements on page F-15. In addition, since the properties will be
directly or indirectly owned by entities that elect to be treated as REITs for
Federal income tax purposes, a presentation of estimated taxable operating
results is not applicable.
PAGE
----
PARK MEADOWS MALL PROPERTY
- - --------------------------
Report of Independent Accountants..................................... F-3
Statement of Revenues and Certain Expenses
for the Year Ended December 31, 1997............................... F-4
Notes to Statement of Revenues and Certain Expenses................... F-5
VALLEY FAIR PROPERTY
- - --------------------
Report of Independent Accountants..................................... F-9
Statement of Revenues and Certain Expenses
for the Year Ended December 31, 1997............................... F-10
Notes to Statement of Revenues and Certain Expenses................... F-11
THE ROUSE COMPANY AND SUBSIDIARIES
- - ----------------------------------
Introductory language regarding Unaudited Pro Forma
Condensed Consolidated Financial Statements.......................... F-15
Pro Forma Condensed Consolidated Balance
Sheet as of June 30, 1998 (unaudited)................................ F-17
F-1
<PAGE>
PAGE
----
Pro Forma Condensed Consolidated Statement
of Operations for the Year Ended December 31, 1997 (unaudited)....... F-18
Pro Forma Condensed Consolidated Statement
of Operations for the Six Months ended June 30, 1998 (unaudited).. F-19
Notes to Pro Forma Condensed Consolidated Financial
Statements (unaudited)............................................ F-20
F-2
<PAGE>
Report of Independent Accountants
---------------------------------
The Board of Directors
of The Rouse Company
We have audited the accompanying statement of revenues and certain expenses for
the year ended December 31, 1997 of the Park Meadows Mall Property, as defined
in Note 1, which is intended to be acquired by The Rouse Company. This
statement is the responsibility of the management of TrizecHahn Centers Inc.
Our responsibility is to express an opinion on this statement based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the statement. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall presentation of the statement. We believe that our audit
provides a reasonable basis for our opinion.
As described in Note 2, this statement excludes certain expenses that would not
be comparable with those resulting from the operations of the Park Meadows Mall
Property after acquisition by The Rouse Company. The accompanying statement was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission Rule 3-14 of Regulation S-X and is not
intended to be a complete presentation of the Park Meadows Mall Property's
revenues and expenses.
In our opinion, the statement referred to above presents fairly, in all material
respects, the revenues and certain expenses described in Note 2, of the Park
Meadows Mall Property for the year ended December 31, 1997, in conformity with
generally accepted accounting principles.
PricewaterhouseCoopers LLP
Newport Beach, California
June 15, 1998
F-3
<PAGE>
PARK MEADOWS MALL PROPERTY
STATEMENT OF REVENUES AND CERTAIN EXPENSES
OF THE PARK MEADOWS MALL PROPERTY
TO BE ACQUIRED BY THE ROUSE COMPANY
For The Year Ended December 31, 1997
Revenues:
Minimum rent $15,062,127
Overage rent 740,139
Carts and temporary tenant rents 1,029,382
Recoveries from tenants 9,409,368
Other income 322,079
Public improvement fee revenue 4,759,236
-----------
31,322,331
-----------
Certain expenses:
Operating expenses 5,586,128
Property taxes 3,707,665
Promotion 43,937
Professional services 72,743
Interest expense 1,731,195
Other expenses 279,981
-----------
11,421,649
-----------
Revenues in excess of certain expenses $19,900,682
===========
The accompanying notes are an integral part of this statement.
F-4
<PAGE>
PARK MEADOWS MALL PROPERTY
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
1. Organization:
The accompanying statement of revenues and certain expenses (the "Statement")
of the Park Meadows Mall Property, as defined herein, relates to the
operations of a regional shopping center, Park Meadows Mall, located in
Douglas County, Colorado (the "Park Meadows Mall Property" or "Property"),
which is owned by Park Meadows Mall, Ltd., a Colorado limited partnership
(the "Partnership") and is managed by TrizecHahn Centers Management Inc.
("THCMI"), a wholly owned subsidiary of TrizecHahn Centers Inc. ("THCI").
The Property is intended to be sold to The Rouse Company ("Rouse") in a
single transaction subject to, among other things, an executed Asset Purchase
Agreement between THCI and Rouse.
The Partnership was formed to develop and operate the Property which opened
on August 30, 1996. The partnership agreement provides that the Partnership
shall continue until November 2043, unless terminated earlier. The
Partnership interests at December 31, 1997 are as follows:
Hahn Park Meadows Mall, Inc. 75%
Trizec Colorado, Inc. 25%
Hahn Park Meadows Mall, Inc. and Trizec Colorado, Inc. are effectively wholly
owned by THCI.
2. Summary of Significant Accounting Policies:
The following are significant accounting policies followed in the preparation
of the accompanying Statement. This Statement and notes are representations
of THCI and THCMI, whose managements are responsible for their integrity and
objectivity.
Basis of Presentation:
---------------------
The accompanying Statement is presented on the accrual basis of accounting in
conformity with Rule 3-14 of Regulation S-X of the Securities and Exchange
Commission. Accordingly, it is not representative of the actual operations
for the period presented because certain expenses, which may not be
comparable to those expected to be incurred by Rouse in the proposed future
operations of the Property, have been excluded. Expenses excluded consist of
depreciation and amortization, management and leasing fees and mortgage
interest.
F-5
<PAGE>
PARK MEADOWS MALL PROPERTY
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
2. Summary of Significant Accounting Policies, Continued:
Rental Revenue:
--------------
The Partnership recognizes scheduled minimum rent increases on a straight-
line basis. Overage rents, which are based upon the level of sales achieved
by the lessee, are recognized on an accrual basis. Recoveries from tenants
for real estate taxes, insurance and certain other shopping center operating
expenses are recognized as revenue in the period the applicable costs are
incurred.
Lease Fees:
----------
Payments received from tenants in connection with early termination of a
tenant lease are recognized as income when received.
Maintenance and Repairs:
-----------------------
Maintenance and repairs are charged to operations as incurred.
Use of Estimates:
----------------
The Partnership has made a number of estimates and assumptions relating to
the reported amounts of revenue and expenses during the reporting period to
prepare this Statement in conformity with generally accepted accounting
principles. Actual results could differ from those estimates.
3. Public Improvement Fee Revenue:
The Partnership issued bonds for the purpose of financing public
infrastructure improvements. In connection with the bond issue, a trust fund
was established to oversee the dispersal of bond proceeds and the repayment
of the bond issue. The bond repayment is funded by a Public Improvement Fee
("PIF") assessed on the retail sales of each store in the shopping center and
is remitted directly to the trustee, Norwest Bank. The Statement includes
PIF revenue of $4,759,236, interest income earned on undisbursed bond
proceeds of $109,586 and interest expense of $1,731,195.
F-6
<PAGE>
PARK MEADOWS MALL PROPERTY
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
4. Commitments and Contingencies:
Partnership as Lessor:
---------------------
The Partnership leases space to tenants in the shopping center for which it
charges minimum rents and receives reimbursement for real estate taxes,
insurance and certain other shopping center operating expenses. The terms of
the leases vary with the tenants, and the majority of the leases also provide
for additional overage rents during any year in which a tenant's gross sales
exceed a stated amount.
Future minimum rents to be received under leases in effect at December 31,
1997 are as follows:
<TABLE>
<CAPTION>
Years Ending December 31,
- - -------------------------
<S> <C>
1998 $ 14,129,880
1999 16,161,609
2000 16,183,400
2001 16,206,313
2002 15,794,393
thereafter 94,053,840
------------
$172,529,435
============
</TABLE>
Legal:
-----
The Partnership is, from time to time, involved in various claims and legal
actions arising in the ordinary course of business. Although the final
outcome of these legal matters cannot be determined, it is management's
opinion, based in part upon advice from legal counsel, that the final
resolution of these matters will not have a material adverse effect on the
Partnership's results of operations.
F-7
<PAGE>
PARK MEADOWS MALL PROPERTY
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
5. Related-Party Transactions:
THCI and THCMI provide payroll, professional and various legal services to
the Partnership.
A summary of related-party costs and fees incurred for the year ended
December 31, 1997 is as follows:
<TABLE>
<CAPTION>
<S> <C>
Payroll and related benefits $1,754,517
Development fees 101,155
Professional services 14,020
Legal fees 56,678
----------
$1,926,370
==========
</TABLE>
F-8
<PAGE>
Report of Independent Accountants
---------------------------------
The Board of Directors
of The Rouse Company
We have audited the accompanying statement of revenues and certain expenses for
the year ended December 31, 1997 of the Valley Fair Property, as defined in Note
1, which is intended to be acquired by The Rouse Company and Westfield America,
Inc., in a joint venture. This statement is the responsibility of the
management of TrizecHahn Centers Inc. Our responsibility is to express an
opinion on this statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the statement. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall presentation of the statement. We believe that our audit
provides a reasonable basis for our opinion.
As described in Note 2, this statement excludes certain expenses that would not
be comparable with those resulting from the operations of the Valley Fair
Property after acquisition by The Rouse Company and Westfield America, Inc..
The accompanying statement was prepared for the purpose of complying with the
rules and regulations of the Securities and Exchange Commission Rule 3-14 of
Regulation S-X and is not intended to be a complete presentation of the Valley
Fair Property's revenues and expenses.
In our opinion, the statement referred to above presents fairly, in all material
respects, the revenues and certain expenses described in Note 2, of the Valley
Fair Property for the year ended December 31, 1997, in conformity with generally
accepted accounting principles.
PricewaterhouseCoopers LLP
Newport Beach, California
June 15, 1998
F-9
<PAGE>
VALLEY FAIR PROPERTY
STATEMENT OF REVENUES AND CERTAIN EXPENSES
OF THE VALLEY FAIR PROPERTY
TO BE ACQUIRED BY THE ROUSE COMPANY AND WESTFIELD AMERICA, INC.
For The Year Ended December 31, 1997
<TABLE>
<S> <C>
Revenues:
Minimum rent $15,827,632
Overage rent 1,719,478
Carts and temporary tenant rents 848,286
Recoveries from tenants 6,243,693
Other income 417,482
-----------
25,056,571
-----------
Certain expenses:
Operating expenses 4,205,839
Property taxes 1,417,352
Office and management 180,690
Promotion 27,770
Professional services 63,926
Other expenses 14,748
-----------
5,910,325
-----------
Revenues in excess of certain expenses $19,146,246
===========
</TABLE>
The accompanying notes are an integral part of this statement.
F-10
<PAGE>
VALLEY FAIR PROPERTY
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
1. Organization:
The accompanying statement of revenues and certain expenses (the "Statement")
of the Valley Fair Property, as defined herein, relates to the operations of
a regional shopping center, Valley Fair, located in San Jose, California (the
"Valley Fair Property" or "Property"), which is owned by Stevens Creek
Associates, a partnership (the "Partnership") and is managed by TrizecHahn
Centers Management Inc. ("THCMI"), a wholly owned subsidiary of one of the
partners, TrizecHahn Centers Inc. ("THCI"). The ownership interest of THCI
in the Partnership is intended to be sold to The Rouse Company ("Rouse") and
Westfield America, Inc. ("Westfield") in a single transaction subject to,
among other things, an executed Asset Purchase Agreement between THCI, Rouse
and Westfield.
The Statement includes the accounts of the Partnership and its wholly owned
subsidiary, Hahn Issuing Corporation. Hahn Issuing Corporation
("Subsidiary") is a Delaware corporation formed in 1986 solely for the
purpose of issuing commercial paper to private investors under the
Partnership's Credit Agreement with a commercial bank. All significant
intercompany balances and transactions have been eliminated.
The Partnership is a California general partnership formed for the purpose of
improving, renovating and integrating two existing shopping centers, known as
"Valley Fair Shopping Center," located in San Jose, California, and "Stevens
Creek Plaza," located in the cities of San Jose and Santa Clara, California,
into a regional shopping center known as "Valley Fair." The Partnership
agreement provides that the Partnership is to continue until December 31,
2024 unless terminated earlier.
The general partners and their respective interests are as follows:
THCI 33.33%
RT-H Corporation ("RT-H") 16.67%
Valley Fair Associates, L.P. ("VFA") 50.00%
RT-H is effectively wholly owned by THCI.
F-11
<PAGE>
VALLEY FAIR PROPERTY
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
2. Summary of Significant Accounting Policies:
The following are significant accounting policies followed in the preparation
of the accompanying Statement. This Statement and notes are representations
of THCI and THCMI, whose managements are responsible for their integrity and
objectivity.
Basis of Presentation:
---------------------
The accompanying Statement is presented on the accrual basis of accounting in
conformity with Rule 3-14 of Regulation S-X of the Securities and Exchange
Commission. Accordingly, it is not representative of the actual operations
for the period presented because certain expenses, which may not be
comparable to those expected to be incurred by Rouse and Westfield in the
proposed future operations of the Property, have been excluded. Expenses
excluded consist of depreciation and amortization, management and leasing
fees and mortgage interest.
Rental Revenue:
--------------
The Partnership recognizes scheduled minimum rent increases on a straight-
line basis. Overage rents, which are based upon the level of sales achieved
by the lessee, are recognized on an accrual basis. Recoveries from tenants
for real estate taxes, insurance and certain other shopping center operating
expenses are recognized as revenue in the period the applicable costs are
incurred.
Lease Fees:
----------
Payments received from tenants in connection with early termination of a
tenant lease are recognized as income when received.
Maintenance and Repairs:
-----------------------
Maintenance and repairs are charged to operations as incurred.
Use of Estimates:
----------------
The Partnership has made a number of estimates and assumptions relating to
the reported amounts of revenue and expenses during the reporting period to
prepare this Statement in conformity with generally accepted accounting
principles. Actual results could differ from those estimates.
F-12
<PAGE>
VALLEY FAIR PROPERTY
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
3. Commitments and Contingencies:
Partnership as Lessor:
---------------------
The Partnership leases space to tenants in the shopping center for which it
charges minimum rents and receives reimbursement for real estate taxes,
insurance and certain other shopping center operating expenses. The terms of
the leases vary with the tenants, and the majority of the leases also provide
for additional overage rents during any year in which a tenant's gross sales
exceed a stated amount.
Future minimum rents to be received under leases in effect at December 31,
1997 are as follows:
<TABLE>
<CAPTION>
Years Ending December 31,
- - -------------------------
<S> <C>
1998 $ 16,071,655
1999 15,031,985
2000 13,861,335
2001 13,277,659
2002 11,975,001
thereafter 39,452,957
------------
$109,670,592
============
</TABLE>
Legal:
-----
The Partnership is, from time to time, involved in various claims and legal
actions arising in the ordinary course of business. Although the final
outcome of these legal matters cannot be determined, it is management's
opinion, based in part upon advice from legal counsel, that the final
resolution of these matters will not have a material adverse effect on the
Partnership's results of operations.
F-13
<PAGE>
VALLEY FAIR PROPERTY
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
4. Related-Party Transactions:
THCI and THCMI provide payroll, professional and various legal services to
the Partnership.
A summary of related-party costs and fees incurred for the year ended
December 31, 1997 is as follows:
<TABLE>
<CAPTION>
<S> <C>
Payroll and related benefits $1,573,626
Development fees 444,790
Professional services 522,633
Legal fees 129,655
----------
$2,670,704
==========
</TABLE>
F-14
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
On April 6, 1998, The Rouse Company and Westfield America, Inc. entered into an
agreement to purchase a portfolio of interests in retail centers from TrizecHahn
Centers Inc. Under terms of the agreement, as amended, and subject to certain
terms and conditions, The Rouse Company agreed to purchase interests in eight
retail centers for approximately $1.3 billion. The agreement is subject to the
satisfaction of certain conditions and includes a provision for the substitution
of, or increase or decrease in, the number of retail centers to be acquired.
On July 31, 1998, The Rouse Company purchased ownership interests in two of the
retail centers, including Park Meadows Mall and a 50% joint venture ownership
interest in Valley Fair (together, the "Acquired Properties") for approximately
$445 million, including debt assumed of approximately $193 million. The Rouse
Company used available cash and borrowings of $210 million under its new
revolving line of credit facility to fund the net purchase price of the retail
center interests.
Park Meadows Mall is a regional shopping center in Littleton, Colorado, which is
approximately 15 miles from downtown Denver. The center was completed in 1996
and is in excellent condition. The Mall contains approximately 593,000 square
feet of leasable mall space and four department stores (Nordstrom, Joslin's,
Dillard's and Foley's) encompassing 875,000 square feet of space with a fifth
department store (JCPenney) encompassing 146,000 square feet of space under
construction. The Joslin's department store closed on October 1, 1998 in
conjunction with the sale of its owner to Dillard's. Dillard's is expected to
sell the building to the May Company, and the building is expected to reopen as
a Lord & Taylor department store in late 1999. The mall space is leased
primarily to high-profile, well-capitalized national retailers, produces sales
of approximately $420 per square foot and is 96% occupied. Substantially all of
the tenant leases provide for the recovery of operating expenses in addition to
stated minimum rents and most leases provide for increasing minimum rents over
their terms. The Company believes Park Meadows Mall is one of the dominant
centers in its market and intends to operate it in a manner that will maintain
its dominance. Accordingly, the Company is not aware of any material factors
that would cause the reported information not to be necessarily indicative of
future operating results of the property.
In connection with the purchase transaction, the Company decided to hold for
sale its ownership interest in Valley Fair. The Company is negotiating with a
potential purchaser and believes it has the ability to sell the ownership
interest within twelve months at a price approximating the purchase price.
Accordingly, the Company will classify its ownership interest in Valley Fair as
property held for sale in its consolidated balance sheet, and will exclude from
its consolidated statement of operations any profit or loss resulting from the
operation or sale of its ownership interest. Any profit or loss from operations
or gain or loss on the ultimate disposition will be treated as adjustments to
the original purchase price allocation.
F-15
<PAGE>
The remaining retail center acquisitions are expected to close in a series of
transactions in the fourth quarter of 1998.
The following unaudited pro forma condensed consolidated financial statements
are based upon the consolidated financial statements of The Rouse Company and
the statements of revenues and certain expenses of Park Meadows Mall Property
adjusted to give effect to the purchase of the Acquired Properties. The pro
forma condensed consolidated statements of operations do not include any
revenues, operating and interest expense or depreciation relating to the Valley
Fair Property due to the Company's decision to sell its interest in the property
as discussed above. The pro forma condensed consolidated balance sheet and
statements of operations are provided to illustrate the effects of the
acquisitions on The Rouse Company and have been prepared using the purchase
method of accounting and, accordingly, the cost to purchase the Acquired
Properties is allocated among the assets acquired and liabilities assumed
according to their respective fair values. These statements reflect how the
balance sheet of The Rouse Company might have appeared at June 30, 1998 if the
acquisitions had been consummated at that date, and how the statements of
operations of The Rouse Company for the year ended December 31, 1997 and the six
months ended June 30, 1998 might have appeared if the acquisitions had been
consummated at the beginning of the respective periods. These unaudited pro
forma condensed consolidated financial statements are not necessarily indicative
of the results of operations or financial position of The Rouse Company that
would have occurred had the acquisitions occurred at the beginning of the
periods presented or on the date indicated, nor are they necessarily indicative
of the future results of operations or financial position of The Rouse Company.
These unaudited pro forma condensed consolidated financial statements should be
read in conjunction with the audited consolidated financial statements of The
Rouse Company, including the notes to the financial statements. The unaudited
pro forma adjustments are based upon certain assumptions included in the notes
to the unaudited pro forma condensed consolidated financial statements.
F-16
<PAGE>
THE ROUSE COMPANY AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1998
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
The Rouse
The Rouse Company and
Company and Allocated Pro Forma Subsidiaries
Subsidiaries Purchase Adjustments (Pro Forma
ASSETS (Historical) Price (Note 1) (Note 2) Combined)
------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
Property
Operating properties, net...................... $2,740,081 $ 298,433 $ - $3,038,514
Properties in development...................... 170,696 - - 170,696
Properties held for sale....................... 1,000 146,991 - 147,991
---------- ---------- ------------- ----------
Total property............................. 2,911,777 445,424 - 3,357,201
Investments in and advances to
unconsolidated real estate ventures............. 286,431 - - 286,431
Prepaid expenses, receivables under
finance leases and other assets................. 225,797 4,635 - 230,432
Accounts and notes receivable.................... 95,920 520 - 96,440
Investments in marketable securities............. 3,866 - - 3,866
Cash and cash equivalents........................ 39,647 (252,815) 213,168 (b) -
---------- ---------- ------------- ----------
Total...................................... $3,563,438 $ 197,764 $213,168 $3,974,370
========== ========== ============= ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Debt............................................. $2,545,102 $ 192,618 $210,000 (b) $2,947,720
Obligations under capital leases................. 54,866 - - 54,866
Accounts payable, accrued expenses
and other liabilities........................... 322,295 5,146 3,168 (b) 330,609
Company-obligated mandatorily redeemable
preferred securities of a trust holding
solely Parent Company subordinated
debt securities................................. 137,500 - - 137,500
Shareholders' equity............................. 503,675 - - 503,675
---------- ---------- ------------- ----------
Total...................................... $3,563,438 $ 197,764 $213,168 $3,974,370
========== ========== ============= ==========
</TABLE>
The accompanying notes are an integral part of these statements.
F-17
<PAGE>
THE ROUSE COMPANY AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
The Rouse
The Rouse Park Company and
Company and Meadows Pro Forma Subsidiaries
Subsidiaries Mall Valley Fair Adjustments (Pro Forma
(Historical) Property Property (Note 2) Combined)
------------- -------- ----------- ---------------- -------------
<S> <C> <C> <C> <C> <C>
Revenues............................................ $ 930,094 $31,322 $25,057 $ (2,355)(c) $ 959,061
(12,529)(i)
(12,528)(a)
Operating expenses, exclusive of provision
for bad debts, depreciation and
amortization....................................... 532,240 9,690 5,910 960 (d) 542,890
(2,955)(i)
(2,955)(a)
Interest expense.................................... 207,490 1,731 - 14,613 (e) 225,445
9,057 (f)
2,564 (g)
(10,010)(i)
Provision for bad debts............................. 5,766 - - 5,766
Depreciation and amortization....................... 86,009 - - 4,460 (h) 90,469
Gain (loss) on dispositions of assets
and other provisions, net.......................... (24,763) - - - (24,763)
---------- -------- ----------- --------------- ----------
Earnings from continuing operations
before income taxes................................ 73,826 19,901 19,147 (43,146) 69,728
Income taxes........................................ (116,066) - - - (116,066)
---------- -------- ----------- --------------- ----------
Earnings from continuing operations................. $ 189,892 $19,901 $19,147 $(43,146) $ 185,794
========== ======== =========== =============== ==========
Earnings from continuing operations
per share of common stock after
provision for dividends on
Preferred stock:
Basic $ 2.70 $ 2.64
========== ==========
Diluted $ 2.59 $ 2.54
========== ==========
Weighted average number of
common shares outstanding:
Basic 66,201 66,201
========== ==========
Diluted 76,005 76,005
========== ==========
</TABLE>
The acompanying notes are an integral part of these statements.
F-18
<PAGE>
THE ROUSE COMPANY AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
The Rouse
The Rouse Park Company and
Company and Meadows Pro Forma Subsidiaries
Subsidiaries Mall Valley Fair Adjustments (Pro Forma
(Historical) Property Property (Note 1) Combined)
------------- -------- ----------- ---------------- -------------
<S> <C> <C> <C> <C> <C>
Revenues.................................. $335,243 $14,970 $13,164 $ (1,177)(c) $349,036
(6,582)(i)
(6,582)(a)
Operating expenses, exclusive of provision
for bad debts, depreciation and
amortization............................. 181,429 4,207 3,650 (1,825)(a) 186,042
406 (d)
(1,825)(i)
Interest expense.......................... 90,659 845 - 7,306 (e) 103,311
4,501 (f)
1,282 (g)
(5,005)(i)
Provision for bad debts................... 1,790 - - - 1,790
Depreciation and amortization............. 36,199 - - 2,230 (h) 38,429
Equity in earnings of unconsolidated
real estate ventures..................... 36,660 - - - 36,660
Gain (loss) on dispositions of assets
and other provisions, net................ 2,169 - - - 2,169
------------- -------- ----------- ---------------- -------------
Earnings from continuing operations
before income taxes...................... 63,995 9,918 9,514 (21,411) 62,016
Income taxes.............................. 199 - - - 199
------------- -------- ----------- ---------------- -------------
Earnings from continuing operations....... $ 63,796 $ 9,918 $ 9,514 $ 21,411) $ 61,817
============ ======= =========== ============== =============
Earnings from continuing operations
per share of common stock after
provision for dividends on
Preferred stock :
Basic $.86 $.83
======== ========
Diluted $.84 $.81
======== ========
Weighted average number of
common shares outstanding:
Basic 66,978 66,978
======== ========
Diluted 72,720 72,720
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
F-19
<PAGE>
THE ROUSE COMPANY AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
1. Allocated Purchase Price
------------------------
The acquisition will be accounted for by the purchase method of accounting.
Accordingly, the Company's cost to acquire a 100% ownership in Park Meadows
Mall and a 50% ownership interest in Valley Fair will be allocated to the
assets acquired and liabilities assumed according to their respective fair
values. In connection with the acquisitions, the Company decided to sell
its ownership interest in Valley Fair. Accordingly, the cost allocated to
its interest in Valley Fair is classified as property held for sale in the
pro forma balance sheet. The unaudited pro forma condensed consolidated
financial statements indicate that the aggregate fair value of the assets
acquired and liabilities assumed in the purchase are $450,581,000 and
$197,764,000, respectively. The purchase allocation adjustments made in
connection with the development of the unaudited pro forma condensed
combined financial statements are based on the information available at
this time. Subsequent adjustments and refinements to the allocation may be
made based on additional information.
2. Pro forma Adjustments
---------------------
The accompanying unaudited pro forma condensed consolidated financial
statements reflect certain adjustments which are explained below to give
effect to the acquisition of the Acquired Properties and to include results
of operations for the indicated periods of the Park Meadows Mall based on
accounting policies of the Company where such policies differ from those
which were applied in preparing the historical financial statements of Park
Meadows Mall included elsewhere herein.
(a) Adjust revenues and certain operating expenses to reflect the Company's
50% ownership interest in Valley Fair Mall.
(b) The Company used available cash to pay approximately $42,817,000 of the
purchase price at closing. The balance of the price paid at closing of
$210,000,000 was provided by borrowings under the Company's unsecured
revolving credit facility that was underwritten by The First National
Bank of Chicago and Bankers Trust Company. The accompanying unaudited
pro forma condensed consolidated balance sheet as of June 30, 1998
reflects an adjustment to reclassify the bank overdraft attributable to
the payment of cash at acquisition.
F-20
<PAGE>
THE ROUSE COMPANY AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
2. Pro forma Adjustments, Continued
--------------------------------
(c) Eliminate income earned on available cash of $42,817,000 paid at
closing. The pro forma reduction of interest revenue was calculated
using an average interest rate of 5.5%.
(d) Adjust operating expenses for Park Meadows Mall to reflect management
and leasing costs consistent with costs incurred by the Company at
similar operating properties.
(e) Adjust for interest expense incurred on borrowings of $210 million
under a line of credit facility used to fund the net purchase price of
the Acquired Properties. The pro forma interest expense on these
borrowings was calculated using an effective interest rate of 6.96%.
(f) Adjust interest expense for mortgage note secured by Park Meadows Mall
assumed by subsidiaries of the Company in connection with the
acquisition.
(g) Adjust interest expense for mortgage note secured by Valley Fair
assumed by subsidiaries of the Company in connection with the
acquisition.
(h) Adjust depreciation and amortization expense for Park Meadows Mall for
the net effects of revalued property basis and different estimated
useful lives in accordance with the established accounting policies of
the Company.
(i) In connection with the purchase of its 50% ownership interest in Valley
Fair the Company made a decision to market its ownership interest for
sale. Accordingly, pro forma adjustments are to eliminate the
Company's share of operations of Valley Fair from the condensed
consolidated statements of operations.
F-21
<PAGE>
Exhibit 10.1
CREDIT AGREEMENT (BRIDGE LOAN)
DATED AS OF JULY 29, 1998
AMONG
THE ROUSE COMPANY, AS BORROWER
AND
THE FIRST NATIONAL BANK OF CHICAGO
AND
BANKERS TRUST COMPANY
AND
CERTAIN OTHER BANKS,
AS LENDERS
AND
BANKERS TRUST COMPANY,
AS SYNDICATION AGENT
AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS ADMINISTRATIVE AGENT
<PAGE>
CREDIT AGREEMENT (BRIDGE LOAN)
------------------------------
THIS CREDIT AGREEMENT (BRIDGE LOAN) is entered into as of July 29, 1998, by
and among the following:
THE ROUSE COMPANY, a Maryland corporation having its principal place of
business at 10275 Little Patuxent Parkway, Columbia, Maryland 21044-3456
("Borrower");
--------
THE FIRST NATIONAL BANK OF CHICAGO ("First Chicago"), a national bank
-------------
organized under the laws of the United States of America having an office at One
First National Plaza, Chicago, Illinois 60670;
BANKERS TRUST COMPANY ("Bankers Trust"), a New York banking corporation,
-------------
having an office at Bankers Trust Plaza, 130 Liberty Street, New York, New York
10006;
CERTAIN BANKS identified on the signature pages hereto;
Bankers Trust, as Syndication Agent ("Syndication Agent"); and
-----------------
First Chicago, as Administrative Agent ("Administrative Agent") for the
--------------------
Lenders (as defined below).
RECITALS
--------
A. Borrower is primarily engaged in the business of developing, acquiring,
owning and managing commercial real estate projects, including without
limitation regional shopping centers, mixed-use projects, office buildings,
business/industrial projects and large-scale, master-planned land developments.
B. The Borrower has requested that the Lenders make loans available to the
Borrower in the maximum aggregate principal amount of $350,000,000 outstanding
from time to time pursuant to the terms of this Agreement (the "Facility"), and
--------
that the Administrative Agent act as administrative agent for the Lenders and
that the Syndication Agent act as syndication agent for the Lenders. The
Administrative Agent, the Syndication Agent and the Lenders have agreed to do
so.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
<PAGE>
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
--------------------------------
1.1 Definitions. As used in this Agreement, the following terms have the
-----------
meanings set forth below:
"Adjusted Combined EBITDA" means, as of any date, for the most recent four
------------------------
(4) fiscal quarters for which financial results then have been reported, then-
current Combined EBITDA adjusted by (i) eliminating that portion of Combined
EBITDA attributable to any Properties or entities not owned by a member of the
Consolidated Group or an Investment Affiliate as of the date of determination,
(ii) eliminating that portion of Combined EBITDA attributable to any Properties
or entities acquired by a member of the Consolidated Group after the beginning
of the last fiscal quarter in such four (4) quarter period, and (iii) adding to
Combined EBITDA for such four quarter period on account of Properties (including
any renovation or expansion of an existing Property) or entities owned by a
member of the Consolidated Group or an Investment Affiliate and in service for
more than the full last fiscal quarter of such period but less than such full
four quarter period, the Combined EBITDA that would have been generated by such
Property or entity if it had been owned and in service for such full four
quarter period determined by annualizing the actual Combined EBITDA attributed
to such Property or entity for the portion of such period that such Property or
entity was actually so owned and in service.
"Adjusted LIBOR Rate" means, with respect to a LIBOR Advance for the
-------------------
relevant LIBOR Interest Period, the sum of (i) the quotient of (a) the Base
LIBOR Rate applicable to such LIBOR Interest Period, divided by (b) one minus
the Reserve Requirement (expressed as a decimal) applicable to such LIBOR
Interest Period, if and only if a Reserve Requirement is then being imposed
under Regulation D, plus (ii) the LIBOR Applicable Margin in effect from time to
time during such LIBOR Interest Period.
"Administrative Agent" means First Chicago, acting as agent for the Lenders
--------------------
in connection with the transactions contemplated by this Agreement, and its
successors in such capacity.
"Advance" means an advance of funds to the Borrower hereunder by one or
-------
more of the Lenders pursuant to Section 2.1 hereof, including the initial
------------
Advance and all subsequent Advances, whether such Advances are from time to
time, Alternate Base Rate Advances or LIBOR Advances.
"Affiliate" means any Person directly or indirectly controlling, controlled
---------
by or under direct or indirect common control with any other Person. A Person
shall be deemed to control another Person if the controlling Person owns ten
percent (10%) or more of any class of voting securities of the controlled Person
or possesses, directly or indirectly, the power to
-2-
<PAGE>
direct or cause the direction of the management or policies of the controlled
Person, whether through ownership of stock, by contract or otherwise.
"Aggregate Commitment" means, as of any date, the sum of all of the
--------------------
Lenders' then-current Commitments, which initially shall be $350,000,000,
subject to Borrower's right to reduce the Aggregate Commitment pursuant to
Section 2.18 and which shall otherwise only be increased with the consent of all
- - ------------
Lenders.
"Agreement" means this Credit Agreement (Bridge Loan) and all amendments,
---------
modifications and supplements hereto.
"Agreement Execution Date" shall mean July 29, 1998, the date on which all
------------------------
of the parties hereto have executed this Agreement and all conditions precedent
to the initial Advance hereunder have been satisfied.
"Allocated Facility Amount" means, at any time, the sum of all then
-------------------------
outstanding Advances.
"Alternate Base Rate" means, for any day, a rate of interest per annum
-------------------
equal to the higher of (i) the Corporate Base Rate for such day and (ii) the sum
of the Federal Funds Effective Rate for such day plus 1/2% per annum.
"Alternate Base Rate Advance" means an Advance that bears interest at the
---------------------------
Alternate Base Rate.
"Arranger" means First Chicago Capital Markets, Inc. and BT Alex. Brown
--------
Incorporated, collectively.
"Assets Under Development" means land and improvements owned by a member of
------------------------
the Consolidated Group or an Investment Affiliate being developed for retail,
office, mixed-use or other rental-income producing purposes which meet all four
of the following criteria: (i) such project (or phase) has not yet been
substantially completed, (ii) no rental income has yet been received, (iii) no
certificate of occupancy has yet been issued for such project (or phase) and
(iv) such project (or phase) is classified as construction in progress in
accordance with GAAP. No such land or improvements may be included in the
category "Assets Under Development" for more than twelve (12) fiscal quarters
(it being agreed that any time period during which such land or improvements
would have been included in such category if the Facility had been in effect
previously shall be taken into consideration in determining whether such twelve
(12) fiscal quarter time period has been exceeded.
"Bankers Trust" means Bankers Trust Company.
-------------
"Base LIBOR Rate" means, with respect to a LIBOR Advance for the relevant
---------------
LIBOR Interest Period, the applicable London interbank offered rate for deposits
in U.S. dollars
-3-
<PAGE>
appearing on Dow Jones Markets (Telerate) Page 3750 as of 11:00 a.m. (London
---------------------------
time) two (2) Business Days prior to the first day of such LIBOR Interest
Period, and having a maturity approximately equal to such LIBOR Interest Period.
If no London interbank offered rate of such maturity then appears on Dow Jones
---------
Markets (Telerate) Page 3750, then the Base LIBOR Rate shall be equal to the
- - -----------------
London interbank offered rate for deposits in U.S. dollars maturing immediately
before or immediately after such maturity, whichever is higher, as determined by
the Administrative Agent from Dow Jones Markets (Telerate) Page 3750. If Dow
--------------------------- ---
Jones Markets (Telerate) Page 3750 is not available, the applicable Base LIBOR
- - -----------------------
Rate for the relevant LIBOR Interest Period shall be the rate determined by the
Administrative Agent to be the rate at which the Administrative Agent offers to
place deposits in U.S. dollars with first-class banks in the London interbank
market at approximately 11:00 a.m. (London time) two (2) Business Days prior to
the first day of such LIBOR Interest Period, in the approximate amount of the
Administrative Agent's relevant portion of the LIBOR Advance and having a
maturity approximately equal to such LIBOR Interest Period.
"Borrower" means The Rouse Company, along with its permitted successors and
--------
assigns.
"Borrowing Date" means a Business Day on which an Advance is made to the
--------------
Borrower.
"Borrowing Notice" is defined in Section 2.11(a) hereof.
---------------- ---------------
"Business Day" means a day, other than a Saturday, Sunday or holiday, on
------------
which banks are open for business in Chicago, Illinois, New York, New York and,
where such term is used in reference to the selection or determination of the
Adjusted LIBOR Rate, in London, England.
"Capital Stock" means any and all shares, interests, participations or
-------------
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person which is not a corporation
and any and all warrants or options to purchase any of the foregoing.
"Cash Equivalents" shall mean (i) short-term obligations of, or fully
----------------
guaranteed by, the United States of America, (ii) commercial paper rated A-1 or
better by S&P or P-1 or better by Moody's, or (iii) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $100,000,000.
"Code" means the Internal Revenue Code of 1986 as amended from time to
----
time, or any replacement or successor statute, and the regulations promulgated
thereunder from time to time.
"Combined Debt Service" means, for any period, without duplication, (a)
---------------------
Combined Senior Interest Expense for such period plus (b) all interest expense
----
of the Consolidated
-4-
<PAGE>
Group determined in accordance with GAAP attributable to Subordinated
Indebtedness for such period plus (c) the aggregate amount of regularly
----
scheduled principal payments of Indebtedness (excluding optional prepayments and
balloon principal payments due on maturity in respect of any Indebtedness)
required to be made during such period by the Consolidated Group plus (d) the
----
Consolidated Group Pro Rata Share of all such regularly scheduled principal
payments required to be made during such period by any Investment Affiliate on
Indebtedness (excluding optional prepayments and balloon principal payments due
on maturity in respect of any Indebtedness) taken into account in calculating
Combined Senior Interest Expense plus (e) Preferred Stock Expense of the
----
Consolidated Group for such period plus (f) Ground Lease Base Expense of the
----
Consolidated Group for such period. No interest expense or principal payments on
Indebtedness due from one member of the Consolidated Group solely to another
member of the Consolidated Group shall be included in Combined Debt Service.
"Combined EBITDA" means, as of any date, for the most recent four fiscal
---------------
quarters for which financial results have then been reported, (a) income before
extraordinary items (reduced to eliminate any income from Investment
Affiliates), as reported by the Consolidated Group in accordance with GAAP, plus
----
interest (less the proportionate share of interest of any minority interest
holders), depreciation, amortization and income tax (if any) expense plus (b) a
----
percentage of such income (adjusted as described above) of any Investment
Affiliate equal to the Consolidated Group Pro Rata Share in such Investment
Affiliate, plus (c) dividends or other distributions accrued with respect to
----
such period on any preferred stock or other preferred security issued by the
Borrower which dividends or other distributions are treated as operating expense
under GAAP (but only to the extent actually deducted from earnings under clause
(a) above) plus (d) payments made and other amounts treated as an expense of the
----
Borrower under GAAP with respect to such period pursuant to the Hughes Agreement
(provided that no item of income or expense shall be included more than once in
such calculation even if it falls within more than one of the foregoing
categories).
"Combined Senior Interest Expense" means, with respect to any period, all
--------------------------------
interest expense of the Consolidated Group (less the proportionate share of
interest expense of any minority interest holders) determined in accordance with
GAAP attributable to such period plus (i) the allocable portion (based on
----
liability) of any accrued or paid interest incurred on any obligation for which
any member of the Consolidated Group is wholly or partially liable under
repayment, interest carry, or performance guarantees, or other relevant
liabilities, plus (ii) the Consolidated Group Pro Rata Share of any accrued or
----
paid interest incurred on any Indebtedness of any Investment Affiliate
attributable to such period, whether recourse or non-recourse, less (iii) any
----
such interest expense attributable to Subordinated Indebtedness, provided that
no expense shall be included more than once in such calculation even if it falls
within more than one of the foregoing categories, and provided further that no
interest expense on Indebtedness due from one member of the Consolidated Group
solely to another member of the Consolidated Group shall be included in Combined
Senior Interest Expense.
-5-
<PAGE>
"Commitment" means the obligation of each Lender, subject to the terms and
----------
conditions of this Agreement and in reliance upon the representations and
warranties herein, to make Advances not exceeding in the aggregate the amount
set forth below its signature at the end hereof, or the amount stated in any
subsequent amendment hereto.
"Consolidated Group" means the Borrower, the Guarantors, any other PSS, and
------------------
all other Subsidiaries that are consolidated with the Borrower for financial
reporting purposes under GAAP.
"Consolidated Group Pro Rata Share" means, with respect to any Investment
---------------------------------
Affiliate, the percentage of the total ownership interests held by the
Consolidated Group, in the aggregate, in such Investment Affiliate as determined
in accordance with GAAP.
"Controlled Group" means all members of a controlled group of corporations
----------------
and all trades or businesses (whether or not incorporated) under common control
which, together with all or any of the entities in the Consolidated Group, are
treated as a single employer under Sections 414(b) or 414(c) of the Code.
"Corporate Base Rate" means a rate per annum equal to the corporate base
-------------------
rate of interest announced by First Chicago from time to time, changing when and
as such corporate base rate changes.
"Default" means an event which, with notice or lapse of time or both, would
-------
become an Event of Default.
"Default Rate" means with respect to any Advance, a rate equal to the
------------
interest rate applicable to such Advance plus four percent (4%) per annum.
"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
written notice from the Administrative Agent; provided that if such Lender cures
--------
such failure or refusal, such Lender shall cease to be a Defaulting Lender.
"Dollars" and "$" mean United States Dollars.
------- -
"Effective Date" means each Borrowing Date and, if no Borrowing Date has
--------------
occurred in the preceding calendar month, the first Business Day of each
calendar month.
"Environmental Laws" means any and all Federal, state, local or municipal
------------------
laws, rules, orders, regulations, statutes, ordinances, codes, decrees,
requirements of any Governmental Authority having jurisdiction over any member
of the Consolidated Group or any Investment Affiliate, or their respective
assets, and regulating or imposing liability or standards of conduct concerning
protection of human health or the environment, as now or may at any time
-6-
<PAGE>
hereafter be in effect, in each case to the extent the foregoing are applicable
to the operations of such member of the Consolidated Group or Investment
Affiliate, or any of their respective assets or Properties.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended, and regulations promulgated thereunder from time to time.
"Event of Default" means any event set forth in Article X hereof.
---------------- ---------
"Facility" is defined in Section 2.1.
-------- -----------
"Facility Fee" is defined in Section 2.7.
------------ -----------
"Facility Fee Rate" means, for any day, the percentage in effect on such
-----------------
day pursuant to the pricing grid attached hereto as Exhibit A and made a part
---------
hereof.
"Federal Funds Effective Rate" means, for any day, an interest rate per
----------------------------
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately 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 at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion.
"First Chicago" means The First National Bank of Chicago.
-------------
"Funded Percentage" means, with respect to any Lender at any time, a
-----------------
percentage equal to a fraction the numerator of which is the portion of the
Aggregate Commitment actually disbursed and outstanding to Borrower by such
Lender at such time, and the denominator of which is the portion of the
Aggregate Commitment disbursed and outstanding to Borrower by all of the Lenders
at such time.
"Funds From Operations" means the "funds from operations" of the Borrower
---------------------
as such term is defined under the then-current definitions and interpretations
thereof promulgated by the National Association of Real Estate Investment Trusts
or its successor.
"Funded Senior Unsecured Debt" means, as of any date of determination,
----------------------------
Total Outstanding Indebtedness less the sum of (A) Subordinated Indebtedness
----
plus (B) Secured Outstanding Indebtedness plus (C) that portion of Total
- - ---- ----
Outstanding Indebtedness that does not represent indebtedness for borrowed
money, without duplication.
-7-
<PAGE>
"GAAP" means generally accepted accounting principles in the United States
----
of America consistent with those utilized in preparing the audited financial
statements of the Borrower required hereunder.
"Gross Asset Value" means, as of any date, the sum of the value of certain
-----------------
assets of the Consolidated Group, including their interests in Investment
Affiliates, subject to the valuation methods, exclusions and sublimits set forth
below:
(a) with respect to Retail Properties, the Net Operating Income
attributable thereto for the most recent period of four full fiscal quarters for
which results have been reported, divided by 0.0825;
(b) with respect to all office, mixed-use and other income-producing
properties other than Retail Properties, the Net Operating Income attributable
thereto for the most recent period of four full fiscal quarters for which
results have been reported, divided by 0.09;
(c) with respect to the Summerlin, Las Vegas and Columbia properties as
specifically identified on Exhibit J hereto, (i) to the extent such amount does
---------
not exceed 20% of the then-current total Gross Asset Value, 100% of the most
recent value thereof (without deduction for the value of the interests of the
Hughes heirs therein under the Hughes Agreement) as established by Landauer
Associates, Inc. (or another appraiser selected by the Borrower satisfactory to
the Administrative Agent), provided that the Required Lenders may require
updates thereof not more often than annually and as required when any material
portion of such properties are sold or transferred; plus (ii) to the extent the
----
amount otherwise includable in clause (i) exceeds 20% of the then-current total
Gross Asset Value, 75% of such excess value, provided that the amount determined
by adding the values determined under clauses (c)(i) and (ii) is not in excess
of 25% of the then-current total Gross Asset Value;
(d) (i) to the extent such amount, when added to the total amount included
in Gross Asset Value under clause (c), does not exceed 20% of the then-current
total Gross Asset Value, 100% of the GAAP book value of all other land, all
Assets Under Development and other non-income-producing properties (less the
portion of such value attributable to minority interest holders) plus (ii) to
----
the extent such amount included in Gross Asset Value under clause (c) plus the
amount included in Gross Asset Value under clause (d)(i) exceeds 20% of the
then-current total Gross Asset Value, 75% of such excess value, provided that
the aggregate amount included in Gross Asset Value under clause (c) and this
clause (d) is not in excess of 25% of the then-current total Gross Asset Value;
(e) with respect to cash and Cash Equivalents held by the Consolidated
Group, 100% of the GAAP book value thereof; and
(f) with respect to current trade receivables (other than notes
receivable) held by the Consolidated Group, 100% of the GAAP book value thereof.
-8-
<PAGE>
In each case, if the applicable property is owned by an Investment Affiliate
rather than a member of the Consolidated Group, only the Consolidated Group's
Pro Rata Share of such value will be included in Gross Asset Value.
Notwithstanding the foregoing, (i) the contribution to Gross Asset Value of
those assets acquired in the TrizecHahn Acquisition shall be calculated at the
actual acquisition cost of such assets excluding transaction costs (without
regard to any adjustments which may be made in determining their book value
under GAAP) and (ii) the amount contributed to Gross Asset Value from the
following types of properties shall not exceed the following percentages of
Gross Asset Value:
(a) Not more than 25% of Gross Asset Value shall be attributable to any
single property or group of contiguous properties;
(b) Not more than 25% of Gross Asset Value shall be attributable to Assets
Under Development and Undeveloped Land Holdings (regardless of the valuation
method applicable to such properties under clauses (c) or (d) of the first
sentence of this definition), in the aggregate;
(c) Not more than 15% of Gross Asset Value shall be attributable to
interests of the Consolidated Group in entities (i) in which the Borrower,
directly or indirectly, holds less than 50% of the total economic interests in
such entity, and (ii) which are not managed, directly or indirectly, by the
Borrower;
(d) Not more than 5% of Gross Asset Value shall be attributable to
Properties held by PSSs which are not Guarantors hereunder; and
(e) Not more than 5% of Gross Asset Value shall be attributable to those
current trade receivables described in clause (f) of the first sentence of this
----------
definition.
"Ground Lease Base Expense" means, for any period, (a) all payments
-------------------------
accruing from any member of the Consolidated Group under a lease of land
underlying a property for such period other than percentage rentals or other
contingent payments that are based upon the financial results of the operation
of such property, plus (b) the Consolidated Group Pro Rata Share of all such
----
non-contingent payments accruing from any Investment Affiliate under such a
lease of land for such period.
"Guarantee Obligation" as to any Person (the "guaranteeing person"), any
-------------------- -------------------
obligation (determined without duplication) of (a) the guaranteeing person or
(b) another Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has issued a
reimbursement, counter indemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or
other obligations (the "primary obligations") of any other third Person (the
-------------------
"primary obligor") in any manner, whether directly or indirectly, including,
- - ----------------
without limitation, any obligation of the guaranteeing person, whether or not
contingent, (i) to
-9-
<PAGE>
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; provided, however, that the
-------- -------
term Guarantee Obligation shall not include completion or performance
guarantees, environmental indemnities, or endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be the
maximum stated amount of the primary obligation relating to such Guarantee
Obligation (or, if less, the maximum stated liability set forth in the
instrument embodying such Guarantee Obligation), provided, that in the absence
--------
of any such stated amount or stated liability, the amount of such Guarantee
Obligation shall be such guaranteeing person's maximum reasonably anticipated
liability in respect thereof as determined by the Borrower in good faith.
"Guarantors" means the Limited Guarantors and the Unlimited Guarantor,
----------
jointly and severally, subject to the terms of the Guaranty.
"Guaranty" means the Limited Guaranty and the Unlimited Guaranty,
--------
collectively.
"Hughes Agreement" means that certain Contingent Stock Agreement, effective
----------------
as of January 1, 1996, by the Borrower in favor of and for the benefit of the
"Holders" and the "Representatives" (as such terms are defined therein).
"Indebtedness" of any Person at any date means, without duplication, (a)
------------
all indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade liabilities and other accounts payable, and accrued expenses
incurred in the ordinary course of business and payable in accordance with
customary practices), to the extent such obligations constitute indebtedness for
the purposes of GAAP, (c) any other indebtedness of such Person which is
evidenced by a note, bond, debenture or similar instrument, (d) all obligations
of such Person under financing leases and capital leases as defined in
accordance with GAAP, (e) all obligations of such Person in respect of
acceptances issued or created for the account of such Person, (f) all Guarantee
Obligations of such Person (excluding in any calculation of consolidated
indebtedness of the Borrower, Guarantee Obligations of the Borrower in respect
of primary obligations of any Subsidiary), (g) all reimbursement obligations of
such Person for letters of credit and other contingent liabilities, (h) all
liabilities secured by any lien (other than liens for taxes not yet due and
payable or otherwise being contested in good faith) on any property owned by
such Person even though such Person has not assumed or otherwise become liable
for the payment thereof, (i) any repurchase obligation or liability of such
Person or any of its Subsidiaries with respect to accounts or notes receivable
sold by
-10-
<PAGE>
such Person or any of its Subsidiaries, and (j) such Person's pro rata share of
debt in Investment Affiliates and any loans where such Person is liable as a
general partner, less, in each instance, the proportionate share of Indebtedness
of any minority interest holders. The term "Indebtedness" shall not, however,
include any Indebtedness due from any member of the Consolidated Group or any
Investment Affiliate solely to a member of the Consolidated Group.
"Insolvency" means insolvency as defined in the United States Bankruptcy
----------
Code, as amended. "Insolvent" when used with respect to a Person, shall refer
---------
to a Person who satisfies the definition of Insolvency.
"Interest Period" means a LIBOR Interest Period.
---------------
"Investment Affiliate" means any Person (other than a PSS) in which any
--------------------
member of the Consolidated Group, directly or indirectly, has an ownership
interest, whose financial results are not consolidated using the proportionate
share method under GAAP with the financial results of the Consolidated Group in
the consolidated financial statements of the Consolidated Group.
"Lenders" means, collectively, First Chicago, Bankers Trust and the other
-------
Persons executing this Agreement in such capacity, or any Person which
subsequently executes and delivers any amendment hereto in such capacity and
each of their respective permitted successors and assigns. Where reference is
made to "the Lenders" in any Loan Document it shall be read to mean "all of the
Lenders".
"Lending Installation" means any U.S. office of any Lender authorized to
--------------------
make loans similar to the Advances described herein.
"LIBOR Advance" means an Advance that bears interest at the Adjusted LIBOR
-------------
Rate.
"LIBOR Applicable Margin" is defined on Exhibit A attached hereto and made
-----------------------
a part hereof.
"LIBOR Interest Period" means, with respect to a LIBOR Advance, (i) until
---------------------
the date on which the Syndication Agent shall advise the Borrower that the
initial syndication of the Facility is completed, a period of one (1) week, and
(ii) thereafter, a period of one (1), two (2), three (3) or six (6) months, as
selected in advance by the Borrower.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
----
charge of any kind (including, without limitation, any conditional sale or other
title retention agreement or lease in the nature thereof, any filing or
agreement to file a financing statement as debtor under the Uniform Commercial
Code on any property leased to any Person under a lease which is not in the
nature of a conditional sale or title retention agreement, or any subordination
agreement in favor of another Person).
-11-
<PAGE>
"Limited Guarantors" means The Howard Hughes Corporation, a Delaware
------------------
corporation, and Howard Hughes Properties, Inc., a Nevada corporation.
"Limited Guaranty" means that certain guaranty of even date herewith, in
----------------
the form of Exhibit D hereto, made jointly and severally by the Limited
---------
Guarantors for the benefit of the Lenders.
"Loan" means, with respect to a Lender, such Lender's portion of any
----
Advance.
"Loan Documents" means this Agreement, the Notes, the Guaranty, the Pledge
--------------
and any and all other agreements or instruments required and/or provided to
Lenders hereunder or thereunder, as any of the foregoing may be amended from
time to time.
"Majority Lenders" means Lenders in the aggregate having in excess of 50%
----------------
of the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding in excess of 50% of the aggregate unpaid
principal amount of the outstanding Advances.
"Margin Stock" has the meaning ascribed to it in Regulation U of the Board
------------
of Governors of the Federal Reserve System.
"Material Adverse Effect" means, with respect to any matter, that such
-----------------------
matter in the Majority Lenders' good faith judgment may reasonably be expected
to, (x) materially and adversely affect the business, properties, condition or
results of operations of the Consolidated Group taken as a whole (results of
operations to be based on Funds From Operations), or (y) constitute a non-
frivolous challenge to the validity or enforceability of any material provision
of any Loan Document against any obligor party thereto.
"Material Adverse Financial Change" shall be deemed to have occurred if the
---------------------------------
Majority Lenders, in their good faith judgment, determine that a material
adverse financial change has occurred which may reasonably be expected to
prevent timely repayment of any Advance hereunder or materially impair
Borrower's ability to perform its obligations under any of the Loan Documents.
"Material Subsidiary" means, as of any date, any member of the Consolidated
-------------------
Group that has assets that represent more than five percent (5%) of the then-
current Gross Asset Value.
"Materials of Environmental Concern" means any gasoline or petroleum
----------------------------------
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Laws, including, without limitation, asbestos,
radon, polychlorinated biphenyls and urea-formaldehyde insulation.
-12-
<PAGE>
"Maturity Date" means the Business Day immediately preceding the first
-------------
anniversary of the Agreement Execution Date.
"Monetary Default" means any Default involving Borrower's failure to pay
----------------
any of the Obligations when due.
"Moody's" means Moody's Investors Service, Inc. and its successors.
-------
"Net Asset Value" means, as of any date, (a) then-current Gross Asset Value
---------------
less (b) the Consolidated Group's Indebtedness less (c) the Consolidated Group's
- - ---- ----
Pro Rata Share of the Indebtedness of each Investment Affiliate which has a
property then included in Gross Asset Value plus (d) to the extent treated as
----
Indebtedness, the liquidation payment due on any preferred stock of any member
of the Consolidated Group or such Investment Affiliate.
"Net Capital Proceeds" means the aggregate of (i) 100% of the proceeds (net
--------------------
of customary issuance fees and expenses) from the issuance after the Effective
Date of either (A) any public debt of the Borrower or (B) any common stock,
preferred stock or partnership units in the Borrower or any operating
partnership which may hereafter be formed by the Borrower if it elects to
convert to an "UPREIT" structure, excluding issuance of any such interests
solely to members of the Consolidated Group, plus (ii) the proceeds (net of
----
repayment of any related debt and customary sale fees and expenses) received by
the Consolidated Group from any sale (A) from the Effective Date through
December 31, 1998 of (i) any assets included in the TrizecHahn Acquisition, and
(ii) any other properties (excluding properties in the Rouse-Teachers
Properties, Inc. portfolio and vacant land sales at the Summerlin, Las Vegas and
Columbia properties in the ordinary course of business at approximately the same
levels of activity as in the past) or any ownership interests in entities
holding such properties sold during such period which cause the aggregate amount
of such properties and interests sold during such period to exceed 5% of Gross
Asset Value and (B) from and after January 1, 1999 of any properties (excluding
properties in the Rouse-Teachers Properties, Inc. portfolio and vacant land
sales at the Summerlin, Las Vegas and Columbia properties in the ordinary course
of business at approximately the same levels of activity as in the past) or any
ownership interests in entities holding such properties, in either case by any
member of the Consolidated Group, any PSS or any Investment Affiliate, plus
----
(iii) the proceeds (net of repayment of any refinanced debt and other customary
financing costs and expenses) received by the Consolidated Group from any
financing or refinancing of (A) any of the properties included in the TrizecHahn
Acquisition or any of the Summerlin, Las Vegas and Columbia properties or any
ownership interests in entities holding such properties at any time after the
Effective Date and (B) any other property or any ownership interests in entities
holding such other properties after January 1, 1999 by any member of the
Consolidated Group, any PSS or any Investment Affiliate (excluding any financing
or refinancing proceeds to be used for construction, renovation or expansion of
such properties and any purchase money financing secured by such properties or
ownership interests therein or any other financing secured by such properties or
ownership interests
-13-
<PAGE>
therein used solely for purposes of acquiring a joint venturer's or partner's
interest in properties partially owned by any member of the Consolidated Group,
any PSS or any Investment Affiliate as of the Effective Date).
"Net Operating Income" means, with respect to any Property, for any period,
--------------------
earnings from rental operations (computed in accordance with GAAP but without
deduction for reserves) attributable to such Property plus depreciation,
----
amortization, interest expense and deferred taxes with respect to such Property
for such period, and, if such period is less than a year, adjusted by straight
lining various ordinary operating expenses which are payable less frequently
than once during every such period (e.g. real estate taxes and insurance). The
amounts determined under the preceding sentence shall be adjusted by adding back
(i) the interests of the former Hughes owners pursuant to the Hughes Agreement
that were excluded in determining such amounts and (ii) dividends or other
distributions accrued with respect to such period on any preferred stock or
other preferred security issued by the Borrower which dividends or other
distributions are treated as operating expense under GAAP. The Net Operating
Income shall be adjusted to include a pro forma amount thereof (as substantiated
to the satisfaction of the Administrative Agent) for four quarters for any
Property acquired or placed in service (including, without limitation, the
placing into service of any expansion project at a Property costing in excess of
$10,000,000) during the quarter and to exclude any Net Operating Income for the
prior four quarters from any Property not owned as of the end of the quarter.
"Non-Cash Allocation" is defined in Section 8.13 below.
------------------- ------------
"Non-Recourse Outstanding Indebtedness" means, as of any date, all
-------------------------------------
outstanding Indebtedness of a Person for which such Person's liability is
limited by agreement with the creditors thereunder to the proceeds of certain
assets of such Person less, in the case of the Borrower, any other Indebtedness
of the Borrower included in Recourse Outstanding Indebtedness.
"Note" means the promissory note payable to the order of each Lender in the
----
amount of such Lender's maximum Commitment in the form attached hereto as
Exhibit B-1 (collectively, the "Notes").
- - ----------- -----
"Obligations" means the Advances and all accrued and unpaid fees and all
-----------
other obligations of Borrower to the Administrative Agent or any or all of the
Lenders arising under this Agreement or any of the other Loan Documents.
"Partial Advance" is defined in Section 2.3 hereof.
--------------- -----------
"Participants" is defined in Section 13.2.1 hereof.
------------ --------------
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
----
succeeding to any or all of its functions under ERISA.
-14-
<PAGE>
"Percentage" means, with respect to each Lender, the applicable percentage
----------
of the then-current Aggregate Commitment represented by such Lender's then-
current Commitment.
"Permitted Liens" are defined in Section 9.6 hereof.
--------------- -----------
"Person" means an individual, a corporation, a limited or general
------
partnership, a limited liability company, an association, a joint venture or any
other entity or organization, including a governmental or political subdivision
or an agent or instrumentality thereof.
"Plan" means an employee benefit plan as defined in Section 3(3) of ERISA,
----
whether or not terminated, as to which the Borrower or any member of the
Controlled Group may have any liability.
"Pledge" means that certain Pledge Agreement dated as of the date hereof,
------
in the form of Exhibit K hereto, pursuant to which the Borrower and The Hughes
---------
Corporation have, among other things, (a) pledged to the Lenders, and granted to
the Lenders a first priority perfected security interest in, all of the Pledged
Stock, and (b) agreed with the Lenders that they will not sell or encumber in
any manner any Indebtedness owed to them by either of the Limited Guarantors.
"Pledged Stock" means all capital stock of either Limited Guarantor and The
-------------
Hughes Corporation which is owned, directly or indirectly, by the Borrower or
any other member of the Consolidated Group.
"Preferred Stock Expense" means, for any period, (a) the aggregate dividend
-----------------------
payments due to the holders of preferred stock of any member of the Consolidated
Group, whether payable in cash or in kind, and whether or not actually paid
during such period plus (b) the Consolidated Group Pro Rata Share of any such
----
dividend payments due from Investment Affiliates plus (c) dividends or other
----
distributions on any preferred stock or other preferred security of any member
of the Consolidated Group which dividends or distributions are treated as an
operating expense under GAAP, but, with respect to (a), (b) and (c), excluding
any dividend payments or other distributions to a member of the Consolidated
Group.
"Property" means each parcel of real property owned or operated by any
--------
member of the Consolidated Group or any Investment Affiliate.
"PSS" means any corporation, partnership or other entity as to which both
---
(i) the Borrower or any other member of the Consolidated Group owns, directly or
indirectly, through one or more intermediaries, or both, 10% or less (or such
greater percentage as is permitted under Section 856(c)(3)(I)(B) of the Code, or
any successor provision) of the shares of the stock or other ownership interests
having the ordinary voting power to elect the board of directors or to designate
the other managers of such corporation, partnership or other entity, and (ii)
the Borrower or any other member of the Consolidated Group is entitled, directly
or indirectly, through one or more intermediaries, or both, to receive at
-15-
<PAGE>
least 90% of the net income or capital distributions of such corporation,
partnership or other entity.
"Purchasers" is defined in Section 13.3.1 hereof.
---------- --------------
"Qualified Officer" means, with respect to any entity, the chief financial
-----------------
officer, treasurer, chief accounting officer or controller of such entity if it
is a corporation or a limited liability company or of such entity's general
partner if it is a partnership.
"Rate Option" means the Alternate Base Rate or the Adjusted LIBOR Rate. The
-----------
Rate Option in effect on any date shall always be the Alternate Base Rate unless
the Borrower has properly selected the Adjusted LIBOR Rate pursuant to Section
-------
2.11 hereof.
- - ----
"Recourse Outstanding Indebtedness" means, as of any date of determination,
---------------------------------
(i) all Indebtedness (including Subordinated Indebtedness) of the Borrower then
outstanding with respect to which recourse is not limited substantially to the
proceeds of a specified asset or assets and which meets the requirements for
inclusion in one of the two categories defined as "Parent Company Debt" and
"Property Debt Carrying a Parent Company Guaranty of Repayment" in the
Consolidated Group's financial statements, plus (ii) without duplication, all
----
Indebtedness (including Subordinated Indebtedness) of any member of the
Consolidated Group which is guaranteed in whole or in part by the Borrower and
which consists of mortgages and bonds relating to operating properties of
subsidiary corporations which are subject to agreements with lenders requiring
the Borrower to provide support for operating and debt service costs, where
necessary, for defined periods or until specified conditions relating to the
operating results of the properties are met, as reflected in the Consolidated
Group's financial statements, plus (iii) without duplication, the Consolidated
Group Pro Rata Share of any Indebtedness of an Investment Affiliate which is
guaranteed in whole or in part by the Borrower if such Indebtedness would be
included under clause (ii) of this definition if the obligor on such
Indebtedness were a member of the Consolidated Group. The guidelines for
inclusion of various types of Indebtedness within the above categories in the
Consolidated Group's financial statements shall be those used for the most
recent annual financial statements of the Consolidated Group available as of the
Agreement Execution Date and such guidelines shall not be changed without the
prior written approval of the Administrative Agent acting with the consent of
the Majority Lenders.
"Regulation D" means Regulation D of the Board of Governors of the Federal
------------
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"Reportable Event" means a reportable event as defined in Section 4043 of
----------------
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided that a
-16-
<PAGE>
failure to meet the minimum funding standard of Section 412 of the Code and of
Section 302 of ERISA shall be a Reportable Event regardless of the issuance of
any such waivers in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
"Required Lenders" means Lenders in the aggregate having at least 66 2/3%
----------------
of the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding at least 66 2/3% of the aggregate unpaid
principal amount of the outstanding Advances.
"Reserve Requirement" means, with respect to a LIBOR Interest Period, the
-------------------
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"Restricted EBITDA" means, as of any date, that portion of Adjusted
-----------------
Combined EBITDA attributable to members of the Consolidated Group or Investment
Affiliates which is, as of such date, not permitted to be distributed or
dividended to holders of ownership interests in such entities as a result of any
contractual restriction on the payment or distribution of dividends or current
income.
"Retail Property" means a shopping center or other retail development
---------------
containing more than one retail tenant in which at least 90% of the Net
Operating Income from such center or development is attributable to retail uses.
"Revolving Facility" means that certain three (3) year unsecured
------------------
$450,000,000 revolving credit facility to be made to the Borrower by First
Chicago and Bankers Trust, as co-arrangers, and certain other lenders at the
same time as this Facility.
"S&P" means Standard & Poor's Corporation and its successors.
---
"Secured Outstanding Indebtedness" means, as of any date of determination,
--------------------------------
the sum of (a) the aggregate principal amount of all Indebtedness (other than
Indebtedness under this Facility or the Revolving Facility) of the Consolidated
Group outstanding at such date which is secured by a Lien on any asset or
Capital Stock of any member of the Consolidated Group, including without
limitation loans secured by mortgages, stock, or partnership interests, plus (b)
----
the aggregate principal amount of all unsecured Indebtedness of any member of
the Consolidated Group other than the Borrower outstanding at such date, less
----
the aggregate principal amount of all Indebtedness of any member of the
Consolidated Group that is a single purpose, pass-through entity that serves
solely as a vehicle for the Borrower to obtain financing, without duplication of
any Indebtedness included under clause (a) of this definition and provided that,
with respect to unsecured Indebtedness of any member of the Consolidated Group
other than the Borrower, the amount of such unsecured Indebtedness which must be
included in Secured Outstanding Indebtedness shall not exceed the book value, as
determined under GAAP, of all assets of such member of the Consolidated Group
plus (c) the Consolidated Group's Pro Rata Share of any Indebtedness of an
- - ----
Investment Affiliate
-17-
<PAGE>
outstanding at such date which (i) is to a Person other than a member of the
Consolidated Group and (ii) with respect to any unsecured Indebtedness of such
Investment Affiliate, does not exceed the Consolidated Group's Pro Rata share of
the book value, as determined under GAAP, of all assets of such Investment
Affiliate, without duplication of any Indebtedness included under clause (a) or
clause (b) of this definition, provided that Indebtedness for purposes of
clauses (b) and (c) of this definition shall be deemed to include any current
trade liabilities and other accounts payable (other than Subordinated
Indebtedness) of the members of the Consolidated Group (other than the Borrower)
and Investment Affiliates described in such clauses (b) and (c) due to Persons
other than members of the Consolidated Group.
"Status" is defined in Exhibit A attached hereto and made a part hereof.
------ ---------
"Subordinated Indebtedness" means any Indebtedness of a member of the
-------------------------
Consolidated Group which is subordinated to this Facility on terms satisfactory
to the Administrative Agent, but excluding any Indebtedness due from one member
of the Consolidated Group solely to one or more other members of the
Consolidated Group.
"Subsidiary" means as to any Person, a corporation, partnership or other
----------
entity of which shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by the Borrower, and provided such corporation, partnership or other entity is
consolidated with the Borrower for financial reporting purposes under GAAP.
"Syndication Agent" means Bankers Trust.
-----------------
"Total Outstanding Indebtedness" means, as of any date, (a) all
-------------------------------
Indebtedness of the Consolidated Group then outstanding less (b) all "current
liabilities" of the Consolidated Group, as defined under GAAP to the extent not
already excluded in the definition of Indebtedness plus (c) the Consolidated
----
Group's Pro Rata Share of all Indebtedness (other than such "current
liabilities") of Investment Affiliates then outstanding and owing to parties
other than the members of the Consolidated Group, without duplication of any
such items, provided that Indebtedness for purposes of clauses (b) and (c) of
this definition shall be deemed to include any current trade liabilities and
other accounts payable (other than Subordinated Indebtedness) of the members of
the Consolidated Group (other than the Borrower) and Investment Affiliates
described in such clauses (b) and (c) due to Persons other than members of the
Consolidated Group.
"Transferee" is defined in Section 13.4 hereof.
---------- ------------
"TrizecHahn Acquisition" means the acquisition by the Borrower of certain
----------------------
assets from TrizecHahn Centers Inc., pursuant to the TrizecHahn Agreement.
-18-
<PAGE>
"TrizecHahn Agreement" means that certain Asset Purchase Agreement among
--------------------
the Borrower and Westfield America, Inc., as purchasers, and TrizecHahn Centers
Inc., as seller, dated as of April 6, 1998, pursuant to which the parties
thereto have agreed to consummate the TrizecHahn Acquisition.
"Undeveloped Land Holdings" means land owned by a member of the
-------------------------
Consolidated Group or an Investment Affiliate which either (i) is intended to be
developed for rental-income purposes (other than single family or multifamily
residential uses), (ii) is unimproved and not yet zoned for development, or
(iii) is land subdivided into parcels or lots having adequate access and utility
service for further development or sale as improved parcels or lots, but in each
case upon which no construction of foundations or other material on-site
improvements have begun .
"Unlimited Guarantor" means The Howard Research And Development
-------------------
Corporation, a Maryland corporation.
"Unlimited Guaranty" means that certain guaranty of even date herewith, in
------------------
the form of Exhibit D-1 hereto, made by the Unlimited Guarantor for the benefit
-----------
of the Lenders.
"Year 2000 Issues" means anticipated costs, problems and uncertainties
----------------
associated with the inability of certain computer applications to effectively
handle data including dates on and after January 1, 2000, as such inability
affects the business, operations and financial condition of any member of the
Consolidated Group and any of their material customers, suppliers and vendors.
"Year 2000 Program" is defined in Section 6.26.
----------------- -------
The foregoing definitions shall be equally applicable to both the singular
and the plural forms of the defined terms.
1.2 Financial Standards. All financial computations required of a Person
-------------------
under this Agreement shall be made, and all financial information required under
this Agreement shall be prepared, in accordance with GAAP, except that if any
Person's financial statements are not audited, such Person's financial
statements shall be prepared in accordance with the same sound accounting
principles utilized in connection with the financial information submitted to
Lenders with respect to the Consolidated Group or the Properties in connection
with this Agreement and shall be certified by a Qualified Officer of such
Person.
ARTICLE II
THE FACILITY
------------
2.1 The Facility. Subject to the terms and conditions of this Agreement
-------------
and in re liance upon the representations and warranties of the Borrower
contained herein, Lenders
-19-
<PAGE>
agree to make Advances through the Administrative Agent to the Borrower from
time to time prior to the Maturity Date, provided that (i) the making of any
-------- ----
Advance will not cause the then Allocated Facility Amount to exceed the then-
current Aggregate Commitment, (ii) the aggregate Advances made under this
Agreement, including any Advances all or part of which may have been previously
repaid, shall in no event exceed the Aggregate Commitment, (iii) any Advance
which is in whole or in part repaid (whether voluntarily or involuntarily) may
not be reborrowed under any circumstance, it being understood and agreed that
this Facility is not a revolving credit facility, and (iv) Lenders' obligation
to make Advances hereunder, if not sooner terminated in accordance with the
provisions of this Agreement, shall terminate on January 31, 1999, after which
date Advances will no longer be available to the Borrower, irrespective of
whether or not the Allocated Facility Amount on that date is less than
$350,000,000, unless an extension of the January 31, 1999 deadline is consented
to by the Required Lenders. The Advances may be Alternate Base Rate Advances or
LIBOR Advances. Each Lender shall fund its Percentage of each such Advance and
no Lender will be required to fund any amounts which, when aggregated with such
Lender's Percentage of all other Advances then outstanding, would exceed such
Lender's then-current Commitment. The credit facility created
by this Agreement (the "Facility") shall terminate on the Maturity Date, unless
--------
sooner terminated in accordance with the terms of this Agreement.
2.2 Principal Payments. Any outstanding Advances and all other unpaid
------------------
Obligations shall be paid in full by the Borrower no later than the Maturity
Date or such earlier date as may be required under this Agreement. The Maturity
Date may not be extended without the prior written consent of all Lenders.
2.3 Requests for Advances; Responsibility for Advances. Advances shall be
--------------------------------------------------
made available to Borrower by Administrative Agent in accordance with Section
-------
2.1 and Section 2.11(a) hereof. The obligation of each Lender to fund its
- - --- ---------------
Percentage of each Advance shall be several and not joint.
2.4 Evidence of Credit Extensions. The Advances of each Lender outstanding
-----------------------------
at any time shall be evidenced by the Notes. Each Note executed by the Borrower
shall be in a maximum principal amount equal to each Lender's Percentage of the
Aggregate Commitment. Each Lender shall record Advances and principal payments
thereof on the schedule attached to its Note or, at its option, in its records,
and each Lender's record thereof shall be conclusive absent Borrower furnishing
to such Lender conclusive and irrefutable evidence of an error made by such
Lender with respect to that Lender's records. Notwithstanding the foregoing, the
failure to make, or an error in making, a notation with respect to any Advance
shall not limit or otherwise affect the obligations of Borrower hereunder or
under the Notes to pay the amount actually owed by Borrower to Lenders.
-20-
<PAGE>
2.5 Ratable Loans. Each Advance hereunder shall consist of Loans made
-------------
from the several Lenders ratably in proportion to their Percentages. Advances
may be Alternate Base Rate Advances, LIBOR Advances or a combination thereof,
selected by the Borrower in accordance with Sections 2.10 and 2.11.
------------- ----
2.6 LIBOR Applicable Margins. The LIBOR Applicable Margin to be used in
------------------------
calculating the interest rate applicable to LIBOR Advances shall vary from time
to time in accordance with the Borrower's long term senior unsecured debt
ratings as shown on Exhibit A.
---------
2.7 Facility Fee. The Borrower agrees to pay to the Administrative Agent
------------
for the account of each Lender a facility fee (the "Facility Fee") from the
------------
Agreement Execution Date to and including the Maturity Date, calculated on a per
diem basis at the Facility Fee Rate on the sum of (i) the amount of such
Lender's Loans outstanding and (ii) such Lender's then remaining undisbursed
Commitment on such day, payable quarterly in arrears on the last day of each
calendar quarter hereafter beginning September 30, 1998 and on the Maturity
Date.
2.8 Other Fees. The Borrower agrees to pay all other fees payable to the
----------
Administrative Agent, the Syndication Agent and the Arrangers pursuant to the
Borrower's prior letter agreements with them.
2.9 Minimum Amount of Each Advance. Each LIBOR Advance shall be in the
------------------------------
minimum amount of $5,000,000 (and in multiples of $1,000,000 if in excess
thereof), and each Alternate Base Rate Advance shall be in the minimum amount of
$1,000,000 (and in multiples of $100,000 if in excess thereof), provided,
however, that any Alternate Base Rate Advance may be in the amount of the unused
Aggregate Commitment.
2.10 Interest.
--------
(a) The outstanding principal balance under the Notes shall bear
interest from time to time at a rate per annum equal to:
(i) the Alternate Base Rate; or
(ii) at the election of Borrower with respect to all or portions
of the Loans, the Adjusted LIBOR Rate.
(b) All interest shall be calculated for actual days elapsed on the
basis of a 360-day year. Interest accrued on each Alternate Base Rate Advance
shall be payable in arrears on (i) the first day of each calendar month,
commencing with the first such date to occur after the date hereof, and (ii) the
Maturity Date or such earlier date on which such Alternate Base Rate Advance is
due and payable. Interest accrued on each LIBOR Advance shall be payable in
arrears on the earliest of (i) the first day of each calendar quarter,
commencing with the first such date to occur after the date hereof, (ii) the
last day of the
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<PAGE>
applicable LIBOR Interest Period, (iii) any date on which such LIBOR Advance is
prepaid, whether by acceleration or otherwise, and (iv) the Maturity Date or
such earlier date on which such LIBOR Advance is due and payable. Interest shall
not be payable for the day of any payment on the amount paid if payment is
received by Administrative Agent prior to noon (Chicago time). If any payment of
principal or interest under the Notes shall become due on a day that is not a
Business Day, such payment shall be made on the next succeeding Business Day
and, in the case of a payment of principal, such extension of time shall be
included in computing interest due in connection with such payment; provided
that for purposes of Section 10.1 hereof, any payments of principal described in
------------
this sentence shall be considered to be "due" on such next succeeding Business
Day.
2.11 Selection of Rate Options and LIBOR Interest Periods.
----------------------------------------------------
(a) Borrower, from time to time, may select the Rate Option and, in
the case of each LIBOR Advance, the commencement date (which shall be a Business
Day) and the length of the LIBOR Interest Period applicable to each LIBOR
Advance. Borrower shall give Administrative Agent irrevocable notice (a
"Borrowing Notice") not later than 11:00 a.m. (Chicago time) (i) at least one
----------------
Business Day prior to an Alternate Base Rate Advance, and (ii) at least three
(3) Business Days prior to a LIBOR Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such
Advance,
(ii) the aggregate amount of such Advance,
(iii) the type of Advance selected, and
(iv) in the case of each LIBOR Advance, the LIBOR Interest
Period applicable thereto.
The Borrower shall also deliver together with each Borrowing Notice the
compliance certificate required in Section 5.2 and otherwise comply with the
-----------
conditions set forth in Section 5.2 for Advances. Administrative Agent shall
-----------
provide each Lender by facsimile with a copy of each Borrowing Notice and
compliance certificate on the same Business Day it is received.
Not later than noon (Chicago time) on each Borrowing Date, each Lender
shall make available its Loan or Loans, in funds immediately available in
Chicago to the Administrative Agent. Administrative Agent will promptly make
the funds so received from the Lenders available to the Borrower.
(b) Administrative Agent shall, as soon as practicable after receipt
of a Borrowing Notice, determine the Adjusted LIBOR Rate applicable to the
requested LIBOR Advance and inform Borrower and Lenders of the same. Each
determination of the Adjusted
-22-
<PAGE>
LIBOR Rate by Administrative Agent shall be conclusive and binding upon Borrower
in the absence of manifest error.
(c) If Borrower shall prepay a LIBOR Advance other than on the last
day of the LIBOR Interest Period applicable thereto, Borrower shall be
responsible to pay all amounts due to Lenders as required by Section 4.4 hereof.
-----------
The Lenders shall not be obligated to match fund their LIBOR Advances.
(d) As of the end of each LIBOR Interest Period selected for a LIBOR
Advance, the interest rate on the LIBOR Advance will become the Alternate Base
Rate, unless Borrower has once again selected a LIBOR Interest Period in
accordance with the timing and procedures set forth in Section 2.11(g).
---------------
(e) The right of Borrower to select the Adjusted LIBOR Rate for an
Advance pursuant to this Agreement is subject to the availability to Lenders of
a similar option. If Administrative Agent determines that (i) deposits of
Dollars in an amount approximately equal to the LIBOR Advance for which the
Borrower wishes to select the Adjusted LIBOR Rate are not generally available at
such time in the London interbank eurodollar market, or (ii) the rate at which
the deposits described in subsection (i) herein are being offered will not
adequately and fairly reflect the costs to Lenders of maintaining an Adjusted
LIBOR Rate on an Advance or of funding the same in such market for such LIBOR
Interest Period, or (iii) reasonable means do not exist for determining an
Adjusted LIBOR Rate, or (iv) the Adjusted LIBOR Rate would be in excess of the
maximum interest rate which Borrower may by law pay, then in any of such events,
Administrative Agent shall so notify Borrower and Lenders and such Advance shall
bear interest at the Alternate Base Rate.
(f) In no event may Borrower elect a LIBOR Interest Period which
would extend beyond the Maturity Date. Unless the Administrative Agent agrees
thereto, in no event may Borrower have more than six (6) different LIBOR
Interest Periods for LIBOR Advances outstanding at any one time.
(g) Conversion and Continuation.
---------------------------
(i) Borrower may elect from time to time, subject to the other
provisions of this Section 2.11, to convert all or any part of an
------------
Advance into any other type of Advance; provided that any conversion
of a LIBOR Advance shall be made on, and only on, the last day of the
LIBOR Interest Period applicable thereto.
(ii) Alternate Base Rate Advances shall continue as Alternate
Base Rate Advances unless and until such Alternate Base Rate Advances
are converted into LIBOR Advances pursuant to a
Conversion/Continuation Notice from Borrower in accordance with
Section 2.11(g)(iv). LIBOR Advances shall continue until the end of
-------------------
the then applicable LIBOR Interest Period therefor, at
-23-
<PAGE>
which time each such Advance shall be automatically converted into an
Alternate Base Rate Advance unless the Borrower shall have given the
Administrative Agent a Conversion/Continuation Notice in accordance
with Section 2.11(g)(iv) requesting that, at the end of such LIBOR
-------------------
Interest Period, such Advance continue as a LIBOR Advance for the same
or another LIBOR Interest Period.
(iii) Notwithstanding anything to the contrary contained in
Sections 2.11(g)(i) or (g)(ii), no Advance may be converted into a
------------------- -------
LIBOR Advance or continued as a LIBOR Advance (except with the consent
of the Majority Lenders) when any Monetary Default or Event of Default
has occurred and is continuing.
(iv) The Borrower shall give the Administrative Agent
irrevocable notice (a "Conversion/Continuation Notice") of each
------------------------------
conversion of an Advance or continuation of a LIBOR Advance not later
than 11:00 a.m. (Chicago time) on the Business Day immediately
preceding the date of the requested conversion, in the case of a
conversion into an Alternate Base Rate Advance, or 11:00 a.m. (Chicago
time) at least three (3) Business Days prior to the date of the
requested conversion or continuation, in the case of a conversion into
or continuation of a LIBOR Advance, specifying: (1) the requested
date (which shall be a Business Day) of such conversion or
continuation; (2) the amount and type of the Advance to be converted
or continued; and (3) the amounts and type(s) of Advance(s) into which
such Advance is to be converted or continued and, in the case of a
conversion into or continuation of a LIBOR Advance, the duration of
the LIBOR Interest Period applicable thereto.
2.12 Method of Payment. All payments of the Obligations hereunder shall be
-----------------
made, without set-off, deduction, or counterclaim, in immediately available
funds to Administrative Agent at Administrative Agent's address specified
herein, or at any other Lending Installation of Administrative Agent specified
in writing by Administrative Agent to Borrower, by noon (local time) on the date
when due and shall be applied ratably by Administrative Agent among the Lenders.
All payments received by the Administrative Agent from the Borrower for the
account of the Lenders shall be disbursed to the applicable Lenders no later
than the next Business Day following the day such payment is received in good
funds by the Administrative Agent. If payments received by the Administrative
Agent from the Borrower are not disbursed to the applicable Lenders the same day
as they are received, such funds shall be invested overnight by the
Administrative Agent and each Lender will receive its Percentage of any interest
so earned. The Lenders acknowledge that the Administrative Agent does not
guarantee any particular level of return on the overnight funds and that the
Administrative Agent will invest such funds as it deems prudent from time to
time.
-24-
<PAGE>
2.13 Default. During the continuance of a Monetary Default or an Event of
-------
Default, at the election of the Majority Lenders, by notice to Borrower,
outstanding Advances shall bear interest at the applicable Default Rates until
such Monetary Default or Event of Default ceases to exist or the Obligations are
paid in full.
2.14 Lending Installations. Each Lender may book its Advances at any
---------------------
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Notes shall be deemed held by each Lender for
the benefit of such Lending Installation. Each Lender may, by written or telex
notice to the Administrative Agent and Borrower, designate a Lending
Installation through which Advances will be made by it and for whose account
payments are to be made.
2.15 Non-Receipt of Funds by Administrative Agent. Unless Borrower or a
--------------------------------------------
Lender, as the case may be, notifies Administrative Agent prior to the date on
which it is scheduled to make payment to Administrative Agent of (i) in the case
of a Lender, its portion of an Advance, or (ii) in the case of Borrower,
principal, interest or fees to the Administrative Agent for the account of the
Lenders, that it does not intend to make such payment, Administrative Agent may
assume that such payment has been made. Administrative Agent may, but shall not
be obligated to, make the amount of such payment available to the intended
recipient in reliance upon such assumption. If such Lender or Borrower, as the
case may be, has not in fact made such payment to Administrative Agent, the
recipient of such payment shall, on demand by Administrative Agent, repay to
Administrative Agent the amount so made available together with interest thereon
in respect of each day during the period commencing on the date such amount was
so made available by Administrative Agent until the date Administrative Agent
recovers such amount at a rate per annum equal to (i) in the case of payment by
a Lender, the Federal Funds Effective Rate (as determined by Administrative
Agent) for such day or (ii) in the case of payment by Borrower, the interest
rate applicable to the relevant Advance.
2.16 Application of Moneys Received. All moneys collected or received by
------------------------------
the Administrative Agent on account of the Facility directly or indirectly,
shall be applied in the following order of priority:
(i) to the payment of all reasonable costs incurred in the
collection of such moneys of which the Administrative Agent shall
have given notice to the Borrower;
(ii) to the reimbursement of any yield protection due to
any of the Lenders in accordance with Section 4.1;
-----------
(iii) [INTENTIONALLY DELETED];
-25-
<PAGE>
(iv) first to interest until paid in full and then to
principal for all Lenders (other than Defaulting Lenders), to be
distributed on a pro rata basis in accordance with the respective
Percentages of the Lenders;
(v) any other sums due to the Administrative Agent or any
Lender under any of the Loan Documents; and
(vi) to the payment of any sums due to each Defaulting
Lender as their respective Percentages appear (provided that
Administrative Agent shall have the right to set-off against such
sums any amounts due from each Defaulting Lender).
2.17 The Pledge. The Borrower and The Hughes Corporation have executed
----------
and delivered the Pledge to the Lenders and delivered possession of the Pledged
Stock to the Administrative Agent for the purpose of providing further security
for the full payment and performance of all of the Obligations. The Pledge shall
remain in full force and effect until such time as the "Limitation End Date" (as
defined in Paragraph 1 of the Limited Guaranty) has occurred and the Limited
-----------
Guarantors have become fully liable under the Limited Guaranty. At the request
of the Administrative Agent made after the Limitation End Date has occurred, the
Lenders shall, at the Borrower's sole cost and expense, execute and deliver to
the Borrower an instrument terminating and releasing the Pledge and possession
of all of the Pledged Stock.
2.18 Voluntary Reduction of Aggregate Commitment Amount. Upon at least
--------------------------------------------------
three (3) Business Days prior irrevocable written notice (or telephonic notice
promptly confirmed in writing) to the Administrative Agent, Borrower shall have
the right, without premium or penalty, to terminate the Aggregate Commitment in
whole or in part provided that (a) Borrower may not reduce the Aggregate
Commitment below the Allocated Facility Amount at the time of such requested
reduction, and (b) any such partial termination shall be in the minimum
aggregate amount of Ten Million Dollars ($10,000,000.00) or any integral
multiple of Ten Million Dollars ($10,000,000.00) in excess thereof. Any partial
termination of the Aggregate Commitment shall be applied pro rata to each
Lender's Commitment.
ARTICLE III
[INTENTIONALLY DELETED]
-26-
<PAGE>
ARTICLE IV
CHANGE IN CIRCUMSTANCES
-----------------------
4.1 Yield Protection. If the adoption of or change in any law or any
----------------
governmental or quasi-governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law), or any interpretation
thereof, or the compliance of any Lender therewith,
(i) subjects any Lender or any applicable Lending
Installation to any tax, duty, charge or withholding on or from
payments due from Borrower (excluding federal and state taxation of
the overall net income of any Lender or applicable Lending
Installation), or changes the basis of such taxation of payments to
any Lender in respect of its Advances or other amounts due it
hereunder, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any Lender or any applicable Lending Installation (other
than reserves and assessments taken into account in determining the
interest rate applicable to LIBOR Advances), or
(iii) imposes any other condition, and the result is to
increase the cost of any Lender or any applicable Lending Installation
of making, funding or maintaining loans or reduces any amount
receivable by any Lender or any applicable Lending Installation in
connection with loans, or requires any Lender or any applicable
Lending Installation to make any payment calculated by reference to
the amount of loans held or interest received by it, by an amount
deemed material by such Lender,
then, within fifteen (15) days of demand by such Lender, Borrower shall pay such
- - ----
Lender that portion of such increased expense incurred or reduction in an amount
received which such Lender determines is attributable to making, funding and
maintaining its Advances and its Commitment.
4.2 Changes in Capital Adequacy Regulations. If a Lender determines the
---------------------------------------
amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporate entity controlling such
Lender is increased as a result of a Change (as defined below), then, within
fifteen (15) days of demand by such Lender, Borrower shall pay such Lender the
amount necessary to compensate for any shortfall in the rate of return on the
portion of such increased capital which such Lender determines is attributable
to this Agreement, its Advances, or its obligation to make Advances hereunder
(after taking into account such Lender's policies as to capital adequacy).
"Change" means (i) any change after the date of this Agreement in the Risk-Based
- - -------
Capital Guidelines (as
-27-
<PAGE>
defined below) or (ii) any adoption of or change in any other law, governmental
or quasi-governmental rule, regulation, policy, guideline, interpretation, or
directive (whether or not having the force of law) after the date of this
Agreement which affects the amount of capital required or expected to be
maintained by any Lender or any Lending Installation or any corporation
controlling any Lender. "Risk-Based Capital Guidelines" means (i) the risk-based
-----------------------------
capital guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Basle Committee on Banking Regulation and Supervisory
Practices Entitled "International Convergence of Capital Measurements and
Capital Standards", including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.
4.3 Suspension of LIBOR Advances. If any Lender determines that
----------------------------
maintenance of any of its LIBOR Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation or directive of any Governmental
Authority having jurisdiction, the Administrative Agent shall suspend by written
notice to Borrower the availability of LIBOR Advances and require any LIBOR
Advances to be converted to Alternate Base Rate Advances. Without in any way
affecting the Borrower's obligation to pay compensation actually claimed by a
Lender under Section 4.2 or to convert LIBOR Advances to Alternate Base Rate
-----------
Advances if so required by a Lender under Section 4.3, the Borrower shall have
-----------
the right to replace any Lender which has demanded such compensation or caused
such conversion provided that Borrower notifies such Lender that it has elected
to replace such Lender and notifies such Lender and the Administrative Agent of
the identity of the proposed replacement Lender not more than six (6) months
after such action. The Lender being replaced shall assign its Percentage of the
Aggregate Commitment and its rights and obligations under this Facility to the
replacement Lender in accordance with the requirements of Section 13.3 hereof
------------
and the replacement Lender shall assume such Percentage of the Aggregate
Commitment and the related obligations under this Facility prior to the Maturity
Date to be extended, all pursuant to an assignment agreement substantially in
the form of Exhibit I hereto. The purchase by the replacement Lender shall be
---------
at par (plus all accrued and unpaid interest and any other sums owed to such
Lender being replaced hereunder) which shall be paid to the Lender being
replaced upon the execution and delivery of the assignment.
4.4 Funding Indemnification. If any payment of a LIBOR Advance occurs on
-----------------------
a date which is not the last day of the applicable Interest Period, whether
because of acceleration, prepayment for any reason (including, without
limitation, a prepayment required under Section 8.13 hereof) or otherwise, or a
------------
LIBOR Advance is not made on the date specified by Borrower for any reason other
than default by one or more of the Lenders, Borrower will indemnify each Lender
for any loss or cost incurred by such Lender resulting therefrom, including,
without limitation, any loss or cost in liquidating or employing deposits
acquired to fund or maintain the LIBOR Advance.
-28-
<PAGE>
4.5 Lender Statements; Survival of Indemnity. To the extent reasonably
----------------------------------------
possible, each Lender shall designate an alternate Lending Installation with
respect to its LIBOR Advances to reduce any liability of Borrower to such Lender
under Sections 4.1 and 4.2 or to avoid the unavailability of a LIBOR Advance, so
------------ ---
long as such designation is not disadvantageous to such Lender. Each Lender
shall deliver a written statement of such Lender as to the amount due, if any,
under Sections 4.1, 4.2 or 4.4 hereof. Such written statement shall set forth
------------ --- ---
in reasonable detail the calculations upon which such Lender determined such
amount and shall be final, conclusive and binding on Borrower in the absence of
manifest error. Determination of amounts payable under such Sections in
connection with a LIBOR Advance shall be calculated as though each Lender funded
its LIBOR Advance through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the Adjusted
LIBOR Rate applicable to such Advance, whether in fact that is the case or not.
Unless otherwise provided herein, the amount specified in the written statement
shall be payable on demand after receipt by Borrower of the written statement.
The obligations of Borrower under Sections 4.1, 4.2 and 4.4 hereof shall survive
------------ --- ---
payment of the Obligations and termination of this Agreement.
ARTICLE V
CONDITIONS PRECEDENT
--------------------
5.1 Conditions Precedent to the Initial Advance. The Lenders shall not be
-------------------------------------------
required to make the initial Advance hereunder, unless (i) the Borrower shall
have paid all fees then due and payable to the Lenders, the Syndication Agent,
the Arrangers and the Administrative Agent hereunder, (ii) all of the conditions
set forth in Section 5.2 are satisfied, and (iii) the Borrower shall have
-----------
furnished to the Administrative Agent, in form and substance satisfactory to the
Lenders and their counsel and with sufficient copies for the Lenders, the
following:
(a) Articles of Incorporation. A copy of the articles of
-------------------------
incorporation of the Borrower and each Guarantor, each certified by the
appropriate Secretary of State or equivalent state official.
(b) Bylaws. A copy of the bylaws of the Borrower and each Guarantor,
------
including all amendments thereto, each certified by the Secretary or an
Assistant Secretary thereof as being in full force and effect on the Agreement
Execution Date.
(c) Good Standing Certificates. A certified copy of a certificate
--------------------------
from the Secretary of State or equivalent state official of the states where the
Borrower and Guarantors are organized, dated as of the most recent practicable
date, showing the good standing of the Borrower and the Guarantors.
-29-
<PAGE>
(d) Foreign Qualification Certificates. A certified copy of a
----------------------------------
certificate from the Secretary of State or equivalent state official of each
state where the Borrower or a Guarantor maintains its principal place of
business, dated as of the most recent practicable date, showing the
qualification to transact business in such state as a foreign corporation.
(e) Resolutions. A copy of a resolution or resolutions adopted by
-----------
the Board of Directors of the Borrower and each Guarantor, certified by the
Secretary or an Assistant Secretary of the Borrower and each Guarantor as being
in full force and effect on the Agreement Execution Date, authorizing the
Advances provided for herein and the execution, delivery and performance of the
Loan Documents to be executed and delivered by it hereunder.
(f) Incumbency Certificate. A certificate, signed by the Secretary
----------------------
or an Assistant Secretary of the Borrower and each Guarantor and dated the
Agreement Execution Date, as to the incumbency, and containing the specimen
signature or signatures, of the Persons authorized to execute and deliver the
Loan Documents to be executed and delivered by it hereunder.
(g) Loan Documents. Originals of the Loan Documents (in such
--------------
quantities as the Lenders may reasonably request), duly executed by authorized
officers of the appropriate entity.
(h) Opinion of Borrower's Counsel. A written opinion, dated the
-----------------------------
Agreement Execution Date, from David R. Schwiesow, Vice President and Associate
General Counsel of the Borrower, as to all matters other than enforceability,
which enforceability opinion shall be issued by an Illinois counsel reasonably
satisfactory to the Administrative Agent, the substance of such opinions to be
substantially in the form attached hereto as Exhibit E.
---------
(i) Opinion of Guarantors' Counsel and Counsel to The Hughes
--------------------------------------------------------
Corporation. Written opinions, dated the Agreement Execution Date, from David
- - -----------
R. Schwiesow, Vice President and Associate General Counsel of the Unlimited
Guarantor, and Michael C. Niarchos, Senior Vice President and General Counsel of
the Limited Guarantors and The Hughes Corporation, as to all matters other than
enforceability, which enforceability opinion shall be issued by an Illinois
counsel reasonably satisfactory to the Administrative Agent, the substance of
such opinions to be substantially in the form attached hereto as Exhibit F.
---------
(j) Insurance. Original or certified copies of insurance policies or
---------
binders therefor, with accompanying receipts showing current payment of all
premiums, evidencing that Borrower and the Guarantors carries insurance on their
respective Properties which satisfies the Administrative Agent's insurance
requirements, including, without limitation:
-30-
<PAGE>
(i) Property and casualty insurance (including coverage for
flood and other water damage for any Properties located within a 100-
year flood plain) in the amount of the replacement cost of the
improvements at such Projects;
(ii) Loss of rental income insurance in the amount not less than
one year's gross revenues from the Properties; and
(iii) Comprehensive general liability insurance in the amount of
$1,000,000 per occurrence.
All insurance must be carried by companies with a Best Insurance
Reports (1992) Policyholder's and Financial Size Rating of "A-VII" or better.
(k) Use of Facility Proceeds. Evidence that the proceeds of such
------------------------
Advance will be used by the Borrower, directly or indirectly, to (i) make
payments required to be made to the seller under, and in accordance with the
terms and provisions of, the TrizecHahn Agreement, (ii) pay for usual and
customary third-party costs incurred by the Borrower in connection the closing
of any transaction under the TrizecHahn Agreement, or (iii) reimburse the
Borrower for any such payments made or costs incurred by the Borrower prior to
the date of such Advance.
(l) Financial and Related Information. The following information:
---------------------------------
(i) A certificate, signed by an officer of the Borrower,
stating that on the Agreement Execution Date no Default or Event of
Default has occurred and is continuing and that all representations
and warranties of the Borrower contained herein are true and correct
as of the Agreement Execution Date as and to the extent set forth
herein;
(ii) The most recent financial statements of the
Consolidated Group and a certificate from a Qualified Officer of the
Borrower that no change in the Borrower's financial condition that
would have a Material Adverse Effect has occurred since the date
thereof; and
(iii) Written money transfer instructions, in substantially
the form of Exhibit G hereto, addressed to the Administrative Agent
---------
and signed by a Qualified Officer, together with such other related
money transfer authorizations as the Administrative Agent may have
reasonably requested.
(m) Other Evidence as any Lender May Require. Such other evidence as
----------------------------------------
any Lender may reasonably request to establish the consummation of the
transactions contemplated hereby, the taking of all necessary actions in any
proceedings in connection herewith and compliance with the conditions set forth
in this Agreement.
-31-
<PAGE>
(n) Year 2000. Written information satisfactory to the
---------
Administrative Agent indicating that each of the Borrower and the other members
of the Consolidated Group (a) has made a reasonable assessment of the Year 2000
Issues; (b) has a Year 2000 Program; and (c) does not reasonably anticipate that
the Year 2000 Issues will have a Material Adverse Effect or cause a Material
Adverse Financial Change.
5.2 Conditions Precedent to Each Advance. Advances after the initial
------------------------------------
Advance shall be made or issued from time to time as requested by Borrower, and
the obligation of each Lender to make any Advance is subject to the following
terms and conditions:
(a) Prior to each such Advance or issuance no Default or Event of
Default shall have occurred and be continuing under this Agreement or any of the
Loan Documents and, if required by Administrative Agent, Borrower shall deliver
a certificate of Borrower to such effect;
(b) The representations and warranties contained in Articles VI and
-----------
VII shall be true and correct as of such Borrowing Date, or date of conversion
- - ---
and/or continuation as and to the extent set forth therein, except to the extent
any such representation or warranty is stated to relate solely to an earlier
date, in which case such representation or warranty shall be true and correct on
and as of such earlier date; and
(c) The Borrower shall provide to the Administrative Agent evidence
satisfactory to the Administrative Agent that the proceeds of such Advance will
be used by the Borrower, directly or indirectly, as required under Section
-------
5.1(k) hereof.
- - --------------
Subject to the last grammatical paragraphs of Articles VI and VII hereof,
----------- ---
each Borrowing Notice and Conversion/Continuation Notice shall constitute a
representation and warranty by the Borrower that the conditions contained in
Sections 5.2(a), (b) and (c) have been satisfied.
- - --------------- --- ---
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
------------------------------
Borrower hereby represents and warrants that:
6.1 Existence. Borrower is a corporation duly organized and existing
---------
under the laws of the State of Maryland, with its principal place of business in
the State of Maryland, and is duly qualified as a foreign corporation and
properly licensed (if required) and in good standing in each jurisdiction in
which the failure to qualify or be licensed would constitute a Material Adverse
Financial Change or have a Material Adverse Effect. Each of its Subsidiaries is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization and is duly qualified as a foreign corporation and
properly
-32-
<PAGE>
licensed (if required) and in good standing in each jurisdiction in which the
failure to qualify, be in good standing or be licensed would constitute a
Material Adverse Financial Change or have a Material Adverse Effect.
6.2 Corporate Powers. The execution, delivery and performance of the Loan
----------------
Documents required to be delivered by Borrower hereunder are within its
corporate powers, have been duly authorized by all requisite action, and are not
in conflict with the terms of any organizational instruments of such entity, or
any instrument or agreement to which Borrower is a party or by which the
Borrower or any of its assets may be bound or affected.
6.3 Power of Officers. The officers of the Borrower executing the Loan
-----------------
Documents required to be delivered by the Borrower hereunder have been duly
elected or appointed and were fully authorized to execute the same at the time
each such agreement, certificate or instrument was executed.
6.4 Government and Other Approvals. No approval, consent, exemption or
------------------------------
other action by, or notice to or filing with, any governmental authority is
necessary in connection with the execution, delivery or performance of the Loan
Documents.
6.5 Solvency.
--------
(i) Immediately after the Agreement Execution Date and
immediately following the making of each Advance and after giving
effect to the application of the proceeds of such Advances, (a) the
fair value of the assets of the Borrower and its Subsidiaries on a
consolidated basis, will exceed the debts and liabilities,
subordinated, contingent or otherwise, of the Borrower and its
Subsidiaries on a consolidated basis; (b) the fair saleable value of
the Properties of the Borrower and its Subsidiaries on a consolidated
basis will be greater than the amount that will be required to pay the
probable liability of the Borrower and its Subsidiaries on a
consolidated basis on their debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become
absolute and matured; (c) the Borrower and its Subsidiaries on a
consolidated basis will be able to pay their debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities
become absolute and matured; and (d) the Borrower and its Subsidiaries
on a consolidated basis will not have unreasonably small capital with
which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted after
the date hereof.
(ii) Borrower does not intend to, or to permit any of its
Subsidiaries to incur debts beyond its ability to pay such debts as
they mature, taking into account the timing of and amounts of cash to
be received by it or any such Subsidiary and the timing of the amounts
of cash to be payable on or in respect of its Indebtedness or the
Indebtedness of any such Subsidiary.
-33-
<PAGE>
6.6 Compliance With Laws. There is no judgment, decree or order or any
--------------------
law, rule or regulation of any court or governmental authority binding on
Borrower or any of its Subsidiaries which would be contravened by the execution,
delivery or performance of the Loan Documents required hereunder.
6.7 Enforceability of Agreement. This Agreement is the legal, valid and
---------------------------
binding agreement of the Borrower, and the Notes when executed and delivered
will be the legal, valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with their respective terms, and the Loan
Documents required hereunder, when executed and delivered, will be similarly
legal, valid, binding and enforceable except to the extent that such enforcement
may be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws affecting the rights of creditors generally.
6.8 Title to Property. To the best of Borrower's knowledge after due
-----------------
inquiry, and except to the extent that any such failure would not have a
Material Adverse Effect, Borrower or its Subsidiaries has good and marketable
title to the Properties and assets reflected in the financial statements as
owned by it or any such Subsidiary free and clear of Liens except for the
Permitted Liens. The execution, delivery or performance of the Loan Documents
required to be delivered by the Borrower hereunder will not result in the
creation of any Lien on the Properties. No consent to the transactions
contemplated hereunder is required from any ground lessor or mortgagee or
beneficiary under a deed of trust or any other Person except as has been
delivered to the Lenders.
6.9 Litigation. There are no suits, arbitrations, claims, disputes or
----------
other proceedings (including, without limitation, any civil, criminal,
administrative or environmental proceedings), pending or, to the best of
Borrower's knowledge, threatened against or affecting the Borrower or any of the
Properties, which individually or in the aggregate may reasonably be expected to
have a Material Adverse Effect and/or constitute a Material Adverse Financial
Change or materially impair the Borrower's ability to perform its obligations
hereunder or under any instrument or agreement required hereunder.
6.10 Events of Default. No Default or Event of Default has occurred and is
-----------------
continuing or would result from the incurring of obligations by the Borrower
under any of the Loan Documents or any other document to which Borrower is a
party.
6.11 Investment Company Act of 1940. Borrower is not, and will not be, an
------------------------------
investment company within the meaning of the Investment Company Act of 1940.
6.12 Public Utility Holding Company Act. The Borrower is not a "holding
----------------------------------
company" or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company," within
the definitions of the Public Utility Holding Company Act of 1935, as amended.
-34-
<PAGE>
6.13 Regulation U. The proceeds of the Advances will not be used,
------------
directly or indirectly, to purchase or carry any Margin Stock or to extend
credit to others for the purpose of purchasing or carrying any Margin Stock.
6.14 No Material Adverse Financial Change. To the best knowledge of
------------------------------------
Borrower, there has been no Material Adverse Financial Change in the condition
of Borrower since the date of the financial and/or operating statements most
recently submitted to the Lenders.
6.15 Financial Information. All financial statements furnished to the
---------------------
Lenders by or at the direction of the Borrower and all other financial
information and data furnished by the Borrower to the Lenders are complete and
correct in all material respects as of the date thereof, and such financial
statements have been prepared in accordance with GAAP and fairly present the
consolidated financial condition and results of operations of the Borrower as of
such date. The Borrower has no contingent obligations, liabilities for taxes or
other outstanding financial obligations which are material in the aggregate,
except as disclosed in such statements, information and data.
6.16 Factual Information. All factual information heretofore or
-------------------
contemporaneously furnished by or on behalf of the Borrower to the Lenders for
purposes of or in connection with this Agreement and the other Loan Documents
and the transactions contemplated therein is, and all other such factual
information hereafter furnished by or on behalf of the Borrower to the Lenders
will be, true and accurate (taken as a whole) in all material respects on the
date as of which such information is dated or certified and not incomplete by
omitting to state any material fact necessary to make such information (taken as
a whole) not misleading at such time.
6.17 ERISA. (i) Borrower is not an entity deemed to hold "plan assets"
-----
within the meaning of ERISA or any regulations promulgated thereunder of an
employee benefit plan (as defined in Section 3(3) of ERISA) which is subject to
Title I of ERISA or any plan within the meaning of Section 4975 of the Code, and
(ii) the execution of this Agreement and the transactions contemplated hereunder
do not give rise to a prohibited transaction within the meaning of Section 406
of ERISA or Section 4975 of the Code.
6.18 Taxes. All required tax returns have been filed by Borrower with the
-----
appropriate authorities except to the extent that extensions of time to file
have been requested, granted and have not expired or except to the extent such
taxes are being contested in good faith and for which adequate reserves, in
accordance with GAAP, are being maintained.
6.19 Environmental Matters. Except as disclosed in Schedule 6.19, each of
--------------------- -------------
the following representations and warranties is true and correct except to the
extent that the facts and circumstances giving rise to any such failure to be so
true and correct, in the aggregate, are not reasonably expected to have a
Material Adverse Effect:
-35-
<PAGE>
(i) To the knowledge of the Borrower, the Properties of
Borrower, its Subsidiaries, and Investment Affiliates do not contain
any Materials of Environmental Concern in amounts or concentrations
which constitute a violation of, or could reasonably give rise to
liability under, Environmental Laws.
(ii) Borrower has not received any written notice alleging
that any of the Properties of Borrower and its Subsidiaries and
Investment Affiliates or any operations at the Properties are not in
compliance with all applicable Environmental Laws. Further, Borrower
has not received any written notice alleging the existence of any
contamination at or under such Properties in amounts or
concentrations which constitute a violation of any Environmental Law,
or any violation of any Environmental Law with respect to such
Properties for which Borrower, its Subsidiaries or Investment
Affiliates is or could be liable.
(iii) Neither Borrower nor any of its Subsidiaries or
Investment Affiliates has received any written notice of non-
compliance, liability or potential liability regarding Environmental
Laws with regard to any of the Properties, nor does it have knowledge
that any such notice will be received or is being threatened.
(iv) To the knowledge of Borrower during the ownership of
the Properties by any or all of Borrower, its Subsidiaries and
Investment Affiliates, Materials of Environmental Concern have not
been transported or disposed of from the Properties in violation of,
or in a manner or to a location which could reasonably give rise to
liability of Borrower, any Subsidiary, or any Investment Affiliate
under, Environmental Laws, nor during the ownership of the Properties
by any or all of Borrower, its Subsidiaries and Investment Affiliates
have any Materials of Environmental Concern been generated, treated,
stored or disposed of at, on or under any of the Properties in
violation of, or in a manner that could give rise to liability of
Borrower, any Subsidiary or any Investment Affiliate under, any
applicable Environmental Laws.
(v) No judicial proceedings or governmental or
administrative action is pending, or, to the knowledge of Borrower,
threatened, under any Environmental Law to which Borrower, any of its
Subsidiaries, or any Investment Affiliate is named as a party with
respect to the Properties of such entity, nor are there any consent
decrees or other decrees, consent orders, administrative orders or
other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to such
Properties for which Borrower, its Subsidiaries, or any Investment
Affiliate is or could be liable.
-36-
<PAGE>
(vi) To the knowledge of Borrower during the ownership of
the Properties by any or all of Borrower, its Subsidiaries and
Investment Affiliates, there has been no release or threat of release
of Materials of Environmental Concern at or from the Properties, or
arising from or related to the operations of any such entity in
connection with the Properties in violation of, or in amounts or in a
manner that could give rise to liability under, Environmental Laws.
6.20 Insurance. Borrower has obtained the insurance which Borrower is
---------
required to furnish to Lenders under Section 5.1(j) hereof.
--------------
6.21 No Brokers. Borrower has dealt with no brokers in connection with
----------
this Facility, and no brokerage fees or commissions are payable by or to any
Person in connection with this Agreement or the Advances. Lenders shall not be
responsible for the payment of any fees or commissions to any broker and
Borrower shall indemnify, defend and hold Lenders harmless from and against any
claims, liabilities, obligations, damages, costs and expenses (including
reasonable attorneys' fees and disbursements) made against or incurred by
Lenders as a result of claims made or actions instituted by any broker or Person
claiming by, through or under Borrower in connection with the Facility.
6.22 No Violation of Usury Laws. No aspect of any of the transactions
--------------------------
contemplated herein violate or will violate any usury laws or other laws in
effect on the date hereof regarding the validity of agreements to pay interest.
6.23 Not a Foreign Person. Borrower is not a "foreign person" within the
--------------------
meaning of Section 1445 or 7701 of the Internal Revenue Code.
6.24 No Trade Name. Borrower does not use any trade name and has not and
-------------
does not do business under any name other than its actual name set forth herein.
The principal place of business of Borrower is as stated in the recitals hereto.
6.25 Subsidiaries. Schedule 6.25 hereto contains an accurate list of all
------------ -------------
of the presently existing Subsidiaries of Borrower, setting forth their
respective jurisdictions of formation and the percentage of their respective
Capital Stock owned by it or its Subsidiaries. All of the issued and
outstanding shares of Capital Stock of such Subsidiaries have been duly
authorized and issued and are fully paid and non-assessable.
6.26 Year 2000. Each of the Borrower and the other members of the
---------
Consolidated Group has made a reasonable assessment of the Year 2000 Issues and
has a realistic and achievable program for remediating the Year 2000 Issues on a
timely basis (the "Year 2000 Program"). Based on such assessment and on the
-----------------
Year 2000 Program, the Borrower does not reasonably anticipate that the Year
2000 Issues will have a Material Adverse Effect or cause a Material Adverse
Financial Change.
-37-
<PAGE>
Borrower agrees that all of its representations and warranties set forth in
Article VI of this Agreement and elsewhere in this Agreement are true on the
- - ----------
Agreement Execution Date, and will be true on each Effective Date in all
material respects (except with respect to matters which have been disclosed in
writing to and approved by the Majority Lenders), and will be true in all
material respects (except with respect to matters which have been disclosed in
writing to and approved by the Majority Lenders) upon each request for
disbursement of an Advance. Each request for disbursement hereunder shall
constitute a reaffirmation of such representations and warranties as deemed
modified in accordance with the disclosures made and approved, as aforesaid, as
of the date of such request and disbursement.
ARTICLE VII
ADDITIONAL REPRESENTATIONS AND WARRANTIES
-----------------------------------------
Each Guarantor hereby represents and warrants that:
7.1 Existence. The Howard Research And Development Corporation is a
---------
corporation duly organized and existing under the laws of the State of Maryland,
with its principal place of business in the State of Maryland, and is duly
qualified as a foreign corporation and properly licensed (if required) and in
good standing in each jurisdiction where the failure to qualify, be in good
standing or be licensed (if required) would constitute a Material Adverse
Financial Change or have a Material Adverse Effect on such Guarantor. Howard
Hughes Properties, Inc. and The Howard Hughes Corporation are each a corporation
duly organized and existing under the laws of the States of Nevada and of
Delaware, respectively, with its principal place of business in the State of
Nevada, and is duly qualified as a foreign corporation and properly licensed (if
required) and in good standing in each jurisdiction where the failure to
qualify, be in good standing or be licensed (if required) would constitute a
Material Adverse Financial Change or have a Material Adverse Effect on such
Guarantor.
7.2 Corporate Powers. The execution, delivery and performance of the Loan
----------------
Documents required to be delivered by such Guarantor hereunder are within the
corporate or partnership powers of such Guarantor, have been duly authorized by
all requisite corporate or partnership action, and are not in conflict with the
terms of any organizational instruments of such Guarantor, or any instrument or
agreement to which such Guarantor is a party or by which such Guarantor or any
of its assets is bound or affected.
7.3 Power of Officers. The officers of such Guarantor executing the Loan
-----------------
Documents required to be delivered by such Guarantor hereunder have been duly
elected or appointed and were fully authorized to execute the same at the time
each such agreement, certificate or instrument was executed.
-38-
<PAGE>
7.4 Government and Other Approvals. No approval, consent, exemption or
------------------------------
other action by, or notice to or filing with, any governmental authority is
necessary in connection with the execution, delivery or performance of the Loan
Documents required hereunder.
7.5 Solvency.
--------
(i) Immediately after the Agreement Execution Date and
immediately following the making of each Advance and after giving
effect to the application of the proceeds of such Advances, (a) the
fair value of the assets of each Guarantor and its Subsidiaries on a
consolidated basis, will exceed the debts and liabilities,
subordinated, contingent or otherwise, of each Guarantor and its
Subsidiaries on a consolidated basis; (b) the fair saleable value of
the Properties of each Guarantor and its Subsidiaries on a
consolidated basis will be greater than the amount that will be
required to pay the probable liability of each Guarantor and its
Subsidiaries on a consolidated basis on their debts and other
liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (c) each Guarantor and
its Subsidiaries on a consolidated basis will be able to pay their
debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (d) each
Guarantor and its Subsidiaries on a consolidated basis will not have
unreasonably small capital with which to conduct the businesses in
which they are engaged as such businesses are now conducted and are
proposed to be conducted after the date hereof.
(ii) Each Guarantor does not intend to, or to permit any of
its Subsidiaries to, incur debts beyond its ability to pay such debts
as they mature, taking into account the timing of and amounts of cash
to be received by it or any such Subsidiary and the timing of the
amounts of cash to be payable on or in respect of its Indebtedness or
the Indebtedness of any such Subsidiary.
7.6 Compliance With Laws. There is no judgment, decree or order or any
--------------------
law, rule or regulation of any court or governmental authority binding on such
Guarantor which would be contravened by the execution, delivery or performance
of the Loan Documents required hereunder.
7.7 Enforceability of Guaranty. The Guaranty is the legal, valid and
--------------------------
binding agreement of such Guarantor, enforceable against such Guarantor in
accordance with its respective terms, and the Loan Documents required hereunder,
when executed and delivered, will be similarly legal, valid, binding and
enforceable except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws
affecting the rights of creditors generally.
-39-
<PAGE>
7.8 Title to Properties. The Guarantors and their Subsidiaries,
-------------------
collectively, own all or substantially all of the Consolidated Group's
undeveloped land holdings in Columbia, Maryland and Summerlin, Nevada as
described on Exhibit J, and, to the best of Guarantors' knowledge after due
---------
inquiry, the Guarantors have good and marketable title to such Properties free
and clear of any Liens except for the Permitted Liens. The execution, delivery
or performance of the Loan Documents required to be delivered by the Guarantors
hereunder shall not result in the creation of any Lien on such Properties. No
consent to the transactions contemplated hereunder is required from any ground
lessor or mortgagee or beneficiary under a deed of trust or any other party
having an interest in such Properties.
7.9 Litigation. There are no suits, arbitrations, claims, disputes or
----------
other proceedings (including, without limitation, any civil, criminal,
administrative or environmental proceedings), pending or, to the best of such
Guarantor's knowledge, threatened against or affecting such Guarantor or any of
its Properties, which individually or in the aggregate may reasonably be
expected to have a Material Adverse Effect and/or to cause a Material Adverse
Financial Change or materially impair such Guarantor's ability to perform its
obligations under the Guaranty or under any instrument or agreement required
hereunder.
7.10 Events of Default. No Default or Event of Default has occurred and is
-----------------
continuing or would result from the incurring of obligations by such Guarantor
under any of the Loan Documents or any other document to which such Guarantor is
a party.
7.11 Investment Company Act of 1940. Such Guarantor is not, and will not
------------------------------
be, an investment company within the meaning of the Investment Company Act of
1940.
7.12 Public Utility Holding Company Act. Such Guarantor is not a "holding
----------------------------------
company" or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company," within
the definitions of the Public Utility Holding Company Act of 1935, as amended.
7.13 No Material Adverse Financial Change. There has been no Material
------------------------------------
Adverse Financial Change since the last date on which the financial and/or
operating statements were submitted to the Lenders.
7.14 Financial Information. All financial statements furnished to the
---------------------
Lenders by or on behalf of such Guarantor and all other financial information
and data furnished by or on behalf of such Guarantor to the Lenders are complete
and correct in all material respects as of the date thereof, and such financial
statements have been prepared in accordance with GAAP and fairly present the
consolidated financial condition and results of operations of such Guarantor as
of such date. Such Guarantor has no contingent obligations, liabilities for
taxes or other outstanding financial obligations which are material in the
aggregate, except as disclosed in such statements, information and data.
-40-
<PAGE>
7.15 Factual Information. All factual information heretofore or
-------------------
contemporaneously furnished by or on behalf of such Guarantor to the Lenders for
purposes of or in connection with this Agreement and the other Loan Documents
and the transactions contemplated therein is, and all other such factual
information hereafter furnished by or on behalf of such Guarantor to the Lenders
will be, true and accurate in all material respects (taken as a whole) on the
date as of which such information is dated or certified and not incomplete by
omitting to state any material fact necessary to make such information (taken as
a whole) not misleading at such time.
7.16 ERISA. (i) Such Guarantor is not an entity deemed to hold "plan
-----
assets" within the meaning of ERISA or any regulations promulgated thereunder of
an employee benefit plan (as defined in Section 3(3) of ERISA) which is subject
to Title I of ERISA or any plan within the meaning of Section 4975 of the Code,
and (ii) the execution of this Agreement and the transactions contemplated
hereunder do not give rise to a prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Code.
7.17 Taxes. All required tax returns have been filed by such Guarantor
-----
with the appropriate authorities except to the extent that extensions of time to
file have been requested, granted and have not expired or except to the extent
such taxes are being contested in good faith and for which adequate reserves, in
accordance with GAAP, are being maintained.
7.18 Environmental Matters. Except as disclosed in Schedule 7.18, each of
--------------------- -------------
the following representations and warranties is true and correct except to the
extent that the facts and circumstances giving rise to any such failure to be so
true and correct, in the aggregate, are not reasonably expected to have a
Material Adverse Effect:
(i) To the knowledge of such Guarantor, the Properties of
such Guarantor, its Subsidiaries, and Investment Affiliates do not
contain any Materials of Environmental Concern in amounts or
concentrations which constitute a violation of, or could reasonably
give rise to liability under, Environmental Laws.
(ii) Such Guarantor has not received any written notice
alleging that any of the Properties of such Guarantor and its
Subsidiaries and Investment Affiliates or any operations at the
Properties are not in compliance with all applicable Environmental
Laws. Further, such Guarantor has not received any written notice
alleging the existence of any contamination at or under such
Properties in amounts or concentrations which constitute a violation
of any Environmental Law, or any violation of any Environmental Law
with respect to such Properties for which such Guarantor, its
Subsidiaries or Investment Affiliates is or could be liable.
-41-
<PAGE>
(iii) Neither such Guarantor nor any of its Subsidiaries or
Investment Affiliates has received any written notice of non-
compliance, liability or potential liability regarding Environmental
Laws with regard to any of the Properties, nor does it have knowledge
that any such notice will be received or is being threatened.
(iv) To the knowledge of such Guarantor during the
ownership of the Properties by any or all of such Guarantor, its
Subsidiaries and Investment Affiliates, Materials of Environmental
Concern have not been transported or disposed of from the Properties
in violation of, or in a manner or to a location which could
reasonably give rise to liability of such Guarantor, any Subsidiary,
or any Investment Affiliate under, Environmental Laws, nor during the
ownership of the Properties by any or all of such Guarantor, its
Subsidiaries and Investment Affiliates have any Materials of
Environmental Concern been generated, treated, stored or disposed of
at, on or under any of such Properties in violation of, or in a manner
that could give rise to liability of such Guarantor, any Subsidiary or
any Investment Affiliate under, any applicable Environmental Laws.
(v) No judicial proceedings or governmental or
administrative action is pending, or, to the knowledge of such
Guarantor, threatened, under any Environmental Law to which such
Guarantor, any of its Subsidiaries, or any Investment Affiliate is
named as a party with respect to the Properties of such entity, nor
are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with
respect to such Properties for which such Guarantor, its Subsidiaries,
or any Investment Affiliate is or could be liable.
(vi) To the knowledge of such Guarantor during the
ownership of the Properties by any or all of such Guarantor, its
Subsidiaries and Investment Affiliates, there has been no release or
threat of release of Materials of Environmental Concern at or from the
Properties or arising from or related to the operations of such entity
in connection with the Properties in violation of, or in amounts or in
a manner that could give rise to liability under, Environmental Laws.
7.19 Insurance. Such Guarantor has obtained the insurance which such
---------
Guarantor is required to furnish to Lenders under Section 5.1(j) hereof.
--------------
7.20 Subsidiaries. Schedule 7.20 hereto contains an accurate list of all
------------ -------------
of the presently existing Subsidiaries of such Guarantor, setting forth their
respective jurisdictions of formation and the percentage of their respective
Capital Stock owned by it or its
-42-
<PAGE>
Subsidiaries. All of the issued and outstanding shares of Capital Stock of such
Subsidiaries have been duly authorized and issued and are fully paid and non-
assessable.
7.21 Year 2000. Such Guarantor has made a reasonable assessment of the
---------
Year 2000 Issues and has a Year 2000 Program. Based on such assessment and on
its Year 2000 Program, such Guarantor does not reasonably anticipate the Year
2000 Issues will have a Material Adverse Effect or cause a Material Adverse
Financial Change.
Each Guarantor agrees that all of its representations and warranties set
forth in Article VII of this Agreement are true on the Agreement Execution Date,
-----------
and will be true on each Effective Date in all material respects (except with
respect to matters which have been disclosed in writing to and approved by the
Majority Lenders), and will be true in all material respects (except with
respect to matters which have been disclosed in writing to and approved by the
Majority Lenders) upon each request for disbursement of an Advance. Each request
for disbursement hereunder shall constitute a reaffirmation of such
representations and warranties as deemed modified in accordance with the
disclosures made and approved, as aforesaid, as of the date of such request and
disbursement.
ARTICLE VII
AFFIRMATIVE COVENANTS
---------------------
The Borrower and each Guarantor covenants and agrees that so long as the
Commitment of any Lender shall remain available and until the full and final
payment of all Obligations incurred under the Loan Documents it will:
8.1 Notices. Promptly give written notice to Administrative Agent (who
-------
will promptly send such notice to Lenders) of:
(a) all non-insured litigation or arbitration proceedings affecting
the Borrower, a Guarantor or any Subsidiary of any of them where the amount
claimed is $10,000,000 or more;
(b) any Default or Event of Default, specifying the nature and the
period of existence thereof and what action has been taken or been proposed to
be taken with respect thereto;
(c) all claims filed against any Property owned by the Borrower, a
Guarantor or any Subsidiary of any of them which may reasonably be expected to
have a Material Adverse Effect on the ability of the Borrower or any Guarantor
to meet any of its obligations under the Loan Documents;
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<PAGE>
(d) the occurrence of any other event which may reasonably be
expected to have a Material Adverse Effect or cause a Material Adverse Financial
Change (including, without limitation, developments with respect to Year 2000
Issues);
(e) any Reportable Event or any "prohibited transaction" (as such
term is defined in Section 4975 of the Code) in connection with any Plan or any
trust created thereunder, which may reasonably be expected, singly or in the
aggregate, to materially impair the ability of the Borrower or any Guarantor to
repay any of its obligations under the Loan Documents, describing the nature of
each such event and the action, if any, the Borrower or Guarantor proposes to
take with respect thereto;
(f) any notice from any federal, state, local or foreign authority
regarding any Hazardous Material, asbestos, or other environmental condition,
proceeding, order, claim or violation affecting any Property that may reasonably
be expected to result in liability for damages and remediation costs in excess
of $10,000,000.
8.2 Financial Statements, Reports, Etc. The Borrower will maintain, for
-----------------------------------
itself and the Guarantors and each of their Subsidiaries, a system of accounting
established and administered in accordance with GAAP, and furnish to the
Lenders:
(i) As soon as available, but in any event not later than
60 days after the close of the first three fiscal quarters of each
fiscal year and 105 days after the close of the fiscal year, for the
Consolidated Group a quarterly financial statement (including a
balance sheet and income statement), which may be in the form
contained in Form 10-Q and Form 10-K filings as described below, for
such period and the portion of the fiscal year through the end of such
period, setting forth in each case in comparative form the figures for
the previous year, all certified by the Borrower's chief financial
officer, treasurer or chief accounting officer and the annual
statement to be audited by the Borrower's independent public
accounting firm;
(ii) As soon as available, but in any event not later than
60 days after the close of the first three fiscal quarters of each
fiscal year and 105 days after the close of the fiscal year, for the
Consolidated Group, related reports in form and substance satisfactory
to the Administrative Agent, all certified by Borrower's chief
financial officer, treasurer or chief accounting officer, including a
statement of Combined EBITDA and Funds from Operations, a report
listing and describing all newly acquired Properties having a value in
excess of $25,000,000, including their cash flow, cost and secured or
unsecured Indebtedness assumed in connection with such acquisition, if
any, the Consolidated Group's level of debt, summary Property
information for all Properties having a value in excess of
$25,000,000, and such other information as may be reasonably requested
to evaluate the quarterly compliance certificate delivered as provided
below;
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<PAGE>
(iii) Not later than 15 days after the date such reports are
filed with the Securities and Exchange Commission, copies of all Form
10-Ks, 10-Qs, 8-Ks, and any other annual, quarterly, monthly or other
reports, copies of all registration statements and any other public
information which the Borrower, the Guarantors or any of their
respective Subsidiaries files with the Securities and Exchange
Commission; provided, however, that to the extent any of such reports
contains information required under the other subsections of this
Section 8.2, the information need not be furnished separately under
-----------
the other subsections;
(iv) Not later than 60 days after the end of each of the
first three fiscal quarters, and not later than 105 days after the end
of the fiscal year, a compliance certificate in substantially the form
of Exhibit H hereto signed by the Borrower's chief financial officer,
---------
treasurer or chief accounting officer confirming that Borrower is in
compliance with all of the covenants of the Loan Documents as of the
end of the last fiscal quarter, showing the calculations and
computations necessary to determine compliance with the financial
covenants contained in this Agreement (including such schedules and
backup information as may be necessary to demonstrate such compliance)
and stating that to such officer's best knowledge, no other Default or
Event of Default exists, or if any Default or Event of Default exists,
stating the nature and status thereof;
(v) (a) As soon as possible and in any event within 10
Business Days after the Borrower or any Guarantor knows that any
Reportable Event has occurred with respect to any Plan, a statement,
signed by the chief financial officer or treasurer of Borrower or such
Guarantor, describing said Reportable Event and within 20 days after
such Reportable Event, a statement signed by such chief financial
officer describing the action which Borrower or such Guarantor
proposes to take with respect thereto; and (b) within 10 Business Days
of receipt, any notice from the Internal Revenue Service, PBGC or
Department of Labor with respect to a Plan regarding any excise tax,
proposed termination of a Plan, prohibited transaction or fiduciary
violation under ERISA or the Code which may reasonably be expected to
result in any liability to Borrower or such Guarantor or any member of
the Controlled Group in excess of $10,000,000; and (c) within 10
Business Days of filing, any Form 5500 filed by Borrower or such
Guarantor with respect to a Plan, or any member of the Controlled
Group which includes a qualified accountant's opinion, except a
qualification with respect to assets certified by a third party as
permitted by ERISA.
(vi) As soon as possible and in any event within 30 days
after receipt by the Borrower or any Guarantor, a copy of (a) any
notice or claim to the effect that the Borrower or any Guarantor or
any of their respective
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<PAGE>
Subsidiaries is or may be liable to any Person as a result of the
release by such entity, or any of its Subsidiaries, or any other
Person of any toxic or hazardous waste or substance into the
environment, and (b) any notice alleging any violation of any federal,
state or local environmental, health or safety law or regulation by
the Borrower or any Guarantor or any of their respective Subsidiaries
or Investment Affiliates, which, in either case, may reasonably be
expected to have a Material Adverse Effect;
(vii) Promptly upon the furnishing thereof to the
shareholders of the Borrower or any Guarantor, copies of all financial
statements, reports, proxy statements and other materials distributed
generally to its shareholders by the Borrower or such Guarantor;
(viii) Promptly upon the distribution thereof to the press
or the public, copies of all press releases; and
(ix) Such other information (including, without
limitation, a detailed listing of the Properties owned by each member
of the Consolidated Group, all Landauer Associates, Inc. (or other
appraiser's) reports and updates described in clause (c) of the
definition of "Gross Asset Value" and, to the extent reasonably
available, each Investment Affiliate and other non-financial
information) as the Administrative Agent or any Lender may from time
to time reasonably request, provided the Administrative Agent and each
Lender shall take all reasonable steps to maintain the confidentiality
of such information and any confidential information obtained under
Section 8.8 below, except for disclosure to regulatory agencies, to
-----------
their accountants, attorneys and other professional service providers,
to prospective assignees and participants and as otherwise may be
required by law.
8.3 Existence and Conduct of Operations. Except as permitted herein,
-----------------------------------
maintain and preserve its existence and all rights, privileges and franchises
now enjoyed and necessary for the operation of its business, including remaining
in good standing in each jurisdiction in which business is currently operated.
Except to the extent that any failure would not have a Material Adverse Effect,
the Borrower and each Guarantor will do, and will cause each of its Subsidiaries
to do, all things necessary to remain duly incorporated and/or duly qualified,
validly existing and in good standing as a real estate investment trust,
corporation, general partnership, limited liability company or limited
partnership, as the case may be, in its jurisdiction of incorporation/formation.
The Borrower and each Guarantor will maintain all requisite authority to conduct
its business in each jurisdiction in which the Properties are located and,
except where the failure to be so qualified would not have a Material Adverse
Effect, in each jurisdiction required to carry on and conduct its businesses in
substantially the same manner as it is presently conducted.
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<PAGE>
8.4 Maintenance of Properties. Maintain, preserve, protect and keep the
-------------------------
Properties in good repair, working order and condition, and make all necessary
and proper repairs, renewals and replacements, normal wear and tear excepted.
8.5 Insurance. Provide a certificate of insurance from all insurance
---------
carriers who maintain policies with respect to the Properties within thirty (30)
days after the end of each fiscal year, evidencing that the insurance required
to be furnished to Lenders pursuant to Section 5.1(j) hereof is in full force
--------------
and effect. Borrower or each Guarantor shall timely pay, or cause to be paid,
all premiums on all insurance policies required under this Agreement from time
to time. Borrower or each Guarantor shall promptly notify its insurance carrier
or agent therefor (with a copy of such notification being provided
simultaneously to Administrative Agent if the claimed loss exceeds $10,000,000)
if there is any occurrence which, under the terms of any insurance policy then
in effect with respect to the Properties, requires such notification.
8.6 Payment of Obligations. Pay all taxes, assessments, governmental
----------------------
charges and other obligations when due, except such as may be contested in good
faith or as to which a bona fide dispute may exist, and for which adequate
reserves have been provided in accordance with sound accounting principles used
by Borrower or such Guarantor on the date hereof.
8.7 Compliance with Laws. Comply in all material respects with all
--------------------
applicable laws, rules, regulations, orders and directions of any governmental
authority having jurisdiction over Borrower, such Guarantor, their respective
Subsidiaries or any of their respective businesses.
8.8 Adequate Books. Maintain adequate books, accounts and records in
--------------
order to provide financial statements in accordance with GAAP and, if requested
by any Lender, permit employees or representatives of such Lender at any
reasonable time and upon reasonable notice to inspect and audit the Properties
of the Consolidated Group, and to examine or audit the inventory, books,
accounts and records of each of them and make copies and memoranda thereof.
8.9 ERISA. Comply in all material respects with all requirements of ERISA
-----
applicable to it with respect to each Plan.
8.10 Maintenance of Status. The Borrower shall at all times (i) remain as
---------------------
a corporation listed and in good standing on the New York Stock Exchange (NYSE),
and (ii) maintain the Borrower's status as a real estate investment trust in
compliance with all applicable provisions of the Code (unless otherwise
consented to by the Required Lenders).
8.11 Use of Proceeds. Use the proceeds of the Facility solely as provided
---------------
in Section 5.1(k) hereof.
--------------
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<PAGE>
8.12 Pre-Acquisition Environmental Investigations. Receive or cause to be
--------------------------------------------
prepared an environmental report substantially in accordance with the then-
current ASTM Standard for Environmental Site Assessments, Phase I or Transaction
Screen Process, prior to the acquisition of each Property that a member of the
Consolidated Group intends to acquire, other than acquisitions of (i) entities
owning multiple properties, (ii) properties which a member of the Consolidated
Group previously owned or currently owns an interest in, and (iii) properties in
the immediate vicinity of a Property which were either covered by the
environmental report on such Property or have an environmental profile
substantially the same as such Property.
8.13 Required Principal Prepayment and Aggregate Commitment Reduction. The
----------------------------------------------------------------
Borrower shall give the Administrative Agent not less than ten (10) days prior
written notice of its anticipated receipt of any Net Capital Proceeds, which
notice shall set forth in reasonable detail (i) the transaction giving rise to
such Net Capital Proceeds, (ii) the likely amount thereof and (iii) the
anticipated date of receipt thereof. If the Borrower shall realize any Net
Capital Proceeds at any time from and after the Agreement Execution Date, such
Net Capital Proceeds shall be paid by the Borrower to the Administrative Agent
not later than one (1) Business Day after the Borrower's receipt thereof for the
purpose of prepaying outstanding Advances until the aggregate outstanding
Advances have been reduced to zero. If the Borrower shall at any time from and
after the Agreement Execution Date realize any Net Capital Proceeds in an amount
which at the time in question exceeds the then outstanding principal amount of
the Facility, then the Aggregate Commitment shall, automatically and without the
necessity of any action on the part of the Administrative Agent or any of the
other Lenders, be reduced by an amount equal to such excess realized Net Capital
Proceeds. Any prepayment of a LIBOR Advance under this Section 8.13 shall be
------------
made subject to and in accordance with the provisions of Section 4.4 hereof. The
-----------
Borrower shall also give the Administrative Agent not less than ten (10) days
prior written notice of any portion of the Borrower's purchase obligations under
the TrizecHahn Acquisition which will be satisfied by an exchange of properties
or other non-cash consideration, which notice shall set forth the properties to
be acquired by such non-cash means, the proposed amendment to the TrizecHahn
Agreement which will effectuate such exchange of properties, and the portion of
the net purchase price being satisfied by such non-cash means (the "Non-Cash
Allocation"). The Aggregate Commitment shall be reduced by an amount equal to
the aggregate of all such Non-Cash Allocations.
8.14 Year 2000. Each of the Borrower and the Guarantors will take and will
---------
cause each other member of the Consolidated Group to take all such actions as
are reasonably necessary to successfully implement the Year 2000 Program and to
assure that Year 2000 Issues will not have or cause a Material Adverse Effect or
a Material Adverse Financial Change. At the request of the Administrative Agent
or any Lender, the Borrower will provide a description of the Year 2000 Program,
together with any updates or progress reports with respect thereto.
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<PAGE>
ARTICLE IX
NEGATIVE COVENANTS
------------------
The Borrower and each Guarantor covenants and agrees that, so long as the
Commitment shall remain available and until full and final payment of all
Obligations incurred under the Loan Documents, without the prior written consent
of the Required Lenders (or the Administrative Agent or a greater Percentage of
the Lenders, if so expressly provided), it will not, and its Subsidiaries will
not:
9.1 Change in Business. Engage in any business activities or operations
------------------
other than (i) the ownership and operation of the Properties, or (ii) other
business functions and transactions traditionally carried on by real estate
companies in connection with the financing, ownership, acquisition, development
and/or management of real estate and related improvements, or (iii) other non-
traditional activities relating to real estate and any non-real estate business
activities or operations as long as the Combined EBITDA attributable to such
non-traditional and non-real estate activities and operations does not exceed
10% of Combined EBITDA.
9.2 Change of Property Management. Change the management of the
-----------------------------
Properties, except that any member of the Consolidated Group, Investment
Affiliate or other Affiliate of Borrower shall be permitted to manage any of the
Properties.
9.3 Change of Borrower Control. Permit or suffer (i) the beneficial
--------------------------
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934) of more than 25% of the
Capital Stock of the Borrower having general voting rights to be held by any
Person, or two or more Persons acting in concert, unless the Administrative
Agent and the Required Lenders have approved in advance in writing the identity
of such Person or Persons or (ii) 50% or more of the members of the Borrower's
Board of Directors to resign or be removed from such Board of Directors during
any 12 month period for any reason other than death, disability or voluntary
retirement for personal reasons, unless otherwise approved in advance in writing
by the Required Lenders.
9.4 Use of Proceeds. Apply or permit to be applied any proceeds of any
---------------
Advance directly or indirectly, for any purpose other as permitted under Section
-------
5.1(k) hereof.
- - -------------
9.5 Transfers of Properties. Transfer or otherwise dispose of any
------------------------
Properties or interests in Subsidiaries or other entities which own any
Properties (other than transfers among members of the Consolidated Group) which,
together with all other Properties or interests in Subsidiaries or such other
entities which have been transferred or disposed of during the then-current
fiscal quarter and the immediately preceding three (3) full fiscal quarters have
an aggregate value, using the "Gross Asset Value" definition to determine value,
of more than 15% of the then-current Gross Asset Value, in which event the
transfer or other disposition of such Property or interest which causes the 15%
limitation to be
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<PAGE>
exceeded shall not be completed until the Administrative Agent has received
written notice of such proposed action, together with a pro forma compliance
certificate, with detailed back-up and calculations, demonstrating that the
Borrower will be in compliance with all of its covenants herein after giving
effect to such proposed transfer or disposition.
9.6 Liens. Create, incur, or suffer to exist (or permit any of its
-----
Subsidiaries to create, incur, or suffer to exist) any Lien in, of or on the
Property of any member of the Consolidated Group, except:
(i) Liens for taxes, assessments or governmental charges
or levies on their Property if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are being
contested in good faith and by appropriate proceedings and for which
adequate reserves shall have been set aside on their books;
(ii) Liens which arise by operation of law, such as
carriers', warehousemen's, landlords', materialmen and mechanics'
liens and other similar liens arising in the ordinary course of
business which secure payment of obligations not more than 30 days
past due or which are being contested in good faith by appropriate
proceedings and for which adequate reserves shall have been set aside
on its books;
(iii) Liens arising out of pledges or deposits under
worker's compensation laws, unemployment insurance, old age pensions,
or other social security or retirement benefits, or similar
legislation;
(iv) Utility easements, building restrictions, zoning
restrictions, easements and such other encumbrances or charges against
real property as are of a nature generally existing with respect to
properties of a similar character and which do not in any material way
affect the marketability of the same or interfere with the use thereof
in the business of the Borrower or its Subsidiaries;
(v) Liens of any Subsidiary or Investment Affiliate in
favor of the Borrower, the Guarantors or any other Subsidiary or
Investment Affiliate;
(vi) Liens arising in connection with any Indebtedness
permitted hereunder to the extent such Liens will not result in a
violation of any of the provisions of this Agreement; and
(vii) Any Lien which, if it were enforced and realized upon
by the beneficiary thereof and aggregated with all other Liens then
permitted
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<PAGE>
solely under this clause (vii), would not give rise to an Event of
Default under Article X hereof.
---------
Liens permitted pursuant to this Section 9.6 shall be deemed to be "Permitted
----------- ---------
Liens".
- - -----
9.7 Regulation U. Use any of the proceeds of the Advances to purchase or
------------
carry any Margin Stock.
9.8 Variable Rate Debt. Permit at any time less than 70% of the Total
------------------
Outstanding Indebtedness to either (i) bear interest at a fixed rate through the
Maturity Date in accordance with its terms or (ii) be fully hedged through the
Maturity Date to produce a fixed or maximum rate through the purchase of an
interest rate swap, cap or collar or other financial instrument then being used
by publicly held real estate companies to hedge similar types of interest rate
risk.
9.9 Negative Pledge. Incur or permit any member of the Consolidated Group
---------------
to incur any Indebtedness which either contains a "negative pledge" prohibiting
the Borrower or any member of the Consolidated Group from selling, encumbering
or otherwise transferring their interests in any unencumbered Properties or
interests in entities holding unencumbered Properties, or which contains an
"equal and ratable" clause granting the holder of such Indebtedness a lien on
such Properties upon any other encumbrance thereof.
9.10 Indebtedness and Cash Flow Covenants. Permit or suffer:
------------------------------------
(a) Total Outstanding Indebtedness to exceed, as of any date, 70% of
then-current Gross Asset Value.
(b) Secured Outstanding Indebtedness to exceed, as of any date, 60%
of then-current Gross Asset Value.
(c) Recourse Outstanding Indebtedness to exceed, as of any date, 30%
of then-current Gross Asset Value.
(d) Funded Senior Unsecured Debt to exceed, as of any date, the
product of (i) 6.0 and (ii) Adjusted Combined EBITDA less Combined Senior
----
Interest Expense less Restricted EBITDA, all for the most recent period of
----
four (4) fiscal quarters for which results have been reported.
(e) Combined EBITDA for the most recent period of four (4) fiscal
quarters for which results have been reported to be less than 1.70 times
Combined Senior Interest Expense for the corresponding period.
(f) The sum of (i) Combined EBITDA for the most recent period of four
(4) fiscal quarters for which results have been reported plus (ii) to the
----
extent deducted
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<PAGE>
in calculating such Combined EBITDA, Ground Lease Base Expense for the
corresponding period, to be less than 1.30 times Combined Debt Service for
the corresponding period.
(g) Adjusted Combined EBITDA for the most recent period of four (4)
full fiscal quarters for which results have been reported to be less than
11.0% of Total Outstanding Indebtedness as of the date of determination of
compliance, less that portion of Total Outstanding Indebtedness
----
attributable to those properties the income from which has been excluded
from such Adjusted Combined EBITDA amount and less that portion of Total
----
Outstanding Indebtedness attributable to current trade liabilities and
other accounts payable.
(h) The Consolidated Group's Net Asset Value to be less than the sum
of (i) $1,700,000,000 plus (ii) 75% of the proceeds (net of customary
----
issuance fees and expenses) from the issuance after the Agreement Execution
Date of any common stock, preferred stock or partnership units in the
Borrower or any operating partnership which may hereafter be formed by the
Borrower if it elects to convert to an "UPREIT" structure, excluding
issuance of any such interests solely to members of the Consolidated Group.
9.11 Mergers and Dispositions. Consolidate with or merge into any other
------------------------
Person or convey, transfer or lease its Properties and assets substantially as
an entirety to any Person, or permit any Person to consolidate with or merge
into the Company, unless:
(i) in case the Borrower shall be consolidated with or
merge into another Person or convey, transfer or lease its Properties
and assets substantially as an entirety to any Person, the Person
formed by such consolidation or into which the Borrower is merged or
the Person which acquires by conveyance or transfer, or which leases,
the Properties and assets of the Borrower substantially as an entirety
shall be a corporation, partnership or trust, shall be organized and
validly existing under the laws of the United States of America, any
State thereof or the District of Columbia and shall assume, and shall
cause its Subsidiaries to expressly assume, by an amendment hereto,
executed and delivered to the Administrative Agent and the Required
Lenders, in form satisfactory to the Administrative Agent and the
Required Lenders, the due and punctual payment of all Obligations and
the performance or observance of every covenant of this Agreement and
each of the other Loan Documents on the part of the Borrower or its
Subsidiaries to be performed or observed;
(ii) immediately after giving effect to such transaction
and treating any Indebtedness which becomes an obligation of the
Borrower or any Subsidiary as a result of such transaction as having
been incurred by the
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<PAGE>
Borrower or such Subsidiary at the time of such transaction, no
Default or Event of Default, shall have occurred and be continuing;
and
(iii) the Borrower has delivered to the Administrative Agent
and Lenders an officer's certificate including a pro forma compliance
certificate in the form of Exhibit H assuming such proposed
---------
transaction was then effective, and an opinion of counsel, each
stating or demonstrating that such consolidation, merger, conveyance,
transfer or lease and, if an amendment hereto is required in
connection with such transaction, such amendment, complies with this
Section 9.11 and that all conditions precedent herein relating to such
------------
transaction have been complied with.
Upon any consolidation of the Borrower with, or merger of the Borrower into, any
other Person or any conveyance, transfer or lease of the Properties and assets
of the Borrower substantially as an entirety in accordance with this Section
-------
9.11, the successor Person formed by such consolidation or into which the
- - ----
Borrower is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Borrower under this Agreement and each other Loan Document to which it is a
party with the same effect as if such successor Person had been named as the
Borrower herein, and thereafter the predecessor Person shall be relieved of all
Obligations and covenants under this Agreement, the Notes and each other Loan
Document to which it is a party, except in the case of (i) a lease, or (ii) any
transaction in which the Borrower continues to hold a general partnership or
other ownership interest in such successor Person (in which case the Borrower
shall continue to be liable as a guarantor of the Obligations under a guaranty
in form satisfactory to the Required Lenders). The Borrower and such successor
Person shall execute such amendments and deliver such opinions and other
documents as the Required Lenders may require in connection with any such
transaction.
9.12 Dividends. Pay, or permit to be paid, any dividends to the
---------
shareholders of the Borrower if (i) the aggregate amount of dividends paid by
the Borrower for the most recent four (4) fiscal quarters for which financial
reports are available would exceed 55% of the Consolidated Group's Funds from
Operations for such period, provided that, as long as a Monetary Default or
Event of Default does not exist, the Borrower shall be permitted at all times to
distribute whatever amount is necessary to maintain the Borrower's tax status as
a real estate investment trust.
9.13 Encumbrances. Permit any member of the Consolidated Group to allow,
------------
its direct or indirect ownership interests in any other member of the
Consolidated Group or any Investment Affiliate to be encumbered to secure any
Indebtedness other than pursuant to the existing and contemplated encumbrances
set forth on Schedule 9.13 hereto.
-------------
9.14 Restrictions on Dividends and Distributions. Permit any member of the
-------------------------------------------
Consolidated Group (other than the Borrower), or any Investment Affiliate, at
any time after the Agreement Execution Date, to agree to any contractual
restriction on the payment or
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<PAGE>
distribution of dividends or current income to the holders of ownership
interests therein, other than (i) restrictions imposed on such entities in
connection with the issuance of securities collateralized by mortgage loans on
Properties owned by such entities and (ii) restrictions imposed on such entities
and triggered solely by a default under the terms of any mortgage loans on
Properties owned by such entities.
9.15 Limitations on Indebtedness. Permit any member of the Consolidated
---------------------------
Group (other than the Borrower) or any Investment Affiliate, at any time after
the Agreement Execution Date, to incur any Indebtedness for borrowed money other
than (a) Non-Recourse Outstanding Indebtedness, (b) Indebtedness due to a member
of the Consolidated Group or an Investment Affiliate, (c) Indebtedness used to
finance equipment owned by such entity and used in its business operations or
(d) current trade liabilities and other accounts payable and accrued expenses
incurred in the ordinary course of business and payable in accordance with
customary practices.
9.16 Limitations on PSS Assets. Suffer or permit the aggregate GAAP book
-------------------------
value of the assets of all PSSs which are not Guarantors (excluding assets which
are capital stock in a Guarantor) to exceed $50,000,000 at any time after the
Agreement Execution Date.
ARTICLE X
DEFAULTS
--------
The occurrence of any one or more of the following events shall constitute
an Event of Default:
10.1 Nonpayment of Principal. The Borrower fails to pay any principal
-----------------------
portion of the Obligations when due, whether on the Maturity Date or otherwise.
10.2 Certain Covenants. The Borrower is not in compliance with any one or
-----------------
more of Sections 8.10, 8.13, or 9.3 through 9.15 (inclusive) hereof.
------------- ---- --- ----
10.3 Nonpayment of Interest and Other Obligations. The Borrower fails to
--------------------------------------------
pay any interest or other portion of the Obligations, other than payments of
principal, and such failure continues for a period of two (2) Business Days
after the date such payment is due.
10.4 Cross Default. Any Event of Default occurs under the Revolving
-------------
Facility; or any monetary default occurs (after giving effect to any applicable
cure period) under (i) any other Recourse Outstanding Indebtedness of the
Borrower, any of the Guarantors or any Material Subsidiary, singly or in the
aggregate, in excess of Ten Million Dollars ($10,000,000) or (ii) any Non-
Recourse Outstanding Indebtedness of the Consolidated Group, singly or in the
eaggregate, in excess of Two Hundred Fifty Million Dollars ($250,000,000).
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<PAGE>
10.5 Loan Documents. Any Loan Document is not in full force and effect
--------------
or a default has occurred and is continuing thereunder after giving effect to
any cure or grace period in any such document.
10.6 Representation or Warranty. At any time or times hereafter any
--------------------------
representation or warranty set forth in Articles VI or VII of this Agreement or
----------- ---
in any other Loan Document or in any statement, report or certificate now or
hereafter made by the Borrower or the Guarantors to the Lenders or the
Administrative Agent is (i) not true and correct in any material respect and
(ii) if such representation and warranty is susceptible of cure, such
representation and warranty is not rendered true and correct in all material
respects within thirty (30) days after written notice from the Administrative
Agent to the Borrower requesting correction of such representation and warranty.
10.7 Covenants, Agreements and Other Conditions. The Borrower or the
------------------------------------------
Guarantors fail to perform or observe any of the covenants, agreements and
conditions contained in Articles VIII and IX (except for Sections 8.10 and 8.13,
------------- -- ------------- ----
9.3 through 9.15 (inclusive) hereof) and elsewhere in this Agreement or any of
- - --- ----
the other Loan Documents in accordance with the terms hereof or thereof, not
specifically referred to herein, and such failure continues unremedied for a
period of thirty (30) days after written notice from Administrative Agent to the
Borrower requesting a cure of such failure.
10.8 Borrower Status. The Borrower shall fail to maintain its listing on
---------------
the New York Stock Exchange or its status as a real estate investment trust
under the Code.
10.9 Material Adverse Financial Change. The Consolidated Group has
---------------------------------
suffered a Material Adverse Financial Change or the Borrower, any Guarantor or
any Material Subsidiary is Insolvent.
10.10 Bankruptcy.
----------
(a) The Borrower, any Guarantor or any Material Subsidiary shall (i)
make an assignment for the benefit of creditors, (ii) apply for, seek, consent
to, or acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any substantial portion of
its Properties, (iii) institute any proceeding seeking an order for relief under
the Federal bankruptcy laws as now or hereafter in effect or seeking to
adjudicate it as a bankrupt or insolvent, or seeking dissolution, winding up,
liquidation, reorganization, arrangement, adjustment or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors or fail to file an answer or other pleading denying the
material allegations of any such proceeding filed against it, (iv) take any
corporate action to authorize or effect any of the foregoing actions set forth
in this Section 10.10(a), (v) fail to contest in good faith any appointment or
----------------
proceeding described in Section 10.10(b) or (vi) not pay, or admit in writing
----------------
its inability to pay, its debts generally as they become due; and/or
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(b) A receiver, trustee, examiner, liquidator or similar official
shall be appointed for the Borrower, any Guarantor or any Material Subsidiary or
any substantial portion of any of their respective Properties, or an involuntary
proceeding of the type described in Section 10.10(a)(iii) shall be instituted
---------------------
against the Borrower, any Guarantor or any Material Subsidiary and such
appointment continues undischarged or such involuntary proceeding continues
undismissed or unstayed for a period of ninety (90) consecutive days.
10.11 Legal Proceedings. Borrower, any Guarantor or any Material
-----------------
Subsidiary is enjoined, restrained or in any way prevented by any court order or
judgment or if a notice of lien, levy, or assessment is filed of record with
respect to all or any part of the Properties by any governmental department,
office or agency, which may reasonably be expected to materially adversely
affect the performance of the obligations of such parties hereunder or under the
Loan Documents, as the case may be, and there is a failure to vacate, stay,
dismiss, set aside or remedy the same within ninety (90) days after the
occurrence thereof.
10.12 Failure to Satisfy Judgments. The Borrower, any Guarantor or any
----------------------------
Material Subsidiary shall fail to pay, bond or otherwise discharge any judgments
against the Borrower, any of the Guarantors or any Material Subsidiary in excess
of $10,000,000 in the aggregate if such judgment is not stayed or bonded over on
appeal excluding, however, any foreclosure or related judgments or decrees
entered in the enforcement of defaulted Non-Recourse Outstanding Indebtedness
provided that such Non-Recourse Outstanding Indebtedness, when aggregated with
any other Non-Recourse Outstanding Indebtedness of the Consolidated Group which
is then in monetary default beyond applicable cure periods, does not exceed
$250,000,000.
10.13 ERISA. The Borrower, any Guarantor or any Material Subsidiary shall
-----
violate any ERISA regulations involving reasonably expected liability of the
Borrower, any of the Guarantors or any Material Subsidiary in excess of
$10,000,000 in the aggregate.
10.14 Environmental Remediation. Failure to remediate within the time
-------------------------
period required by law or governmental order after all administrative hearings
and appeals have been concluded (or within a reasonable time in light of the
nature of the problem if no specific time period is so established),
environmental problems in violation of applicable law related to Properties of
the Consolidated Group where the estimated cost of remediation is in the
aggregate in excess of $20,000,000.
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ARTICLE XI
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
----------------------------------------------
11.1 Acceleration.
------------
If any Event of Default described in Section 10.10 hereof occurs, the
-------------
obligation of the Lenders to make Advances hereunder shall automatically
terminate and the Obligations shall immediately become due and payable. If any
other Event of Default described in Article X hereof occurs, such obligation to
---------
make Advances shall be terminated and, at the election of the Majority Lenders,
the Obligations may be declared to be due and payable.
11.2 Preservation of Rights; Amendments. No delay or omission of the
----------------------------------
Lenders in exercising any right under the Loan Documents shall impair such right
or be construed to be a waiver of any Default or Event of Default or an
acquiescence therein, and the making of an Advance notwithstanding the existence
of a Default or Event of Default or the inability of the Borrower to satisfy the
conditions precedent to such Advance shall not constitute any waiver or
acquiescence. 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 the Administrative Agent and the number of Lenders required hereunder
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 the Lenders until the Obligations have been paid in full.
ARTICLE XII
THE ADMINISTRATIVE AGENT
------------------------
12.1 Appointment. First Chicago is hereby appointed Administrative Agent
-----------
hereunder and under each other Loan Document, and each of the Lenders authorizes
the Administrative Agent to act as the agent of such Lender with respect to the
terms hereof. The Administrative Agent agrees to act as such upon the express
conditions contained in this Article XII. The Administrative Agent shall not
-----------
have a fiduciary relationship in respect of any Lender by reason of this
Agreement, except to the extent the Administrative Agent acts as an agent with
respect to the receipt or payment of funds hereunder. The Administrative Agent
shall use the same standard of care in performing its obligations hereunder as
it uses in administering loans held for its own account.
12.2 Powers. The Administrative Agent shall have and may exercise such
------
powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the
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terms of each thereof, together with such powers as are reasonably incidental
thereto. The Administrative Agent shall have no implied duties to the Lenders,
or any obligation to the Lenders to take any action thereunder except any action
specifically provided by the Loan Documents to be taken by the Administrative
Agent.
12.3 General Immunity. Neither the Administrative Agent (in its capacity
----------------
as Administrative Agent) nor any of its directors, officers, agents or employees
shall be liable to the Borrower, the Lenders or any Lender for any action taken
or omitted to be taken by it or them hereunder or under any other Loan Document
or in connection herewith or therewith, except for its or their own gross
negligence or willful misconduct.
12.4 No Responsibility for Loans, Recitals, etc. Neither the
------------------------------------------
Administrative Agent (in its capacity as Administrative Agent) nor any of its
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into, or verify (i) any statement, warranty or
representation made in connection with any Loan Document or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document; (iii) the satisfaction of any
condition specified in Article V, except receipt of items required to be
---------
delivered to the Administrative Agent; or (iv) the validity, effectiveness or
genuineness of any Loan Document or any other instrument or writing furnished in
connection therewith.
12.5 Action on Instructions of Lenders. The Administrative Agent shall in
---------------------------------
all cases act upon the written instructions of the Majority Lenders, Required
Lenders or all Lenders, as this Agreement may require, so long as such
directions (i) are consistent with the Lenders' express obligations hereunder
and (ii) in the Administrative Agent's good faith judgment, do not expose the
Administrative Agent to any material risk of liability to the Borrower as a
result thereof. The Administrative Agent shall be fully protected in so acting,
or in so refraining from acting, hereunder and under any other Loan Document in
accordance with written instructions signed by the Majority Lenders, Required
Lenders or all Lenders, as the case may be, and such instructions and any action
taken or failure to act pursuant thereto shall be binding on all of the Lenders
and on all holders of Notes. The Administrative Agent shall be fully justified
in failing or refusing to take any action hereunder and under any other Loan
Document unless it shall first be indemnified to its satisfaction by the Lenders
pro rata against any and all liability, cost and expense that it may incur by
reason of taking or continuing to take any such action.
12.6 Employment of Administrative Agents and Counsel. The Administrative
-----------------------------------------------
Agent may execute any of its duties as Administrative Agent hereunder and under
any other Loan Document by or through employees, agents, and attorneys-in-fact
and shall not be answerable to the Lenders, except as to money or securities
received by it or its authorized agents, for the default or misconduct of any
such agents or attorneys-in-fact selected by it with reasonable care. The
Administrative Agent shall be entitled to advice of counsel concerning all
matters pertaining to the agency hereby created and its duties hereunder and
under any other Loan Document.
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12.7 Reliance on Documents; Counsel. The Administrative Agent shall be
------------------------------
entitled to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and, in respect
to legal matters, upon the opinion of outside counsel selected by the
Administrative Agent.
12.8 Administrative Agent's Reimbursement and Indemnification. The
--------------------------------------------------------
Lenders agree to reimburse and indemnify the Administrative Agent ratably in
accordance with their respective Percentages (i) for any amounts not reimbursed
by the Borrower for which the Administrative Agent is entitled to reimbursement
by the Borrower under the Loan Documents, (ii) for any other reasonable expenses
incurred by the Administrative Agent on behalf of the Lenders, in connection
with the preparation, execution, delivery, administration and enforcement of the
Loan Documents, if not paid by Borrower, and (iii) for any liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever which may be imposed
on, incurred by or asserted against the Administrative Agent (in its capacity as
Administrative Agent and not as a Lender) in any way relating to or arising out
of the Loan Documents or any other document delivered in connection therewith or
the transactions contemplated thereby, or the enforcement of any of the terms
thereof or of any such other documents, provided that no Lender shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the Administrative Agent.
12.9 Rights as a Lender. With respect to the Commitment, Advances made by
------------------
it and the Note issued to it, the Administrative Agent shall have the same
rights and powers hereunder and under any other Loan Document as any Lender and
may exercise the same as though it were not the Administrative Agent, and the
term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include the Administrative Agent in its individual capacity. The Administrative
Agent, in its individual capacity, may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Subsidiaries in which the Borrower or such
Subsidiary is not restricted hereby from engaging with any other Person.
12.10 Lender Credit Decision. Each Lender acknowledges that it has,
----------------------
independently and without reliance upon the Administrative Agent or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent 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 and the other Loan Documents.
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12.11 Successor Administrative Agent. Each Lender agrees that First
------------------------------
Chicago shall serve as Administrative Agent at all times during the term of this
Facility, except that First Chicago may resign as Administrative Agent in the
event (x) First Chicago and Borrower shall mutually agree in writing or (y) an
Event of Default shall occur under the Loan Documents (irrespective of whether
such Event of Default subsequently is waived), or (z) First Chicago shall
determine, in its sole reasonable discretion, that because of its other banking
relationships with Borrower and/or Borrower's Affiliates at the time of such
decision First Chicago's resignation as Administrative Agent would be necessary
in order to avoid creating an appearance of impropriety on the part of First
Chicago. First Chicago (or any successor Administrative Agent) may be removed as
Administrative Agent by written notice received by Administrative Agent from the
Majority Lenders at any time with cause (i.e., a breach by First Chicago (or any
successor Administrative Agent) of its duties as Administrative Agent
hereunder). Upon any such resignation or removal, Bankers Trust shall be the
successor Administrative Agent (unless objected to by the Majority Lenders) or,
if Bankers Trust declines or is so objected to, the Majority Lenders shall have
the right to appoint, on behalf of the Borrower and the Lenders, a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by the Majority Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Administrative Agent's giving notice
of resignation, then the retiring Administrative Agent may appoint, on behalf of
the Borrower and the Lenders, a successor Administrative Agent. If a successor
Administrative Agent has been appointed by a retiring Administrative Agent
pursuant to the immediately preceding sentence, the Majority Lenders shall have
the right at any time thereafter to remove, without cause, such successor
Administrative Agent by written notice to such Administrative Agent. Any
successor Administrative Agent shall be a commercial bank having capital and
retained earnings of at least $1,000,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent (including the right to receive any fees for performing
such duties which accrue thereafter), and the retiring Administrative Agent
shall be discharged from its duties and obligations hereunder and under the
other Loan Documents arising or accruing after the effective date of such
retirement. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article XII shall continue in
-----------
effect for its benefit and that of the other Lenders in respect of any actions
taken or omitted to be taken by it while it was acting as the Administrative
Agent hereunder and under the other Loan Documents.
12.12 Notice of Defaults. If a Lender becomes aware of a Default or Event
------------------
of Default, such Lender shall notify the Administrative Agent of such fact.
Upon receipt of such notice that a Default or Event of Default has occurred, the
Administrative Agent shall notify each of the Lenders of such fact.
12.13 Requests for Approval. If the Administrative Agent requests in
---------------------
writing the consent or approval of a Lender, such Lender shall respond and
either approve or disapprove definitively in writing to the Administrative Agent
within ten (10) Business Days (or sooner
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if such notice specifies a shorter period, but in no event less than five (5)
Business Days, for responses based on Administrative Agent's good faith
determination that circumstances exist warranting its request for an earlier
response) after such written request from the Administrative Agent. If the
Lender does not so respond, that Lender shall be deemed to have approved the
request. Upon request, the Administrative Agent shall notify the Lenders which
Lenders, if any, failed to respond to a request for approval.
12.14 Copies of Documents. Administrative Agent shall promptly deliver
-------------------
to each of the Lenders copies of all notices of default and other formal notices
sent or received and according to Section 15.1 of this Agreement.
------------
Administrative Agent shall deliver to Lenders within ten (10) Business Days
following receipt, copies of all financial statements, certificates and notices
received regarding the Borrower's ratings except to the extent such items are
required to be furnished directly to the Lenders by Borrower hereunder. Within
ten (10) Business Days after a request by a Lender to the Administrative Agent
for other documents furnished to the Administrative Agent by the Borrower, the
Administrative Agent shall provide copies of such documents to such Lender
except where this Agreement obligates Administrative Agent to provide copies in
a shorter period of time.
12.15 Defaulting Lenders. At such time as a Lender becomes a Defaulting
------------------
Lender, such Defaulting Lender's right to vote on matters which are subject to
the consent or approval of the Majority Lenders, Required Lenders or all
Lenders, shall be immediately suspended until such time as the Lender is no
longer a Defaulting Lender and, during the period of such suspension, the
calculation of Majority Lenders and Required Lenders shall be made without
reference to such Defaulting Lender's Percentage. If a Defaulting Lender has
failed to fund its Percentage of any Advance and until such time as such
Defaulting Lender subsequently funds its Percentage of such Advance, all
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 of, interest on and fees relating to the Loans funded by
the other Lenders in connection with any such Advance in which the Defaulting
Lender has not funded its Percentage (such principal, interest and fees being
referred to as "Senior Loans" for the purposes of this section). All amounts
------------
paid by the Borrower and otherwise due to be applied to the Obligations owing to
such Defaulting Lender pursuant to the terms hereof shall be distributed by the
Administrative Agent to the other Lenders in accordance with their respective
Percentages (recalculated for the purposes hereof to exclude the Defaulting
Lender) until all Senior Loans have been paid in full. At that point, the
"Defaulting Lender" shall no longer be deemed a Defaulting Lender and the
remainder of the Advances due to such "Defaulting Lender" shall no longer be
subordinated but shall be payable on the same basis as payments to the other
Lenders. After the Senior Loans have been paid in full equitable adjustments
will be made in connection with future payments by the Borrower to the extent a
portion of the Senior Loans had been repaid with amounts that otherwise would
have been distributed to a Defaulting Lender but for the operation of this
Section 12.15. This provision governs only the relationship among the
- - -------------
Administrative Agent, each Defaulting Lender and the other Lenders; nothing
hereunder shall limit the obligation of the Borrower to repay all Loans in
accordance with the terms of this
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Agreement. The provisions of this Section 12.15 shall apply and be effective
-------------
regardless of whether a Default or Event of Default occurs and is continuing,
and notwithstanding (i) any other provision of this Agreement to the contrary,
(ii) any instruction of the Borrower as to its desired application of payments
or (iii) the suspension of such Defaulting Lender's right to vote on matters as
provided above.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
-------------------------------------------------
13.1 Successors and Assigns.
----------------------
The terms and provisions of the Loan Documents shall be binding upon
and inure to the benefit of Borrower and the Lenders and their respective
successors and assigns, except that the Borrower shall not have the right to
assign its rights or obligations under the Loan Documents without the consent of
all the Lenders and any assignment by any Lender must be made in compliance with
Section 13.3. The Administrative Agent may treat the payee of any Note as the
- - ------------
owner thereof for all purposes hereof unless and until such payee complies with
Section 13.3 in the case of an assignment thereof or, in the case of any other
- - ------------
transfer, a written notice of the transfer is filed with the Administrative
Agent. Any assignee or transferee of a Note agrees by acceptance thereof to be
bound by all the terms and provisions of the Loan Documents. Any request,
authority or consent of any Person who at the time of making such request or
giving such authority or consent is the holder of any Note, shall be conclusive
and binding on any subsequent holder, transferee or assignee of such Note or of
any Note or Notes issued in exchange therefor.
13.2 Participations.
--------------
13.2.1 Permitted Participants; Effect. With the prior written
------------------------------
consent of the Administrative Agent (and, during the initial syndication of
the Facility, the Syndication Agent) and the Borrower (which consents shall
not be unreasonably withheld or delayed), any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any time
sell to one or more banks or other entities ("Participants") participating
------------
interests in any Advance owing to such Lender, any Note held by such
Lender, any Commitment of such Lender or any other interest of such Lender
under the Loan Documents, except that (i) no consent of Borrower shall be
required for any such sale if an Event of Default has occurred and is
continuing and (ii) no consent of any of the Administrative Agent, the
Syndication Agent or the Borrower shall ever be required for any such sale
made to any Lender's Affiliate. In the event of any such sale by a Lender
of participating interests to a Participant, such Lender's obligations
under the Loan Documents shall remain unchanged, such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, such Lender shall remain the holder of any such Note for all
purposes
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under the Loan Documents, all amounts payable by Borrower under this
Agreement shall be determined as if such Lender had not sold such
participating interests, and Borrower and the Administrative 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 the Loan
Documents.
13.2.2 Voting Rights. Each Lender shall retain the sole right to
-------------
vote its Percentage of the Aggregate Commitment, without the consent of any
Participant, for the approval or disapproval of any amendment, modification
or waiver of any provision of the Loan Documents, provided that such Lender
may grant such Participant the right to approve any amendment, modification
or waiver which forgives principal, interest or fees or reduces the
interest rate or fees payable hereunder, postpones any date fixed for any
regularly-scheduled payment of principal of or interest on the Obligations,
or extends the Maturity Date, except as expressly provided for herein.
13.3 Assignments.
-----------
13.3.1 Permitted Assignments. Any Lender may, with the prior
---------------------
written consent of the Administrative Agent, Borrower and, during the
initial syndication of the Facility, the Syndication Agent (which consents
shall not be unreasonably withheld or delayed), in accordance with
applicable law, at any time assign to one or more banks or other entities
(collectively, "Purchasers") all, or a portion equal to $5,000,000 of its
----------
Commitment or more, of its rights and obligations under the Loan Documents,
except that (i) no consent of Borrower shall be required if an Event of
Default has occurred and is continuing and (ii) no consent of the
Administrative Agent, Borrower or the Syndication Agent shall ever be
required for (A) any assignment to any Lender's Affiliate or (B) the pledge
or assignment by a Lender of such Lender's Note and other rights under the
Loan Documents to any Federal Reserve Bank in accordance with applicable
law. Such assignments and assumptions shall be substantially in the form
of Exhibit I hereto. Borrower shall execute any and all documents which
---------
are customarily required by such Lender (including, without limitation, a
replacement promissory note or notes in the forms provided hereunder) in
connection with any such assignment, but Borrower shall not be obligated to
pay any fees and expenses incurred by any Lender in connection with any
assignment pursuant to this Section. Any Lender selling all or any part of
its rights and obligation hereunder in a transaction requiring the consent
of the Administrative Agent shall pay to the Administrative Agent a fee of
$3,500.00 per assignee to reimburse the Administrative Agent for its
involvement in such assignment.
13.3.2 Effect; Effective Date of Assignment. Upon delivery to the
------------------------------------
Administrative Agent of a notice of assignment executed by the assigning
Lender and the Purchaser, such assignment shall become effective on the
effective date specified in such notice of assignment. The notice of
assignment shall contain a representation
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by the Purchaser to the effect that none of the consideration used to make
the purchase of the Commitment and the Loans under the applicable
assignment agreement are "plan assets" as defined under ERISA and that the
rights and interests of the Purchaser in and under the Loan Documents will
not be "plan assets" under ERISA. On and after the effective date of such
assignment, such Purchaser shall for all purposes be a Lender party to this
Agreement and any other Loan Document executed by the Lenders and shall
have all the rights and obligations of a Lender under the Loan Documents,
to the same extent as if it were an original party hereto, and no further
consent or action by Borrower, the Lenders, the Administrative Agent or the
Syndication Agent shall be required to release the transferor Lender with
respect to the percentage of the Commitment and Advances assigned to such
Purchaser. Upon the consummation of any assignment to a Purchaser pursuant
to this Section 13.3.2, the transferor Lender, the Administrative Agent and
--------------
Borrower shall make appropriate arrangements so that replacement Notes are
issued to such transferor Lender and new Notes or, as appropriate,
replacement Notes, are issued to such Purchaser, in each case in principal
amounts reflecting their respective Commitments, as adjusted pursuant to
such assignment. The Borrower shall not bear any of the costs associated
with an assignment to a Purchaser.
13.4 Dissemination of Information. Borrower authorizes each Lender to
----------------------------
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
----------
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of Borrower. Each Transferee shall agree in
writing to keep confidential any such information which is not publicly
available.
13.5 Tax Treatment. If any interest in any Loan Document is transferred
-------------
to any Transferee which is organized under the laws of any jurisdiction other
than the United States or any State thereof, the transferor Lender shall cause
such Transferee, concurrently with the effectiveness of such transfer, to comply
with all applicable provisions of the Code with respect to withholding and other
tax matters.
ARTICLE XIV
GENERAL PROVISIONS
------------------
14.1 Survival of Representations. All representations and warranties
---------------------------
contained in this Agreement shall survive delivery of the Notes and the making
of the Advances herein contemplated.
14.2 Governmental Regulation. Anything contained in this Agreement to the
-----------------------
contrary notwithstanding, no Lender shall be obligated to extend credit to the
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
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14.3 Taxes. Any recording and other taxes (excluding franchise, income or
-----
similar taxes) or other similar assessments or charges payable or ruled payable
by any governmental authority incurred in connection with the consummation of
the transactions contemplated by this Agreement shall be paid by the Borrower,
together with interest and penalties, if any.
14.4 Headings. Section headings in the Loan Documents are for convenience
--------
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
14.5 No Third Party Beneficiaries. This Agreement shall not be construed
----------------------------
so as to confer any right or benefit upon any Person other than the parties to
this Agreement and their respective successors and assigns.
14.6 Expenses; Indemnification. Subject to the provisions of this
-------------------------
Agreement, Borrower will pay (a) all reasonable and customary out-of-pocket
costs and expenses incurred by the Administrative Agent (including the
reasonable fees, out-of-pocket expenses and other reasonable expenses of
counsel, which counsel may be employees of the Administrative Agent) in
connection with the documentation and administration of the Facility, including
without limitation, the preparation, execution and delivery of this Agreement,
the Notes, the Loan Documents and any other agreements or documents referred to
herein or therein and any amendments or waivers thereto, (b) all out-of-pocket
costs and expenses incurred by the Administrative Agent and the Lenders
(including the reasonable fees, out-of-pocket expenses and other reasonable
expenses of counsel to the Administrative Agent and the Lenders, which counsel
may be employees of Administrative Agent and/or the Lenders) in connection with
the enforcement and protection of the rights of the Lenders under this
Agreement, the Notes, the Loan Documents or any other agreement or document
referred to herein or therein, and (c) all reasonable and customary costs and
expenses (excluding internal salary costs) of periodic reviews by the
Administrative Agent's personnel of the Borrower's and Guarantors' books and
records. The Borrower further agrees to indemnify the Administrative Agent, the
Arranger, the Lenders, and their respective directors, officers and employees
against all losses, claims, damages, penalties, judgments, liabilities and
reasonable expenses (including, without limitation, all expenses of litigation
or preparation therefor whether or not one of them is a party thereto) which any
of them may pay or incur arising out of or relating to this Agreement, the other
Loan Documents, the transactions contemplated hereby or the direct or indirect
application or proposed application of the proceeds of any Advance hereunder,
except that the foregoing indemnity shall not apply to any entity to the extent
that any such losses, claims, etc. are the result of such entity's gross
negligence or wilful misconduct. The obligations of the Borrower under this
Section shall survive the termination of this Agreement.
14.7 Severability of Provisions. Any provision in any Loan Document that
--------------------------
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other
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jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
14.8 Nonliability of the Lenders. The relationship between the Borrower
---------------------------
and the Lenders shall be solely that of borrower and lender. The Lenders shall
not have any fiduciary responsibilities to the Borrower. The Lenders undertake
no responsibility to the Borrower to review or inform the Borrower of any matter
in connection with any phase of the Borrower's business or operations.
14.9 Choice of Law. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
-------------
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
14.10 Consent to Jurisdiction. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO
-----------------------
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE
COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF THE LENDERS TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS
OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE
LENDERS OR ANY AFFILIATE OF THE LENDERS INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
14.11 Waiver of Jury Trial. THE BORROWER, THE GUARANTORS, THE
--------------------
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
14.12 Successors and Assigns. The terms and provisions of the Loan
----------------------
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that the Borrower
shall not have the right to assign its rights or obligations under the Loan
Documents. Any assignee or transferee of the Notes agrees by acceptance thereof
to be bound by all the terms and provisions of the Loan
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<PAGE>
Documents. Any request, authority or consent of any Person, who at the time of
making such request or giving such authority or consent is the holder of the
Notes, shall be conclusive and binding on any subsequent holder, transferee or
assignee of such Notes or of any note or notes issued in exchange therefor.
14.13 Entire Agreement; Modification of Agreement. The Loan Documents
-------------------------------------------
embody the entire agreement among the Borrower, Guarantors, Administrative
Agent, and Lenders and supersede all prior conversations, agreements,
understandings, commitments and term sheets among any or all of such parties
with respect to the subject matter hereof. Any provisions of this Agreement may
be amended or waived if, but only if, such amendment or waiver is in writing and
is signed by the Borrower and Administrative Agent, and
(a) each of the Lenders if such amendment or waiver
(i) reduces or forgives any payment of principal or
interest on the Obligations or any fees payable by Borrower to such
Lender hereunder; or
(ii) postpones the date fixed for any payment of principal
of or interest on the Obligations or any fees payable by Borrower to
such Lender hereunder; or
(iii) changes the amount of such Lender's Commitment (other
than pursuant to a Commitment reduction by the Borrower under
Section 2.18 or an assignment permitted under Section 13.3) or the
------------ ------------
unpaid principal amount of such Lender's Note; or
(iv) extends the Maturity Date; or
(v) releases or limits the liability of a Guarantor under
the Loan Documents; or
(vi) changes the definition of Majority Lenders or
Required Lenders or modifies any requirement for consent by each of
the Lenders; or
(b) the Majority Lenders, to the extent expressly provided for
herein; or
(c) the Required Lenders, to the extent expressly provided for
herein and in the case of all other waivers or amendments if no percentage of
Lenders is specified herein.
14.14 Dealings with the Borrower. The Lenders and their affiliates may
--------------------------
accept deposits from, extend credit to and generally engage in any kind of
banking, trust or other
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<PAGE>
business with the Borrower or other member of the Consolidated Group regardless
of the capacity of the Lenders hereunder.
14.15 Set-Off.
-------
(a) If an Event of Default shall have occurred, each Lender shall
have the right, at any time and from time to time without notice to the
Borrower, any such notice being hereby expressly waived, to set-off and to
appropriate or apply any and all deposits of money or property or any other
indebtedness at any time held or owing by such Lender to or for the credit or
the account of the Borrower against and on account of all outstanding
Obligations and all Obligations which from time to time may become due hereunder
and all other obligations and liabilities of the Borrower under this Agreement,
irrespective of whether or not such Lender shall have made any demand hereunder
and whether or not said obligations and liabilities shall have matured.
(b) Each Lender agrees that if it shall, by exercising any right of
set-off or counterclaim or otherwise, receive payment of a proportion of the
aggregate amount of principal, interest or fees due with respect to any Note
held by it (other than payments with respect to Senior Loans under Section
-------
12.15) which is greater than the proportion received by any other Lender in
- - -----
respect of the aggregate amount of principal, interest or fees due with respect
to any Note held by such other Lender, the Lender receiving such proportionately
greater payment shall purchase such participations in the Notes held by the
other Lenders and such other adjustments shall be made as may be required so
that all such payments of principal, interest or fees with respect to the Notes
held by the Lenders shall be shared by the Lenders pro rata according to their
respective Commitments.
14.16 Counterparts. This Agreement may be executed in any number of
------------
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart. This Agreement shall be effective when it has been executed by the
Borrower, the Guarantors and each of the Lenders shown on the signature pages
hereof.
ARTICLE XV
NOTICES
-------
15.1 Giving Notice. All notices and other communications provided to any
-------------
party hereto under this Agreement or any other Loan Document shall be in writing
or by telex or by facsimile and addressed or delivered to such party at its
address set forth below or at such other address as may be designated by such
party in a notice to the other parties. Any notice, if mailed and properly
addressed with postage prepaid, shall be deemed given when received; any notice,
if transmitted by telex or facsimile, shall be deemed given when transmitted
(answerback confirmed in the case of telexes). Notice shall be given as
follows:
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<PAGE>
To the Borrower:
The Rouse Company
10275 Little Patuxent Parkway
Columbia, Maryland 21044-3456
Attention: Patricia H. Dayton
Telecopy: (410) 964-3412
To Guarantors:
The Howard Research And Development Corporation
10275 Little Patuxent Parkway
Columbia, Maryland 21044-3456
Attention: Patricia H. Dayton
Telecopy: (410) 964-3412
The Howard Hughes Corporation
Howard Hughes Properties, Inc.
3800 Howard Hughes Parkway
Las Vegas, Nevada 89109
Attention: General Counsel
Telecopy: (702) 791-4385
Each of the above with a copy to:
The Rouse Company
10275 Little Patuxent Parkway
Columbia, Maryland 21044-3456
Attention: David R. Schwiesow
Telecopy: (410) 992-6392
To each Lender:
As shown below the Lenders' signatures.
To the Administrative Agent:
The First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670
Attention: Real Estate Finance Division
Telecopy: (312) 732-1117
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<PAGE>
With a copy to:
Sonnenschein Nath & Rosenthal
8000 Sears Tower
Chicago, Illinois 60606
Attention: Patrick G. Moran, Esq.
Telecopy: (312) 876-7934
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<PAGE>
15.2 Change of Address. Each party may change the address for service of
-----------------
notice upon it by a notice in writing to the other parties hereto.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
BORROWER: THE ROUSE COMPANY
By:_____________________________________________
Title:__________________________________________
GUARANTORS: THE HOWARD HUGHES CORPORATION
By:_____________________________________________
Title:__________________________________________
HOWARD HUGHES PROPERTIES, INC.
By:_____________________________________________
Title:__________________________________________
THE HOWARD RESEARCH AND DEVELOPMENT CORPORATION
By:_____________________________________________
Title:__________________________________________
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<PAGE>
LENDERS: THE FIRST NATIONAL BANK OF CHICAGO, for itself and as
Administrative Agent
By:_____________________________________________
Title: Vice President
Commitment: $175,000,000
Percentage of Aggregate Commitment: 50%
Address for Notices:
One First National Plaza
Chicago, Illinois 60670
Attention: Real Estate Finance Division
Telephone: 312/732-1486
Telecopy: 312/732-1117
BANKERS TRUST COMPANY
By:_____________________________________________
Title: Managing Director
Commitment: $175,000,000
Percentage of Aggregate Commitment: 50%
Address for Notices:
Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Attention: Susan LeBoutillier
Telephone: 212/250-2418
Telecopy: 212/669-0752
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<PAGE>
EXHIBIT D - FORM OF LIMITED GUARANTY
------------------------------------
LIMITED GUARANTY
----------------
(TERM)
This Limited Guaranty (Term Loan) made as of July 29, 1998 (the
"Guaranty"), by The Howard Hughes Corporation and Howard Hughes Properties, Inc.
--------
(individually, a "Guarantor" and collectively, "Guarantor"), to and for the
--------- ---------
benefit of Bankers Trust Company ("Bankers Trust") and The First National Bank
-------------
of Chicago ("First Chicago"), individually and as agents for themselves and the
-------------
lenders listed on the signature pages of the Term Loan Agreement (as defined
below) and their respective successors and assigns (collectively, "Lender").
------
RECITALS
--------
A. The Rouse Company ("Borrower") and Guarantor have requested that
--------
Lender make an unsecured term loan facility available to Borrower in the
aggregate principal amount of up to $350,000,000 ("Term Loan Facility").
------------------
B. Lender has agreed to make the Term Loan Facility available to Borrower
pursuant to the terms and conditions set forth in a Credit Agreement (Bridge
Loan) of even date herewith ("Term Loan Agreement") among Borrower, the Lender,
-------------------
the entities comprising the Guarantor and The Howard Research And Development
Corporation (the "Other Guarantor"). All capitalized terms used herein and not
---------------
otherwise defined shall have the meanings ascribed to such terms in the Term
Loan Agreement.
C. Borrower has executed and delivered to Lender Promissory Notes each of
even date herewith in the aggregate principal amount of $350,000,000 as evidence
of its indebtedness to Lender with respect to the Term Loan Facility. The
Promissory Notes described above, together with any amendments or allonges
thereto, or restatements, replacements or renewals thereof, and/or new
promissory notes to new Lenders under the Term Loan Agreement, are collectively
referred to herein as the "Note".
----
D. Borrower is a stockholder, directly or indirectly, of each entity
comprising Guarantor, and Guarantor will receive advances from time to time from
the Borrower out of the proceeds of the Term Loan Facility and, therefore,
Guarantor will derive financial benefit from the Term Loan Facility evidenced by
the Note, Term Loan Agreement and the other Loan Documents. The execution and
delivery of this Guaranty by Guarantor and of another guaranty by the Other
Guarantor are conditions precedent to the performance by Lender of its
obligations under the Term Loan Agreement.
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<PAGE>
EXHIBIT D - FORM OF LIMITED GUARANTY
------------------------------------
E. Borrower has also entered into an Amended and Restated Unsecured
Revolving Credit Agreement of even date herewith (the "Revolving Credit
----------------
Agreement") among Borrower, the entities comprising the Guarantor, the Other
- - ---------
Guarantor, First Chicago and Bankers Trust, individually and as agents, and the
lenders listed on the signature pages of such Revolving Loan Agreement and their
respective successors and assigns (collectively, the "Revolving Lenders"). The
-----------------
Revolving Lenders have also required the Guarantor to execute and deliver a
Limited Guaranty (Revolving) of even date herewith (the "Revolving Guaranty")
------------------
regarding Borrower's obligations under the Revolving Credit Agreement.
AGREEMENTS
----------
NOW, THEREFORE, Guarantor, in consideration of the matters described in the
foregoing Recitals, which Recitals are incorporated herein and made a part
hereof, and for other good and valuable consideration, hereby agrees as follows:
1. Guarantor absolutely, unconditionally, and irrevocably guarantees to
Lender:
(a) the full and prompt payment of the principal of and interest on
the Note when due, whether at stated maturity, upon acceleration or
otherwise, and at all times thereafter, and the prompt payment of all sums
which may now be or may hereafter become due and owing under the Note, the
Term Loan Agreement, and the other Loan Documents;
(b) the payment of all Enforcement Costs (as hereinafter defined in
Paragraph 7 hereof); and
-----------
(c) the full, complete, and punctual observance, performance, and
satisfaction of all of the obligations, duties, covenants, and agreements
of Borrower under the Term Loan Agreement and the Loan Documents.
All amounts due, debts, liabilities, and payment obligations described in
subparagraphs (a) and (b) of this Paragraph 1 are referred to herein as the
-----------
"Facility Indebtedness." All obligations described in subparagraph (c) of this
---------------------
Paragraph 1 are referred to herein as the "Obligations." All obligations
- - ----------- -----------
described in subparagraphs (a), (b) and (c) of this Paragraph 1 are referred to
-----------
collectively as the "Guaranteed Obligations". Guarantor and Lender agree that a
----------------------
Guarantor's obligations hereunder shall not exceed the greater of: (i) the
aggregate amount of all monies received, directly or indirectly, by such
Guarantor from Borrower after the date hereof (whether by loan, capital infusion
or other means), or (ii) the maximum amount not subject to avoidance under Title
11 of the United States Code, as same may be amended from time to time, or any
applicable state law (the "Bankruptcy Code"). To that end, to the extent such
obligations would otherwise be subject to avoidance under the
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<PAGE>
EXHIBIT D - FORM OF LIMITED GUARANTY
------------------------------------
Bankruptcy Code if such Guarantor is not deemed to have received valuable
consideration, fair value or reasonably equivalent value for its obligations
hereunder, any such Guarantor's obligations hereunder shall be reduced to that
amount which, after giving effect thereto, would not render such Guarantor
insolvent, or leave such Guarantor with an unreasonably small capital to conduct
its business, or cause such Guarantor to have incurred debts (or intended to
have incurred debts) beyond its ability to pay such debts as they mature, as
such terms are determined, and at the time such obligations are deemed to have
been incurred, under the Bankruptcy Code. In the event either of the entities
comprising the Guarantor shall make any payment or payments under this Guaranty,
the other entity comprising the Guarantor shall contribute to such paying entity
an amount equal to such non-paying entity's pro rata share (based on their
respective maximum liabilities hereunder) of such payment or payments made by
such paying entity, provided that such contribution right shall be subordinate
and junior in right of payment to all the Guaranteed Obligations to Lender.
Notwithstanding anything herein to the contrary, the maximum aggregate
liability of both entities comprising the Guarantor (i) under this Guaranty to
the Lender and (ii) under the Revolving Guaranty to the Revolving Lenders with
respect to any portion of the aggregate principal balances outstanding under the
Revolving Credit Agreement and the Term Loan Agreement that becomes due and
payable prior to the "Limitation End Date" (as defined below) shall not exceed
$250,000,000 (the "Maximum Principal Liability"). The Guarantor's Maximum
---------------------------
Principal Liability shall be reduced only by payments made by Guarantor to
either Lender or the Revolving Lenders during the continuance of (i) an Event of
Default under the Revolving Agreement (as such term is defined therein) or (ii)
an Event of Default under the Term Loan Agreement which are expressly identified
in writing at the time of payment as being made for such purpose. Any principal
payments made by the Borrower, the Other Guarantor or from any other source
shall not reduce the Maximum Principal Liability, despite reducing the aggregate
principal balance outstanding under the Revolving Credit Agreement or the Term
Loan Agreement. Guarantor shall have no rights or obligations with respect to
the allocation of any payments made by Guarantor hereunder between the Term Loan
Agreement and the Revolving Credit Agreement, which allocation shall be governed
by separate agreement between Lender and the Revolving Lenders. The limitation
imposed on a Guarantor's liability shall expire, and such Guarantor shall be
liable for the full principal balance of the Facility Indebtedness without
regard to this paragraph, on the date that those obligations of Borrower to
deliver additional stock of Borrower to certain "Holders" on account of those
"Business Units" (as such terms are defined in the Contingent Stock Agreement
described below) which are held by such Guarantor have either been terminated
early by agreement or expired in accordance with the terms of that certain
Contingent Stock Agreement dated as of January 1, 1996 (the "Limitation End
--------------
Date"). Guarantor shall not take any action, or consent to any action by any
- - ----
other party, which would extend the current Limitation End Date.
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EXHIBIT D - FORM OF LIMITED GUARANTY
------------------------------------
2. In the event of any default by Borrower in making payment of the
Facility Indebtedness, or in performance of the Obligations, as aforesaid, in
each case beyond the expiration of any applicable grace period, Guarantor
agrees, on demand by Lender or the holder of the Note, to pay all the Facility
Indebtedness and to perform all the Obligations as are or then or thereafter
become due and owing or are to be performed under the terms of the Note, the
Term Loan Agreement and the other Loan Documents. Lender shall have the right,
at its option, either before, during or after pursuing any other right or remedy
against Borrower or Guarantor, to perform any and all of the Obligations by or
through any agent, contractor or subcontractor, or any of their agents, of its
selection, all as Lender in its sole discretion deems proper, and Guarantor
shall indemnify and hold Lender free and harmless from and against any and all
loss, damage, cost, expense, injury, or liability Lender may suffer or incur in
connection with the exercise of its rights under this Guaranty or the
performance of the Obligations, except to the extent the same arises as a result
of the gross negligence or wilful misconduct of Lender.
All of the remedies set forth herein and/or provided by any of the Loan
Documents or law or equity shall be equally available to Lender, and the choice
by Lender of one such alternative over another shall not be subject to question
or challenge by Guarantor or any other person, nor shall any such choice be
asserted as a defense, set-off, or failure to mitigate damages in any action,
proceeding, or counteraction by Lender to recover or seeking any other remedy
under this Guaranty, nor shall such choice preclude Lender from subsequently
electing to exercise a different remedy. The parties have agreed to the
alternative remedies hereinabove specified in part because they recognize that
the choice of remedies in the event of a failure hereunder will necessarily be
and should properly be a matter of business judgment, which the passage of time
and events may or may not prove to have been the best choice to maximize
recovery by Lender at the lowest cost to Borrower and/or Guarantor. It is the
intention of the parties that such choice by Lender be given conclusive effect
regardless of such subsequent developments.
3. Guarantor does hereby waive (i) notice of acceptance of this Guaranty
by Lender and any and all notices and demands of every kind which may be
required to be given by any statute, rule or law, (ii) any defense, right of
set-off or other claim which Guarantor may have against the Borrower or which
Guarantor or Borrower may have against Lender or any holders of the Note (other
than defenses relating to payment of the Facility Indebtedness or the
correctness of any allegation by Lender that Borrower was in default in the
performance of the Obligations), (iii) presentment for payment, demand for
payment (other than as provided for in Paragraph 2 above), notice of nonpayment
-----------
(other than as provided for in Paragraph 2 above) or dishonor, protest and
-----------
notice of protest, diligence in collection and any and all formalities which
otherwise might be legally required to charge Guarantor with liability, (iv) any
failure by Lender to inform Guarantor of any facts Lender may now or hereafter
know about Borrower, the Term Loan Facility, or the transactions
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EXHIBIT D - FORM OF LIMITED GUARANTY
------------------------------------
contemplated by the Term Loan Agreement, it being understood and agreed that
Lender has no duty so to inform and that the Guarantor is fully responsible for
being and remaining informed by the Borrower of all circumstances bearing on the
existence or creation, or the risk of nonpayment of the Facility Indebtedness or
the risk of nonperformance of the Obligations, and (v) any and all right to
cause a marshalling of assets of the Borrower or any other action by any court
or governmental body with respect thereto, or to cause Lender to proceed against
any other security given to Lender in connection with the Facility Indebtedness
or the Obligations. Credit may be granted or continued from time to time by
Lender to Borrower without notice to or authorization from Guarantor, regardless
of the financial or other condition of the Borrower at the time of any such
grant or continuation. Lender shall have no obligation to disclose or discuss
with Guarantor its assessment of the financial condition of Borrower. Guarantor
acknowledges that no representations of any kind whatsoever have been made by
Lender to Guarantor. No modification or waiver of any of the provisions of this
Guaranty shall be binding upon Lender except as expressly set forth in a writing
duly signed and delivered on behalf of Lender. Guarantor further agrees that any
exculpatory language contained in the Term Loan Agreement or the Note shall in
no event apply to this Guaranty, and will not prevent Lender from proceeding
against Guarantor to enforce this Guaranty.
4. Guarantor further agrees that Guarantor's liability as guarantor shall
in nowise be impaired by any renewals or extensions which may be made from time
to time, with or without the knowledge or consent of Guarantor, of the time for
payment of interest or principal under the Note or by any forbearance or delay
in collecting interest or principal under the Note, or by any waiver by Lender
under the Term Loan Agreement or any other Loan Documents, or by Lender's
failure or election not to pursue any other remedies it may have against
Borrower, or by any change or modification in the Note, Term Loan Agreement or
any other Loan Documents, or by the acceptance by Lender of any additional
security or any increase, substitution or change therein, or by the release by
Lender of any security or any withdrawal thereof or decrease therein, or by the
application of payments received from any source to the payment of any
obligation other than the Facility Indebtedness, even though Lender might
lawfully have elected to apply such payments to any part or all of the Facility
Indebtedness, it being the intent hereof that Guarantor shall remain liable as
principal for payment of the Facility Indebtedness and performance of the
Obligations until all indebtedness has been paid in full and the other terms,
covenants and conditions of the Term Loan Agreement and other Loan Documents and
this Guaranty have been performed and the Aggregate Commitment terminated,
notwithstanding any act or thing which might otherwise operate as a legal or
equitable discharge of a surety. Guarantor further understands and agrees that
Lender may at any time enter into agreements with Borrower to amend and modify
the Note, Term Loan Agreement or other Loan Documents, or any thereof, and may
waive or release any provision or provisions of the Note, the Term Loan
Agreement and other Loan Documents or any thereof, and, with reference to such
instruments, may make
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<PAGE>
EXHIBIT D - FORM OF LIMITED GUARANTY
------------------------------------
and enter into any such agreement or agreements as Lender and Borrower may deem
proper and desirable, without in any manner impairing this Guaranty or any of
Lender's rights hereunder or any of the Guarantor's obligations hereunder.
5. This is an absolute, unconditional, complete, present and continuing
guaranty of payment and performance and not of collection. Guarantor agrees
that this Guaranty may be enforced by Lender without the necessity at any time
of resorting to or exhausting any other security or collateral given in
connection herewith or with the Note, the Term Loan Agreement or any of the
other Loan Documents, or resorting to any other guaranties, and Guarantor hereby
waives the right to require Lender to join Borrower in any action brought
hereunder or to commence any action against or obtain any judgment against
Borrower or to pursue any other remedy or enforce any other right. Guarantor
further agrees that nothing contained herein or otherwise shall prevent Lender
from pursuing concurrently or successively all rights and remedies available to
it at law and/or in equity or under the Note, Term Loan Agreement or any other
Loan Documents, and the exercise of any of its rights or the completion of any
of its remedies shall not constitute a discharge of any of Guarantor's
obligations hereunder, it being the purpose and intent of the Guarantor that the
obligations of such Guarantor hereunder shall be primary, absolute, independent
and unconditional under any and all circumstances whatsoever. Neither
Guarantor's obligations under this Guaranty nor any remedy for the enforcement
thereof shall be impaired, modified, changed or released in any manner
whatsoever by any impairment, modification, change, release or limitation of the
liability of Borrower under the Note, Term Loan Agreement or other Loan
Documents or by reason of Borrower's bankruptcy or by reason of any creditor or
bankruptcy proceeding instituted by or against Borrower. This Guaranty shall
continue to be effective and be deemed to have continued in existence or be
reinstated (as the case may be) if at any time payment of all or any part of any
sum payable pursuant to the Note, Term Loan Agreement or any other Loan Document
is rescinded or otherwise required to be returned by the payee upon the
insolvency, bankruptcy, or reorganization of the payor, all as though such
payment to Lender had not been made, regardless of whether Lender contested the
order requiring the return of such payment. The obligations of Guarantor
pursuant to the preceding sentence shall survive any termination, cancellation,
or release of this Guaranty.
6. This Guaranty shall be assignable by Lender to any assignee of all or
a portion of Lender's rights under the Loan Documents.
7. If: (i) this Guaranty, the Note or any other Loan Document is placed
in the hands of attorneys for collection or is collected through any legal
proceeding; (ii) attorneys are retained to represent Lender in any bankruptcy,
reorganization, receivership, or other proceedings affecting creditors' rights
and involving a claim under this Guaranty, the Note, the Term Loan Agreement, or
any other Loan Document; (iii) attorneys are retained to provide advice or other
representation with respect to the Loan Documents in connection
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EXHIBIT D - FORM OF LIMITED GUARANTY
------------------------------------
with an enforcement action or potential enforcement action; or (iv) attorneys
are retained to represent Lender in any other legal proceedings whatsoever in
connection with this Guaranty, the Note, the Term Loan Agreement, any of the
other Loan Documents, or any property subject thereto (other than any action or
proceeding brought by any Lender or participant against the Administrative Agent
(as defined in the Term Loan Agreement) alleging a breach by the Administrative
Agent of its duties under the Loan Documents), then Guarantor shall pay to
Lender upon demand all reasonable attorneys' fees, costs and expenses,
including, without limitation, court costs, filing fees, recording costs,
expenses of foreclosure, title insurance premiums, survey costs, minutes of
foreclosure, and all other costs and expenses incurred in connection therewith
(all of which are referred to herein as "Enforcement Costs"), in addition to all
-----------------
other amounts due hereunder.
8. The parties hereto intend that each provision in this Guaranty
comports with all applicable local, state and federal laws and judicial
decisions. However, if any provision or provisions, or if any portion of any
provision or provisions, in this Guaranty is found by a court of law to be in
violation of any applicable local, state or federal ordinance, statute, law,
administrative or judicial decision, or public policy, and if such court should
declare such portion, provision or provisions of this Guaranty to be illegal,
invalid, unlawful, void or unenforceable as written, then it is the intent of
all parties hereto that such portion, provision or provisions shall be given
force to the fullest possible extent that they are legal, valid and enforceable,
that the remainder of this Guaranty shall be construed as if such illegal,
invalid, unlawful, void or unenforceable portion, provision or provisions were
not contained therein, and that the rights, obligations and interest of Lender
or any holder of the Note under the remainder of this Guaranty shall continue in
full force and effect.
9. Any indebtedness of Borrower to Guarantor now or hereafter existing is
hereby subordinated to the Facility Indebtedness. Guarantor agrees that until
the entire Facility Indebtedness has been paid in full and the aggregate
Commitment is terminated, if an Event of Default under the Term Loan Agreement
exists and is continuing, (i) Guarantor will not seek, accept, or retain for
Guarantor's own account, any payment from Borrower on account of such
subordinated debt, and (ii) any such payments to Guarantor on account of such
subordinated debt shall be collected and received by Guarantor in trust for
Lender and shall be paid over to Lender on account of the Facility Indebtedness
without impairing or releasing the obligations of Guarantor hereunder.
10. Unless and until the Facility Indebtedness is repaid in full and the
Aggregate Commitment is terminated, Guarantor shall not assert any claim (within
the meaning of 11 U.S.C. (S) 101) which Guarantor may have against Borrower
arising from a payment made by Guarantor under this Guaranty and agrees not to
assert or take advantage of any subrogation rights of Guarantor or Lender or any
right of Guarantor or Lender to proceed against (i) Borrower for reimbursement,
or (ii) any other guarantor or any collateral security or
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EXHIBIT D - FORM OF LIMITED GUARANTY
------------------------------------
guaranty or right of offset held by Lender for the payment of the Facility
Indebtedness and performance of the Obligations, nor shall Guarantor seek or be
entitled to seek any contribution or reimbursement from Borrower or any other
guarantor in respect of payments made by Guarantor hereunder. It is expressly
understood that the waivers and agreements of Guarantor set forth above
constitute additional and cumulative benefits given to Lender for its security
and as an inducement for its extension of credit to Borrower.
11. Any amounts received by Lender from any source on account of any
indebtedness may be applied by Lender toward the payment of such indebtedness,
and in such order of application, as Lender may from time to time elect.
12. The Guarantor hereby submits to personal jurisdiction in the State of
Illinois for the enforcement of this Guaranty and waives any and all personal
rights to object to such jurisdiction for the purposes of litigation to enforce
this Guaranty. Guarantor hereby consents to the jurisdiction of either the
Circuit Court of Cook County, Illinois, or the United States District Court for
the Northern District of Illinois, in any action, suit, or proceeding which
Lender may at any time wish to file in connection with this Guaranty or any
related matter. Guarantor hereby agrees that an action, suit, or proceeding to
enforce this Guaranty may be brought in any state or federal court in the State
of Illinois and hereby waives any objection which Guarantor may have to the
laying of the venue of any such action, suit, or proceeding in any such court;
provided, however, that the provisions of this Paragraph shall not be deemed to
preclude Lender from filing any such action, suit, or proceeding in any other
appropriate forum.
13. All notices and other communications provided to any party hereto
under this Agreement or any other Loan Document shall be in writing or by telex
or by facsimile and addressed or delivered to such party at its address set
forth below or at such other address as may be designated by such party in a
notice to the other parties. Any notice, if mailed and properly addressed with
postage prepaid, shall be deemed given when received; any notice, if transmitted
by telex or facsimile, shall be deemed given when transmitted (answerback
confirmed in the case of telexes and facsimiles). Notice may be given as
follows:
To Guarantors:
The Howard Hughes Corporation
Howard Hughes Properties, Inc.
3800 Howard Hughes Parkway
Las Vegas, Nevada 89109
Attention: General Counsel
Telecopy: (702) 791-4385
-89-
<PAGE>
EXHIBIT D - FORM OF LIMITED GUARANTY
------------------------------------
With a copy to:
The Rouse Company
10275 Little Patuxent Parkway
Columbia, Maryland 21044-3456
Attention: David R. Schwiesow
Telecopy: (410) 992-6392
To the Lender:
c/o The First National Bank of Chicago, as agent
One First National Plaza
Chicago, Illinois 60670
Attention: Real Estate Finance Department
Telecopy: (312) 732-1117
With a copy to:
Sonnenschein Nath & Rosenthal
8000 Sears Tower
Chicago, Illinois 60606
Attention: Patrick G. Moran, Esq.
Telecopy: (312) 876-7934
or at such other address or to such other person as the party to be served with
notice may have furnished in writing to the party seeking or desiring to serve
notice as a place for the service of notice.
14. This Guaranty shall be binding upon the heirs, executors, legal and
personal representatives, successors and assigns of Guarantor and shall inure to
the benefit of Lender's successors and assigns. All liability of the entities
comprising the Guarantor shall be joint and several, subject to the limitations
set forth in Paragraph 1 hereof.
-----------
15. This Guaranty shall be construed and enforced under the internal laws
of the State of Illinois.
16. GUARANTOR AND LENDER, BY ITS ACCEPTANCE HEREOF, EACH HEREBY WAIVE ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHT UNDER THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR RELATING THERETO OR
ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS
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EXHIBIT D - FORM OF LIMITED GUARANTY
------------------------------------
GUARANTY AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
IN WITNESS WHEREOF, each entity comprising the Guarantor has delivered this
Guaranty in the State of Illinois as of the date first written above.
THE HOWARD HUGHES CORPORATION
By:_____________________________________
Its:____________________________________
HOWARD HUGHES PROPERTIES, INC.
By:_____________________________________
Its:____________________________________
ACCEPTED:
THE FIRST NATIONAL BANK OF CHICAGO,
not individually but as Administrative
Agent for the Lenders
By:_____________________________________
Its:____________________________________
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EXHIBIT D-1 - FORM OF UNLIMITED GUARANTY
----------------------------------------
UNLIMITED GUARANTY
------------------
(TERM)
This Unlimited Guaranty (Term Loan) made as of July 29, 1998 (the
"Guaranty"), by The Howard Research And Devlopment Corporation ("Guarantor"), to
-------- ---------
and for the benefit of Bankers Trust Company ("Bankers Trust") and The First
-------------
National Bank of Chicago ("First Chicago"), individually and as agents for
-------------
themselves and the lenders listed on the signature pages of the Term Loan
Agreement (as defined below) and their respective successors and assigns
(collectively, "Lender").
------
RECITALS
--------
A. The Rouse Company ("Borrower") and Guarantor have requested that
--------
Lender make an unsecured term loan facility available to Borrower in the
aggregate principal amount of up to $350,000,000 ("Term Loan Facility").
------------------
B. Lender has agreed to make the Term Loan Facility available to Borrower
pursuant to the terms and conditions set forth in a Credit Agreement (Bridge
Loan) of even date herewith ("Term Loan Agreement") among The Howard Hughes
-------------------
Corporation and Howard Hughes Properties, Inc. (individually and collectively,
the "Other Guarantor"), Borrower, and Guarantor. All capitalized terms used
---------------
herein and not otherwise defined shall have the meanings ascribed to such terms
in the Term Loan Agreement.
C. Borrower has executed and delivered to Lender Promissory Notes each of
even date herewith in the aggregate principal amount of $350,000,000 as evidence
of its indebtedness to Lender with respect to the Term Loan Facility. The
Promissory Notes described above, together with any amendments or allonges
thereto, or restatements, replacements or renewals thereof, and/or new
promissory notes to new Lenders under the Term Loan Agreement, are collectively
referred to herein as the "Note".
----
D. Borrower is a stockholder, directly or indirectly, of Guarantor, and
Guarantor will receive advances from time to time from the Borrower out of the
proceeds of the Term Loan Facility and, therefore, Guarantor will derive
financial benefit from the Term Loan Facility evidenced by the Note, Term Loan
Agreement and the other Loan Documents. The execution and delivery of this
Guaranty by Guarantor and of another guaranty by the Other Guarantor are
conditions precedent to the performance by Lender of its obligations under the
Term Loan Agreement.
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<PAGE>
EXHIBIT D-1 - FORM OF UNLIMITED GUARANTY
----------------------------------------
E. Borrower has also entered into an Amended and Restated Unsecured
Revolving Credit Agreement of even date herewith (the "Revolving Credit
----------------
Agreement") among Borrower, the Guarantor, the entities comprising the Other
- - ---------
Guarantor, First Chicago and Bankers Trust, individually and as agents, and the
lenders listed on the signature pages of such Revolving Loan Agreement and their
respective successors and assigns (collectively, the "Revolving Lenders"). The
-----------------
Revolving Lenders have also required the Guarantor to execute and deliver a
Limited Guaranty (Revolving) of even date herewith (the "Revolving Guaranty")
------------------
regarding Borrower's obligations under the Revolving Credit Agreement.
AGREEMENTS
----------
NOW, THEREFORE, Guarantor, in consideration of the matters described in the
foregoing Recitals, which Recitals are incorporated herein and made a part
hereof, and for other good and valuable consideration, hereby agrees as follows:
1. Guarantor absolutely, unconditionally, and irrevocably guarantees to
Lender:
(a) the full and prompt payment of the principal of and interest on
the Note when due, whether at stated maturity, upon acceleration or
otherwise, and at all times thereafter, and the prompt payment of all sums
which may now be or may hereafter become due and owing under the Note, the
Term Loan Agreement, and the other Loan Documents;
(b) the payment of all Enforcement Costs (as hereinafter defined in
Paragraph 7 hereof); and
-----------
(c) the full, complete, and punctual observance, performance, and
satisfaction of all of the obligations, duties, covenants, and agreements of
Borrower under the Term Loan Agreement and the Loan Documents.
All amounts due, debts, liabilities, and payment obligations described in
subparagraphs (a) and (b) of this Paragraph 1 are referred to herein as the
-----------
"Facility Indebtedness." All obligations described in subparagraph (c) of this
- - ----------------------
Paragraph 1 are referred to herein as the "Obligations." All obligations
- - ----------- -----------
described in subparagraphs (a), (b) and (c) of this Paragraph 1 are referred to
-----------
collectively as the "Guaranteed Obligations". Guarantor and Lender agree that
----------------------
Guarantor's obligations hereunder shall not exceed the greater of: (i) the
aggregate amount of all monies received, directly or indirectly, by Guarantor
from Borrower after the date hereof (whether by loan, capital infusion or other
means), or (ii) the maximum amount not subject to avoidance under Title 11 of
the United States Code, as same may be amended from time to time, or any
applicable state law (the "Bankruptcy Code"). To that end, to the extent such
obligations would otherwise be subject to avoidance under the Bankruptcy Code
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<PAGE>
EXHIBIT D-1 - FORM OF UNLIMITED GUARANTY
----------------------------------------
if Guarantor is not deemed to have received valuable consideration, fair value
or reasonably equivalent value for its obligations hereunder, Guarantor's
obligations hereunder shall be reduced to that amount which, after giving effect
thereto, would not render Guarantor insolvent, or leave Guarantor with an
unreasonably small capital to conduct its business, or cause Guarantor to have
incurred debts (or intended to have incurred debts) beyond its ability to pay
such debts as they mature, as such terms are determined, and at the time such
obligations are deemed to have been incurred, under the Bankruptcy Code.
2. In the event of any default by Borrower in making payment of the
Facility Indebtedness, or in performance of the Obligations, as aforesaid, in
each case beyond the expiration of any applicable grace period, Guarantor
agrees, on demand by Lender or the holder of the Note, to pay all the Facility
Indebtedness and to perform all the Obligations as are or then or thereafter
become due and owing or are to be performed under the terms of the Note, the
Term Loan Agreement and the other Loan Documents. Lender shall have the right,
at its option, either before, during or after pursuing any other right or remedy
against Borrower or Guarantor, to perform any and all of the Obligations by or
through any agent, contractor or subcontractor, or any of their agents, of its
selection, all as Lender in its sole discretion deems proper, and Guarantor
shall indemnify and hold Lender free and harmless from and against any and all
loss, damage, cost, expense, injury, or liability Lender may suffer or incur in
connection with the exercise of its rights under this Guaranty or the
performance of the Obligations, except to the extent the same arises as a result
of the gross negligence or wilful misconduct of Lender.
All of the remedies set forth herein and/or provided by any of the Loan
Documents or law or equity shall be equally available to Lender, and the choice
by Lender of one such alternative over another shall not be subject to question
or challenge by Guarantor or any other person, nor shall any such choice be
asserted as a defense, set-off, or failure to mitigate damages in any action,
proceeding, or counteraction by Lender to recover or seeking any other remedy
under this Guaranty, nor shall such choice preclude Lender from subsequently
electing to exercise a different remedy. The parties have agreed to the
alternative remedies hereinabove specified in part because they recognize that
the choice of remedies in the event of a failure hereunder will necessarily be
and should properly be a matter of business judgment, which the passage of time
and events may or may not prove to have been the best choice to maximize
recovery by Lender at the lowest cost to Borrower and/or Guarantor. It is the
intention of the parties that such choice by Lender be given conclusive effect
regardless of such subsequent developments.
3. Guarantor does hereby waive (i) notice of acceptance of this Guaranty
by Lender and any and all notices and demands of every kind which may be
required to be given by any statute, rule or law, (ii) any defense, right of
set-off or other claim which Guarantor may have against the Borrower or which
Guarantor or Borrower may have against
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EXHIBIT D-1 - FORM OF UNLIMITED GUARANTY
----------------------------------------
Lender or any holders of the Note (other than defenses relating to payment of
the Facility Indebtedness or the correctness of any allegation by Lender that
Borrower was in default in the performance of the Obligations), (iii)
presentment for payment, demand for payment (other than as provided for in
Paragraph 2 above), notice of nonpayment (other than as provided for in
- - -----------------
Paragraph 2 above) or dishonor, protest and notice of protest, diligence in
- - -----------------
collection and any and all formalities which otherwise might be legally required
to charge Guarantor with liability, (iv) any failure by Lender to inform
Guarantor of any facts Lender may now or hereafter know about Borrower, the Term
Loan Facility, or the transactions contemplated by the Term Loan Agreement, it
being understood and agreed that Lender has no duty so to inform and that the
Guarantor is fully responsible for being and remaining informed by the Borrower
of all circumstances bearing on the existence or creation, or the risk of
nonpayment of the Facility Indebtedness or the risk of nonperformance of the
Obligations, and (v) any and all right to cause a marshalling of assets of the
Borrower or any other action by any court or governmental body with respect
thereto, or to cause Lender to proceed against any other security given to
Lender in connection with the Facility Indebtedness or the Obligations. Credit
may be granted or continued from time to time by Lender to Borrower without
notice to or authorization from Guarantor, regardless of the financial or other
condition of the Borrower at the time of any such grant or continuation. Lender
shall have no obligation to disclose or discuss with Guarantor its assessment of
the financial condition of Borrower. Guarantor acknowledges that no
representations of any kind whatsoever have been made by Lender to Guarantor. No
modification or waiver of any of the provisions of this Guaranty shall be
binding upon Lender except as expressly set forth in a writing duly signed and
delivered on behalf of Lender. Guarantor further agrees that any exculpatory
language contained in the Term Loan Agreement or the Note shall in no event
apply to this Guaranty, and will not prevent Lender from proceeding against
Guarantor to enforce this Guaranty.
4. Guarantor further agrees that Guarantor's liability as guarantor shall
in nowise be impaired by any renewals or extensions which may be made from time
to time, with or without the knowledge or consent of Guarantor, of the time for
payment of interest or principal under the Note or by any forbearance or delay
in collecting interest or principal under the Note, or by any waiver by Lender
under the Term Loan Agreement or any other Loan Documents, or by Lender's
failure or election not to pursue any other remedies it may have against
Borrower, or by any change or modification in the Note, Term Loan Agreement or
any other Loan Documents, or by the acceptance by Lender of any additional
security or any increase, substitution or change therein, or by the release by
Lender of any security or any withdrawal thereof or decrease therein, or by the
application of payments received from any source to the payment of any
obligation other than the Facility Indebtedness, even though Lender might
lawfully have elected to apply such payments to any part or all of the Facility
Indebtedness, it being the intent hereof that Guarantor shall remain liable as
principal for payment of the Facility Indebtedness and performance of the
Obligations until all
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EXHIBIT D-1 - FORM OF UNLIMITED GUARANTY
----------------------------------------
indebtedness has been paid in full and the other terms, covenants and conditions
of the Term Loan Agreement and other Loan Documents and this Guaranty have been
performed and the Aggregate Commitment terminated, notwithstanding any act or
thing which might otherwise operate as a legal or equitable discharge of a
surety. Guarantor further understands and agrees that Lender may at any time
enter into agreements with Borrower to amend and modify the Note, Term Loan
Agreement or other Loan Documents, or any thereof, and may waive or release any
provision or provisions of the Note, the Term Loan Agreement and other Loan
Documents or any thereof, and, with reference to such instruments, may make and
enter into any such agreement or agreements as Lender and Borrower may deem
proper and desirable, without in any manner impairing this Guaranty or any of
Lender's rights hereunder or any of the Guarantor's obligations hereunder.
5. This is an absolute, unconditional, complete, present and continuing
guaranty of payment and performance and not of collection. Guarantor agrees
that this Guaranty may be enforced by Lender without the necessity at any time
of resorting to or exhausting any other security or collateral given in
connection herewith or with the Note, the Term Loan Agreement or any of the
other Loan Documents, or resorting to any other guaranties, and Guarantor hereby
waives the right to require Lender to join Borrower in any action brought
hereunder or to commence any action against or obtain any judgment against
Borrower or to pursue any other remedy or enforce any other right. Guarantor
further agrees that nothing contained herein or otherwise shall prevent Lender
from pursuing concurrently or successively all rights and remedies available to
it at law and/or in equity or under the Note, Term Loan Agreement or any other
Loan Documents, and the exercise of any of its rights or the completion of any
of its remedies shall not constitute a discharge of any of Guarantor's
obligations hereunder, it being the purpose and intent of the Guarantor that the
obligations of Guarantor hereunder shall be primary, absolute, independent and
unconditional under any and all circumstances whatsoever. Neither Guarantor's
obligations under this Guaranty nor any remedy for the enforcement thereof shall
be impaired, modified, changed or released in any manner whatsoever by any
impairment, modification, change, release or limitation of the liability of
Borrower under the Note, Term Loan Agreement or other Loan Documents or by
reason of Borrower's bankruptcy or by reason of any creditor or bankruptcy
proceeding instituted by or against Borrower. This Guaranty shall continue to
be effective and be deemed to have continued in existence or be reinstated (as
the case may be) if at any time payment of all or any part of any sum payable
pursuant to the Note, Term Loan Agreement or any other Loan Document is
rescinded or otherwise required to be returned by the payee upon the insolvency,
bankruptcy, or reorganization of the payor, all as though such payment to Lender
had not been made, regardless of whether Lender contested the order requiring
the return of such payment. The obligations of Guarantor pursuant to the
preceding sentence shall survive any termination, cancellation, or release of
this Guaranty.
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EXHIBIT D-1 - FORM OF UNLIMITED GUARANTY
----------------------------------------
6. This Guaranty shall be assignable by Lender to any assignee of all or
a portion of Lender's rights under the Loan Documents.
7. If: (i) this Guaranty, the Note or any other Loan Document is placed
in the hands of attorneys for collection or is collected through any legal
proceeding; (ii) attorneys are retained to represent Lender in any bankruptcy,
reorganization, receivership, or other proceedings affecting creditors' rights
and involving a claim under this Guaranty, the Note, the Term Loan Agreement, or
any other Loan Document; (iii) attorneys are retained to provide advice or other
representation with respect to the Loan Documents in connection with an
enforcement action or potential enforcement action; or (iv) attorneys are
retained to represent Lender in any other legal proceedings whatsoever in
connection with this Guaranty, the Note, the Term Loan Agreement, any of the
other Loan Documents, or any property subject thereto (other than any action or
proceeding brought by any Lender or participant against the Administrative Agent
(as defined in the Term Loan Agreement) alleging a breach by the Administrative
Agent of its duties under the Loan Documents), then Guarantor shall pay to
Lender upon demand all reasonable attorneys' fees, costs and expenses,
including, without limitation, court costs, filing fees, recording costs,
expenses of foreclosure, title insurance premiums, survey costs, minutes of
foreclosure, and all other costs and expenses incurred in connection therewith
(all of which are referred to herein as "Enforcement Costs"), in addition to all
-----------------
other amounts due hereunder.
8. The parties hereto intend that each provision in this Guaranty
comports with all applicable local, state and federal laws and judicial
decisions. However, if any provision or provisions, or if any portion of any
provision or provisions, in this Guaranty is found by a court of law to be in
violation of any applicable local, state or federal ordinance, statute, law,
administrative or judicial decision, or public policy, and if such court should
declare such portion, provision or provisions of this Guaranty to be illegal,
invalid, unlawful, void or unenforceable as written, then it is the intent of
all parties hereto that such portion, provision or provisions shall be given
force to the fullest possible extent that they are legal, valid and enforceable,
that the remainder of this Guaranty shall be construed as if such illegal,
invalid, unlawful, void or unenforceable portion, provision or provisions were
not contained therein, and that the rights, obligations and interest of Lender
or any holder of the Note under the remainder of this Guaranty shall continue in
full force and effect.
9. Any indebtedness of Borrower to Guarantor now or hereafter existing is
hereby subordinated to the Facility Indebtedness. Guarantor agrees that until
the entire Facility Indebtedness has been paid in full and the aggregate
Commitment is terminated, if an Event of Default under the Term Loan Agreement
exists and is continuing, (i) Guarantor will not seek, accept, or retain for
Guarantor's own account, any payment from Borrower on account of such
subordinated debt, and (ii) any such payments to Guarantor on account of such
subordinated debt shall be collected and received by Guarantor in trust for
Lender and shall
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EXHIBIT D-1 - FORM OF UNLIMITED GUARANTY
----------------------------------------
be paid over to Lender on account of the Facility Indebtedness without impairing
or releasing the obligations of Guarantor hereunder.
10. Unless and until the Facility Indebtedness is repaid in full and the
Aggregate Commitment is terminated, Guarantor shall not assert any claim (within
the meaning of 11 U.S.C. (S) 101) which Guarantor may have against Borrower
arising from a payment made by Guarantor under this Guaranty and agrees not to
assert or take advantage of any subrogation rights of Guarantor or Lender or any
right of Guarantor or Lender to proceed against (i) Borrower for reimbursement,
or (ii) any other guarantor or any collateral security or guaranty or right of
offset held by Lender for the payment of the Facility Indebtedness and
performance of the Obligations, nor shall Guarantor seek or be entitled to seek
any contribution or reimbursement from Borrower or any other guarantor in
respect of payments made by Guarantor hereunder. It is expressly understood
that the waivers and agreements of Guarantor set forth above constitute
additional and cumulative benefits given to Lender for its security and as an
inducement for its extension of credit to Borrower.
11. Any amounts received by Lender from any source on account of any
indebtedness may be applied by Lender toward the payment of such indebtedness,
and in such order of application, as Lender may from time to time elect.
12. The Guarantor hereby submits to personal jurisdiction in the State of
Illinois for the enforcement of this Guaranty and waives any and all personal
rights to object to such jurisdiction for the purposes of litigation to enforce
this Guaranty. Guarantor hereby consents to the jurisdiction of either the
Circuit Court of Cook County, Illinois, or the United States District Court for
the Northern District of Illinois, in any action, suit, or proceeding which
Lender may at any time wish to file in connection with this Guaranty or any
related matter. Guarantor hereby agrees that an action, suit, or proceeding to
enforce this Guaranty may be brought in any state or federal court in the State
of Illinois and hereby waives any objection which Guarantor may have to the
laying of the venue of any such action, suit, or proceeding in any such court;
provided, however, that the provisions of this Paragraph shall not be deemed to
preclude Lender from filing any such action, suit, or proceeding in any other
appropriate forum.
13. All notices and other communications provided to any party hereto
under this Agreement or any other Loan Document shall be in writing or by telex
or by facsimile and addressed or delivered to such party at its address set
forth below or at such other address as may be designated by such party in a
notice to the other parties. Any notice, if mailed and properly addressed with
postage prepaid, shall be deemed given when received; any notice, if transmitted
by telex or facsimile, shall be deemed given when transmitted (answerback
confirmed in the case of telexes and facsimiles). Notice may be given as
follows:
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EXHIBIT D-1 - FORM OF UNLIMITED GUARANTY
----------------------------------------
To Guarantors:
The Howard Research And Development Corporation
10275 Little Patuxent Parkway
Columbia, Maryland 21044-3456
Attention: Patricia H. Dayton
Telecopy: (410) 964-3412
With a copy to:
The Rouse Company
10275 Little Patuxent Parkway
Columbia, Maryland 21044-3456
Attention: David R. Schwiesow
Telecopy: (410) 992-6392
To the Lender:
c/o The First National Bank of Chicago, as agent
One First National Plaza
Chicago, Illinois 60670
Attention: Real Estate Finance Department
Telecopy: (312) 732-1117
With a copy to:
Sonnenschein Nath & Rosenthal
8000 Sears Tower
Chicago, Illinois 60606
Attention: Patrick G. Moran, Esq.
Telecopy: (312) 876-7934
or at such other address or to such other person as the party to be served with
notice may have furnished in writing to the party seeking or desiring to serve
notice as a place for the service of notice.
14. This Guaranty shall be binding upon the heirs, executors, legal and
personal representatives, successors and assigns of Guarantor and shall inure to
the benefit of Lender's successors and assigns.
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<PAGE>
EXHIBIT D-1 - FORM OF UNLIMITED GUARANTY
----------------------------------------
15. This Guaranty shall be construed and enforced under the internal laws
of the State of Illinois.
16. GUARANTOR AND LENDER, BY ITS ACCEPTANCE HEREOF, EACH HEREBY WAIVE ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHT UNDER THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR RELATING THERETO OR
ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS GUARANTY AND
AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
IN WITNESS WHEREOF, Guarantor has delivered this Guaranty in the State of
Illinois as of the date first written above.
THE HOWARD RESEARCH AND DEVELOPMENT CORPORATION
By:___________________________________________
Its:__________________________________________
ACCEPTED:
THE FIRST NATIONAL BANK OF CHICAGO,
not individually but as Administrative
Agent for the Lenders
By:___________________________________
Its:__________________________________
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<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS..................................................................... 2
1.1 Definitions..................................................................................... 2
1.2 Financial Standards............................................................................. 19
ARTICLE II THE FACILITY........................................................................................ 19
2.1 The Facility.................................................................................... 19
2.2 Principal Payments.............................................................................. 20
2.3 Requests for Advances; Responsibility for Advances.............................................. 20
2.4 Evidence of Credit Extensions................................................................... 20
2.5 Ratable Loans................................................................................... 21
2.6 LIBOR Applicable Margins........................................................................ 21
2.7 Facility Fee.................................................................................... 21
2.8 Other Fees...................................................................................... 21
2.9 Minimum Amount of Each Advance.................................................................. 21
2.10 Interest........................................................................................ 21
2.11 Selection of Rate Options and LIBOR Interest Periods............................................ 22
2.12 Method of Payment............................................................................... 24
2.13 Default......................................................................................... 25
2.14 Lending Installations........................................................................... 25
2.15 Non-Receipt of Funds by Administrative Agent.................................................... 25
2.16 Application of Moneys Received.................................................................. 25
2.17 ................................................................................................ 26
2.18 Voluntary Reduction of Aggregate Commitment Amount.............................................. 26
ARTICLE III [Intentionally Deleted]............................................................................ 26
ARTICLE IV CHANGE IN CIRCUMSTANCES............................................................................ 27
4.1 Yield Protection................................................................................ 27
4.2 Changes in Capital Adequacy Regulations......................................................... 27
4.3 Suspension of LIBOR Advances.................................................................... 28
4.4 Funding Indemnification......................................................................... 28
4.5 Lender Statements; Survival of Indemnity........................................................ 29
ARTICLE V CONDITIONS PRECEDENT................................................................................. 29
5.1 Conditions Precedent to the Initial Advance..................................................... 29
5.2 Conditions Precedent to Each Advance............................................................ 32
ARTICLE VI REPRESENTATIONS AND WARRANTIES...................................................................... 32
6.1 Existence....................................................................................... 32
</TABLE>
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6.2 Corporate Powers................................................................................ 33
6.3 Power of Officers............................................................................... 33
6.4 Government and Other Approvals.................................................................. 33
6.5 Solvency........................................................................................ 33
6.6 Compliance With Laws............................................................................ 34
6.7 Enforceability of Agreement..................................................................... 34
6.8 Title to Property............................................................................... 34
6.9 Litigation...................................................................................... 34
6.10 Events of Default............................................................................... 34
6.11 Investment Company Act of 1940.................................................................. 34
6.12 Public Utility Holding Company Act.............................................................. 34
6.13 Regulation U.................................................................................... 35
6.14 No Material Adverse Financial Change............................................................ 35
6.15 Financial Information........................................................................... 35
6.16 Factual Information............................................................................. 35
6.17 ERISA........................................................................................... 35
6.18 Taxes........................................................................................... 35
6.19 Environmental Matters........................................................................... 35
6.20 Insurance....................................................................................... 37
6.21 No Brokers...................................................................................... 37
6.22 No Violation of Usury Laws...................................................................... 37
6.23 Not a Foreign Person............................................................................ 37
6.24 No Trade Name................................................................................... 37
6.25 Subsidiaries.................................................................................... 37
ARTICLE VII ADDITIONAL REPRESENTATIONS AND WARRANTIES.......................................................... 38
7.1 Existence....................................................................................... 38
7.2 Corporate Powers................................................................................ 38
7.3 Power of Officers............................................................................... 38
7.4 Government and Other Approvals.................................................................. 39
7.5 Solvency........................................................................................ 39
7.6 Compliance With Laws............................................................................ 39
7.7 Enforceability of Guaranty...................................................................... 39
7.8 Title to Properties............................................................................. 40
7.9 Litigation...................................................................................... 40
7.10 Events of Default............................................................................... 40
7.11 Investment Company Act of 1940.................................................................. 40
7.12 Public Utility Holding Company Act.............................................................. 40
7.13 No Material Adverse Financial Change............................................................ 40
7.14 Financial Information........................................................................... 40
7.15 Factual Information............................................................................. 41
7.16 ERISA........................................................................................... 41
7.17 Taxes........................................................................................... 41
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7.18 Environmental Matters........................................................................... 41
7.19 Insurance....................................................................................... 42
7.20 Subsidiaries.................................................................................... 42
ARTICLE VIII AFFIRMATIVE COVENANTS............................................................................. 43
8.1 Notices......................................................................................... 43
8.2 Financial Statements, Reports, Etc.............................................................. 44
8.3 Existence and Conduct of Operations............................................................. 46
8.4 Maintenance of Properties....................................................................... 47
8.5 Insurance....................................................................................... 47
8.6 Payment of Obligations.......................................................................... 47
8.7 Compliance with Laws............................................................................ 47
8.8 Adequate Books.................................................................................. 47
8.9 ERISA........................................................................................... 47
8.10 Maintenance of Status........................................................................... 47
8.11 Use of Proceeds................................................................................. 47
8.12 Pre-Acquisition Environmental Investigations.................................................... 48
8.13 Required Principal Prepayment and Aggregate Commitment Reduction................................ 48
8.14 Year 2000....................................................................................... 48
9.1 Change in Business.............................................................................. 49
9.2 Change of Property Management................................................................... 49
9.3 Change of Borrower Control...................................................................... 49
9.4 Use of Proceeds................................................................................. 49
9.5 Transfers of Properties......................................................................... 49
9.6 Liens........................................................................................... 50
9.7 Regulation U.................................................................................... 51
9.8 Variable Rate Debt.............................................................................. 51
9.9 Negative Pledge................................................................................. 51
9.10 Indebtedness and Cash Flow Covenants............................................................ 51
9.11 Mergers and Dispositions........................................................................ 52
9.12 Dividends....................................................................................... 53
9.13 Encumbrances.................................................................................... 53
9.14 Restriction on Dividends and Distributions...................................................... 53
9.15 Limitations on Indebtedness..................................................................... 54
9.16 Limitations on PSS Assets....................................................................... 54
ARTICLE X DEFAULTS............................................................................................. 54
10.1 Nonpayment of Principal......................................................................... 54
10.2 Certain Covenants............................................................................... 54
10.3 Nonpayment of Interest and Other Obligations.................................................... 54
10.4 Cross Default................................................................................... 54
10.5 Loan Documents.................................................................................. 55
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10.6 Representation or Warranty...................................................................... 55
10.7 Covenants, Agreements and Other Conditions...................................................... 55
10.8 Borrower Status................................................................................. 55
10.9 Material Adverse Financial Change............................................................... 55
10.10 Bankruptcy...................................................................................... 55
10.11 Legal Proceedings............................................................................... 56
10.12 Failure to Satisfy Judgments.................................................................... 56
10.13 ERISA........................................................................................... 56
10.14 Environmental Remediation....................................................................... 56
ARTICLE XI ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES...................................................... 57
11.1 Acceleration.................................................................................... 57
11.2 Preservation of Rights; Amendments.............................................................. 57
ARTICLE XII THE ADMINISTRATIVE AGENT........................................................................... 57
12.1 Appointment..................................................................................... 57
12.2 Powers.......................................................................................... 57
12.3 General Immunity................................................................................ 58
12.4 No Responsibility for Loans, Recitals, etc...................................................... 58
12.5 Action on Instructions of Lenders............................................................... 58
12.6 Employment of Administrative Agents and Counsel................................................. 58
12.7 Reliance on Documents; Counsel.................................................................. 59
12.8 Administrative Agent's Reimbursement and Indemnification........................................ 59
12.9 Rights as a Lender.............................................................................. 59
12.10 Lender Credit Decision.......................................................................... 59
12.11 Successor Administrative Agent.................................................................. 60
12.12 Notice of Defaults.............................................................................. 60
12.13 Requests for Approval........................................................................... 60
12.14 Copies of Documents............................................................................. 61
12.15 Defaulting Lenders.............................................................................. 61
ARTICLE XIII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS................................................. 62
13.1 Successors and Assigns.......................................................................... 62
13.2 Participations.................................................................................. 62
13.2.1 Permitted Participants; Effect.......................................................... 62
13.2.2 Voting Rights........................................................................... 63
13.3 Assignments..................................................................................... 63
13.3.1 Permitted Assignments................................................................... 63
13.3.2 Effect; Effective Date of Assignment.................................................... 63
13.4 Dissemination of Information.................................................................... 64
13.5 Tax Treatment................................................................................... 64
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ARTICLE XIV GENERAL PROVISIONS................................................................................. 64
14.1 Survival of Representations..................................................................... 64
14.2 Governmental Regulation......................................................................... 64
14.3 Taxes........................................................................................... 65
14.4 Headings........................................................................................ 65
14.5 No Third Party Beneficiaries.................................................................... 65
14.6 Expenses; Indemnification....................................................................... 65
14.7 Severability of Provisions...................................................................... 65
14.8 Nonliability of the Lenders..................................................................... 66
14.9 Choice of Law................................................................................... 66
14.10 Consent to Jurisdiction......................................................................... 66
14.11 Waiver of Jury Trial............................................................................ 66
14.12 Successors and Assigns.......................................................................... 66
14.13 Entire Agreement; Modification of Agreement..................................................... 67
14.14 Dealings with the Borrower...................................................................... 67
14.15 Set-Off......................................................................................... 68
14.16 Counterparts.................................................................................... 68
ARTICLE XV NOTICES............................................................................................. 68
15.1 Giving Notice................................................................................... 68
15.2 Change of Address............................................................................... 71
</TABLE>
EXHIBITS
A - Pricing Grid
B-1 - Form of Note
B-2 - [Intentionally Deleted]
C-1 - [Intentionally Deleted]
C-2 - [Intentionally Deleted]
C-3 - [Intentionally Deleted]
D - Form of Limited Guaranty
D-1 - Form of Unlimited Guaranty
E - Opinion of Borrower's Counsel
F - Opinion of Guarantors' Counsel
G - Wiring Instructions
H - Form of Compliance Certificate
I - Form of Assignment Agreement
J - Description of Summerlin and Columbia Properties
K - Form of Pledge
WITH THE EXCEPTION OF EXHIBITS D AND D-1, THE EXHIBITS AND SCHEDULES ARE
OMITTED. ANY OMITTED EXHIBIT OR SCHEDULE WILL BE FURNISHED SUPPLEMENTALLY TO THE
COMMISSION UPON REQUEST.
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SCHEDULES
- - ---------
6.19 Environmental Compliance (Borrower)
6.25 Subsidiaries (Borrower)
7.18 Environmental Compliance (Guarantors)
7.20 Subsidiaries (Guarantors)
9.13 Existing Encumbrances
(vi)
<PAGE>
EXHIBIT 10.2
FIRST AMENDMENT TO
CREDIT AGREEMENT (BRIDGE LOAN)
------------------------------
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (BRIDGE LOAN) (the "Amendment") is
made as of the 14th day of August, 1998, by and among THE ROUSE COMPANY, a
Maryland corporation ("Borrower"), THE HOWARD HUGHES CORPORATION ("HHC"), HOWARD
HUGHES PROPERTIES, INC. ("HHP"), THE HOWARD RESEARCH AND DEVELOPMENT CORPORATION
("HRD"; HHC, HHP and HRD are collectively referred to herein as "Guarantors"),
THE FIRST NATIONAL BANK OF CHICAGO, a national banking association ("First
Chicago"), in First Chicago's capacity as Administrative Agent and Lender under
the Credit Agreement described below, BANKERS TRUST COMPANY, a New York banking
corporation ("Bankers Trust"), in Bankers Trust's capacity as Syndication Agent
and Lender under the Credit Agreement (First Chicago and Bankers Trust in their
capacities as Lenders being referred to as the "Original Lenders") and the
additional banks identified on the signature pages of this Amendment (the "New
Lenders").
RECITALS
--------
A. Borrower, Guarantors and the Original Lenders entered into a certain
Credit Agreement (Bridge Loan) dated as of July 29, 1998 (the "Credit
Agreement"). All capitalized terms used in this Agreement and not otherwise
defined herein shall have the meanings ascribed to such terms in the Credit
Agreement.
B. Pursuant to the terms of the Credit Agreement, the Original Lenders
agreed to provide Borrower with a term loan credit facility in an aggregate
principal amount of up to $350,000,000. The parties hereto desire to amend the
Credit Agreement in order to, among other things, (i) admit each of the New
Lenders as a "Lender" under the Credit Agreement without increasing the
Aggregate Commitment; (ii) adjust the respective Percentages and Commitments of
the Lenders; and (iii) make certain other modifications to the Credit Agreement.
NOW, THEREFORE, in consideration of the foregoing Recitals and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
AGREEMENTS
----------
1. The foregoing Recitals to this Amendment hereby are incorporated into
and made a part of this Amendment.
2. From and after the "Effective Date", as defined below, each of the
Original Lenders and each New Lender shall be considered a "Lender" under the
Credit Agreement and the Loan Documents. Borrower, Guarantors and the Original
Lenders hereby consent to
<PAGE>
the addition of each of the New Lenders as a Lender. From and after the
Effective Date, each New Lender's Commitment and Percentage shall be as shown
below such New Lender's signature block on this Amendment. The adjusted
Commitments and Percentages for the Original Lenders are also shown on the
signature pages to this Amendment.
3. The "Effective Date" shall be the date on which all of the following
conditions shall have been fulfilled (or waived by the Original Lenders and New
Lenders):
(i) no Default or Event of Default then exists;
(ii) Borrower shall have executed and delivered to the
Administrative Agent for delivery to each New Lender a Note in the form
attached hereto as Exhibit B-2 in the amount of such New Lender's
Commitment (each a "Primary Note");
(iii) Borrower shall have executed and delivered to the
Administrative Agent for delivery to each Original Lender an amended and
restated Note in the form attached hereto as Exhibit B-3 in the adjusted
amount of such Original Lender's Commitment (each a "Primary Note");
(iv) if any LIBOR Advances are then outstanding, it shall be
the last day of the LIBOR Interest Period for such LIBOR Advances, and the
only other Advances outstanding on such date shall be Alternate Base Rate
Advances;
(v) Borrower shall have executed and delivered, or caused to
be executed and delivered, to the Administrative Agent (and, upon receipt
from Borrower, the Administrative Agent shall deliver to the other Lenders)
a certificate dated as of the Effective Date signed by Borrower (i)
confirming that no Default or Event of Default exists under the Loan
Documents; and (ii) representing and warranting that the Loan Documents are
then in full force and effect and that, to the best of their knowledge,
Borrower then has no defenses or offsets to, or claims or counterclaims
relating to, its obligations under the Loan Documents;
(vi) the Original Lenders shall have paid in equal shares to
each of the New Lenders the agreed upon upfront fee payable to each such
New Lender; and
(vii) the Borrower, the Guarantors, the Administrative Agent,
the Original Lenders and the New Lenders shall have executed this
Amendment.
If the Effective Date has not occurred by August 31, 1998, either Borrower or
any New Lender may, by written notice to all other parties hereto, elect to
terminate this Amendment which thereupon shall have no further force or effect
and the Credit Agreement shall continue as if this Amendment had not been
executed. The Administrative Agent shall return (or cause to be returned) to
the Borrower the Notes previously executed and delivered by the
-2-
<PAGE>
Borrower to First Chicago and Bankers Trust dated July 29, 1998, in the
respective amounts of $175,000,000 each, on or promptly after the Effective
Date.
4. Each New Lender, on the Effective Date, agrees to purchase from each
of the Original Lenders, in equal shares, and each of the Original Lenders
hereby agrees to sell to each New Lender, in equal shares, without recourse, a
portion of the Obligations equal to such New Lender's Percentage of the then
outstanding principal balance of each Advance then outstanding and held by the
Original Lenders. Such purchases by each New Lender shall not change the
aggregate principal amount of all Advances outstanding on the Effective Date.
Each such purchase shall be effected by wire transfer of immediately available
funds in the appropriate amounts to the Administrative Agent for remittance to
each of the Original Lenders on the Effective Date. Borrower irrevocably and
unconditionally agrees that from and after the Effective Date the portion of
Obligations so funded by each of the New Lenders shall be evidenced by and shall
be deemed to be an Advance by such New Lender under such New Lender's Primary
Note as of the date of such purchase and shall be treated as such for purposes
of calculating interest and fees accruing from and after the date of such
purchase under the Credit Agreement (as amended by this Amendment). All
interest and fees accruing on such portion of the Obligations prior to the date
of such purchase shall be paid when due to the Administrative Agent for
remittance to the Original Lenders, as described in the Credit Agreement.
5. Section 1.1 of the Credit Agreement is hereby amended by adding the
following definition before the definition of "Gross Asset Value":
"Governmental Authority" means any nation or government, any state or
----------------------
other political subdivision thereof and any quasi-governmental agency
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
6. Section 1.1 of the Credit Agreement is hereby amended by adding the
following definition before the definition of "Total Outstanding Indebtedness":
"The Hughes Corporation" means that certain Delaware corporation which
----------------------
is one of the Pledgors under the Pledge.
7. Section 2.16(iii) of the Credit Agreement is hereby amended by
deleting the words "[intentionally deleted]" and adding in lieu thereof the
words "to the payment of the Facility Fee to the Lenders, if then due, and to
the payment of all fees to the Administrative Agent on a pro rata basis".
8. Section 9.4 of the Credit Agreement is hereby amended by adding the
word "than" after the word "other" in the second line thereof.
-3-
<PAGE>
9. Section 14.13 of the Credit Agreement is hereby amended by deleting
the words "and Administrative Agent," after the word "Borrower" in the sixth
line thereof.
10. Section 7(d) of Exhibit K of the Credit Agreement is hereby amended by
adding the Roman numeral "(i)" before the word "sell" in the first line thereof
and adding after the words "to do so" in the third line thereof the phrase ", or
(ii) sell, assign, exchange or otherwise transfer, or encumber in any manner,
any Indebtedness (as defined in the Credit Agreement) owed to such Pledgor by
either HHC or HHP, or attempt or contract to do so."
11. Except as specifically modified hereby, the Credit Agreement is and
remains unmodified and in full force and effect and is hereby ratified and
confirmed. All references in the Loan Documents to the "Agreement" or the "Term
Loan Agreement" henceforth shall be deemed to refer to the Credit Agreement as
amended by this Amendment. Each Guarantor, in its capacity as a Guarantor under
the Guaranty, hereby consents to this Amendment and specifically acknowledges
and agrees that its obligations under the Guaranty continue in full force and
effect with respect to all of the "Facility Indebtedness" and all "Obligations"
(as defined in the Guaranty) which are now or hereafter due to the Lenders or
the Administrative Agent under the Credit Agreement as amended by this
Amendment.
12. This Amendment may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Amendment by signing any such counterpart. This
Amendment shall be construed in accordance with the internal laws (and not the
law of conflicts) of the State of Illinois, but giving effect to federal laws
applicable to national banks. This Amendment shall be effective on the
Effective Date.
13. The Syndication Agent hereby advises the Borrower, and all parties
hereto agree, that the initial syndication of the Facility has been completed as
of the date hereof.
-4-
<PAGE>
IN WITNESS WHEREOF, the Borrower, the Guarantors, the Original Lenders, the
New Lenders, and the Administrative Agent have executed this Amendment as of the
date first above written.
THE ROUSE COMPANY, a Maryland corporation
By:________________________________________
Title:_____________________________________
THE HOWARD HUGHES CORPORATION
By:________________________________________
Title:_____________________________________
HOWARD HUGHES PROPERTIES, INC.
By:________________________________________
Title:_____________________________________
THE HOWARD RESEARCH AND DEVELOPMENT CORPORATION
By:________________________________________
Title:_____________________________________
-5-
<PAGE>
THE FIRST NATIONAL BANK
OF CHICAGO, as Original Lender and as
Administrative Agent
By:________________________________________
Title:_____________________________________
Commitment: $57,968,750
Percentage of Aggregate Commitment: 16.5625%
Address for Notices:
One First National Plaza
Chicago, Illinois 60670
Attention: Real Estate Finance Division
Telephone: (312) 732-1486
Facsimile: (312) 732-1117
BANKERS TRUST COMPANY, as Original Lender and as
Syndication Agent
By:________________________________________
Title:_____________________________________
Commitment: $57,968,750
Percentage of Aggregate Commitment: 16.5625%
Address for Notices:
Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Attention: Susan LeBoutillier
Telephone: (212) 250-2418
Facsimile: (212) 669-0752
-6-
<PAGE>
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as New Lender
By:_____________________________________
Title:__________________________________
Commitment: $43,750,000
Percentage of Aggregate Commitment: 12.5000%
Address for Notices:
60 Wall Street
New York, New York 10260
Attention: Glenda Irving
Telephone: (212) 648-4690
Facsimile: (212) 648-5249
THE CHASE MANHATTAN BANK, N.A., as
New Lender
By:_____________________________________
Title:__________________________________
Commitment: $43,750,000
Percentage of Aggregate Commitment: 12.5000%
Address for Notices:
380 Madison Avenue, 10th Floor
New York, New York 10017
Attention: Charles Hoagland
Telephone: (212) 622-3270
Facsimile: (212) 622-3369
-7-
<PAGE>
NATIONSBANK N.A., as New Lender
By:_____________________________________
Title:__________________________________
Commitment: $43,750,000
Percentage of Aggregate Commitment: 12.5000%
Address for Notices:
6610 Rockledge Drive, 6th Floor
Bethesda, Maryland 20217
Attention: Mr. Matt Juall
Telephone: (301) 897-7513
Facsimile: (301) 493-2885
BANK OF AMERICA NATIONAL TRUST & SAVINGS
ASSOCIATION, as New Lender
By:_____________________________________
Title:__________________________________
Commitment: $32,812,500
Percentage of Aggregate Commitment: 9.3750%
Address for Notices:
Real Estate Group
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Michael Edwards
Telephone: (312) 828-5175
Facsimile: (312) 974-4970
-8-
<PAGE>
DRESDNER BANK AG, NEW YORK
BRANCH AND GRAND CAYMAN BRANCH,
as New Lender
By:_____________________________________
Title:__________________________________
Commitment: $32,812,500
Percentage of Aggregate Commitment: 9.3750%
Address for Notices:
75 Wall Street
New York, New York 10005-2889
Attention: Neil J. Crawford
Telephone: (212) 429-2657
Facsimile: (212) 429-2781
COMMERZBANK AKTIENGESELLSCHAFT, NEW YORK BRANCH
AND GRAND CAYMAN BRANCH, as New Lender
By:
Title:
Commitment: $21,875,000
Percentage of Aggregate Commitment: 6.2500%
Address for Notices:
2 World Financial Center, 34th Floor
New York, New York 10281
Attention: Mr. Douglas Traynor
Telephone: (212) 266-7569
Telecopy: (212) 266-7576
-9-
<PAGE>
AMSOUTH BANK, as New Lender
By:_____________________________________
Title:__________________________________
Commitment: $15,312,500
Percentage of Aggregate Commitment: 4.3750%
Address for Notices:
Commercial Real Estate - Loan Department
1900 Fifth Avenue, North
Birmingham, Alabama 35203
Attention: Lawrence B. Clark
Telephone: (205) 581-7493
Telecopy: (205) 326-40
EXHIBITS
B-2 -- Form of Note
B-3 -- Form of Amended and Restated Note
EXHIBITS B-2 AND B-3 ARE OMITTED. ANY OMITTED EXHIBIT WILL BE FURNISHED
SUPPLEMENTALLY TO THE COMMISSION UPON REQUEST.
-10-
<PAGE>
Exhibit 10.3
AMENDED AND RESTATED
UNSECURED REVOLVING CREDIT AGREEMENT
DATED AS OF JULY 29, 1998
AMONG
THE ROUSE COMPANY, AS BORROWER
AND
THE FIRST NATIONAL BANK OF CHICAGO
AND
BANKERS TRUST COMPANY
AND
CERTAIN OTHER BANKS,
AS LENDERS
AND
BANKERS TRUST COMPANY
AS SYNDICATION AGENT
AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS ADMINISTRATIVE AGENT
<PAGE>
AMENDED AND RESTATED UNSECURED REVOLVING CREDIT AGREEMENT
---------------------------------------------------------
THIS AMENDED AND RESTATED UNSECURED REVOLVING CREDIT AGREEMENT is entered
into as of July 29, 1998, by and among the following:
THE ROUSE COMPANY, a Maryland corporation having its principal place of
business at 10275 Little Patuxent Parkway, Columbia, Maryland 21044-3456
("Borrower");
----------
THE FIRST NATIONAL BANK OF CHICAGO ("First Chicago"), a national bank
-------------
organized under the laws of the United States of America having an office at One
First National Plaza, Chicago, Illinois 60670;
BANKERS TRUST COMPANY ("Bankers Trust"), a New York banking corporation,
-------------
having an office at Bankers Trust Plaza, 130 Liberty Street, New York, New York
10006;
CERTAIN BANKS identified on the signature pages hereto;
Bankers Trust, as Syndication Agent ("Syndication Agent"); and
-----------------
First Chicago, as Administrative Agent ("Administrative Agent") for the
--------------------
Lenders (as defined below).
RECITALS
--------
A. This Amended and Restated Unsecured Revolving Credit Agreement amends
and restates in its entirety that certain Unsecured Revolving Credit Agreement
dated as of December 16, 1997 by and among Borrower, First Chicago, Morgan
Guaranty Trust Company of New York and certain other lenders, which made loans
available to the Borrower in the maximum aggregate principal amount of
$250,000,000 (the "Existing Facility").
-----------------
B. Borrower is primarily engaged in the business of developing,
acquiring, owning and managing commercial real estate projects, including
without limitation regional shopping centers, mixed-use projects, office
buildings, business/industrial projects and large-scale, master-planned land
developments.
C. The Borrower has requested that the Lenders make loans available to
the Borrower in the maximum aggregate principal amount of $450,000,000
outstanding from time to time pursuant to the terms of this Agreement (the
"Facility"), and that the Administrative Agent act as administrative agent for
--------
the Lenders and that the Syndication Agent act as syndication agent for the
Lenders. The Administrative Agent, the Syndication Agent and the Lenders have
agreed to do so.
D. The Facility shall be used by Borrower for general corporate purposes
and to refinance certain outstanding balances under the Existing Facility.
<PAGE>
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
--------------------------------
1.1 Definitions. As used in this Agreement, the following terms have the
-----------
meanings set forth below:
"Absolute Interest Period" means, with respect to a Competitive Bid Loan
------------------------
made at an Absolute Rate, a period of not less than 14 days and not more than
180 days as requested by Borrower in a Competitive Bid Quote Request and
confirmed by a Lender in a Competitive Bid Quote but in no event extending
beyond the Maturity Date. If an Absolute Interest Period would end on a day
which is not a Business Day, such Absolute Interest Period shall end on the next
succeeding Business Day.
"Absolute Rate" means a fixed rate of interest (rounded to the nearest
-------------
1/100 of 1%) for an Absolute Interest Period with respect to a Competitive Bid
Loan offered by a Lender and accepted by the Borrower at such rate under Section
-------
2.17.
- - ----
"Adjusted Combined EBITDA" means, as of any date, for the most recent four
------------------------
(4) fiscal quarters for which financial results then have been reported, then-
current Combined EBITDA adjusted by (i) eliminating that portion of Combined
EBITDA attributable to any Properties or entities not owned by a member of the
Consolidated Group or an Investment Affiliate as of the date of determination,
(ii) eliminating that portion of Combined EBITDA attributable to any Properties
or entities acquired by a member of the Consolidated Group after the beginning
of the last fiscal quarter in such four (4) quarter period, and (iii) adding to
Combined EBITDA for such four (4) quarter period on account of Properties
(including any renovation or expansion of an existing Property) or entities
owned by a member of the Consolidated Group or an Investment Affiliate and in
service for more than the full last fiscal quarter of such period but less than
such full four (4) quarter period, the Combined EBITDA that would have been
generated by such Property or entity if it had been owned and in service for
such full four (4) quarter period determined by annualizing the actual Combined
EBITDA attributed to such Property or entity for the portion of such period that
such Property or entity was actually so owned and in service.
"Adjusted LIBOR Rate" means, with respect to a LIBOR Advance for the
-------------------
relevant LIBOR Interest Period, the sum of (i) the quotient of (a) the Base
LIBOR Rate applicable to such LIBOR Interest Period, divided by (b) one (1)
minus the Reserve Requirement (expressed as a decimal) applicable to such LIBOR
Interest Period, if and only if a Reserve Requirement is then being imposed
under Regulation D, plus, (ii) in the case of ratable LIBOR Advances, the LIBOR
----
Applicable Margin in effect from time to time during such LIBOR Interest Period,
or in the case
-2-
<PAGE>
of LIBOR Advances made as Competitive Bid Loans, the Competitive LIBOR Margin
established in the Competitive Bid Quote applicable to such Competitive Bid
Loan.
"Administrative Agent" means First Chicago, acting as agent for the Lenders
--------------------
in connection with the transactions contemplated by this Agreement, and its
successors in such capacity.
"Advance" means an advance of funds to the Borrower hereunder by one or
-------
more of the Lenders pursuant to Section 2.1 hereof (including Competitive Bid
-----------
Loans), including the initial Advance and all subsequent Advances, whether such
Advances are, from time to time, Alternate Base Rate Advances, LIBOR Advances or
Competitive Bid Loans.
"Affiliate" means any Person directly or indirectly controlling, controlled
---------
by or under direct or indirect common control with any other Person. A Person
shall be deemed to control another Person if the controlling Person owns ten
percent (10%) or more of any class of voting securities of the controlled Person
or possesses, directly or indirectly, the power to direct or cause the direction
of the management or policies of the controlled Person, whether through
ownership of stock, by contract or otherwise.
"Aggregate Commitment" means, as of any date, the sum of all of the
--------------------
Lenders' then-current Commitments, which initially shall be $450,000,000,
subject to Borrower's right to reduce the Aggregate Commitment pursuant to
Section 2.18 and which shall otherwise only be increased with the consent of all
- - ------------
Lenders.
"Agreement" means this Amended and Restated Unsecured Revolving Credit
---------
Agreement and all amendments, modifications and supplements hereto.
"Agreement Execution Date" shall mean July 29, 1998, the date on which all
------------------------
of the parties hereto have executed this Agreement and all conditions precedent
to the initial Advance hereunder have been satisfied.
"Allocated Facility Amount" means, at any time, the sum of all then
-------------------------
outstanding Advances (including all Competitive Bid Loans) and the then
outstanding Facility Letter of Credit Obligations.
"Alternate Base Rate" means, for any day, a rate of interest per annum
-------------------
equal to the higher of (i) the Corporate Base Rate for such day and (ii) the sum
of the Federal Funds Effective Rate for such day plus 1/2% per annum.
"Alternate Base Rate Advance" means an Advance that bears interest at the
---------------------------
Alternate Base Rate.
"Arranger" means First Chicago Capital Markets, Inc. and BT Alex. Brown
--------
Incorporated, collectively.
-3-
<PAGE>
"Assets Under Development" means land and improvements owned by a member of
------------------------
the Consolidated Group or an Investment Affiliate being developed for retail,
office, mixed-use or other rental-income producing purposes which meet all four
(4) of the following criteria: (i) such project (or phase) has not yet been
substantially completed, (ii) no rental income has yet been received, (iii) no
certificate of occupancy has yet been issued for such project (or phase) and
(iv) such project (or phase) is classified as construction in progress in
accordance with GAAP. No such land or improvements may be included in the
category "Assets Under Development" for more than twelve (12) fiscal quarters
(it being agreed that any time period during which such land or improvements
would have been included in such category if the Facility had been in effect
previously shall be taken into consideration in determining whether such twelve
(12) fiscal quarter time period has been exceeded).
"Bankers Trust" means Bankers Trust Company.
-------------
"Base LIBOR Rate" means, with respect to a LIBOR Advance for the relevant
---------------
LIBOR Interest Period, the applicable London interbank offered rate for deposits
in U.S. dollars appearing on Dow Jones Markets (Telerate) Page 3750 as of 11:00
----------------------------
a.m. (London time) two (2) Business Days prior to the first day of such LIBOR
Interest Period, and having a maturity approximately equal to such LIBOR
Interest Period. If no London interbank offered rate of such maturity then
appears on Dow Jones Markets (Telerate) Page 3750, then the Base LIBOR Rate
----------------------------
shall be equal to the London interbank offered rate for deposits in U.S. dollars
maturing immediately before or immediately after such maturity, whichever is
higher, as determined by the Administrative Agent from Dow Jones Markets
-----------------
(Telerate) Page 3750. If Dow Jones Markets (Telerate) Page 3750 is not
- - ---------- ----------------------------
available, the applicable Base LIBOR Rate for the relevant LIBOR Interest Period
shall be the rate determined by the Administrative Agent to be the rate at which
the Administrative Agent offers to place deposits in U.S. dollars with first-
class banks in the London interbank market at approximately 11:00 a.m. (London
time) two (2) Business Days prior to the first day of such LIBOR Interest
Period, in the approximate amount of the Administrative Agent's relevant portion
of the LIBOR Advance and having a maturity approximately equal to such LIBOR
Interest Period.
"Borrower" means The Rouse Company, along with its permitted successors and
--------
assigns.
"Borrowing Date" means a Business Day on which an Advance is made to the
--------------
Borrower.
"Borrowing Notice" is defined in Section 2.11(a) hereof.
---------------- ---------------
"Bridge Facility" means that certain 364 day unsecured $350,000,000 term
---------------
loan to be made to the Borrower by First Chicago, Bankers Trust and certain
other Lenders at the same time as this Facility.
-4-
<PAGE>
"Bridge Facility Loan Documents" means any and all agreements and
------------------------------
instruments required and/or provided to Lenders in connection with the Bridge
Facility, as any of the same may be amended from time to time.
"Bridge Facility Retirement Date" means the date on which all advances
-------------------------------
under the Bridge Facility, and all other obligations of the Borrower thereunder,
have been paid in full and no further commitment to lend exists thereunder.
"Business Day" means a day, other than a Saturday, Sunday or holiday, on
------------
which banks are open for business in Chicago, Illinois, New York, New York and,
where such term is used in reference to the selection or determination of the
Adjusted LIBOR Rate, in London, England.
"Capital Stock" means any and all shares, interests, participations or
-------------
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person which is not a corporation
and any and all warrants or options to purchase any of the foregoing.
"Cash Equivalents" shall mean (i) short-term obligations of, or fully
----------------
guaranteed by, the United States of America, (ii) commercial paper rated A-1 or
better by S&P or P-1 or better by Moody's, or (iii) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $100,000,000.
"Code" means the Internal Revenue Code of 1986 as amended from time to
----
time, or any replacement or successor statute, and the regulations promulgated
thereunder from time to time.
"Combined Debt Service" means, for any period, without duplication, (a)
---------------------
Combined Senior Interest Expense for such period plus (b) all interest expense
----
of the Consolidated Group determined in accordance with GAAP attributable to
Subordinated Indebtedness for such period, plus (c) the aggregate amount of
----
regularly scheduled principal payments of Indebtedness (excluding optional
prepayments and balloon principal payments due on maturity in respect of any
Indebtedness) required to be made during such period by the Consolidated Group
plus (d) the Consolidated Group Pro Rata Share of all such regularly scheduled
- - ----
principal payments required to be made during such period by any Investment
Affiliate on Indebtedness (excluding optional prepayments and balloon principal
payments due on maturity in respect of any Indebtedness) taken into account in
calculating Combined Senior Interest Expense plus (e) Preferred Stock Expense of
----
the Consolidated Group for such period plus (f) Ground Lease Base Expense of the
----
Consolidated Group for such period. No interest expense or principal payments
on Indebtedness due from one member of the Consolidated Group solely to another
member of the Consolidated Group shall be included in Combined Debt Service.
"Combined EBITDA" means, as of any date, for the most recent four (4)
---------------
fiscal quarters for which financial results have then been reported, (a) income
before extraordinary items (reduced to eliminate any income from Investment
Affiliates), as reported by the Consolidated
-5-
<PAGE>
Group in accordance with GAAP, plus interest (less the proportionate share of
----
interest of any minority interest holders), depreciation, amortization and
income tax (if any) expense, plus (b) a percentage of such income (adjusted as
----
described above) of any Investment Affiliate equal to the Consolidated Group Pro
Rata Share in such Investment Affiliate, plus (c) dividends or other
----
distributions accrued with respect to such period on any preferred stock or
other preferred security issued by the Borrower which dividends or other
distributions are treated as operating expense under GAAP (but only to the
extent actually deducted from earnings under clause (a) above) plus (d) payments
----
made and other amounts treated as an expense of the Borrower under GAAP with
respect to such period pursuant to the Hughes Agreement (provided that no item
of income or expense shall be included more than once in such calculation even
if it falls within more than one of the foregoing categories).
"Combined Senior Interest Expense" means, with respect to any period, all
--------------------------------
interest expense of the Consolidated Group (less the proportionate share of
interest expense of any minority interest holders) determined in accordance with
GAAP attributable to such period plus (i) the allocable portion (based on
----
liability) of any accrued or paid interest incurred on any obligation for which
any member of the Consolidated Group is wholly or partially liable under
repayment, interest carry, or performance guarantees, or other relevant
liabilities, plus (ii) the Consolidated Group Pro Rata Share of any accrued or
----
paid interest incurred on any Indebtedness of any Investment Affiliate
attributable to such period, whether recourse or non-recourse, less (iii) any
----
such interest expense attributable to Subordinated Indebtedness, provided that
no expense shall be included more than once in such calculation even if it falls
within more than one of the foregoing categories, and provided further that no
interest expense on Indebtedness due from one member of the Consolidated Group
solely to another member of the Consolidated Group shall be included in Combined
Senior Interest Expense.
"Commitment" means the obligation of each Lender, subject to the terms and
----------
conditions of this Agreement and in reliance upon the representations and
warranties herein, to make Advances (other than Competitive Bid Loans) not
exceeding in the aggregate the amount set forth below its signature at the end
hereof, or the amount stated in any subsequent amendment hereto.
"Competitive Bid Borrowing Notice" is defined in Section 2.17(f).
-------------------------------- ---------------
"Competitive Bid Lender" means a Lender which has a Competitive Bid Loan
----------------------
outstanding.
"Competitive Bid Loan" is a Loan made pursuant to Section 2.17 hereof.
-------------------- ------------
"Competitive Bid Note" means the promissory note payable to the order of
--------------------
each Lender in the form attached hereto as Exhibit B-2 to be used to evidence
-----------
any Competitive Bid Loans which such Lender elects to make (collectively, the
"Competitive Bid Notes").
- - ----------------------
"Competitive Bid Option Agent" means First Chicago.
----------------------------
-6-
<PAGE>
"Competitive Bid Quote" means a response submitted by a Lender to the
---------------------
Competitive Bid Option Agent with respect to a Competitive Bid Quote Request in
the form attached as Exhibit C-3.
-----------
"Competitive Bid Quote Request" means a written request from Borrower to
-----------------------------
the Competitive Bid Option Agent in the form attached as Exhibit C-1.
-----------
"Competitive LIBOR Margin" means, with respect to any Competitive Bid Loan
------------------------
for a LIBOR Interest Period, the percentage established in the applicable
Competitive Bid Quote which is to be used to determine the interest rate
applicable to such Competitive Bid Loan.
"Consolidated Group" means the Borrower, the Guarantors, any other PSS, and
------------------
those Subsidiaries that are consolidated with the Borrower for financial
reporting purposes under GAAP.
"Consolidated Group Pro Rata Share" means, with respect to any Investment
---------------------------------
Affiliate, the percentage of the total ownership interests held by the
Consolidated Group, in the aggregate, in such Investment Affiliate as determined
in accordance with GAAP.
"Controlled Group" means all members of a controlled group of corporations
----------------
and all trades or businesses (whether or not incorporated) under common control
which, together with all or any of the entities in the Consolidated Group, are
treated as a single employer under Sections 414(b) or 414(c) of the Code.
"Corporate Base Rate" means a rate per annum equal to the corporate base
-------------------
rate of interest announced by First Chicago from time to time, changing when and
as such corporate base rate changes.
"Default" means an event which, with notice or lapse of time or both, would
-------
become an Event of Default.
"Default Rate" means with respect to any Advance, a rate equal to the
------------
interest rate applicable to such Advance plus four percent (4%) per annum.
"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
written notice from the Administrative Agent; provided that if such Lender cures
--------
such failure or refusal, such Lender shall cease to be a Defaulting Lender.
"Dollars" and "$" mean United States Dollars.
------- -
-7-
<PAGE>
"Effective Date" means each Borrowing Date and, if no Borrowing Date has
--------------
occurred in the preceding calendar month, the first Business Day of each
calendar month.
"Environmental Laws" means any and all Federal, state, local or municipal
------------------
laws, rules, orders, regulations, statutes, ordinances, codes, decrees,
requirements of any Governmental Authority having jurisdiction over any member
of the Consolidated Group or any Investment Affiliate, or their respective
assets, and regulating or imposing liability or standards of conduct concerning
protection of human health or the environment, as now or may at any time
hereafter be in effect, in each case to the extent the foregoing are applicable
to the operations of such member of the Consolidated Group or Investment
Affiliate, or any of their respective assets or Properties.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended, and regulations promulgated thereunder from time to time.
"Event of Default" means any event set forth in Article X hereof.
---------------- ---------
"Existing Facility" is defined in the first recital of this Agreement.
-----------------
"Extended Maturity Date" means, if the Facility is extended in accordance
----------------------
with the terms and conditions contained in Section 2.2 hereof, the fourth
-----------
anniversary of the Agreement Execution Date.
"Extension Notice" is defined in Section 2.2 hereof.
---------------- -----------
"Facility" means the unsecured revolving credit facility described in
--------
Section 2.1.
- - -----------
"Facility Fee" is defined in Section 2.7.
------------ -----------
"Facility Fee Rate" means, for any day, the percentage in effect on such
-----------------
day pursuant to the pricing grid attached hereto as Exhibit A and made a part
---------
hereof.
"Facility Letter of Credit" means a Financial Letter of Credit or
-------------------------
Performance Letter of Credit issued hereunder.
"Facility Letter of Credit Fee" is defined in Section 3.8.
----------------------------- -----------
"Facility Letter of Credit Obligations" means, as at the time of
-------------------------------------
determination thereof, all liabilities, whether actual or contingent, of the
Borrower with respect to Facility Letters of Credit, including the sum of (a)
the Reimbursement Obligations and (b) the aggregate undrawn face amount of the
then outstanding Facility Letters of Credit.
-8-
<PAGE>
"Federal Funds Effective Rate" means, for any day, an interest rate per
----------------------------
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately 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 at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Administrative Agent from
three (3) Federal funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion.
"Financial Letter of Credit" means any standby Letter of Credit which
--------------------------
represents an irrevocable obligation to the beneficiary on the part of the
Issuing Bank (i) to repay money borrowed by or advanced to or for the account of
the account party or (ii) to make any payment on account of any indebtedness
undertaken by the account party, in the event the account party fails to fulfill
its obligation to the beneficiary.
"First Chicago" means The First National Bank of Chicago.
-------------
"Funded Percentage" means, with respect to any Lender at any time, a
-----------------
percentage equal to a fraction the numerator of which is the portion of the
Aggregate Commitment actually disbursed and outstanding to Borrower by such
Lender at such time, and the denominator of which is the portion of the
Aggregate Commitment disbursed and outstanding to Borrower by all of the Lenders
at such time.
"Funded Senior Unsecured Debt" means, as of any date of determination,
----------------------------
Total Outstanding Indebtedness less the sum of (a) Subordinated Indebtedness
----
plus (b) Secured Outstanding Indebtedness plus (c) that portion of Total
- - ---- ----
Outstanding Indebtedness that does not represent indebtedness for borrowed
money, without duplication.
"Funds From Operations" means the "funds from operations" of the Borrower
---------------------
as such term is defined under the then-current definitions and interpretations
thereof promulgated by the National Association of Real Estate Investment Trusts
or its successor.
"GAAP" means generally accepted accounting principles in the United States
----
of America consistent with those utilized in preparing the audited financial
statements of the Borrower required hereunder.
"Gross Asset Value" means, as of any date, the sum of the value of certain
-----------------
assets of the Consolidated Group, including their interests in Investment
Affiliates, subject to the valuation methods, exclusions and sublimits set forth
below:
(a) with respect to Retail Properties, the Net Operating Income
attributable thereto for the most recent period of four (4) full fiscal quarters
for which results have been reported, divided by 0.0825;
-9-
<PAGE>
(b) with respect to all office, mixed-use and other income-producing
properties other than Retail Properties, the Net Operating Income attributable
thereto for the most recent period of four (4) full fiscal quarters for which
results have been reported, divided by 0.09;
(c) with respect to the Summerlin, Las Vegas and Columbia properties as
specifically identified on Exhibit J hereto, (i) to the extent such amount does
---------
not exceed 20% of the then-current total Gross Asset Value, 100% of the most
recent value thereof (without deduction for the value of the interests of the
Hughes heirs therein under the Hughes Agreement) as established by Landauer
Associates, Inc. (or another appraiser selected by the Borrower satisfactory to
the Administrative Agent), provided that the Required Lenders may require
updates thereof not more often than annually and as required when any material
portion of such properties are sold or transferred; plus (ii) to the extent the
----
amount otherwise includable in clause (i) exceeds 20% of the then-current total
Gross Asset Value, 75% of such excess value, provided that the amount determined
by adding the values determined under clauses (c)(i) and (ii) is not in excess
of 25% of the then-current total Gross Asset Value;
(d) (i) to the extent such amount, when added to the total amount included
in Gross Asset Value under clause (c), does not exceed 20% of the then-current
total Gross Asset Value, 100% of the GAAP book value of all other land, all
Assets Under Development and other non-income-producing properties (less the
portion of such value attributable to minority interest holders) plus (ii) to
----
the extent such amount included in Gross Asset Value under clause (c) plus the
amount included in Gross Asset Value under clause (d)(i) exceeds 20% of the
then-current total Gross Asset Value, 75% of such excess value, provided that
the aggregate amount included in Gross Asset Value under clause (c) and this
clause (d) is not in excess of 25% of the then-current total Gross Asset Value;
(e) with respect to cash and Cash Equivalents held by the Consolidated
Group, 100% of the GAAP book value thereof; and
(f) with respect to current trade receivables (other than notes
receivable) held by the Consolidated Group, 100% of the GAAP book value thereof.
In each case, if the applicable property is owned by an Investment Affiliate
rather than a member of the Consolidated Group, only the Consolidated Group's
Pro Rata Share of such value will be included in Gross Asset Value.
Notwithstanding the foregoing, (i) the contribution to Gross Asset Value of
those assets acquired in the TrizecHahn Acquisition shall be calculated from the
Agreement Execution Date through the Step-Up Date at the actual acquisition cost
of such assets excluding transaction costs (without regard to any adjustments
which may be made in determining their book value under GAAP) and (ii) the
amount contributed to Gross Asset Value from the following types of properties
shall not exceed the following percentages of Gross Asset Value:
-10-
<PAGE>
(a) Not more than 25% of Gross Asset Value shall be attributable to any
single property or group of contiguous properties;
(b) Not more than 25% of Gross Asset Value shall be attributable to Assets
Under Development and Undeveloped Land Holdings (regardless of the valuation
method applicable to such properties under clauses (c) or (d) of the first
sentence of this definition), in the aggregate;
(c) Not more than 15% of Gross Asset Value shall be attributable to
interests of the Consolidated Group in entities (i) in which the Borrower,
directly or indirectly, holds less than 50% of the total economic interests in
such entity, and (ii) which are not managed, directly or indirectly, by the
Borrower;
(d) Not more than 5% of Gross Asset Value shall be attributable to
Properties held by PSSs which are not Guarantors hereunder; and
(e) Not more than 5% of Gross Asset Value shall be attributable to those
current trade receivables described in clause (f) of the first sentence of this
definition.
"Ground Lease Base Expense" means, for any period, (a) all payments
-------------------------
accruing from any member of the Consolidated Group under a lease of land
underlying a property for such period other than percentage rentals or other
contingent payments that are based upon the financial results of the operation
of such property, plus (b) the Consolidated Group Pro Rata Share of all such
----
non-contingent payments accruing from any Investment Affiliate under such a
lease of land for such period.
"Guarantee Obligation" as to any Person (the "guaranteeing person"), any
-------------------- -------------------
obligation (determined without duplication) of (a) the guaranteeing person or
(b) another Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has issued a
reimbursement, counter indemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or
other obligations (the "primary obligations") of any other third Person (the
-------------------
"primary obligor") in any manner, whether directly or indirectly, including,
- - ----------------
without limitation, any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
- - -------- -------
completion or performance guarantees, environmental indemnities, or endorsements
of instruments for deposit or collection in the
-11-
<PAGE>
ordinary course of business. The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the maximum stated amount of the
primary obligation relating to such Guarantee Obligation (or, if less, the
maximum stated liability set forth in the instrument embodying such Guarantee
Obligation), provided, that in the absence of any such stated amount or stated
--------
liability, the amount of such Guarantee Obligation shall be such guaranteeing
person's maximum reasonably anticipated liability in respect thereof as
determined by the Borrower in good faith.
"Guarantors" means the Limited Guarantors and the Unlimited Guarantor,
----------
jointly and severally, subject to the terms of the Guaranty.
"Guaranty" means the Limited Guaranty and the Unlimited Guaranty,
--------
collectively.
"Hughes Agreement"means that certain Contingent Stock Agreement, effective
----------------
as of January 1, 1996, by the Borrower in favor of and for the benefit of the
"Holders" and the "Representatives" (as such terms are defined therein).
"Indebtedness" of any Person at any date means, without duplication, (a)
------------
all indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade liabilities and other accounts payable, and accrued expenses
incurred in the ordinary course of business and payable in accordance with
customary practices), to the extent such obligations constitute indebtedness for
the purposes of GAAP, (c) any other indebtedness of such Person which is
evidenced by a note, bond, debenture or similar instrument, (d) all obligations
of such Person under financing leases and capital leases as defined in
accordance with GAAP, (e) all obligations of such Person in respect of
acceptances issued or created for the account of such Person, (f) all Guarantee
Obligations of such Person (excluding in any calculation of consolidated
indebtedness of the Borrower, Guarantee Obligations of the Borrower in respect
of primary obligations of any Subsidiary), (g) all reimbursement obligations of
such Person for letters of credit and other contingent liabilities, (h) all
liabilities secured by any lien (other than liens for taxes not yet due and
payable or otherwise being contested in good faith) on any property owned by
such Person even though such Person has not assumed or otherwise become liable
for the payment thereof, (i) any repurchase obligation or liability of such
Person or any of its Subsidiaries with respect to accounts or notes receivable
sold by such Person or any of its Subsidiaries, and (j) such Person's pro rata
share of debt in Investment Affiliates and any loans where such Person is liable
as a general partner, less, in each instance, the proportionate share of
Indebtedness of any minority interest holders. The term "Indebtedness" shall
not, however, include any Indebtedness due from any member of the Consolidated
Group or any Investment Affiliate solely to a member of the Consolidated Group.
"Initial Facility Letters of Credit" means Letters of Credit issued by
----------------------------------
First Chicago and currently outstanding under the Existing Facility, as
described on Exhibit K.
---------
-12-
<PAGE>
"Insolvency" means insolvency as defined in the United States Bankruptcy
----------
Code, as amended. "Insolvent" when used with respect to a Person, shall refer
---------
to a Person who satisfies the definition of Insolvency.
"Interest Period" means either an Absolute Interest Period or a LIBOR
---------------
Interest Period.
"Investment Affiliate" means any Person (other than a PSS) in which any
--------------------
member of the Consolidated Group, directly or indirectly, has an ownership
interest, whose financial results are not consolidated using the proportionate
share method under GAAP with the financial results of the Consolidated Group in
the consolidated financial statements of the Consolidated Group.
"Invitation for Competitive Bid Quotes" means a written notice to the
-------------------------------------
Lenders from the Administrative Agent with respect to a Competitive Bid Quote
Request in the form attached as Exhibit C-2 hereto.
-----------
"Issuance Date" is defined in Section 3.4(a)(3).
------------- -----------------
"Issuance Notice" is defined in Section 3.4(c).
--------------- --------------
"Issuing Bank" means, with respect to each Facility Letter of Credit, First
------------
Chicago, as issuer of such Facility Letter of Credit pursuant to Article III.
-----------
"Lenders" means, collectively, First Chicago, Bankers Trust and the other
-------
Persons executing this Agreement in such capacity, or any Person which
subsequently executes and delivers any amendment hereto in such capacity and
each of their respective permitted successors and assigns. Where reference is
made to "the Lenders" in any Loan Document it shall be read to mean "all of the
Lenders".
"Lending Installation" means any U.S. office of any Lender authorized to
--------------------
make loans similar to the Advances described herein.
"Letter of Credit" of a Person means a letter of credit or similar
----------------
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Letter of Credit Collateral Account" is defined in Section 3.9.
----------------------------------- -----------
"Letter of Credit Request" is defined in Section 3.4(a).
------------------------ --------------
"LIBOR Advance" means an Advance that bears interest at the Adjusted LIBOR
-------------
Rate, whether a ratable Advance based on the LIBOR Applicable Margin or a
Competitive Bid Loan based on a Competitive LIBOR Margin.
-13-
<PAGE>
"LIBOR Applicable Margin" is defined on Exhibit A attached hereto and made
----------------------- ---------
a part hereof.
"LIBOR Interest Period" means, with respect to a LIBOR Advance, (i) until
---------------------
the date on which the Syndication Agent shall advise the Borrower that the
initial syndication of the Facility is completed, a period of one (1) week, and
(ii) thereafter, a period of one (1), two (2), three (3) or six (6) months, as
selected in advance by the Borrower.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
----
charge of any kind (including, without limitation, any conditional sale or other
title retention agreement or lease in the nature thereof, any filing or
agreement to file a financing statement as debtor under the Uniform Commercial
Code on any property leased to any Person under a lease which is not in the
nature of a conditional sale or title retention agreement, or any subordination
agreement in favor of another Person).
"Limited Guarantors" means The Howard Hughes Corporation, a Delaware
------------------
corporation, and Howard Hughes Properties, Inc., a Nevada corporation.
"Limited Guaranty" means that certain guaranty of even date herewith, in
----------------
the form of Exhibit D hereto, made jointly and severally by the Limited
---------
Guarantors for the benefit of the Lenders.
"Loan" means, with respect to a Lender, such Lender's portion of any
----
Advance.
"Loan Documents" means this Agreement, the Notes, the Guaranty, the Pledge,
--------------
the Transition Memorandum and any and all other agreements or instruments
required and/or provided to Lenders hereunder or thereunder, as any of the
foregoing may be amended from time to time.
"Majority Lenders" means Lenders in the aggregate having in excess of 50%
----------------
of the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding in excess of 50% of the aggregate unpaid
principal amount of the outstanding Advances.
"Margin Stock" has the meaning ascribed to it in Regulation U of the Board
------------
of Governors of the Federal Reserve System.
"Material Adverse Effect" means, with respect to any matter, that such
-----------------------
matter in the Majority Lenders' good faith judgment may reasonably be expected
to, (x) materially and adversely affect the business, properties, condition or
results of operations of the Consolidated Group taken as a whole (results of
operations to be based on Funds From Operations), or (y) constitute a non-
frivolous challenge to the validity or enforceability of any material provision
of any Loan Document against any obligor party thereto.
-14-
<PAGE>
"Material Adverse Financial Change" shall be deemed to have occurred if the
---------------------------------
Majority Lenders, in their good faith judgment, determine that a material
adverse financial change has occurred which may reasonably be expected to
prevent timely repayment of any Advance hereunder or materially impair
Borrower's ability to perform its obligations under any of the Loan Documents.
"Material Subsidiary" means, as of any date, any member of the Consolidated
-------------------
Group that has assets that represent more than five percent (5%) of the then-
current Gross Asset Value.
"Materials of Environmental Concern" means any gasoline or petroleum
----------------------------------
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Laws, including, without limitation, asbestos,
radon, polychlorinated biphenyls and urea-formaldehyde insulation.
"Maturity Date" means the Original Maturity Date or, if the Facility is
-------------
extended pursuant to the terms and conditions of Section 2.2 hereof, the
-----------
Extended Maturity Date or, in either case, such earlier date on which the
principal balance of the Facility and all other sums due in connection with the
Facility shall be due as a result of the acceleration of the Facility.
"Monetary Default" means any Default involving Borrower's failure to pay
----------------
any of the Obligations when due.
"Moody's" means Moody's Investors Service, Inc. and its successors.
-------
"Net Asset Value" means, as of any date, (a) then-current Gross Asset Value
---------------
less (b) the Consolidated Group's Indebtedness less (c) the Consolidated Group's
- - ---- ----
Pro Rata Share of the Indebtedness of each Investment Affiliate which has a
property then included in Gross Asset Value plus (d) to the extent treated as
----
Indebtedness, the liquidation payment due on any preferred stock of any member
of the Consolidated Group or such Investment Affiliate.
"Net Operating Income" means, with respect to any Property, for any period,
--------------------
earnings from rental operations (computed in accordance with GAAP but without
deduction for reserves) attributable to such Property plus depreciation,
----
amortization, interest expense and deferred taxes with respect to such Property
for such period, and, if such period is less than a year, adjusted by straight
lining various ordinary operating expenses which are payable less frequently
than once during every such period (e.g., real estate taxes and insurance). The
----
amounts determined under the preceding sentence shall be adjusted by adding back
(i) the interests of the former Hughes owners pursuant to the Hughes Agreement
that were excluded in determining such amounts and (ii) dividends or other
distributions accrued with respect to such period on any preferred stock or
other preferred security issued by the Borrower which dividends or other
distributions are treated as operating expense under GAAP. The Net Operating
Income shall be adjusted to include a pro forma amount thereof (as substantiated
to the satisfaction of the Administrative Agent) for four (4) quarters for any
Property acquired or placed in service
-15-
<PAGE>
(including, without limitation, the placing into service of any expansion
project at a Property costing in excess of $10,000,000) during the quarter and
to exclude any Net Operating Income for the prior four (4) quarters from any
Property not owned as of the end of the quarter.
"Non-Recourse Outstanding Indebtedness" means, as of any date, all
-------------------------------------
outstanding Indebtedness of a Person for which such Person's liability is
limited by agreement with the creditors thereunder to the proceeds of certain
assets of such Person, less, in the case of Borrower, any other Indebtedness of
----
Borrower included in Recourse Outstanding Indebtedness.
"Note" means the promissory note payable to the order of each Lender in the
----
amount of such Lender's maximum Commitment in the form attached hereto as
Exhibit B-1 (collectively, the "Notes").
- - ----------- -----
"Obligations" means the Advances, the Facility Letter of Credit Obligations
-----------
and all accrued and unpaid fees and all other obligations of Borrower to the
Administrative Agent or any or all of the Lenders arising under this Agreement
or any of the other Loan Documents.
"Original Maturity Date" means the Business Day immediately preceding the
----------------------
third anniversary of the Agreement Execution Date.
"Partial Advance" is defined in Section 2.3 hereof.
--------------- -----------
"Participants" is defined in Section 13.2.1 hereof.
------------ --------------
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
----
succeeding to any or all of its functions under ERISA.
"Percentage" means, with respect to each Lender, the applicable percentage
----------
of the then-current Aggregate Commitment represented by such Lender's then-
current Commitment.
"Performance Letter of Credit" means any standby Letter of Credit which
----------------------------
represents an irrevocable obligation to the beneficiary on the part of the
Issuing Bank to make payment on account of any default by the account party in
the performance of a nonfinancial or commercial obligation.
"Permitted Liens" are defined in Section 9.6 hereof.
--------------- -----------
"Person" means an individual, a corporation, a limited or general
------
partnership, a limited liability company, an association, a joint venture or any
other entity or organization, including a governmental or political subdivision
or an agent or instrumentality thereof.
-16-
<PAGE>
"Plan" means an employee benefit plan as defined in Section 3(3) of ERISA,
----
whether or not terminated, as to which the Borrower or any member of the
Controlled Group may have any liability.
"Pledge" means that certain Pledge Agreement dated as of the date hereof,
------
in the form of Exhibit M hereto, pursuant to which the Borrower and The Hughes
Corporation have, among other things, (a) pledged to the Lenders, and granted to
the Lenders a first priority perfected security interest in, all of the Pledged
Stock, and (b) agreed with the Lenders that they will not sell or encumber in
any manner any Indebtedness owed to them by either of the Limited Guarantors.
"Pledged Stock" means all capital stock of either Limited Guarantor and The
-------------
Hughes Corporation which is owned, directly or indirectly, by the Borrower or
any other member of the Consolidated Group.
"Preferred Stock Expense" means, for any period, (a) the aggregate dividend
-----------------------
payments due to the holders of preferred stock of any member of the Consolidated
Group, whether payable in cash or in kind, and whether or not actually paid
during such period plus (b) the Consolidated Group Pro Rata Share of any such
----
dividend payments due from Investment Affiliates plus (c) dividends or other
----
distributions on any preferred stock or other preferred security of any member
of the Consolidated Group which dividends or distributions are treated as an
operating expense under GAAP, but, with respect to (a), (b) and (c), excluding
any dividend payments or other distributions to a member of the Consolidated
Group.
"Property" means each parcel of real property owned or operated by any
--------
member of the Consolidated Group or any Investment Affiliate.
"PSS" means any corporation, partnership or other entity as to which both
---
(i) the Borrower or any other member of the Consolidated Group owns, directly or
indirectly, through one or more intermediaries, or both, 10% or less (or such
greater percentage as is permitted under Section 856(c)(3)(I)(B) of the Code, or
any successor provision) of the shares of the stock or other ownership interests
having the ordinary voting power to elect the board of directors or to designate
the other managers of such corporation, partnership or other entity, and (ii)
the Borrower or any other member of the Consolidated Group is entitled, directly
or indirectly, through one or more intermediaries, or both, to receive at least
90% of the net income or capital distributions of such corporation, partnership
or other entity.
"Purchasers" is defined in Section 13.3.1 hereof.
---------- --------------
"Qualified Officer" means, with respect to any entity, the chief financial
-----------------
officer, treasurer, chief accounting officer or controller of such entity if it
is a corporation or a limited liability company or of such entity's general
partner if it is a partnership.
-17-
<PAGE>
"Rate Option" means the Alternate Base Rate, the Adjusted LIBOR Rate or the
-----------
Absolute Rate (only as applicable to Competitive Bid Loans). The Rate Option in
effect on any date shall always be the Alternate Base Rate unless the Borrower
has properly selected the Adjusted LIBOR Rate pursuant to Section 2.11 hereof or
------------
a Competitive Bid Loan pursuant to Section 2.17 hereof.
------------
"Recourse Outstanding Indebtedness" means, as of any date of determination,
---------------------------------
(i) all Indebtedness (including Subordinated Indebtedness) of the Borrower then
outstanding with respect to which recourse is not limited substantially to the
proceeds of a specified asset or assets and which meets the requirements for
inclusion in one of the two categories defined as "Parent Company Debt" and
"Property Debt Carrying a Parent Company Guaranty of Repayment" in the
Consolidated Group's financial statements, plus (ii) without duplication, all
----
Indebtedness (including Subordinated Indebtedness) of any member of the
Consolidated Group which is guaranteed in whole or in part by the Borrower and
which consists of mortgages and bonds relating to operating properties of
subsidiary corporations which are subject to agreements with lenders requiring
the Borrower to provide support for operating and debt service costs, where
necessary, for defined periods or until specified conditions relating to the
operating results of the properties are met, as reflected in the Consolidated
Group's financial statements, plus (iii) without duplication, the Consolidated
----
Group Pro Rata Share of any Indebtedness of an Investment Affiliate which is
guaranteed in whole or in part by the Borrower if such Indebtedness would be
included under clause (ii) of this definition if the obligor on such
Indebtedness were a member of the Consolidated Group. The guidelines for
inclusion of various types of Indebtedness within the above categories in the
Consolidated Group's financial statements shall be those used for the most
recent annual financial statements of the Consolidated Group available as of the
Agreement Execution Date and such guidelines shall not be changed without the
prior written approval of the Administrative Agent, acting with the consent of
the Majority Lenders.
"Regulation D" means Regulation D of the Board of Governors of the Federal
------------
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"Reimbursement Obligations" means at any time, the aggregate of the
-------------------------
Obligations of the Borrower to the Lenders, the Issuing Bank and the
Administrative Agent in respect of all unreimbursed payments or disbursements
made by the Lenders, the Issuing Bank and the Administrative Agent under or in
respect of the Facility Letters of Credit.
"Reportable Event" means a reportable event as defined in Section 4043 of
----------------
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided that a failure to meet the minimum
funding standard of Section 412 of the Code and of Section 302 of ERISA shall be
a
-18-
<PAGE>
Reportable Event regardless of the issuance of any such waivers in accordance
with either Section 4043(a) of ERISA or Section 412(d) of the Code.
"Required Lenders" means Lenders in the aggregate having at least 66 2/3%
----------------
of the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding at least 66 2/3% of the aggregate unpaid
principal amount of the outstanding Advances.
"Reserve Requirement" means, with respect to a LIBOR Interest Period, the
-------------------
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"Restricted EBITDA" means, as of any date, that portion of Adjusted
-----------------
Combined EBITDA attributable to members of the Consolidated Group or Investment
Affiliates which is, as of such date, not permitted to be distributed or
dividended to holders of ownership interests in such entities as a result of any
contractual restriction on the payment or distribution of dividends or current
income.
"Retail Property" means a shopping center or other retail development
---------------
containing more than one retail tenant in which at least 90% of the Net
Operating Income from such center or development is attributable to retail uses.
"S&P" means Standard & Poor's Corporation and its successors.
---
"Secured Outstanding Indebtedness" means, as of any date of determination,
--------------------------------
the sum of (a) the aggregate principal amount of all Indebtedness (other than
Indebtedness under this Facility or the Bridge Facility) of the Consolidated
Group outstanding at such date which is secured by a Lien on any asset or
Capital Stock of any member of the Consolidated Group, including without
limitation loans secured by mortgages, stock, or partnership interests, plus (b)
----
the aggregate principal amount of all unsecured Indebtedness of any member of
the Consolidated Group other than the Borrower outstanding at such date, less
----
the aggregate principal amount of all Indebtedness of any member of the
Consolidated Group that is a single purpose, pass-through entity that serves
solely as a vehicle for the Borrower to obtain financing, without duplication of
any Indebtedness included under clause (a) of this definition and provided that,
with respect to unsecured Indebtedness of any member of the Consolidated Group
other than the Borrower, the amount of such unsecured Indebtedness which must be
included in Secured Outstanding Indebtedness shall not exceed the book value, as
determined under GAAP, of all assets of such member of the Consolidated Group
plus (c) the Consolidated Group's Pro Rata Share of any Indebtedness of an
- - ----
Investment Affiliate outstanding at such date which (i) is to a Person other
than a member of the Consolidated Group and (ii) with respect to any unsecured
Indebtedness of such Investment Affiliate, does not exceed the Consolidated
Group's Pro Rata share of the book value, as determined under GAAP, of all
assets of such Investment Affiliate, without duplication of any Indebtedness
included under clause (a) or clause (b) of this
-19-
<PAGE>
definition, provided, that Indebtedness for purposes of clauses (b) and (c) of
--------
this definition shall be deemed to include any current trade liabilities and
other accounts payable (other than Subordinated Indebtedness) of the members of
the Consolidated Group (other than the Borrower) and Investment Affiliates
described in such clauses (b) and (c) due to Persons other than members of the
Consolidated Group.
"Status" is defined on Exhibit A attached hereto and made a part hereof.
------ ---------
"Step-Up Date" means the first to occur of (i) the first anniversary of the
------------
Agreement Execution Date and (ii) the Bridge Facility Retirement Date.
"Subordinated Indebtedness" means any Indebtedness of a member of the
-------------------------
Consolidated Group which is subordinated to this Facility on terms satisfactory
to the Administrative Agent, but excluding any Indebtedness due from one member
of the Consolidated Group solely to one or more other members of the
Consolidated Group.
"Subsidiary" means as to any Person, a corporation, partnership or other
----------
entity of which shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by the Borrower, and provided such corporation, partnership or other entity is
consolidated with the Borrower for financial reporting purposes under GAAP.
"Syndication Agent" means Bankers Trust.
-----------------
"Total Outstanding Indebtedness" means, as of any date, (a) all Indebtedness
------------------------------
of the Consolidated Group then outstanding less (b) all "current liabilities" of
----
the Consolidated Group, as defined under GAAP to the extent not already excluded
in the definition of Indebtedness plus (c) the Consolidated Group's Pro Rata
----
Share of all Indebtedness (other than such "current liabilities") of Investment
Affiliates then outstanding and owing to parties other than the members of the
Consolidated Group, without duplication of any such items, provided, that
--------
Indebtedness for purposes of clauses (b) and (c) of this definition shall be
deemed to include any current trade liabilities and other accounts payable
(other than Subordinated Indebtedness) of the members of the Consolidated Group
(other than the Borrower) and Investment Affiliates described in such clauses
(b) and (c) due to Persons other than members of the Consolidated Group.
"Transferee" is defined in Section 13.4 hereof.
---------- ------------
"Transition Memorandum" is defined in Section 5.1(o) hereof.
--------------------- --------------
-20-
<PAGE>
"TrizecHahn Acquisition" means the acquisition by the Borrower of certain
----------------------
assets from TrizecHahn Centers Inc., pursuant to the TrizecHahn Agreement.
"TrizecHahn Agreement" means that certain Asset Purchase Agreement among the
--------------------
Borrower and Westfield America, Inc., as purchasers, and TrizecHahn Centers
Inc., as seller, dated as of April 6, 1998, pursuant to which the parties
thereto have agreed to consummate the TrizecHahn Acquisition.
"Undeveloped Land Holdings" means land owned by a member of the Consolidated
-------------------------
Group or an Investment Affiliate which either (i) is intended to be developed
for rental-income purposes (other than single family or multifamily residential
uses), (ii) is unimproved and not yet zoned for development, or (iii) is land
subdivided into parcels or lots having adequate access and utility service for
further development or sale as improved parcels or lots, but in each case upon
which no construction of foundations or other material on-site improvements have
begun.
"Unlimited Guarantor" means The Howard Research And Development Corporation,
-------------------
a Maryland corporation.
"Unlimited Guaranty" means that certain guaranty of even date herewith, in
------------------
the form of Exhibit D-1 hereto, made by the Unlimited Guarantor for the benefit
of the Lenders.
"Year 2000 Issues" means anticipated costs, problems and uncertainties
----------------
associated with the inability of certain computer applications to effectively
handle data including dates on and after January 1, 2000, as such inability
affects the business, operations and financial condition of any member of the
Consolidated Group and any of their material customers, suppliers and vendors.
"Year 2000 Program" is defined in Section 6.26.
----------------- ------------
The foregoing definitions shall be equally applicable to both the singular
and the plural forms of the defined terms.
1.2 Financial Standards. All financial computations required of a Person
-------------------
under this Agreement shall be made, and all financial information required under
this Agreement shall be prepared, in accordance with GAAP, except that if any
Person's financial statements are not audited, such Person's financial
statements shall be prepared in accordance with the same sound accounting
principles utilized in connection with the financial information submitted to
Lenders with respect to the Consolidated Group or the Properties in connection
with this Agreement and shall be certified by a Qualified Officer of such
Person.
-21-
<PAGE>
ARTICLE II
THE FACILITY
------------
2.1 The Facility. Subject to the terms and conditions of this Agreement
------------
and in reliance upon the representations and warranties of the Borrower
contained herein, Lenders agree to make Advances through the Administrative
Agent to the Borrower from time to time prior to the Maturity Date, provided
--------
that the making of any such Advance will not cause the then Allocated Facility
- - ----
Amount to exceed the then-current Aggregate Commitment. The Advances may be
ratable Alternate Base Rate Advances, ratable LIBOR Advances or non-pro rata
Competitive Bid Loans. Except as provided in Sections 2.17 hereof, each Lender
-------------
shall fund its Percentage of each such Advance and no Lender will be required to
fund any amounts which, when aggregated with such Lender's Percentage of (i) all
other Advances (other than Competitive Bid Loans) then outstanding and (ii) all
then-current Facility Letter of Credit Obligations would exceed such Lender's
then-current Commitment. This facility ("Facility") is a revolving credit
--------
facility and, subject to the provisions of this Agreement, the Borrower may
request Advances hereunder, repay such Advances and reborrow Advances at any
time prior to the Maturity Date. The Facility created by this Agreement, and
the Commitment of each Lender to lend hereunder, shall terminate on the Maturity
Date, unless sooner terminated in accordance with the terms of this Agreement.
2.2 Principal Payments and Extension Option. Any outstanding Advances
---------------------------------------
(other than Competitive Bid Loans) and all other unpaid Obligations shall be
paid in full by the Borrower on the Maturity Date. Each Competitive Bid Loan
shall be paid in full on the last day of the applicable Interest Period as
described in Section 2.17 below. The Original Maturity Date can be extended for
------------
a single extension period of one year upon notice to the Administrative Agent
not later than 90 days prior to the Original Maturity Date with respect to such
extension (the "Extension Notice"), if (i) no Default has occurred and is
continuing at the time of the Extension Notice and at the Original Maturity
Date, (ii) all of the covenants of the Borrower hereunder are being complied
with at the time of the Extension Notice and at the Original Maturity Date, and
(iii) the Borrower pays, along with the Extension Notice, an extension fee to
the Administrative Agent for the account of each Lender equal to 0.10% of the
then-current Commitment of such Lender.
2.3 Requests for Advances; Responsibility for Advances. Ratable Advances
--------------------------------------------------
shall be made available to Borrower by Administrative Agent in accordance with
Section 2.1 and Section 2.11(a) hereof. The obligation of each Lender to fund
- - ----------- ---------------
its Percentage of each ratable Advance shall be several and not joint.
2.4 Evidence of Credit Extensions. The Advances of each Lender
-----------------------------
outstanding at any time (other than Competitive Bid Loans) shall be evidenced by
the Notes. Each Note executed by the Borrower shall be in a maximum principal
amount equal to each Lender's Percentage of the Aggregate Commitment. Each
Lender shall record Advances (other than Competitive Bid
-22-
<PAGE>
Loans) and principal payments thereof on the schedule attached to its Note or,
at its option, in its records, and each Lender's record thereof shall be
conclusive absent Borrower furnishing to such Lender conclusive and irrefutable
evidence of an error made by such Lender with respect to that Lender's records.
Notwithstanding the foregoing, the failure to make, or an error in making, a
notation with respect to any Advance shall not limit or otherwise affect the
obligations of Borrower hereunder or under the Notes to pay the amount actually
owed by Borrower to Lenders.
2.5 Ratable and Non-Pro Rata Loans. Each Advance hereunder shall consist
------------------------------
of Loans made from the several Lenders ratably in proportion to their
Percentages, except for Competitive Bid Loans which may be made on a non-pro
rata basis by one or more of the Lenders in accordance with Section 2.17. The
------------
ratable Advances may be Alternate Base Rate Advances, LIBOR Advances or a
combination thereof, selected by the Borrower in accordance with Sections 2.10
-------------
and 2.11.
----
2.6 LIBOR Applicable Margins. The LIBOR Applicable Margin to be used in
------------------------
calculating the interest rate applicable to different types of LIBOR Advances
shall vary from time to time in accordance with the Borrower's long term senior
unsecured debt ratings as shown on Exhibit A.
---------
2.7 Facility Fee. The Borrower agrees to pay to the Administrative Agent
------------
for the account of each Lender a facility fee (the "Facility Fee") from the
------------
Agreement Execution Date to and including the Maturity Date, calculated on a per
diem basis at the Facility Fee Rate on the amount of such Lender's Commitment on
such day, payable quarterly in arrears on the last day of each calendar quarter
hereafter beginning September 30, 1998 and on the Maturity Date.
2.8 Other Fees. The Borrower shall pay the fee due to the Administrative
----------
Agent in connection with Competitive Bid Loans as described in Section 2.17.
------------
The Borrower agrees to pay all other fees payable to the Administrative Agent,
the Syndication Agent and the Arrangers pursuant to the Borrower's prior letter
agreements with them.
2.9 Minimum Amount of Each Advance. Each LIBOR Advance (other than
------------------------------
Competitive Bid Loans) shall be in the minimum amount of $5,000,000 (and in
multiples of $1,000,000 if in excess thereof), and each Alternate Base Rate
Advance shall be in the minimum amount of $1,000,000 (and in multiples of
$100,000 if in excess thereof), provided, however, that any Alternate Base Rate
Advance may be in the amount of the unused Aggregate Commitment.
2.10 Interest.
--------
(a) The outstanding principal balance under the Notes shall bear
interest from time to time at a rate per annum equal to:
-23-
<PAGE>
(i) the Alternate Base Rate; or
(ii) at the election of Borrower with respect to all or
portions of the Loans, the Adjusted LIBOR Rate.
(b) All interest shall be calculated for actual days elapsed on the
basis of a 360-day year. Interest accrued on each Alternate Base Rate Advance
shall be payable in arrears on (i) the first day of each calendar month,
commencing with the first such date to occur after the date hereof, and (ii) the
Maturity Date or such earlier date on which such Alternate Base Rate Advance is
due and payable. Interest accrued on each LIBOR Advance shall be payable in
arrears on the earliest of (i) the first day of each calendar quarter,
commencing with the first such date to occur after the date hereof, (ii) the
last day of the applicable LIBOR Interest Period, (iii) any date on which such
LIBOR Advance is prepaid, whether by acceleration or otherwise, and (iv) the
Maturity Date or such earlier date on which such LIBOR Advance is due and
payable. Interest shall not be payable for the day of any payment on the amount
paid if payment is received by Administrative Agent prior to noon (Chicago
time). If any payment of principal or interest under the Notes shall become due
on a day that is not a Business Day, such payment shall be made on the next
succeeding Business Day and, in the case of a payment of principal, such
extension of time shall be included in computing interest due in connection with
such payment; provided that for purposes of Section 10.1 hereof, any payments of
------------
principal described in this sentence shall be considered to be "due" on such
next succeeding Business Day.
2.11 Selection of Rate Options and LIBOR Interest Periods.
----------------------------------------------------
(a) Borrower, from time to time, may select the Rate Option and, in
the case of each LIBOR Advance, the commencement date (which shall be a Business
Day) and the length of the LIBOR Interest Period applicable to each LIBOR
Advance. Borrower shall give Administrative Agent irrevocable notice (a
"Borrowing Notice") not later than 11:00 a.m. (Chicago time) (i) at least one
----------------
Business Day prior to an Alternate Base Rate Advance, and (ii) at least three
(3) Business Days prior to a ratable LIBOR Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of
such Advance,
(ii) the aggregate amount of such Advance,
(iii) the type of Advance selected, and
(iv) in the case of each LIBOR Advance, the LIBOR Interest
Period applicable thereto.
The Borrower shall also deliver together with each Borrowing Notice the
compliance certificate required in Section 5.2 and otherwise comply with the
-----------
conditions set forth in
-24-
<PAGE>
Section 5.2 for Advances. Administrative Agent shall provide each Lender by
- - -----------
facsimile with a copy of each Borrowing Notice and compliance certificate on the
same Business Day it is received.
Not later than noon (Chicago time) on each Borrowing Date, each Lender
shall make available its Loan or Loans, in funds immediately available in
Chicago to the Administrative Agent. Administrative Agent will promptly make
the funds so received from the Lenders available to the Borrower.
(b) Administrative Agent shall, as soon as practicable after receipt
of a Borrowing Notice, determine the Adjusted LIBOR Rate applicable to the
requested ratable LIBOR Advance and inform Borrower and Lenders of the same.
Each determination of the Adjusted LIBOR Rate by Administrative Agent shall be
conclusive and binding upon Borrower in the absence of manifest error.
(c) If Borrower shall prepay a LIBOR Advance other than on the last
day of the LIBOR Interest Period applicable thereto, Borrower shall be
responsible to pay all amounts due to Lenders as required by Section 4.4 hereof.
-----------
The Lenders shall not be obligated to match fund their LIBOR Advances.
(d) As of the end of each LIBOR Interest Period selected for a
ratable LIBOR Advance, the interest rate on the LIBOR Advance will become the
Alternate Base Rate, unless Borrower has once again selected a LIBOR Interest
Period in accordance with the timing and procedures set forth in Section
-------
2.11(g).
- - -------
(e) The right of Borrower to select the Adjusted LIBOR Rate for an
Advance pursuant to this Agreement is subject to the availability to Lenders of
a similar option. If Administrative Agent determines that (i) deposits of
Dollars in an amount approximately equal to the LIBOR Advance for which the
Borrower wishes to select the Adjusted LIBOR Rate are not generally available at
such time in the London interbank eurodollar market, or (ii) the rate at which
the deposits described in subsection (i) herein are being offered will not
adequately and fairly reflect the costs to Lenders of maintaining an Adjusted
LIBOR Rate on an Advance or of funding the same in such market for such LIBOR
Interest Period, or (iii) reasonable means do not exist for determining an
Adjusted LIBOR Rate, or (iv) the Adjusted LIBOR Rate would be in excess of the
maximum interest rate which Borrower may by law pay, then in any of such events,
Administrative Agent shall so notify Borrower and Lenders and such Advance shall
bear interest at the Alternate Base Rate.
(f) In no event may Borrower elect a LIBOR Interest Period which
would extend beyond the then-current Maturity Date at the time of such election.
Unless the Administrative Agent agrees thereto, in no event may Borrower have
more than six (6) different LIBOR Interest Periods for LIBOR Advances
outstanding at any one time.
-25-
<PAGE>
(g) Conversion and Continuation.
---------------------------
(i) Borrower may elect from time to time, subject to the other
provisions of this Section 2.11, to convert all or any part of a
------------
ratable Advance into any other type of Advance; provided that any
conversion of a ratable LIBOR Advance shall be made on, and only on,
the last day of the LIBOR Interest Period applicable thereto.
(ii) Alternate Base Rate Advances shall continue as Alternate
Base Rate Advances unless and until such Alternate Base Rate Advances
are converted into ratable LIBOR Advances pursuant to a
Conversion/Continuation Notice from Borrower in accordance with
Section 2.11(g)(iv). Ratable LIBOR Advances shall continue until the
-------------------
end of the then applicable LIBOR Interest Period therefor, at which
time each such LIBOR Advance shall be automatically converted into an
Alternate Base Rate Advance unless the Borrower shall have given the
Administrative Agent a Conversion/Continuation Notice in accordance
with Section 2.11(g)(iv) requesting that, at the end of such LIBOR
-------------------
Interest Period, such LIBOR Advance continue as a ratable LIBOR
Advance for the same or another LIBOR Interest Period.
(iii) Notwithstanding anything to the contrary contained in
Sections 2.11(g)(i) or (g)(ii), no Advance may be converted into a
------------------- -------
LIBOR Advance or continued as a LIBOR Advance (except with the consent
of the Majority Lenders) when any Monetary Default or Event of Default
has occurred and is continuing.
(iv) The Borrower shall give the Administrative Agent
irrevocable notice (a "Conversion/Continuation Notice") of each
------------------------------
conversion of an Advance or continuation of a LIBOR Advance not later
than 11:00 a.m. (Chicago time) on the Business Day immediately
preceding the date of the requested conversion, in the case of a
conversion into an Alternate Base Rate Advance, or 11:00 a.m. (Chicago
time) at least three (3) Business Days prior to the date of the
requested conversion or continuation, in the case of a conversion into
or continuation of a ratable LIBOR Advance, specifying: (1) the
requested date (which shall be a Business Day) of such conversion or
continuation; (2) the amount and type of the Advance to be converted
or continued; and (3) the amounts and type(s) of Advance(s) into which
such Advance is to be converted or continued and, in the case of a
conversion into or continuation of a ratable LIBOR Advance, the
duration of the LIBOR Interest Period applicable thereto.
2.12 Method of Payment. All payments of the Obligations hereunder shall be
-----------------
made, without set-off, deduction, or counterclaim, in immediately available
funds to Administrative Agent at Administrative Agent's address specified
herein, or at any other Lending Installation
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<PAGE>
of Administrative Agent specified in writing by Administrative Agent to
Borrower, by noon (local time) on the date when due and shall be applied ratably
by Administrative Agent among the Lenders. All payments received by the
Administrative Agent from the Borrower for the account of the Lenders shall be
disbursed to the applicable Lenders no later than the next Business Day
following the day such payment is received in good funds by the Administrative
Agent. If payments received by the Administrative Agent from the Borrower are
not disbursed to the applicable Lenders the same day as they are received, such
funds shall be invested overnight by the Administrative Agent and each Lender
will receive its Percentage of any interest so earned. The Lenders acknowledge
that the Administrative Agent does not guarantee any particular level of return
on the overnight funds and that the Administrative Agent will invest such funds
as it deems prudent from time to time.
2.13 Default. During the continuance of a Monetary Default or an Event of
-------
Default, at the election of the Majority Lenders, by notice to Borrower,
outstanding Advances shall bear interest at the applicable Default Rates until
such Monetary Default or Event of Default ceases to exist or the Obligations are
paid in full.
2.14 Lending Installations. Each Lender may book its Advances at any
---------------------
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Notes shall be deemed held by each Lender for
the benefit of such Lending Installation. Each Lender may, by written or telex
notice to the Administrative Agent and Borrower, designate a Lending
Installation through which Advances will be made by it and for whose account
payments are to be made.
2.15 Non-Receipt of Funds by Administrative Agent. Unless Borrower or a
--------------------------------------------
Lender, as the case may be, notifies Administrative Agent prior to the date on
which it is scheduled to make payment to Administrative Agent of (i) in the case
of a Lender, its portion of an Advance, or (ii) in the case of Borrower,
principal, interest or fees to the Administrative Agent for the account of the
Lenders, that it does not intend to make such payment, Administrative Agent may
assume that such payment has been made. Administrative Agent may, but shall not
be obligated to, make the amount of such payment available to the intended
recipient in reliance upon such assumption. If such Lender or Borrower, as the
case may be, has not in fact made such payment to Administrative Agent, the
recipient of such payment shall, on demand by Administrative Agent, repay to
Administrative Agent the amount so made available together with interest thereon
in respect of each day during the period commencing on the date such amount was
so made available by Administrative Agent until the date Administrative Agent
recovers such amount at a rate per annum equal to (i) in the case of payment by
a Lender, the Federal Funds Effective Rate (as determined by Administrative
Agent) for such day or (ii) in the case of payment by Borrower, the interest
rate applicable to the relevant Advance.
-27-
<PAGE>
2.16 Application of Moneys Received. All moneys collected or received by
------------------------------
the Administrative Agent on account of the Facility directly or indirectly,
shall be applied in the following order of priority:
(i) to the payment of all reasonable costs incurred in the
collection of such moneys of which the Administrative Agent shall
have given notice to the Borrower;
(ii) to the reimbursement of any yield protection due to
any of the Lenders in accordance with Section 4.1;
-----------
(iii) to the payment of any fee due pursuant to Section
-------
3.8(b) in connection with the issuance of a Facility Letter of Credit
------
to the Issuing Bank, to the payment of the Facility Fee and Facility
Letter of Credit Fee to the Lenders, if then due, and to the payment
of all fees to the Administrative Agent and Competitive Bid Option
Agent, on a pro rata basis;
(iv) first to interest until paid in full and then to
principal for all Lenders (other than Defaulting Lenders) (a) as
allocated by the Borrower (unless an Event of Default exists) between
Competitive Bid Loans and ratable Advances (the amount allocated to
ratable Advances to be distributed on a pro rata basis in accordance
with the respective Percentages of the Lenders) or (b) if an Event of
Default exists, on a pro rata basis in accordance with the respective
Percentages of the Lenders;
(v) any other sums due to the Administrative Agent or any
Lender under any of the Loan Documents; and
(vi) to the payment of any sums due to each Defaulting
Lender as their respective Percentages appear (provided that
Administrative Agent shall have the right to set-off against such
sums any amounts due from each Defaulting Lender).
2.17 Competitive Bid Loans.
---------------------
(a) Competitive Bid Option. From and after the Bridge Facility
----------------------
Retirement Date, in addition to ratable Advances pursuant to Section 2.5, but
-----------
subject to the terms and conditions of this Agreement (including, without
limitation the limitation set forth in Section 2.1 as to the maximum Allocated
-----------
Facility Amount), the Borrower may, as set forth in this Section 2.17, request
------------
the Lenders, prior to the Maturity Date, to make offers to make Competitive Bid
Loans to the Borrower. Each Lender may, but shall have no obligation to, make
such offers and the Borrower may, but shall have no obligation to, accept any
such offers
-28-
<PAGE>
in the manner set forth in this Section 2.17. Competitive Bid Loans shall be
------------
evidenced by the Competitive Bid Notes.
(b) Competitive Bid Quote Request. When the Borrower wishes to
-----------------------------
request offers to make Competitive Bid Loans under this Section 2.17, it shall
------------
transmit to the Competitive Bid Option Agent by telecopy a Competitive Bid Quote
Request substantially in the form of Exhibit C-1 hereto so as to be received no
-----------
later than (i) 10:00 a.m. (Chicago time) at least four (4) Business Days prior
to the Borrowing Date proposed therein, in the case of a request for a
Competitive LIBOR Margin or (ii) 9:00 a.m. (Chicago time) at least one Business
Day prior to the Borrowing Date proposed therein, in the case of a request for
an Absolute Rate specifying:
(i) the proposed Borrowing Date for the proposed
Competitive Bid Loan,
(ii) the requested aggregate principal amount of such
Competitive Bid Loan,
(iii) whether the Competitive Bid Quotes requested are to
set forth a Competitive LIBOR Margin or an Absolute Rate, or both, and
(iv) the LIBOR Interest Period, if a Competitive LIBOR
Margin is requested, or the Absolute Interest Period, if an Absolute
Rate is requested.
The Borrower may request offers to make Competitive Bid Loans for more than one
(but not more than five) Interest Period in a single Competitive Bid Quote
Request. No Competitive Bid Quote Request shall be given if two (2) other
Competitive Bid Quote Requests have already been made during the preceding 30
days. A Competitive Bid Quote Request that does not conform substantially to
the form of Exhibit C-1 hereto shall be rejected, and the Competitive Bid Option
-----------
Agent shall promptly notify the Borrower of such rejection by telecopy.
(c) Invitation for Competitive Bid Quotes. Promptly after receipt of
-------------------------------------
a Competitive Bid Quote Request that is not rejected pursuant to Section
-------
2.17(b), the Competitive Bid Option Agent shall send to each of the Lenders by
telecopy an Invitation for Competitive Bid Quotes substantially in the form of
Exhibit C-2 hereto, which shall constitute an invitation by the Borrower to each
- - -----------
Lender to submit Competitive Bid Quotes offering to make the Competitive Bid
Loans to which such Competitive Bid Quote Request relates in accordance with
this Section 2.17.
------------
-29-
<PAGE>
(d) Submission and Contents of Competitive Bid Quotes.
-------------------------------------------------
(i) Each Lender may, in its sole discretion, submit a
Competitive Bid Quote containing an offer or offers to make
Competitive Bid Loans in response to any Invitation for Competitive
Bid Quotes. Each Competitive Bid Quote must comply with the
requirements of this Section 2.17(d) and must be submitted to the
---------------
Competitive Bid Option Agent by telex or telecopy at its offices not
later than (a) 2:00 p.m. (Chicago time) at least four (4) Business
Days prior to the proposed Borrowing Date, in the case of a request
for a Competitive LIBOR Margin or (b) 9:00 a.m. (Chicago time) on the
proposed Borrowing Date, in the case of a request for an Absolute Rate
(or, in either case upon reasonable prior notice to the Lenders, such
other time and rate as the Borrower and the Competitive Bid Option
Agent may agree); provided that Competitive Bid Quotes submitted by
--------
First Chicago may only be submitted if First Chicago notifies the
Borrower of the terms of the offer or offers contained therein no
later than 30 minutes prior to the latest time at which the relevant
Competitive Bid Quotes must be submitted by the other Lenders.
Subject to the Borrower's compliance with all other conditions to
disbursement herein, any Competitive Bid Quote so made shall be
irrevocable except with the written consent of the Competitive Bid
Option Agent given on the instructions of the Borrower.
(ii) Each Competitive Bid Quote shall be in substantially
the form of Exhibit C-3 hereto and shall in any case specify:
-----------
(a) the proposed Borrowing Date and the proposed
Interest Period, which shall be the same as that set forth in the
applicable Invitation for Competitive Bid Quotes,
(b) the principal amount of the Competitive Bid Loan
for which each such offer is being made, which principal amount
(1) may be greater than, less than or equal to the Commitment of
the quoting Lender, (2) must be at least $10,000,000 and an
integral multiple of $1,000,000, and (3) may not exceed the
principal amount of Competitive Bid Loans for which offers are
requested,
(c) as applicable, the Competitive LIBOR Margin and
Absolute Rate offered for each such Competitive Bid Loan, and
(d) the identity of the quoting Lender.
(iii) The Competitive Bid Option Agent shall reject any
Competitive Bid Quote that:
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<PAGE>
(a) is not substantially in the form of Exhibit C-3
-----------
hereto or does not specify all of the information required by
Section 2.17(d)(ii),
-------------------
(b) contains a minimum amount or other qualifying,
conditional or similar language, other than any such language
contained in Exhibit C-3 hereto,
-----------
(c) proposes terms other than or in addition to those
set forth in the applicable Invitation for Competitive Bid
Quotes, or
(d) arrives after the time set forth in Section
-------
2.17(d)(i).
----------
If any Competitive Bid Quote shall be rejected pursuant to this
Section 2.17(d)(iii), then the Competitive Bid Option Agent shall
--------------------
notify the relevant Lender of such rejection as soon as practical.
(e) Notice to Borrower. The Competitive Bid Option Agent shall
------------------
promptly notify the Borrower of the terms (i) of any Competitive Bid Quote
submitted by a Lender that is in accordance with Section 2.17(d) and (ii) of any
---------------
Competitive Bid Quote that amends, modifies or is otherwise inconsistent with a
previous Competitive Bid Quote submitted by such Lender with respect to the same
Competitive Bid Quote Request. Any such subsequent Competitive Bid Quote shall
be disregarded by the Competitive Bid Option Agent unless such subsequent
Competitive Bid Quote specifically states that it is submitted solely to correct
a manifest error in such former Competitive Bid Quote. The Competitive Bid
Option Agent's notice to the Borrower shall specify the aggregate principal
amount of Competitive Bid Loans for which offers have been received for each
Interest Period specified in the related Competitive Bid Quote Request and the
respective principal amounts and Competitive LIBOR Margins or Absolute Rate, as
the case may be, so offered.
(f) Acceptance and Notice by Borrower. Not later than (i) 10:00 a.m.
---------------------------------
(Chicago time) at least three (3) Business Days prior to the proposed Borrowing
Date in the case of a request for a Competitive LIBOR Margin or (ii) 10:00 a.m.
(Chicago time) on the proposed Borrowing Date, in the case of a request for an
Absolute Rate (or, in either case upon reasonable prior notice to the Lenders,
such other time and date as the Borrower and the Competitive Bid Option Agent
may agree), the Borrower shall notify the Competitive Bid Option Agent of its
acceptance or rejection of the offers so notified to it pursuant to Section
-------
2.17(e); provided, however, that the failure by the Borrower to give such notice
- - ------- -------- -------
to the Competitive Bid Option Agent shall be deemed to be a rejection of all
such offers. In the case of acceptance, such notice (a "Competitive Bid
---------------
Borrowing Notice") shall specify the aggregate principal amount of offers for
- - ----------------
each Interest Period that are accepted. The Borrower may accept any Competitive
Bid Quote in whole or in part (subject to the terms of Section 2.17(d)(iii)),
--------------------
provided that:
- - --------
-31-
<PAGE>
(i) the aggregate principal amount of all Competitive Bid
Loans to be disbursed on a given Borrowing Date may not exceed the
applicable amount set forth in the related Competitive Bid Quote
Request,
(ii) acceptance of offers may only be made on the basis of
ascending Competitive LIBOR Margins or Absolute Rates, as the case may
be, and
(iii) the Borrower may not accept any offer that is
described in Section 2.17(d)(iii) or that otherwise fails to comply
--------------------
with the requirements of this Agreement.
(g) Allocation by Administrative Agent. If offers are made by two
----------------------------------
(2) or more Lenders with the same Competitive LIBOR Margins or Absolute Rates,
as the case may be, for a greater aggregate principal amount than the amount in
respect of which offers are accepted for the related Interest Period, the
principal amount of Competitive Bid Loans in respect of which such offers are
accepted shall be allocated by the Competitive Bid Option Agent among such
Lenders as nearly as possible (in such multiples, not greater than $1,000,000,
as the Competitive Bid Option Agent may deem appropriate) in proportion to the
aggregate principal amount of such offers. Allocations by the Competitive Bid
Option Agent of the amounts of Competitive Bid Loans shall be conclusive in the
absence of manifest error. The Competitive Bid Option Agent shall promptly, but
in any event on the same Business Day, notify the Administrative Agent and each
Lender of its receipt of a Competitive Bid Borrowing Notice and the principal
amounts of the Competitive Bid Loans allocated to each participating Lender.
(h) Administration Fee. The Borrower hereby agrees to pay to the
------------------
Competitive Bid Option Agent an administration fee of $1,000 per each
Competitive Bid Quote Request transmitted by the Borrower to the Competitive Bid
Option Agent pursuant to Section 2.17(b). Such administration fee shall be
---------------
payable monthly in arrears on the first Business Day of each month and on the
Maturity Date (or such earlier date on which the Aggregate Commitment shall
terminate or be cancelled) for any period then ending for which such fee, if
any, shall not have been theretofore paid.
(i) Other Terms. Any Competitive Bid Loan shall not reduce the
-----------
Commitment of the Lender making such Competitive Bid Loan, and each such Lender
shall continue to be obligated to fund its full percentage of all pro rata
Advances under the Facility. In no event shall the aggregate amount of all
Competitive Bid Loans at any time exceed fifty percent (50%) of the then
Aggregate Commitment. Competitive Bid Loans may not be continued and, if not
repaid at the end of the Interest Period applicable thereto, shall (subject to
the conditions set forth in this Agreement) be replaced by new Competitive Bid
Loans made in accordance with this Section 2.17 or by ratable Advances in
------------
accordance with Section 2.11.
------------
-32-
<PAGE>
2.18 Voluntary Reduction of Aggregate Commitment Amount. Upon at least
--------------------------------------------------
three (3) Business Days prior irrevocable written notice (or telephonic notice
promptly confirmed in writing) to the Administrative Agent, Borrower shall have
the right, without premium or penalty, to terminate the Aggregate Commitment in
whole or in part provided that (a) Borrower may not reduce the Aggregate
Commitment below the Allocated Facility Amount at the time of such requested
reduction, and (b) any such partial termination shall be in the minimum
aggregate amount of Ten Million Dollars ($10,000,000.00) or any integral
multiple of Ten Million Dollars ($10,000,000.00) in excess thereof. Any partial
termination of the Aggregate Commitment shall be applied pro rata to each
Lender's Commitment.
2.19 The Pledge. The Borrower and The Hughes Corporation have executed
----------
and delivered the Pledge to the Lenders and delivered the Pledged Stock to the
Administrative Agent for the purpose of providing further security for the full
payment and performance of all of the Obligations. The Pledge shall remain in
full force and effect until such time as the "Limitation End Date" (as defined
in Paragraph 1 of the Limited Guaranty) has occurred and the Limited Guarantors
-----------
have become fully liable under the Limited Guaranty. At the request of the
Administrative Agent made after the Limitation End Date has occurred, the
Lenders shall, at the Borrower's sole cost and expense, execute and deliver to
the Borrower an instrument terminating and releasing the Pledge, and the
Administrative Agent shall deliver to the Borrower all of the Pledged Stock.
ARTICLE III
THE LETTER OF CREDIT SUBFACILITY
--------------------------------
3.1 Obligation to Issue. Subject to the terms and conditions of this
-------------------
Agreement and in reliance upon the representations and warranties of the
Borrower and the Guarantors herein set forth, First Chicago hereby agrees to
issue for the account of Borrower, as an "Issuing Bank", one or more Facility
Letters of Credit in accordance with this Article III, from time to time during
-----------
the period commencing on the Agreement Execution Date and ending on a date one
Business Day prior to the Maturity Date. The Issuing Bank shall be First
Chicago. The Initial Facility Letters of Credit previously issued for the
benefit of Borrower by First Chicago, one of the Lenders, are hereby
acknowledged to be Facility Letters of Credit properly issued hereunder as the
Agreement Execution Date by an Issuing Bank entitled to all the rights and
benefits hereunder (other than payment of an Issuance Fee) and with respect to
which each Lender will receive Facility Letter of Credit Fees while such
Facility Letters of Credit remain outstanding and the Borrower will pay all
Reimbursement Obligations related thereto.
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<PAGE>
3.2 Types and Amounts. The Issuing Bank shall not have any obligation to:
-----------------
(i) issue any Facility Letter of Credit if the aggregate
maximum amount then available for drawing under Letters of Credit
issued by such Issuing Bank, after giving effect to the Facility
Letter of Credit requested hereunder, shall exceed any "loans-to-a-
single-borrower" or other lending limit imposed by law or regulation
upon such Issuing Bank;
(ii) issue any Facility Letter of Credit if, after giving
effect thereto, either (1) the then applicable Allocated Facility
Amount would exceed the then current Aggregate Commitment, or (2) the
Facility Letter of Credit Obligations would exceed $25,000,000; or
(iii) issue any Facility Letter of Credit having an
expiration date, or containing an automatic extension provision to
extend such date, to a date which is after the Business Day
immediately preceding the Maturity Date.
3.3 Conditions. In addition to being subject to the satisfaction of the
----------
conditions contained in Article V hereof, the obligation of the Issuing Bank to
---------
issue any Facility Letter of Credit is subject to the satisfaction in full of
the following conditions:
(i) the Borrower shall have delivered to the Issuing Bank
at such times and in such manner as the Issuing Bank may reasonably
prescribe such documents and materials as may be reasonably required
pursuant to the terms of the proposed Facility Letter of Credit (it
being understood that if any inconsistency exists between such
documents and the Loan Documents, the terms of the Loan Documents
shall control) and the proposed Facility Letter of Credit shall be
reasonably satisfactory to the Issuing Bank as to form and content;
(ii) as of the date of issuance, no order, judgment or
decree of any court, arbitrator or governmental authority shall
purport by its terms to enjoin or restrain the Issuing Bank from
issuing the requested Facility Letter of Credit and no law, rule or
regulation applicable to the Issuing Bank and no request or directive
(whether or not having the force of law) from any governmental
authority with jurisdiction over the Issuing Bank shall prohibit or
request that the Issuing Bank refrain from the issuance of Letters of
Credit generally or the issuance of the requested Facility Letter or
Credit in particular; and
(iii) there shall not exist any Default or Event of
Default.
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<PAGE>
3.4 Procedure for Issuance of Facility Letters of Credit.
----------------------------------------------------
(a) Borrower shall give the Issuing Bank and the Administrative Agent
at least two (2) Business Days' prior written notice of any requested issuance
of a Facility Letter of Credit under this Agreement (a "Letter of Credit
----------------
Request"), a copy of which shall be sent immediately to all Lenders (except
that, in lieu of such written notice, the Borrower may give the Issuing Bank and
the Administrative Agent telephonic notice of such request if confirmed in
writing by delivery to the Issuing Bank and the Administrative Agent (i)
immediately (A) of a telecopy of the written notice required hereunder which has
been signed by an authorized officer, or (B) of a telex containing all
information required to be contained in such written notice and (ii) promptly
(but in no event later than the requested date of issuance) of the written
notice required hereunder containing the original signature of an authorized
officer); such notice shall be irrevocable and shall specify:
(1) the stated amount of the Facility Letter of Credit requested (which
stated amount shall not be less than $50,000);
(2) the effective date (which day shall be a Business Day) of issuance of
such requested Facility Letter of Credit (the "Issuance Date");
-------------
(3) the date on which such requested Facility Letter of Credit is to
expire;
(4) the purpose for which such Facility Letter of Credit is to be issued;
(5) the Person for whose benefit the requested Facility Letter of Credit
is to be issued; and
(6) any special language required to be included in the Facility Letter of
Credit.
At the time such request is made, the Borrower shall also provide the
Administrative Agent and the Issuing Bank with a copy of the form of the
Facility Letter of Credit that the Borrower is requesting be issued. Such
notice, to be effective, must be received by such Issuing Bank and the
Administrative Agent not later than 2:00 p.m. (Chicago time) on the last
Business Day on which notice can be given under this Section 3.4(a).
--------------
(b) Subject to the terms and conditions of this Article III and
-----------
provided that the applicable conditions set forth in Article V hereof have been
---------
satisfied, the Issuing Bank shall, on the Issuance Date, issue a Facility Letter
of Credit on behalf of the Borrower in accordance with the Letter of Credit
Request and the Issuing Bank's usual and customary business practices unless the
Issuing Bank has actually received (i) written notice from the Borrower
specifically revoking the Letter of Credit Request with respect to such Facility
Letter of Credit, (ii) written notice from a Lender, which complies with the
provisions of
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<PAGE>
Section 3.6(a), or (iii) written or telephonic notice from the Administrative
- - --------------
Agent stating that the issuance of such Facility Letter of Credit would violate
Section 3.2.
- - -----------
(c) The Issuing Bank shall give the Administrative Agent (who shall
promptly notify Lenders) and the Borrower written or telex notice, or telephonic
notice confirmed promptly thereafter in writing, of the issuance of a Facility
Letter of Credit (the "Issuance Notice").
---------------
(d) The Issuing Bank shall not extend or amend any Facility Letter of
Credit unless the requirements of this Section 3.4 are met as though a new
-----------
Facility Letter of Credit was being requested and issued.
3.5 Reimbursement Obligations; Duties of Issuing Bank.
-------------------------------------------------
(a) The Issuing Bank shall promptly notify the Borrower and the
Administrative Agent (who shall promptly notify Lenders) of any draw under a
Facility Letter of Credit. Any such draw shall constitute an Advance of the
Facility in the amount of the Reimbursement Obligation with respect to such
Facility Letter of Credit and shall bear interest from the date of the relevant
drawing(s) under the pertinent Facility Letter of Credit at the Alternate Base
Rate unless a different rate is selected by Borrower in accordance with Section
-------
2.11 hereof; provided that if a Monetary Default or an Event of Default exists
- - ----
at the time of any such drawing(s), then the Borrower shall reimburse the
Issuing Bank for drawings under a Facility Letter of Credit issued by the
Issuing Bank no later than the next succeeding Business Day after the payment by
the Issuing Bank and until repaid such Reimbursement Obligation shall bear
interest at the Default Rate.
(b) Any action taken or omitted to be taken by the Issuing Bank under
or in connection with any Facility Letter of Credit, if taken or omitted in the
absence of willful misconduct or gross negligence, shall not put the Issuing
Bank under any resulting liability to any Lender or, provided that such Issuing
Bank has complied with the procedures specified in Section 3.4 and such Lender
-----------
has not given a notice contemplated by Section 3.6(a) that continues in full
--------------
force and effect, relieve that Lender of its obligations hereunder to the
Issuing Bank. In determining whether to pay under any Facility Letter of Credit,
the Issuing Bank shall have no obligation relative to the Lenders other than to
confirm that any documents required to be delivered under such Letter of Credit
appear to have been delivered in compliance, and that they appear to comply on
their face, with the requirements of such Letter of Credit.
3.6 Participation.
-------------
(a) Immediately upon issuance by the Issuing Bank of any Facility
Letter of Credit in accordance with the procedures set forth in Section 3.4,
-----------
each Lender shall be deemed to have irrevocably and unconditionally purchased
and received from the Issuing
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<PAGE>
Bank, without recourse, representation or warranty except as expressly provided
for herein, an undivided interest and participation equal to such Lender's
Percentage in such Facility Letter of Credit (including, without limitation, all
obligations of the Borrower with respect thereto) and all related rights
hereunder and under the Guaranty and other Loan Documents; provided that a
--------
Letter of Credit issued by the Issuing Bank shall not be deemed to be a Facility
Letter of Credit for purposes of this Section 3.6 if the Issuing Bank shall have
-----------
received written notice from any Lender on or before the Business Day prior to
the date of its issuance of such Letter of Credit that one or more of the
conditions contained in Section 5.2 is not then satisfied, and in the event the
-----------
Issuing Bank receives such a notice it shall have no further obligation to issue
any Facility Letter of Credit until such notice is withdrawn by that Lender or
the Issuing Bank receives a notice from the Administrative Agent that such
condition has been effectively waived in accordance with the provisions of this
Agreement. Each Lender's obligation to make further Loans to Borrower (other
than any payments such Lender is required to make under subparagraph (b) below)
or to purchase an interest from the Issuing Bank in any subsequent letters of
credit issued by the Issuing Bank on behalf of Borrower shall be reduced by such
Lender's Percentage of the undrawn portion of each Facility Letter of Credit
outstanding.
(b) In the event that the Issuing Bank makes any payment under any
Facility Letter of Credit and the Borrower shall not have repaid such amount to
the Issuing Bank pursuant to Section 3.7 hereof, the Issuing Bank shall promptly
-----------
notify the Administrative Agent, which shall promptly notify each Lender of such
failure, and each Lender shall promptly and unconditionally pay to the
Administrative Agent for the account of the Issuing Bank the amount of such
Lender's Percentage of the unreimbursed amount of such payment, and the
Administrative Agent shall promptly pay such amount to the Issuing Bank. A
Lender's payments of its Percentage of such Reimbursement Obligation as
aforesaid shall be deemed to be a Loan by such Lender and shall constitute
outstanding principal under such Lender's Note. The failure of any Lender to
make available to the Administrative Agent for the account of the Issuing Bank
its Percentage of the unreimbursed amount of any such payment shall not relieve
any other Lender of its obligation hereunder to make available to the
Administrative Agent for the account of such Issuing Bank its Percentage of the
unreimbursed amount of any payment on the date such payment is to be made, but
no Lender shall be responsible for the failure of any other Lender to make
available to the Administrative Agent its Percentage of the unreimbursed amount
of any payment on the date such payment is to be made. Any Lender which fails
to make any payment required pursuant to this Section 3.6(b) shall be deemed to
--------------
be a Defaulting Lender hereunder.
(c) Whenever the Issuing Bank receives a payment on account of a
Reimbursement Obligation, including any interest thereon, the Issuing Bank shall
promptly pay to the Administrative Agent and the Administrative Agent shall
promptly pay to each Lender which has funded its participating interest therein,
in immediately available funds, an amount equal to such Lender's Percentage
thereof.
-37-
<PAGE>
(d) Upon the request of the Administrative Agent or any Lender, the
Issuing Bank shall furnish to such Administrative Agent or Lender copies of any
Facility Letter of Credit to which the Issuing Bank is party and such other
documentation as may reasonably be requested by the Administrative Agent or
Lender.
(e) The obligations of a Lender to make payments to the
Administrative Agent for the account of the Issuing Bank with respect to a
Facility Letter of Credit shall be absolute, unconditional and irrevocable, not
subject to any counterclaim, set-off, qualification or exception whatsoever
other than a failure of any such Issuing Bank to comply with the terms of this
Agreement relating to the issuance of such Facility Letter of Credit, and such
payments shall be made in accordance with the terms and conditions of this
Agreement under all circumstances.
3.7 Payment of Reimbursement Obligations.
------------------------------------
(a) The Borrower agrees to pay to the Administrative Agent for the
account of the Issuing Bank the amount of all Advances for Reimbursement
Obligations, interest and other amounts payable to the Issuing Bank under or in
connection with any Facility Letter of Credit when due, irrespective of any
claim, set-off, defense or other right which the Borrower may have at any time
against any Issuing Bank or any other Person, under all circumstances, including
without limitation any of the following circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or other
right which the Borrower may have at any time against a beneficiary
named in a Facility Letter of Credit or any transferee of any Facility
Letter of Credit (or any Person for whom any such transferee may be
acting), the Administrative Agent, the Issuing Bank, any Lender, or
any other Person, whether in connection with this Agreement, any
Facility Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transactions between
the Borrower and the beneficiary named in any Facility Letter of
Credit);
(iii) any draft, certificate or any other document
presented under the Facility Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect of any statement
therein being untrue or inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan
Documents; or
-38-
<PAGE>
(v) the occurrence of any Default or Event of Default.
(b) In the event any payment by the Borrower received by the Issuing
Bank or the Administrative Agent with respect to a Facility Letter of Credit and
distributed by the Administrative Agent to the Lenders on account of their
participations is thereafter set aside, avoided or recovered from the
Administrative Agent or Issuing Bank in connection with any receivership,
liquidation, reorganization or bankruptcy proceeding, each Lender which received
such distribution shall, upon demand by the Administrative Agent, contribute
such Lender's Percentage of the amount set aside, avoided or recovered together
with interest at the rate required to be paid by the Issuing Bank or the
Administrative Agent upon the amount required to be repaid by the Issuing Bank
or the Administrative Agent.
3.8 Compensation for Facility Letters of Credit.
-------------------------------------------
(a) The Borrower shall pay to the Administrative Agent, for the
ratable account of the Lenders (including the Issuing Bank with respect to such
Facility Letter of Credit), based upon the Lenders' respective Percentages, a
per annum fee (the "Facility Letter of Credit Fee") with respect to each
-----------------------------
Facility Letter of Credit that is equal to the LIBOR Applicable Margin in effect
from time to time times the amount of such Facility Letters of Credit from time
to time. The Facility Letter of Credit Fee relating to any Facility Letter of
Credit shall be due and payable in arrears on the first Business Day of each
calendar quarter following the issuance of any Facility Letter of Credit and, to
the extent any such fees are then due and unpaid, on the Maturity Date. The
Administrative Agent shall promptly remit such Facility Letter of Credit Fees,
when paid, to the other Lenders in accordance with their Percentages thereof.
The Borrower shall not have any liability to any Lender for the failure of the
Administrative Agent to promptly deliver funds to any such Lender and shall be
deemed to have made all such payments on the date the respective payment is made
by the Borrower to the Administrative Agent, provided such payment is received
by the time specified in Section 2.12 hereof.
------------
(b) The Borrower shall pay to the Issuing Bank solely for the Issuing
Bank's own account an issuance fee (the "Issuance Fee") with respect to each
------------
Facility Letter of Credit that is equal to the product of (i) 0.10% per annum,
(ii) the face amount of such Facility Letter of Credit and (iii) the number of
years and/or partial years that such Facility Letter of Credit is outstanding
expressed as a decimal. The Issuance Fee relating to the period from the
issuance of any Facility Letter of Credit to any stated expiration date thereof
shall be due and payable upon the issuance of such Facility Letter of Credit and
an additional Issuance Fee shall be due and payable upon the Effective Date of
any stated extension period thereof. The Issuing Bank shall also be entitled to
receive its reasonable out-of-pocket costs and the Issuing Bank's standard
charges of issuing, amending and servicing Facility Letters of Credit and
processing draws thereunder.
-39-
<PAGE>
3.9 Letter of Credit Collateral Account. The Borrower hereby agrees that
-----------------------------------
it will, until the Maturity Date, maintain a special collateral account (the
"Letter of Credit Collateral Account") at the Administrative Agent's office at
- - ------------------------------------
the address specified pursuant to Article XV, in the name of the Borrower but
----------
under the sole dominion and control of the Administrative Agent, for the benefit
of the Lenders, and in which the Borrower shall have no interest other than as
set forth in Section 11.1. In addition to the foregoing, the Borrower hereby
------------
grants to the Administrative Agent, for the benefit of the Lenders, a security
interest in and to the Letter of Credit Collateral Account and any funds that
may hereafter be on deposit in such account, including income earned thereon.
The Lenders acknowledge and agree that the Borrower has no obligation to fund
the Letter of Credit Collateral Account unless and until so required under
Section 11.1 hereof.
- - ------------
ARTICLE IV
CHANGE IN CIRCUMSTANCES
-----------------------
4.1 Yield Protection. If the adoption of or change in any law or any
----------------
governmental or quasi-governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law), or any interpretation
thereof, or the compliance of any Lender therewith,
(i) subjects any Lender or any applicable Lending
Installation to any tax, duty, charge or withholding on or from
payments due from Borrower (excluding federal and state taxation of
the overall net income of any Lender or applicable Lending
Installation), or changes the basis of such taxation of payments to
any Lender in respect of its Advances, its interest in the Facility
Letters of Credit or other amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any Lender or any applicable Lending Installation (other
than reserves and assessments taken into account in determining the
interest rate applicable to LIBOR Advances), or
(iii) imposes any other condition, and the result is to
increase the cost of any Lender or any applicable Lending Installation
of making, funding or maintaining loans or reduces any amount
receivable by any Lender or any applicable Lending Installation in
connection with loans, or requires any Lender or any applicable
Lending Installation to make any payment calculated by reference to
the amount of loans held, Facility Letters of Credit issued or
participated in or interest received by it, by an amount deemed
material by such Lender,
-40-
<PAGE>
then, within fifteen (15) days of demand by such Lender, Borrower shall pay such
- - ----
Lender that portion of such increased expense incurred or reduction in an amount
received which such Lender determines is attributable to making, funding and
maintaining its Advances and its Commitment.
4.2 Changes in Capital Adequacy Regulations. If a Lender determines the
---------------------------------------
amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporate entity controlling such
Lender is increased as a result of a Change (as defined below), then, within
fifteen (15) days of demand by such Lender, Borrower shall pay such Lender the
amount necessary to compensate for any shortfall in the rate of return on the
portion of such increased capital which such Lender determines is attributable
to this Agreement, its Advances, its interest in the Facility Letters of Credit,
or its obligation to make Advances hereunder or participate in or issue Facility
Letters of Credit hereunder (after taking into account such Lender's policies as
to capital adequacy). "Change" means (i) any change after the date of this
------
Agreement in the Risk-Based Capital Guidelines (as defined below) or (ii) any
adoption of or change in any other law, governmental or quasi-governmental rule,
regulation, policy, guideline, interpretation, or directive (whether or not
having the force of law) after the date of this Agreement which affects the
amount of capital required or expected to be maintained by any Lender or any
Lending Installation or any corporation controlling any Lender. "Risk-Based
----------
Capital Guidelines" means (i) the risk-based capital guidelines in effect in the
- - ------------------
United States on the date of this Agreement, including transition rules, and
(ii) the corresponding capital regulations promulgated by regulatory authorities
outside the United States implementing the July 1988 report of the Basle
Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards",
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
4.3 Suspension of LIBOR Advances. If any Lender determines that
----------------------------
maintenance of any of its LIBOR Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation or directive of any Governmental
Authority having jurisdiction, the Administrative Agent shall suspend by written
notice to Borrower the availability of LIBOR Advances and require any LIBOR
Advances to be converted to Alternate Base Rate Advances. Without in any way
affecting the Borrower's obligation to pay compensation actually claimed by a
Lender under Section 4.2 or to convert LIBOR Advances to Alternate Base Rate
-----------
Advances if so required by a Lender under Section 4.3, the Borrower shall have
-----------
the right to replace any Lender which has demanded such compensation or caused
such conversion provided that Borrower notifies such Lender that it has elected
to replace such Lender and notifies such Lender and the Administrative Agent of
the identity of the proposed replacement Lender not more than six (6) months
after such action. The Lender being replaced shall assign its Percentage of the
Aggregate Commitment and its rights and obligations under this Facility to the
replacement Lender in accordance with the requirements of Section 13.3 hereof
------------
and the replacement Lender shall assume such Percentage of the
-41-
<PAGE>
Aggregate Commitment and the related obligations under this Facility prior to
the Maturity Date to be extended, all pursuant to an assignment agreement
substantially in the form of Exhibit I hereto. The purchase by the replacement
---------
Lender shall be at par (plus all accrued and unpaid interest and any other sums
owed to such Lender being replaced hereunder) which shall be paid to the Lender
being replaced upon the execution and delivery of the assignment.
4.4 Funding Indemnification. If any payment of a ratable LIBOR Advance or
-----------------------
a Competitive Bid Loan occurs on a date which is not the last day of the
applicable Interest Period, whether because of acceleration, prepayment or
otherwise, or a ratable LIBOR Advance or a Competitive Bid Loan is not made on
the date specified by Borrower for any reason other than default by one or more
of the Lenders, Borrower will indemnify each Lender for any loss or cost
incurred by such Lender resulting therefrom, including, without limitation, any
loss or cost in liquidating or employing deposits acquired to fund or maintain
the ratable LIBOR Advance or Competitive Bid Loan, as the case may be.
4.5 Lender Statements; Survival of Indemnity. To the extent reasonably
----------------------------------------
possible, each Lender shall designate an alternate Lending Installation with
respect to its LIBOR Advances to reduce any liability of Borrower to such Lender
under Sections 4.1 and 4.2 or to avoid the unavailability of a LIBOR Advance, so
------------ ---
long as such designation is not disadvantageous to such Lender. Each Lender
shall deliver a written statement of such Lender as to the amount due, if any,
under Sections 4.1, 4.2 or 4.4 hereof. Such written statement shall set forth
------------ --- ---
in reasonable detail the calculations upon which such Lender determined such
amount and shall be final, conclusive and binding on Borrower in the absence of
manifest error. Determination of amounts payable under such Sections in
connection with a LIBOR Advance shall be calculated as though each Lender funded
its LIBOR Advance through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the Adjusted
LIBOR Rate applicable to such Advance, whether in fact that is the case or not.
Unless otherwise provided herein, the amount specified in the written statement
shall be payable on demand after receipt by Borrower of the written statement.
The obligations of Borrower under Sections 4.1, 4.2 and 4.4 hereof shall survive
------------ --- ---
payment of the Obligations and termination of this Agreement.
ARTICLE V
CONDITIONS PRECEDENT
--------------------
5.1 Conditions Precedent to the Initial Advance. The Lenders shall not be
-------------------------------------------
required to make the initial Advance hereunder, unless (i) the Borrower shall
have paid all fees then due and payable to the Lenders, the Syndication Agent,
the Arrangers and the Administrative Agent hereunder, (ii) all of the conditions
set forth in Section 5.2 are satisfied, and (iii) the Borrower shall have
-----------
furnished to the Administrative Agent, in form
-42-
<PAGE>
and substance satisfactory to the Lenders and their counsel and with sufficient
copies for the Lenders, the following:
(a) Articles of Incorporation. A copy of the articles of
-------------------------
incorporation of the Borrower and each Guarantor, each certified by the
appropriate Secretary of State or equivalent state official.
(b) Bylaws. A copy of the bylaws of the Borrower and each Guarantor,
------
including all amendments thereto, each certified by the Secretary or an
Assistant Secretary thereof as being in full force and effect on the Agreement
Execution Date.
(c) Good Standing Certificates. A certified copy of a certificate
--------------------------
from the Secretary of State or equivalent state official of the states where the
Borrower and Guarantors are organized, dated as of the most recent practicable
date, showing the good standing of the Borrower and the Guarantors.
(d) Foreign Qualification Certificates. A certified copy of a
----------------------------------
certificate from the Secretary of State or equivalent state official of each
state where the Borrower or a Guarantor maintains its principal place of
business, dated as of the most recent practicable date, showing the
qualification to transact business in such state as a foreign corporation.
(e) Resolutions. A copy of a resolution or resolutions adopted by the
-----------
Board of Directors of the Borrower and each Guarantor, certified by the
Secretary or an Assistant Secretary of the Borrower and each Guarantor as being
in full force and effect on the Agreement Execution Date, authorizing the
Advances provided for herein and the execution, delivery and performance of the
Loan Documents to be executed and delivered by it hereunder.
(f) Incumbency Certificate. A certificate, signed by the Secretary or
----------------------
an Assistant Secretary of the Borrower and each Guarantor and dated the
Agreement Execution Date, as to the incumbency, and containing the specimen
signature or signatures, of the Persons authorized to execute and deliver the
Loan Documents to be executed and delivered by it hereunder.
(g) Loan Documents. Originals of the Loan Documents (in such
--------------
quantities as the Lenders may reasonably request), duly executed by authorized
officers of the appropriate entity.
(h) Opinion of Borrower's Counsel. A written opinion, dated the
-----------------------------
Agreement Execution Date, from David R. Schwiesow, Vice President and Associate
General Counsel of the Borrower, as to all matters other than enforceability,
which enforceability opinion shall be issued by an Illinois counsel reasonably
satisfactory to the
-43-
<PAGE>
Administrative Agent, the substance of such opinions to be substantially in the
form attached hereto as Exhibit E.
---------
(i) Opinion of Guarantors' Counsel and Counsel to The Hughes
--------------------------------------------------------
Corporation. Written opinions, dated the Agreement Execution Date, from David
- - -----------
R. Schwiesow, Vice President and Associate General Counsel of the Unlimited
Guarantor, and Michael C. Niarchos, Senior Vice President and General Counsel of
the Limited Guarantors and The Hughes Corporation, as to all matters other than
enforceability, which enforceability opinion shall be issued by an Illinois
counsel reasonably satisfactory to the Administrative Agent, the substance of
such opinions to be substantially in the form attached hereto as Exhibit F.
---------
(j) Insurance. Original or certified copies of insurance policies or
---------
binders therefor, with accompanying receipts showing current payment of all
premiums, evidencing that Borrower and the Guarantors carries insurance on their
respective Properties which satisfies the Administrative Agent's insurance
requirements, including, without limitation:
(i) Property and casualty insurance (including coverage for
flood and other water damage for any Properties located within a 100-
year flood plain) in the amount of the replacement cost of the
improvements at such Projects;
(ii) Loss of rental income insurance in the amount not less
than one year's gross revenues from the Properties; and
(iii) Comprehensive general liability insurance in the amount
of $1,000,000 per occurrence.
All insurance must be carried by companies with a Best Insurance
Reports (1992) Policyholder's and Financial Size Rating of "A-VII" or better.
(k) Repayment of Certain Outstanding Balances Under the Existing
------------------------------------------------------------
Facility. Evidence that the proceeds of the initial Advance will be used by the
- - --------
Borrower for the purpose of refinancing certain outstanding balances under the
Existing Facility in accordance with the terms of the Transition Memorandum.
(l) Financial and Related Information. The following information:
---------------------------------
(i) A certificate, signed by an officer of the Borrower,
stating that on the Agreement Execution Date no Default or Event of
Default has occurred and is continuing and that all representations
and warranties of the Borrower contained herein are true and correct
as of the Agreement Execution Date as and to the extent set forth
herein;
-44-
<PAGE>
(ii) The most recent financial statements of the
Consolidated Group and a certificate from a Qualified Officer of the
Borrower that no change in the Borrower's financial condition that
would have a Material Adverse Effect has occurred since the date
thereof; and
(iii) Written money transfer instructions, in substantially
the form of Exhibit G hereto, addressed to the Administrative Agent
---------
and signed by a Qualified Officer, together with such other related
money transfer authorizations as the Administrative Agent may have
reasonably requested.
(m) Other Evidence as any Lender May Require. Such other evidence as
----------------------------------------
any Lender may reasonably request to establish the consummation of the
transactions contemplated hereby, the taking of all necessary actions in any
proceedings in connection herewith and compliance with the conditions set forth
in this Agreement.
(n) Year 2000. Written information satisfactory to the
---------
Administrative Agent indicating that each of the Borrower and each other member
of the Consolidated Group (a) has made a reasonable assessment of the Year 2000
Issues; (b) has a Year 2000 Program; and (c) does not reasonably anticipate that
the Year 2000 Issues will have a Material Adverse Effect or cause a Material
Adverse Financial Change.
(o) Transition Memorandum. An agreement in substantially the form of
---------------------
Exhibit L hereto between Borrower and the Administrative Agent on behalf of the
- - ---------
lenders under the Existing Facility that remain as Lenders under this Agreement,
and the lenders under the Existing Facility who are not Lenders under this
Agreement as to the repayment or conversion of loans outstanding to the Borrower
under the Existing Facility, the treatment of any interest and fees accrued
thereon, and the cancellation of all commitments under the Existing Facility
(the "Transition Memorandum").
---------------------
5.2 Conditions Precedent to Each Advance and Issuance of Facility Letters
---------------------------------------------------------------------
of Credit. The obligation of each Lender and Issuing Bank to make any Advance
- - ---------
or issue any Facility Letter of Credit is subject to the following terms and
conditions:
(a) Prior to each such Advance or issuance no Default or Event of
Default shall have occurred and be continuing under this Agreement or any of the
Loan Documents and, if required by Administrative Agent, Borrower shall deliver
a certificate of Borrower to such effect;
(b) The representations and warranties contained in Articles VI and
-----------
VII are true and correct as of such Borrowing Date, Issuance Date, or date of
- - ---
conversion and/or continuation as and to the extent set forth therein, except to
the extent any such representation or warranty is stated to relate solely to an
earlier date, in which case such representation or warranty shall be true and
correct on and as of such earlier date; and
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<PAGE>
(c) Prior to any such issuance the applicable Issuance Fee has been
paid to the Issuing Bank.
Subject to the last grammatical paragraphs of Articles VI and VII hereof,
----------- ---
each Borrowing Notice, Letter of Credit Request, and Conversion/Continuation
Notice shall constitute a representation and warranty by the Borrower that the
conditions contained in Sections 5.2(a) and (b), and, with respect to any Letter
--------------- ---
of Credit Request, the condition contained in Section 5.2(c), have been
--------------
satisfied.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
------------------------------
Borrower hereby represents and warrants that:
6.1 Existence. Borrower is a corporation duly organized and existing
---------
under the laws of the State of Maryland, with its principal place of business in
the State of Maryland, and is duly qualified as a foreign corporation and
properly licensed (if required) and in good standing in each jurisdiction in
which the failure to qualify or be licensed would constitute a Material Adverse
Financial Change or have a Material Adverse Effect. Each of its Subsidiaries is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization and is duly qualified as a foreign corporation and
properly licensed (if required) and in good standing in each jurisdiction in
which the failure to qualify, be in good standing or be licensed would
constitute a Material Adverse Financial Change or have a Material Adverse
Effect.
6.2 Corporate Powers. The execution, delivery and performance of the Loan
----------------
Documents required to be delivered by Borrower hereunder are within its
corporate powers, have been duly authorized by all requisite action, and are not
in conflict with the terms of any organizational instruments of such entity, or
any instrument or agreement to which Borrower is a party or by which Borrower or
any of its assets may be bound or affected.
6.3 Power of Officers. The officers of the Borrower executing the Loan
-----------------
Documents required to be delivered by the Borrower hereunder have been duly
elected or appointed and were fully authorized to execute the same at the time
each such agreement, certificate or instrument was executed.
6.4 Government and Other Approvals. No approval, consent, exemption or
------------------------------
other action by, or notice to or filing with, any governmental authority is
necessary in connection with the execution, delivery or performance of the Loan
Documents.
-46-
<PAGE>
6.5 Solvency.
--------
(i) Immediately after the Agreement Execution Date and
immediately following the making of each Advance and after giving
effect to the application of the proceeds of such Advances, (a) the
fair value of the assets of the Borrower and its Subsidiaries on a
consolidated basis will exceed the debts and liabilities,
subordinated, contingent or otherwise, of the Borrower and its
Subsidiaries on a consolidated basis; (b) the fair saleable value of
the Properties of the Borrower and its Subsidiaries on a consolidated
basis will be greater than the amount that will be required to pay the
probable liability of the Borrower and its Subsidiaries on a
consolidated basis on their debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become
absolute and matured; (c) the Borrower and its Subsidiaries on a
consolidated basis will be able to pay their debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities
become absolute and matured; and (d) the Borrower and its Subsidiaries
on a consolidated basis will not have unreasonably small capital with
which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted after
the date hereof.
(ii) Borrower does not intend to, or to permit any of its
Subsidiaries to incur debts beyond its ability to pay such debts as
they mature, taking into account the timing of and amounts of cash to
be received by it or any such Subsidiary and the timing of the amounts
of cash to be payable on or in respect of its Indebtedness or the
Indebtedness of any such Subsidiary.
6.6 Compliance With Laws. There is no judgment, decree or order or any
--------------------
law, rule or regulation of any court or governmental authority binding on
Borrower or any of its Subsidiaries which would be contravened by the execution,
delivery or performance of the Loan Documents required hereunder.
6.7 Enforceability of Agreement. This Agreement is the legal, valid and
---------------------------
binding agreement of the Borrower, and the Notes when executed and delivered
will be the legal, valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with their respective terms, and the Loan
Documents required hereunder, when executed and delivered, will be similarly
legal, valid, binding and enforceable except to the extent that such enforcement
may be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws affecting the rights of creditors generally.
6.8 Title to Property. To the best of Borrower's knowledge after due
-----------------
inquiry, and except to the extent that any such failure would not have a
Material Adverse Effect, Borrower or its Subsidiaries has good and marketable
title to the Properties and assets reflected in the financial statements as
owned by it or any such Subsidiary free and clear of
-47-
<PAGE>
Liens except for the Permitted Liens. The execution, delivery or performance of
the Loan Documents required to be delivered by the Borrower hereunder will not
result in the creation of any Lien on the Properties. No consent to the
transactions contemplated hereunder is required from any ground lessor or
mortgagee or beneficiary under a deed of trust or any other Person except as has
been delivered to the Lenders.
6.9 Litigation. There are no suits, arbitrations, claims, disputes or
----------
other proceedings (including, without limitation, any civil, criminal,
administrative or environmental proceedings), pending or, to the best of
Borrower's knowledge, threatened against or affecting the Borrower or any of the
Properties, which individually or in the aggregate may reasonably be expected to
have a Material Adverse Effect and/or constitute a Material Adverse Financial
Change or materially impair the Borrower's ability to perform its obligations
hereunder or under any instrument or agreement required hereunder.
6.10 Events of Default. No Default or Event of Default has occurred and is
-----------------
continuing or would result from the incurring of obligations by the Borrower
under any of the Loan Documents or any other document to which Borrower is a
party.
6.11 Investment Company Act of 1940. Borrower is not, and will not be, an
------------------------------
investment company within the meaning of the Investment Company Act of 1940.
6.12 Public Utility Holding Company Act. The Borrower is not a "holding
----------------------------------
company" or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company," or of a "subsidiary company" of a "holding company," within
the definitions of the Public Utility Holding Company Act of 1935, as amended.
6.13 Regulation U. The proceeds of the Advances will not be used, directly
------------
or indirectly, to purchase or carry any Margin Stock or to extend credit to
others for the purpose of purchasing or carrying any Margin Stock.
6.14 No Material Adverse Financial Change. To the best knowledge of
------------------------------------
Borrower, there has been no Material Adverse Financial Change in the condition
of Borrower since the date of the financial and/or operating statements most
recently submitted to the Lenders.
6.15 Financial Information. All financial statements furnished to the
---------------------
Lenders by or at the direction of the Borrower and all other financial
information and data furnished by the Borrower to the Lenders are complete and
correct in all material respects as of the date thereof, and such financial
statements have been prepared in accordance with GAAP and fairly present the
consolidated financial condition and results of operations of the Borrower as of
such date. The Borrower has no contingent obligations, liabilities for taxes or
other outstanding financial obligations which are material in the aggregate,
except as disclosed in such statements, information and data.
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6.16 Factual Information. All factual information heretofore or
-------------------
contemporaneously furnished by or on behalf of the Borrower to the Lenders for
purposes of or in connection with this Agreement and the other Loan Documents
and the transactions contemplated therein is, and all other such factual
information hereafter furnished by or on behalf of the Borrower to the Lenders
will be, true and accurate (taken as a whole) in all material respects on the
date as of which such information is dated or certified and not incomplete by
omitting to state any material fact necessary to make such information (taken as
a whole) not misleading at such time.
6.17 ERISA. (i) Borrower is not an entity deemed to hold "plan assets"
-----
within the meaning of ERISA or any regulations promulgated thereunder of an
employee benefit plan (as defined in Section 3(3) of ERISA) which is subject to
Title I of ERISA or any plan within the meaning of Section 4975 of the Code, and
(ii) the execution of this Agreement and the transactions contemplated hereunder
do not give rise to a prohibited transaction within the meaning of Section 406
of ERISA or Section 4975 of the Code.
6.18 Taxes. All required tax returns have been filed by Borrower with the
-----
appropriate authorities except to the extent that extensions of time to file
have been requested, granted and have not expired or except to the extent such
taxes are being contested in good faith and for which adequate reserves, in
accordance with GAAP, are being maintained.
6.19 Environmental Matters. Except as disclosed in Schedule 6.19, each of
--------------------- -------------
the following representations and warranties is true and correct except to the
extent that the facts and circumstances giving rise to any such failure to be so
true and correct, in the aggregate, are not reasonably expected to have a
Material Adverse Effect:
(i) To the knowledge of the Borrower, the Properties of
Borrower, its Subsidiaries, and Investment Affiliates do not contain
any Materials of Environmental Concern in amounts or concentrations
which constitute a violation of, or could reasonably give rise to
liability under, Environmental Laws.
(ii) Borrower has not received any written notice alleging
that any of the Properties of Borrower and its Subsidiaries and
Investment Affiliates or any operations at the Properties are not in
compliance with all applicable Environmental Laws. Further, Borrower
has not received any written notice alleging the existence of any
contamination at or under such Properties in amounts or concentrations
which constitute a violation of any Environmental Law, or any
violation of any Environmental Law with respect to such Properties for
which Borrower, its Subsidiaries or Investment Affiliates is or could
be liable.
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<PAGE>
(iii) Neither Borrower nor any of its Subsidiaries or
Investment Affiliates has received any written notice of non-
compliance, liability or potential liability regarding Environmental
Laws with regard to any of the Properties, nor does it have knowledge
that any such notice will be received or is being threatened.
(iv) To the knowledge of Borrower during the ownership of
the Properties by any or all of Borrower, its Subsidiaries and
Investment Affiliates, Materials of Environmental Concern have not
been transported or disposed of from the Properties in violation of,
or in a manner or to a location which could reasonably give rise to
liability of Borrower, any Subsidiary, or any Investment Affiliate
under, Environmental Laws, nor during the ownership of the Properties
by any or all of Borrower, its Subsidiaries and Investment Affiliates
have any Materials of Environmental Concern been generated, treated,
stored or disposed of at, on or under any of the Properties in
violation of, or in a manner that could give rise to liability of
Borrower, any Subsidiary or any Investment Affiliate under, any
applicable Environmental Laws.
(v) No judicial proceedings or governmental or
administrative action is pending, or, to the knowledge of Borrower,
threatened, under any Environmental Law to which Borrower, any of its
Subsidiaries, or any Investment Affiliate is named as a party with
respect to the Properties of such entity, nor are there any consent
decrees or other decrees, consent orders, administrative orders or
other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to such
Properties for which Borrower, its Subsidiaries, or any Investment
Affiliate is or could be liable.
(vi) To the knowledge of Borrower during the ownership of
the Properties by any or all of Borrower, its Subsidiaries and
Investment Affiliates, there has been no release or threat of release
of Materials of Environmental Concern at or from the Properties, or
arising from or related to the operations of any such entity in
connection with the Properties in violation of, or in amounts or in a
manner that could give rise to liability under, Environmental Laws.
6.20 Insurance. Borrower has obtained the insurance which Borrower is
---------
required to furnish to Lenders under Section 5.1(j) hereof.
--------------
6.21 No Brokers. Borrower has dealt with no brokers in connection with
----------
this Facility, and no brokerage fees or commissions are payable by or to any
Person in connection with this Agreement or the Advances. Lenders shall not be
responsible for the payment of any fees or commissions to any broker and
Borrower shall indemnify, defend and
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hold Lenders harmless from and against any claims, liabilities, obligations,
damages, costs and expenses (including reasonable attorneys' fees and
disbursements) made against or incurred by Lenders as a result of claims made or
actions instituted by any broker or Person claiming by, through or under
Borrower in connection with the Facility.
6.22 No Violation of Usury Laws. No aspect of any of the transactions
--------------------------
contemplated herein violate or will violate any usury laws or other laws in
effect on the date hereof regarding the validity of agreements to pay interest.
6.23 Not a Foreign Person. Borrower is not a "foreign person" within the
--------------------
meaning of Section 1445 or 7701 of the Internal Revenue Code.
6.24 No Trade Name. Borrower does not use any trade name and has not and
-------------
does not do business under any name other than its actual name set forth herein.
The principal place of business of Borrower is as stated in the recitals hereto.
6.25 Subsidiaries. Schedule 6.25 hereto contains an accurate list of all
------------ -------------
of the presently existing Subsidiaries of Borrower, setting forth their
respective jurisdictions of formation and the percentage of their respective
Capital Stock owned by it or its Subsidiaries. All of the issued and
outstanding shares of Capital Stock of such Subsidiaries have been duly
authorized and issued and are fully paid and non-assessable.
6.26 Year 2000. Each of the Borrower and the other members of the
---------
Consolidated Group has made a reasonable assessment of the Year 2000 Issues and
has a realistic and achievable program for remediating the Year 2000 Issues on a
timely basis (the "Year 2000 Program"). Based on such assessment and on the
-----------------
Year 2000 Program, the Borrower does not reasonably anticipate that the Year
2000 Issues will have a Material Adverse Effect or cause a Material Adverse
Financial Change.
Borrower agrees that all of its representations and warranties set forth in
Article VI of this Agreement and elsewhere in this Agreement are true on the
- - ----------
Agreement Execution Date, and will be true on each Effective Date in all
material respects (except with respect to matters which have been disclosed in
writing to and approved by the Majority Lenders), and will be true in all
material respects (except with respect to matters which have been disclosed in
writing to and approved by the Majority Lenders) upon each request for
disbursement of an Advance. Each request for disbursement hereunder shall
constitute a reaffirmation of such representations and warranties as deemed
modified in accordance with the disclosures made and approved, as aforesaid, as
of the date of such request and disbursement.
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ARTICLE VII
ADDITIONAL REPRESENTATIONS AND WARRANTIES
-----------------------------------------
Each Guarantor hereby represents and warrants that:
7.1 Existence. The Howard Research And Development Corporation is a
---------
corporation duly organized and existing under the laws of the State of Maryland,
with its principal place of business in the State of Maryland, and is duly
qualified as a foreign corporation and properly licensed (if required) and in
good standing in each jurisdiction where the failure to qualify, be in good
standing or be licensed (if required) would constitute a Material Adverse
Financial Change or have a Material Adverse Effect on such Guarantor. Howard
Hughes Properties, Inc. and The Howard Hughes Corporation are each a corporation
duly organized and existing under the laws of the States of Nevada and of
Delaware, respectively, with its principal place of business in the State of
Nevada, and is duly qualified as a foreign corporation and properly licensed (if
required) and in good standing in each jurisdiction where the failure to
qualify, be in good standing or be licensed (if required) would constitute a
Material Adverse Financial Change or have a Material Adverse Effect on such
Guarantor.
7.2 Corporate Powers. The execution, delivery and performance of the Loan
----------------
Documents required to be delivered by such Guarantor hereunder are within the
corporate or partnership powers of such Guarantor, have been duly authorized by
all requisite corporate or partnership action, and are not in conflict with the
terms of any organizational instruments of such Guarantor, or any instrument or
agreement to which such Guarantor is a party or by which such Guarantor or any
of its assets is bound or affected.
7.3 Power of Officers. The officers of such Guarantor executing the Loan
-----------------
Documents required to be delivered by such Guarantor hereunder have been duly
elected or appointed and were fully authorized to execute the same at the time
each such agreement, certificate or instrument was executed.
7.4 Government and Other Approvals. No approval, consent, exemption or
------------------------------
other action by, or notice to or filing with, any governmental authority is
necessary in connection with the execution, delivery or performance of the Loan
Documents required hereunder.
7.5 Solvency.
--------
(i) Immediately after the Agreement Execution Date and
immediately following the making of each Advance and after giving
effect to the application of the proceeds of such Advances, (a) the
fair value of the assets of each Guarantor and its Subsidiaries on a
consolidated basis will exceed the debts and liabilities,
subordinated, contingent or otherwise, of each
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<PAGE>
Guarantor and its Subsidiaries on a consolidated basis; (b) the fair
saleable value of the Properties of each Guarantor and its
Subsidiaries on a consolidated basis will be greater than the amount
that will be required to pay the probable liability of each Guarantor
and its Subsidiaries on a consolidated basis on their debts and other
liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (c) each Guarantor and
its Subsidiaries on a consolidated basis will be able to pay their
debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (d) each
Guarantor and its Subsidiaries on a consolidated basis will not have
unreasonably small capital with which to conduct the businesses in
which they are engaged as such businesses are now conducted and are
proposed to be conducted after the date hereof.
(ii) Each Guarantor does not intend to, or to permit any
of its Subsidiaries to, incur debts beyond its ability to pay such
debts as they mature, taking into account the timing of and amounts of
cash to be received by it or any such Subsidiary and the timing of the
amounts of cash to be payable on or in respect of its Indebtedness or
the Indebtedness of any such Subsidiary.
7.6 Compliance With Laws. There is no judgment, decree or order or any
--------------------
law, rule or regulation of any court or governmental authority binding on such
Guarantor which would be contravened by the execution, delivery or performance
of the Loan Documents required hereunder.
7.7 Enforceability of Guaranty. The Guaranty is the legal, valid and
--------------------------
binding agreement of such Guarantor, enforceable against such Guarantor in
accordance with its respective terms, and the Loan Documents required hereunder,
when executed and delivered, will be similarly legal, valid, binding and
enforceable except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws
affecting the rights of creditors generally.
7.8 Title to Properties. The Guarantors and their Subsidiaries,
-------------------
collectively, own all or substantially all of the Consolidated Group's
undeveloped land holdings in Columbia, Maryland and Summerlin, Nevada as
described on Exhibit J, and, to the best of Guarantors' knowledge after due
---------
inquiry, the Guarantors have good and marketable title to such Properties free
and clear of any Liens except for the Permitted Liens. The execution, delivery
or performance of the Loan Documents required to be delivered by the Guarantors
hereunder shall not result in the creation of any Lien on such Properties. No
consent to the transactions contemplated hereunder is required from any ground
lessor or mortgagee or beneficiary under a deed of trust or any other party
having an interest in such Properties.
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<PAGE>
7.9 Litigation. There are no suits, arbitrations, claims, disputes or
----------
other proceedings (including, without limitation, any civil, criminal,
administrative or environmental proceedings), pending or, to the best of such
Guarantor's knowledge, threatened against or affecting such Guarantor or any of
its Properties, which individually or in the aggregate may reasonably be
expected to have a Material Adverse Effect and/or to cause a Material Adverse
Financial Change or materially impair such Guarantor's ability to perform its
obligations under the Guaranty or under any instrument or agreement required
hereunder.
7.10 Events of Default. No Default or Event of Default has occurred and is
-----------------
continuing or would result from the incurring of obligations by such Guarantor
under any of the Loan Documents or any other document to which such Guarantor is
a party.
7.11 Investment Company Act of 1940. Such Guarantor is not, and will not
------------------------------
be, an investment company within the meaning of the Investment Company Act of
1940.
7.12 Public Utility Holding Company Act. Such Guarantor is not a "holding
----------------------------------
company" or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company," or of a "subsidiary company" of a "holding company," within
the definitions of the Public Utility Holding Company Act of 1935, as amended.
7.13 No Material Adverse Financial Change. There has been no Material
------------------------------------
Adverse Financial Change since the last date on which the financial and/or
operating statements were submitted to the Lenders.
7.14 Financial Information. All financial statements furnished to the
---------------------
Lenders by or on behalf of such Guarantor and all other financial information
and data furnished by or on behalf of such Guarantor to the Lenders are complete
and correct in all material respects as of the date thereof, and such financial
statements have been prepared in accordance with GAAP and fairly present the
consolidated financial condition and results of operations of such Guarantor as
of such date. Such Guarantor has no contingent obligations, liabilities for
taxes or other outstanding financial obligations which are material in the
aggregate, except as disclosed in such statements, information and data.
7.15 Factual Information. All factual information heretofore or
-------------------
contemporaneously furnished by or on behalf of such Guarantor to the Lenders for
purposes of or in connection with this Agreement and the other Loan Documents
and the transactions contemplated therein is, and all other such factual
information hereafter furnished by or on behalf of such Guarantor to the Lenders
will be, true and accurate in all material respects (taken as a whole) on the
date as of which such information is dated or certified and not incomplete by
omitting to state any material fact necessary to make such information (taken as
a whole) not misleading at such time.
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<PAGE>
7.16 ERISA. (i) Such Guarantor is not an entity deemed to hold "plan
-----
assets" within the meaning of ERISA or any regulations promulgated thereunder of
an employee benefit plan (as defined in Section 3(3) of ERISA) which is subject
to Title I of ERISA or any plan within the meaning of Section 4975 of the Code,
and (ii) the execution of this Agreement and the transactions contemplated
hereunder do not give rise to a prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Code.
7.17 Taxes. All required tax returns have been filed by such Guarantor
-----
with the appropriate authorities except to the extent that extensions of time to
file have been requested, granted and have not expired or except to the extent
such taxes are being contested in good faith and for which adequate reserves, in
accordance with GAAP, are being maintained.
7.18 Environmental Matters. Except as disclosed in Schedule 7.18, each of
--------------------- -------------
the following representations and warranties is true and correct except to the
extent that the facts and circumstances giving rise to any such failure to be so
true and correct, in the aggregate, are not reasonably expected to have a
Material Adverse Effect:
(i) To the knowledge of such Guarantor, the Properties of
such Guarantor, its Subsidiaries, and Investment Affiliates do not
contain any Materials of Environmental Concern in amounts or
concentrations which constitute a violation of, or could reasonably
give rise to liability under, Environmental Laws.
(ii) Such Guarantor has not received any written notice
alleging that any of the Properties of such Guarantor and its
Subsidiaries and Investment Affiliates or any operations at the
Properties are not in compliance with all applicable Environmental
Laws. Further, such Guarantor has not received any written notice
alleging the existence of any contamination at or under such
Properties in amounts or concentrations which constitute a violation
of any Environmental Law, or any violation of any Environmental Law
with respect to such Properties for which such Guarantor, its
Subsidiaries or Investment Affiliates is or could be liable.
(iii) Neither such Guarantor nor any of its Subsidiaries or
Investment Affiliates has received any written notice of non-
compliance, liability or potential liability regarding Environmental
Laws with regard to any of the Properties, nor does it have knowledge
that any such notice will be received or is being threatened.
(iv) To the knowledge of such Guarantor during the
ownership of the Properties by any or all of such Guarantor, its
Subsidiaries and Investment Affiliates, Materials of Environmental
Concern have not been
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<PAGE>
transported or disposed of from the Properties in violation of,
or in a manner or to a location which could reasonably give rise to
liability of such Guarantor, any Subsidiary, or any Investment
Affiliate under, Environmental Laws, nor during the ownership of the
Properties by any or all of such Guarantor, its Subsidiaries and
Investment Affiliates have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any of such
Properties in violation of, or in a manner that could give rise to
liability of such Guarantor, any Subsidiary or any Investment
Affiliate under, any applicable Environmental Laws.
(v) No judicial proceedings or governmental or
administrative action is pending, or, to the knowledge of such
Guarantor, threatened, under any Environmental Law to which such
Guarantor, any of its Subsidiaries, or any Investment Affiliate is
named as a party with respect to the Properties of such entity, nor
are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with
respect to such Properties for which such Guarantor, its Subsidiaries,
or any Investment Affiliate is or could be liable.
(vi) To the knowledge of such Guarantor during the
ownership of the Properties by any or all of such Guarantor, its
Subsidiaries and Investment Affiliates, there has been no release or
threat of release of Materials of Environmental Concern at or from the
Properties or arising from or related to the operations of such entity
in connection with the Properties in violation of or in amounts or in
a manner that could give rise to liability under Environmental Laws.
7.19 Insurance. Such Guarantor has obtained the insurance which such
---------
Guarantor is required to furnish to Lenders under Section 5.1(j) hereof.
--------------
7.20 Subsidiaries. Schedule 7.20 hereto contains an accurate list of all
------------ -------------
of the presently existing Subsidiaries of such Guarantor, setting forth their
respective jurisdictions of formation and the percentage of their respective
Capital Stock owned by it or its Subsidiaries. All of the issued and
outstanding shares of Capital Stock of such Subsidiaries have been duly
authorized and issued and are fully paid and non-assessable.
7.21 Year 2000. Such Guarantor has made a reasonable assessment of the
---------
Year 2000 Issues and has a Year 2000 Program. Based on such assessment and on
its Year 2000 Program, such Guarantor does not reasonably anticipate the Year
2000 Issues will have a Material Adverse Effect or cause a Material Adverse
Financial Change.
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<PAGE>
Each Guarantor agrees that all of its representations and warranties set
forth in Article VII of this Agreement are true on the Agreement Execution Date,
-----------
and will be true on each Effective Date in all material respects (except with
respect to matters which have been disclosed in writing to and approved by the
Majority Lenders), and will be true in all material respects (except with
respect to matters which have been disclosed in writing to and approved by the
Majority Lenders) upon each request for disbursement of an Advance. Each
request for disbursement hereunder shall constitute a reaffirmation of such
representations and warranties as deemed modified in accordance with the
disclosures made and approved, as aforesaid, as of the date of such request and
disbursement.
ARTICLE VII
AFFIRMATIVE COVENANTS
---------------------
The Borrower and each Guarantor covenants and agrees that so long as the
Commitment of any Lender shall remain available and until the full and final
payment of all Obligations incurred under the Loan Documents it will:
8.1 Notices. Promptly give written notice to Administrative Agent (who
-------
will promptly send such notice to Lenders) of:
(a) all non-insured litigation or arbitration proceedings affecting
the Borrower, a Guarantor or any Subsidiary of any of them where the amount
claimed is $10,000,000 or more;
(b) any Default or Event of Default, specifying the nature and the
period of existence thereof and what action has been taken or been proposed to
be taken with respect thereto;
(c) all claims filed against any Property owned by the Borrower, a
Guarantor or any Subsidiary of any of them which may reasonably be expected to
have a Material Adverse Effect on the ability of the Borrower or any Guarantor
to meet any of its obligations under the Loan Documents;
(d) the occurrence of any other event which may reasonably be expected
to have a Material Adverse Effect or cause a Material Adverse Financial Change
(including, without limitation, developments with respect to Year 2000 Issues);
(e) any Reportable Event or any "prohibited transaction" (as such term
is defined in Section 4975 of the Code) in connection with any Plan or any trust
created thereunder, which may reasonably be expected, singly or in the
aggregate, to materially impair the ability of the Borrower or any Guarantor to
repay any of its obligations under the
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<PAGE>
Loan Documents, describing the nature of each such event and the action, if any,
the Borrower or Guarantor proposes to take with respect thereto;
(f) any notice from any federal, state, local or foreign authority
regarding any Hazardous Material, asbestos, or other environmental condition,
proceeding, order, claim or violation affecting any Property that may reasonably
be expected to result in liability for damages and remediation costs in excess
of $10,000,000.
8.2 Financial Statements, Reports, Etc. The Borrower will maintain, for
-----------------------------------
itself and the Guarantors and each of their Subsidiaries, a system of accounting
established and administered in accordance with GAAP, and furnish to the
Lenders:
(i) As soon as available, but in any event not later than
60 days after the close of the first three (3) fiscal quarters of each
fiscal year and 105 days after the close of the fiscal year, for the
Consolidated Group a quarterly financial statement (including a
balance sheet and income statement), which may be in the form
contained in Form 10-Q and Form 10-K filings as described below, for
such period and the portion of the fiscal year through the end of such
period, setting forth in each case in comparative form the figures for
the previous year, all certified by the Borrower's chief financial
officer, treasurer or chief accounting officer and the annual
statement to be audited by the Borrower's independent public
accounting firm;
(ii) As soon as available, but in any event not later than
60 days after the close of the first three (3) fiscal quarters of each
fiscal year and 105 days after the close of the fiscal year, for the
Consolidated Group, related reports in form and substance satisfactory
to the Administrative Agent, all certified by Borrower's chief
financial officer, treasurer or chief accounting officer, including a
statement of Funds from Operations and Combined EBITDA, a report
listing and describing all newly acquired Properties having a value in
excess of $25,000,000, including their cash flow, cost and secured or
unsecured Indebtedness assumed in connection with such acquisition, if
any, the Consolidated Group's level of debt, summary Property
information for all Properties having a value in excess of
$25,000,000, and such other information as may be reasonably requested
to evaluate the quarterly compliance certificate delivered as provided
below;
(iii) Not later than 15 days after the date such reports
are filed with the Securities and Exchange Commission, copies of all
Form 10-Ks, 10-Qs, 8-Ks, and any other annual, quarterly, monthly or
other reports, copies of all registration statements and any other
public information which the Borrower, the Guarantors or any of their
respective Subsidiaries files with the Securities and Exchange
Commission provided, however, that to the extent any
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<PAGE>
of such reports contains information required under the other
subsections of this Section 8.2, the information need not be furnished
-----------
separately under the other subsections;
(iv) Not later than 60 days after the end of each of the
first three (3) fiscal quarters, and not later than 105 days after the
end of the fiscal year, a compliance certificate in substantially the
form of Exhibit H hereto signed by the Borrower's chief financial
---------
officer, treasurer or chief accounting officer confirming that
Borrower is in compliance with all of the covenants of the Loan
Documents as of the end of the last fiscal quarter, showing the
calculations and computations necessary to determine compliance with
the financial covenants contained in this Agreement (including such
schedules and backup information as may be necessary to demonstrate
such compliance) and stating that to such officer's best knowledge, no
other Default or Event of Default exists, or if any Default or Event
of Default exists, stating the nature and status thereof;
(v) As soon as possible and in any event within 10
Business Days after the Borrower or any Guarantor knows that any
Reportable Event has occurred with respect to any Plan, a statement,
signed by the chief financial officer or treasurer of Borrower or such
Guarantor, describing said Reportable Event and within 20 days after
such Reportable Event, a statement signed by such chief financial
officer describing the action which Borrower or such Guarantor
proposes to take with respect thereto; and (b) within 10 Business Days
of receipt, any notice from the Internal Revenue Service, PBGC or
Department of Labor with respect to a Plan regarding any excise tax,
proposed termination of a Plan, prohibited transaction or fiduciary
violation under ERISA or the Code which may reasonably be expected to
result in any liability to Borrower or such Guarantor or any member of
the Controlled Group in excess of $10,000,000; and (c) within 10
Business Days of filing, any Form 5500 filed by Borrower or such
Guarantor with respect to a Plan, or any member of the Controlled
Group which includes a qualified accountant's opinion, except a
qualification with respect to assets certified by a third party as
permitted by ERISA.
(vi) As soon as possible and in any event within 30 days
after receipt by the Borrower or any Guarantor, a copy of (a) any
notice or claim to the effect that the Borrower or any Guarantor or
any of their respective Subsidiaries is or may be liable to any Person
as a result of the release by such entity, or any of its Subsidiaries,
or any other Person of any toxic or hazardous waste or substance into
the environment, and (b) any notice alleging any violation of any
federal, state or local environmental, health or safety law or
regulation by the Borrower or any Guarantor or any of their respective
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Subsidiaries or Investment Affiliates, which, in either case, may
reasonably be expected to have a Material Adverse Effect;
(vii) Promptly upon the furnishing thereof to the
shareholders of the Borrower or any Guarantor, copies of all financial
statements, reports, proxy statements and other materials distributed
generally to its shareholders by the Borrower or such Guarantor;
(viii) Promptly upon the distribution thereof to the press
or the public, copies of all press releases; and
(ix) Such other information (including, without
limitation, a detailed listing of the Properties owned by each member
of the Consolidated Group, all Landauer Associates, Inc. (or other
appraiser's) reports and updates described in clause (c) of the
definition of "Gross Asset Value" and, to the extent reasonably
available, each Investment Affiliate and other non-financial
information) as the Administrative Agent or any Lender may from time
to time reasonably request, provided the Administrative Agent and each
Lender shall take all reasonable steps to maintain the confidentiality
of such information and any confidential information obtained under
Section 8.8 below, except for disclosure to regulatory agencies, to
-----------
their accountants, attorneys and other professional service providers,
to prospective assignees and participants and as otherwise may be
required by law.
8.3 Existence and Conduct of Operations. Except as permitted herein,
-----------------------------------
maintain and preserve its existence and all rights, privileges and franchises
now enjoyed and necessary for the operation of its business, including remaining
in good standing in each jurisdiction in which business is currently operated.
Except to the extent that any failure would not have a Material Adverse Effect,
the Borrower and each Guarantor will do, and will cause each of its Subsidiaries
to do, all things necessary to remain duly incorporated and/or duly qualified,
validly existing and in good standing as a real estate investment trust,
corporation, general partnership, limited liability company or limited
partnership, as the case may be, in its jurisdiction of incorporation/formation.
The Borrower and each Guarantor will maintain all requisite authority to conduct
its business in each jurisdiction in which the Properties are located and,
except where the failure to be so qualified would not have a Material Adverse
Effect, in each jurisdiction required to carry on and conduct its businesses in
substantially the same manner as it is presently conducted.
8.4 Maintenance of Properties. Maintain, preserve, protect and keep the
-------------------------
Properties in good repair, working order and condition, and make all necessary
and proper repairs, renewals and replacements, normal wear and tear excepted.
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8.5 Insurance. Provide a certificate of insurance from all insurance
---------
carriers who maintain policies with respect to the Properties within thirty (30)
days after the end of each fiscal year, evidencing that the insurance required
to be furnished to Lenders pursuant to Section 5.1(j) hereof is in full force
--------------
and effect. Borrower or each Guarantor shall timely pay, or cause to be paid,
all premiums on all insurance policies required under this Agreement from time
to time. Borrower or each Guarantor shall promptly notify its insurance carrier
or agent therefor (with a copy of such notification being provided
simultaneously to Administrative Agent if the claimed loss exceeds $10,000,000)
if there is any occurrence which, under the terms of any insurance policy then
in effect with respect to the Properties, requires such notification.
8.6 Payment of Obligations. Pay all taxes, assessments, governmental
----------------------
charges and other obligations when due, except such as may be contested in good
faith or as to which a bona fide dispute may exist, and for which adequate
reserves have been provided in accordance with sound accounting principles used
by Borrower or such Guarantor on the date hereof.
8.7 Compliance with Laws. Comply in all material respects with all
--------------------
applicable laws, rules, regulations, orders and directions of any governmental
authority having jurisdiction over Borrower, such Guarantor, their respective
Subsidiaries or any of their respective businesses.
8.8 Adequate Books. Maintain adequate books, accounts and records in
--------------
order to provide financial statements in accordance with GAAP and, if requested
by any Lender, permit employees or representatives of such Lender at any
reasonable time and upon reasonable notice to inspect and audit the Properties
of the Consolidated Group, and to examine or audit the inventory, books,
accounts and records of each of them and make copies and memoranda thereof.
8.9 ERISA. Comply in all material respects with all requirements of ERISA
-----
applicable to it with respect to each Plan.
8.10 Maintenance of Status. The Borrower shall at all times (i) remain as
---------------------
a corporation listed and in good standing on the New York Stock Exchange (NYSE),
and (ii) maintain the Borrower's status as a real estate investment trust in
compliance with all applicable provisions of the Code (unless otherwise
consented to by the Required Lenders).
8.11 Use of Proceeds. Use the proceeds of the Facility for the general
---------------
corporate purposes of the Consolidated Group and any Investment Affiliate.
8.11 Pre-Acquisition Environmental Investigations. Receive or cause to be
--------------------------------------------
prepared an environmental report substantially in accordance with the then-
current ASTM Standard for Environmental Site Assessments, Phase I or Transaction
Screen Process, prior
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to the acquisition of each Property that a member of the Consolidated Group
intends to acquire, other than acquisitions of (i) entities owning multiple
properties, (ii) properties which a member of the Consolidated Group previously
owned or currently owns an interest in, and (iii) properties in the immediate
vicinity of a Property which were either covered by the environmental report on
such Property or have an environmental profile substantially the same as such
Property.
8.13 Year 2000. Each of the Borrower and the Guarantors will take and will
---------
cause each other member of the Consolidated Group to take all such actions as
are reasonably necessary to successfully implement the Year 2000 Program and to
assure that Year 2000 Issues will not have or cause a Material Adverse Effect or
a Material Adverse Financial Change. At the request of the Administrative
Agent, the Borrower will provide a description of the Year 2000 Program,
together with any updates or progress reports with respect thereto.
ARTICLE IX
NEGATIVE COVENANTS
------------------
The Borrower and each Guarantor covenants and agrees that, so long as the
Commitment shall remain available and until full and final payment of all
Obligations incurred under the Loan Documents, without the prior written consent
of the Required Lenders (or the Administrative Agent or a greater Percentage of
the Lenders, if so expressly provided), it will not, and its Subsidiaries will
not:
9.1 Change in Business. Engage in any business activities or operations
------------------
other than (i) the ownership and operation of the Properties, or (ii) other
business functions and transactions traditionally carried on by real estate
companies in connection with the financing, ownership, acquisition, development
and/or management of real estate and related improvements, or (iii) other non-
traditional activities relating to real estate and any non-real estate business
activities or operations as long as the Combined EBITDA attributable to such
non-traditional and non-real estate activities and operations does not exceed
10% of Combined EBITDA.
9.2 Change of Property Management. Change the management of the
-----------------------------
Properties, except that any member of the Consolidated Group, Investment
Affiliate or other Affiliate of Borrower shall be permitted to manage any of the
Properties.
9.3 Change of Borrower Control. Permit or suffer (i) the beneficial
--------------------------
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934) of more than 25% of the
Capital Stock of the Borrower having general voting rights to be held by any
Person, or two (2) or more Persons acting in
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concert, unless the Administrative Agent and the Required Lenders have approved
in advance in writing the identity of such Person or Persons or (ii) 50% or more
of the members of the Borrower's Board of Directors to resign or be removed from
such Board of Directors during any 12 month period for any reason other than
death, disability or voluntary retirement for personal reasons, unless otherwise
approved in advance in writing by the Required Lenders.
9.4 Use of Proceeds. Apply or permit to be applied any proceeds of any
---------------
Advance directly or indirectly, to the funding of any purchase of, or offer for,
any share of capital stock of any publicly held corporation unless the board of
directors of such corporation has consented to such offer prior to any public
announcements relating thereto and the Lenders have consented to such use of the
proceeds of the Facility.
9.5 Transfers of Properties. Transfer or otherwise dispose of any
------------------------
Properties or interests in Subsidiaries or other entities which own any
Properties (other than transfers among members of the Consolidated Group) which,
together with all other Properties or interests in Subsidiaries or such other
entities which have been transferred or disposed of during the then-current
fiscal quarter and the immediately preceding three (3) full fiscal quarters
have an aggregate value, using the "Gross Asset Value" definition to determine
value, of more than 15% of the then-current Gross Asset Value, in which event
the transfer or other disposition of such Property or interest which causes the
15% limitation to be exceeded shall not be completed until the Administrative
Agent has received written notice of such proposed action, together with a pro
forma compliance certificate, with detailed back-up and calculations,
demonstrating that the Borrower will be in compliance with all of its covenants
herein after giving effect to such proposed transfer or disposition.
9.6 Liens. Create, incur, or suffer to exist (or permit any of its
-----
Subsidiaries to create, incur, or suffer to exist) any Lien in, of or on the
Property of any member of the Consolidated Group, except:
(i) Liens for taxes, assessments or governmental charges
or levies on their Property if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are being
contested in good faith and by appropriate proceedings and for which
adequate reserves shall have been set aside on their books;
(ii) Liens which arise by operation of law, such as
carriers', warehousemen's, landlords', materialmen and mechanics'
liens and other similar liens arising in the ordinary course of
business which secure payment of obligations not more than 30 days
past due or which are being contested in good faith by appropriate
proceedings and for which adequate reserves shall have been set aside
on its books;
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(iii) Liens arising out of pledges or deposits under
worker's compensation laws, unemployment insurance, old age pensions,
or other social security or retirement benefits, or similar
legislation;
(iv) Utility easements, building restrictions, zoning
restrictions, easements and such other encumbrances or charges against
real property as are of a nature generally existing with respect to
properties of a similar character and which do not in any material way
affect the marketability of the same or interfere with the use thereof
in the business of the Borrower or its Subsidiaries;
(v) Liens of any Subsidiary or Investment Affiliate in
favor of the Borrower, the Guarantors or any other Subsidiary or
Investment Affiliate;
(vi) Liens arising in connection with any Indebtedness
permitted hereunder to the extent such Liens will not result in a
violation of any of the provisions of this Agreement; and
(vii) Any Lien which, if it were enforced and realized upon
by the beneficiary thereof and aggregated with all other Liens then
permitted solely under this clause (vii), would not give rise to an
Event of Default under Article X hereof.
---------
Liens permitted pursuant to this Section 9.6 shall be deemed to be "Permitted
----------- ---------
Liens".
- - -----
9.7 Regulation U. Use any of the proceeds of the Advances to purchase or
------------
carry any Margin Stock.
9.8 Variable Rate Debt. Permit at any time less than 70% of the Total
------------------
Outstanding Indebtedness to either (i) bear interest at a fixed rate through the
then-current Maturity Date in accordance with its terms or (ii) be fully hedged
through the then-current Maturity Date to produce a fixed or maximum rate
through the purchase of an interest rate swap, cap or collar or other financial
instrument then being used by publicly held real estate companies to hedge
similar types of interest rate risk.
9.9 Negative Pledge. Incur or permit any member of the Consolidated Group
---------------
to incur any Indebtedness which either contains a "negative pledge" prohibiting
the Borrower or any member of the Consolidated Group from selling, encumbering
or otherwise transferring their interests in any unencumbered Properties or
interests in entities holding unencumbered Properties, or which contains an
"equal and ratable" clause granting the holder of such Indebtedness a lien on
such Properties upon any other encumbrance thereof.
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9.10 Indebtedness and Cash Flow Covenants. Permit or suffer:
------------------------------------
(a) Total Outstanding Indebtedness to exceed, as of any date, 70% of
then-current Gross Asset Value.
(b) Secured Outstanding Indebtedness to exceed, as of any date, 60%
of then-current Gross Asset Value.
(c) Recourse Outstanding Indebtedness to exceed, as of any date, 30%
of then-current Gross Asset Value.
(d) Combined EBITDA for the most recent period of four (4) fiscal
quarters for which results have been reported to be less than 1.70 times
Combined Senior Interest Expense for the corresponding period.
(e) Funded Senior Unsecured Debt to exceed, as of any date, (i) prior
to the Step-Up Date, the product of (A) 6.0 and (B) Adjusted Combined
EBITDA less Combined Senior Interest Expense less Restricted EBITDA all for
---- ----
the most recent period of four (4) full fiscal quarters for which results
have been reported, or (ii) from and after the Step-Up Date, the product of
(A) 5.0 and (B) Adjusted Combined EBITDA less Combined Senior Interest
----
Expense less Restricted EBITDA all for the most recent period of four (4)
----
full fiscal quarters for which results have been reported.
(f) The sum of (i) Combined EBITDA for the most recent period of four
(4) fiscal quarters for which results have been reported plus (ii) to the
----
extent deducted in calculating such Combined EBITDA, Ground Lease Base
Expense for the corresponding period to be less than 1.30 times Combined
Debt Service for the corresponding period.
(g) Adjusted Combined EBITDA for the most recent period of four (4)
full fiscal quarters for which results have been reported to be less than
(i) 11% prior to the Step-Up Date, or (ii) 12.0%, from and after the Step-
Up Date, of Total Outstanding Indebtedness as of the date of determination
of compliance, less that portion of Total Outstanding Indebtedness
----
attributable to those properties the income from which has been excluded
from such Adjusted Combined EBITDA amount and less that portion of Total
----
Outstanding Indebtedness attributable to current trade liabilities and
other accounts payable.
(h) The Consolidated Group's Net Asset Value to be less than the sum
of (i) $1,700,000,000 plus (ii) 75% of the proceeds (net of customary
----
issuance fees and expenses) from the issuance after the Agreement Execution
Date of any common stock, preferred stock or partnership units in the
Borrower or any operating
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partnership which may hereafter be formed by the Borrower if it elects to
convert to an "UPREIT" structure, excluding issuance of any such interests
solely to members of the Consolidated Group.
9.11 Mergers and Dispositions. Consolidate with or merge into any other
------------------------
Person or convey, transfer or lease its Properties and assets substantially as
an entirety to any Person, or permit any Person to consolidate with or merge
into the Company, unless:
(i) in case the Borrower shall be consolidated with or
merge into another Person or convey, transfer or lease its Properties
and assets substantially as an entirety to any Person, the Person
formed by such consolidation or into which the Borrower is merged or
the Person which acquires by conveyance or transfer, or which leases,
the Properties and assets of the Borrower substantially as an entirety
shall be a corporation, partnership or trust, shall be organized and
validly existing under the laws of the United States of America, any
State thereof or the District of Columbia and shall assume, and shall
cause its Subsidiaries to expressly assume, by an amendment hereto,
executed and delivered to the Administrative Agent and the Required
Lenders, in form satisfactory to the Administrative Agent and the
Required Lenders, the due and punctual payment of all Obligations and
the performance or observance of every covenant of this Agreement and
each of the other Loan Documents on the part of the Borrower or its
Subsidiaries to be performed or observed;
(ii) immediately after giving effect to such transaction
and treating any Indebtedness which becomes an obligation of the
Borrower or any Subsidiary as a result of such transaction as having
been incurred by the Borrower or such Subsidiary at the time of such
transaction, no Default or Event of Default, shall have occurred and
be continuing; and
(iii) the Borrower has delivered to the Administrative
Agent and Lenders an officer's certificate including a pro forma
compliance certificate in the form of Exhibit H assuming such proposed
---------
transaction was then effective, and an opinion of counsel, each
stating or demonstrating that such consolidation, merger, conveyance,
transfer or lease and, if an amendment hereto is required in
connection with such transaction, such amendment, complies with this
Section 9.11 and that all conditions precedent herein relating to such
------------
transaction have been complied with.
Upon any consolidation of the Borrower with, or merger of the Borrower into, any
other Person or any conveyance, transfer or lease of the Properties and assets
of the Borrower substantially as an entirety in accordance with this Section
-------
9.11, the successor Person formed by such consolidation or into which the
- - ----
Borrower is merged or to which such conveyance,
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transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Borrower under this Agreement and each
other Loan Document to which it is a party with the same effect as if such
successor Person had been named as the Borrower herein, and thereafter the
predecessor Person shall be relieved of all Obligations and covenants under this
Agreement, the Notes and each other Loan Document to which it is a party, except
in the case of (i) a lease, or (ii) any transaction in which the Borrower
continues to hold a general partnership or other ownership interest in such
successor Person (in which case the Borrower shall continue to be liable as a
guarantor of the Obligations under a guaranty in form satisfactory to the
Required Lenders). The Borrower and such successor Person shall execute such
amendments and deliver such opinions and other documents as the Required Lenders
may require in connection with any such transaction.
9.12 Dividends. Pay, or permit to be paid, any dividends to the
---------
shareholders of the Borrower if the aggregate amount of dividends paid by the
Borrower for the most recent four (4) fiscal quarters for which financial
reports are available would exceed (A) 55%, prior to the Step-Up Date, or (B)
70%, from and after the Step-Up Date, of the Consolidated Group's Funds from
Operations for such period, provided that, as long as a Monetary Default or
Event of Default does not exist, the Borrower shall be permitted at all times to
distribute whatever amount is necessary to maintain the Borrower's tax status as
a real estate investment trust.
9.13 Encumbrances. Permit any member of the Consolidated Group to allow,
------------
its direct or indirect ownership interests in any other member of the
Consolidated Group or any Investment Affiliate to be encumbered to secure any
Indebtedness, other than pursuant to existing and contemplated encumbrances set
forth on Schedule 9.13 hereto.
--------------------
9.14 Restrictions on Dividends and Distributions. Permit any member of the
-------------------------------------------
Consolidated Group (other than the Borrower), or any Investment Affiliate, at
any time after the Agreement Execution Date, to agree to any contractual
restriction on the payment or distribution of dividends or current income to the
holders of ownership interests therein, other than (i) restrictions imposed on
such entities in connection with the issuance of securities collateralized by
mortgage loans on Properties owned by such entities and (ii) restrictions
imposed on such entities and triggered solely by a default under the terms of
any mortgage loans on Properties owned by such entities.
9.15 Limitations on Indebtedness. Permit any member of the Consolidated
---------------------------
Group (other than the Borrower) or any Investment Affiliate, at any time after
the Agreement Execution Date, to incur any Indebtedness for borrowed money other
than (a) Non-Recourse Outstanding Indebtedness, (b) Indebtedness due to a member
of the Consolidated Group or an Investment Affiliate, (c) Indebtedness used to
finance equipment owned by such entity and used in its business operations or
(d) current trade liabilities and other accounts payable and accrued expenses
incurred in the ordinary course of business and payable in accordance with
customary practices.
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9.16 Limitations on PSS Assets. Suffer or permit the aggregate GAAP book
-------------------------
value of the assets of all PSSs which are not Guarantors (excluding assets which
are capital stock in a Guarantor) to exceed $50,000,000 at any time after the
Agreement Execution Date.
ARTICLE X
DEFAULTS
--------
The occurrence of any one or more of the following events shall constitute
an Event of Default:
10.1 Nonpayment of Principal. The Borrower fails to pay any principal
-----------------------
portion of the Obligations when due, whether on the Maturity Date or otherwise.
10.2 Certain Covenants. The Borrower is not in compliance with any one or
-----------------
more of Sections 8.10, or 9.3 through 9.15 (inclusive) hereof.
------------- --- ----
10.3 Nonpayment of Interest and Other Obligations. The Borrower fails to
--------------------------------------------
pay any interest or other portion of the Obligations, other than payments of
principal, and such failure continues for a period of two (2) Business Days
after the date such payment is due.
10.4 Cross Default. Any Event of Default occurs under the Bridge Facility;
-------------
or any monetary default occurs (after giving effect to any applicable cure
period) under (i) any other Recourse Outstanding Indebtedness of the Borrower,
any of the Guarantors or any Material Subsidiary, singly or in the aggregate, in
excess of Ten Million Dollars ($10,000,000) or (ii) any Non-Recourse Outstanding
Indebtedness of the Consolidated Group, singly or in the aggregate, in excess of
Two Hundred Fifty Million Dollars ($250,000,000).
10.5 Loan Documents. Any Loan Document is not in full force and effect or
--------------
a default has occurred and is continuing thereunder after giving effect to any
cure or grace period in any such document.
10.6 Representation or Warranty. At any time or times hereafter any
--------------------------
representation or warranty set forth in Articles VI or VII of this Agreement or
----------- ---
in any other Loan Document or in any statement, report or certificate now or
hereafter made by the Borrower or the Guarantors to the Lenders or the
Administrative Agent is (i) not true and correct in any material respect and
(ii) if such representation and warranty is susceptible of cure, such
representation and warranty is not rendered true and correct in all material
respects within thirty (30) days after written notice from the Administrative
Agent to the Borrower requesting correction of such representation and warranty.
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10.7 Covenants, Agreements and Other Conditions. The Borrower or the
------------------------------------------
Guarantors fail to perform or observe any of the other covenants, agreements and
conditions contained in Articles VIII and IX (except for Sections 8.10, 9.3
------------- -- ------------- ---
through 9.15 (inclusive) hereof) and elsewhere in this Agreement or any of the
----
other Loan Documents in accordance with the terms hereof or thereof, not
specifically referred to herein, and such failure continues unremedied for a
period of thirty (30) days after written notice from Administrative Agent to the
Borrower requesting a cure of such failure.
10.8 Borrower Status. The Borrower shall fail to maintain its listing on
---------------
the New York Stock Exchange or its status as a real estate investment trust
under the Code.
10.9 Material Adverse Financial Change. The Consolidated Group has
---------------------------------
suffered a Material Adverse Financial Change or the Borrower, any Guarantor or
any Material Subsidiary is Insolvent.
10.11 Bankruptcy.
----------
(a) The Borrower, any Guarantor or any Material Subsidiary shall (i)
make an assignment for the benefit of creditors, (ii) apply for, seek, consent
to, or acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any substantial portion of
its Properties, (iii) institute any proceeding seeking an order for relief under
the Federal bankruptcy laws as now or hereafter in effect or seeking to
adjudicate it as a bankrupt or insolvent, or seeking dissolution, winding up,
liquidation, reorganization, arrangement, adjustment or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors or fail to file an answer or other pleading denying the
material allegations of any such proceeding filed against it, (iv) take any
corporate action to authorize or effect any of the foregoing actions set forth
in this Section 10.10(a), (v) fail to contest in good faith any appointment or
----------------
proceeding described in Section 10.10(b) or (vi) not pay, or admit in writing
----------------
its inability to pay, its debts generally as they become due; and/or
(b) A receiver, trustee, examiner, liquidator or similar official
shall be appointed for the Borrower, any Guarantor or any Material Subsidiary or
any substantial portion of any of their respective Properties, or an involuntary
proceeding of the type described in Section 10.10(a)(iii) shall be instituted
---------------------
against the Borrower, any Guarantor or any Material Subsidiary and such
appointment continues undischarged or such involuntary proceeding continues
undismissed or unstayed for a period of ninety (90) consecutive days.
10.11 Legal Proceedings. Borrower, any Guarantor or any Material Subsidiary
-----------------
is enjoined, restrained or in any way prevented by any court order or judgment
or if a notice of lien, levy, or assessment is filed of record with respect to
all or any part of the Properties by any governmental department, office or
agency, which may reasonably be expected to materially adversely affect the
performance of the obligations of such parties hereunder or
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under the Loan Documents, as the case may be, and there is a failure to vacate,
stay, dismiss, set aside or remedy the same within ninety (90) days after the
occurrence thereof.
10.12 Failure to Satisfy Judgments. The Borrower, any Guarantor or any
----------------------------
Material Subsidiary shall fail to pay, bond or otherwise discharge any judgments
against the Borrower, any of the Guarantors or any Material Subsidiary in excess
of $10,000,000 in the aggregate if such judgment is not stayed or bonded over on
appeal excluding, however, any foreclosure or related judgments or decrees
entered in the enforcement of defaulted Non-Recourse Outstanding Indebtedness
provided that such Non-Recourse Outstanding Indebtedness, when aggregated with
any other Non-Recourse Outstanding Indebtedness of the Consolidated Group which
is then in monetary default beyond applicable cure periods, does not exceed
$250,000,000.
10.13 ERISA. The Borrower, any Guarantor or any Material Subsidiary shall
-----
violate any ERISA regulations involving reasonably expected liability of the
Borrower, any of the Guarantors or any Material Subsidiary in excess of
$10,000,000 in the aggregate.
10.14 Environmental Remediation. Failure to remediate within the time
-------------------------
period required by law or governmental order after all administrative hearings
and appeals have been concluded (or within a reasonable time in light of the
nature of the problem if no specific time period is so established),
environmental problems in violation of applicable law related to Properties of
the Consolidated Group where the estimated cost of remediation is in the
aggregate in excess of $20,000,000.
ARTICLE XI
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
----------------------------------------------
11.1 Acceleration.
------------
If any Event of Default described in Section 10.10 hereof occurs, the
-------------
obligation of the Lenders to make Advances and of the Issuing Banks to issue
Facility Letters of Credit hereunder shall automatically terminate and the
Obligations shall immediately become due and payable. If any other Event of
Default described in Article X hereof occurs, such obligation to make Advances
---------
and to issue Facility Letters of Credit shall be terminated and at the election
of the Majority Lenders, the Obligations may be declared to be due and payable.
In addition to the foregoing, following the occurrence of an Event of
Default and so long as any Facility Letter of Credit has not been fully drawn
and has not been cancelled or expired by its terms, upon demand by the Majority
Lenders the Borrower shall deposit in the Letter of Credit Collateral Account
cash in an amount equal to the aggregate
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undrawn face amount of all outstanding Facility Letters of Credit and all fees
and other amounts due or which may become due with respect thereto. The Borrower
shall have no control over funds in the Letter of Credit Collateral Account,
which funds shall be invested by the Administrative Agent from time to time in
its discretion in Cash Equivalents having a maturity not exceeding thirty (30)
days. Such funds shall be promptly applied by the Administrative Agent to
reimburse the Issuing Banks for drafts drawn from time to time under the
Facility Letters of Credit. Such funds, if any, remaining in the Letter of
Credit Collateral Account following the payment of all Obligations in full
shall, unless the Administrative Agent is otherwise directed by a court of
competent jurisdiction, be promptly paid over to the Borrower.
11.2 Preservation of Rights; Amendments. No delay or omission of the
----------------------------------
Lenders in exercising any right under the Loan Documents shall impair such right
or be construed to be a waiver of any Default or Event of Default or an
acquiescence therein, and the making of an Advance notwithstanding the existence
of a Default or Event of Default or the inability of the Borrower to satisfy the
conditions precedent to such Advance shall not constitute any waiver or
acquiescence. 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 writing
signed by the Administrative Agent and the number of Lenders required hereunder
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 the Lenders until the Obligations have been paid in full.
ARTICLE XII
THE ADMINISTRATIVE AGENT
------------------------
12.1 Appointment. First Chicago is hereby appointed Administrative Agent
-----------
hereunder and under each other Loan Document, and each of the Lenders authorizes
the Administrative Agent to act as the agent of such Lender with respect to the
terms hereof. The Administrative Agent agrees to act as such upon the express
conditions contained in this Article XII. The Administrative Agent shall not
-----------
have a fiduciary relationship in respect of any Lender by reason of this
Agreement, except to the extent the Administrative Agent acts as an agent with
respect to the receipt or payment of funds hereunder. The Administrative Agent
shall use the same standard of care in performing its obligations hereunder as
it uses in administering loans held for its own account.
12.2 Powers. The Administrative Agent shall have and may exercise such
------
powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the terms of each thereof, together with such powers as
are reasonably incidental thereto. The Administrative Agent shall have no
implied duties to the Lenders, or any obligation to the
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Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Administrative Agent.
12.3 General Immunity. Neither the Administrative Agent (in its capacity
----------------
as Administrative Agent) nor any of its directors, officers, agents or employees
shall be liable to the Borrower, the Lenders or any Lender for any action taken
or omitted to be taken by it or them hereunder or under any other Loan Document
or in connection herewith or therewith, except for its or their own gross
negligence or willful misconduct.
12.4 No Responsibility for Loans, Recitals, etc. Neither the
------------------------------------------
Administrative Agent (in its capacity as Administrative Agent) nor any of its
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into, or verify (i) any statement, warranty or
representation made in connection with any Loan Document or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document; (iii) the satisfaction of any
condition specified in Article V, except receipt of items required to be
---------
delivered to the Administrative Agent; or (iv) the validity, effectiveness or
genuineness of any Loan Document or any other instrument or writing furnished in
connection therewith.
12.5 Action on Instructions of Lenders. The Administrative Agent shall in
---------------------------------
all cases act upon the written instructions of the Majority Lenders, Required
Lenders or all Lenders, as this Agreement may require, so long as such
directions (i) are consistent with the Lenders' express obligations hereunder
and (ii) in the Administrative Agent's good faith judgment, do not expose the
Administrative Agent to any material risk of liability to the Borrower as a
result thereof. The Administrative Agent shall be fully protected in so acting,
or in so refraining from acting, hereunder and under any other Loan Document in
accordance with written instructions signed by the Majority Lenders, Required
Lenders or all Lenders, as the case may be, and such instructions and any action
taken or failure to act pursuant thereto shall be binding on all of the Lenders
and on all holders of Notes. The Administrative Agent shall be fully justified
in failing or refusing to take any action hereunder and under any other Loan
Document unless it shall first be indemnified to its satisfaction by the Lenders
pro rata against any and all liability, cost and expense that it may incur by
reason of taking or continuing to take any such action.
12.6 Employment of Administrative Agents and Counsel. The Administrative
-----------------------------------------------
Agent may execute any of its duties as Administrative Agent hereunder and under
any other Loan Document by or through employees, agents, and attorneys-in-fact
and shall not be answerable to the Lenders, except as to money or securities
received by it or its authorized agents, for the default or misconduct of any
such agents or attorneys-in-fact selected by it with reasonable care. The
Administrative Agent shall be entitled to advice of counsel concerning all
matters pertaining to the agency hereby created and its duties hereunder and
under any other Loan Document.
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12.7 Reliance on Documents; Counsel. The Administrative Agent shall be
------------------------------
entitled to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and, in respect
to legal matters, upon the opinion of outside counsel selected by the
Administrative Agent.
12.8 Administrative Agent's Reimbursement and Indemnification. The Lenders
--------------------------------------------------------
agree to reimburse and indemnify the Administrative Agent ratably in accordance
with their respective Percentages (i) for any amounts not reimbursed by the
Borrower for which the Administrative Agent is entitled to reimbursement by the
Borrower under the Loan Documents, (ii) for any other reasonable expenses
incurred by the Administrative Agent on behalf of the Lenders, in connection
with the preparation, execution, delivery, administration and enforcement of the
Loan Documents, if not paid by Borrower, and (iii) for any liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever which may be imposed
on, incurred by or asserted against the Administrative Agent (in its capacity as
Administrative Agent and not as a Lender) in any way relating to or arising out
of the Loan Documents or any other document delivered in connection therewith or
the transactions contemplated thereby, or the enforcement of any of the terms
thereof or of any such other documents, provided that no Lender shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the Administrative Agent.
12.9 Rights as a Lender. With respect to the Commitment, Advances made by
------------------
it and the Note issued to it, the Administrative Agent shall have the same
rights and powers hereunder and under any other Loan Document as any Lender and
may exercise the same as though it were not the Administrative Agent, and the
term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include the Administrative Agent in its individual capacity. The Administrative
Agent, in its individual capacity, may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Subsidiaries in which the Borrower or such
Subsidiary is not restricted hereby from engaging with any other Person.
12.10 Lender Credit Decision. Each Lender acknowledges that it has,
----------------------
independently and without reliance upon the Administrative Agent or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and
without reliance upon the Administrative Agent 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 and the other Loan Documents.
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12.11 Successor Administrative Agent. Each Lender agrees that First Chicago
------------------------------
shall serve as Administrative Agent at all times during the term of this
Facility, except that First Chicago may resign as Administrative Agent in the
event (x) First Chicago and Borrower shall mutually agree in writing or (y) an
Event of Default shall occur under the Loan Documents (irrespective of whether
such Event of Default subsequently is waived), or (z) First Chicago shall
determine, in its sole reasonable discretion, that because of its other banking
relationships with Borrower and/or Borrower's Affiliates at the time of such
decision First Chicago's resignation as Administrative Agent would be necessary
in order to avoid creating an appearance of impropriety on the part of First
Chicago. First Chicago (or any successor Administrative Agent) may be removed
as Administrative Agent by written notice received by Administrative Agent from
the Majority Lenders at any time with cause (i.e., a breach by First Chicago (or
any successor Administrative Agent) of its duties as Administrative Agent
hereunder). Upon any such resignation or removal, Bankers Trust shall be the
successor Administrative Agent (unless objected to by the Majority Lenders) or,
if Bankers Trust declines or is so objected to, the Majority Lenders shall have
the right to appoint, on behalf of the Borrower and the Lenders, a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by the Majority Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Administrative Agent's giving notice
of resignation, then the retiring Administrative Agent may appoint, on behalf of
the Borrower and the Lenders, a successor Administrative Agent. If a successor
Administrative Agent has been appointed by a retiring Administrative Agent
pursuant to the immediately preceding sentence, the Majority Lenders shall have
the right at any time thereafter to remove, without cause, such successor
Administrative Agent by written notice to such Administrative Agent. Any
successor Administrative Agent shall be a commercial bank having capital and
retained earnings of at least $1,000,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent (including the right to receive any fees for performing
such duties which accrue thereafter), and the retiring Administrative Agent
shall be discharged from its duties and obligations hereunder and under the
other Loan Documents arising or accruing after the effective date of such
retirement. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article XII shall continue in
-----------
effect for its benefit and that of the other Lenders in respect of any actions
taken or omitted to be taken by it while it was acting as the Administrative
Agent hereunder and under the other Loan Documents.
12.12 Notice of Defaults. If a Lender becomes aware of a Default or Event
------------------
of Default, such Lender shall notify the Administrative Agent of such fact.
Upon receipt of such notice that a Default or Event of Default has occurred, the
Administrative Agent shall notify each of the Lenders of such fact.
12.13 Requests for Approval. If the Administrative Agent requests in
---------------------
writing the consent or approval of a Lender, such Lender shall respond and
either approve or disapprove
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definitively in writing to the Administrative Agent within ten (10) Business
Days (or sooner if such notice specifies a shorter period, but in no event less
than five (5) Business Days, for responses based on Administrative Agent's good
faith determination that circumstances exist warranting its request for an
earlier response) after such written request from the Administrative Agent. If
the Lender does not so respond, that Lender shall be deemed to have approved the
request. Upon request, the Administrative Agent shall notify the Lenders which
Lenders, if any, failed to respond to a request for approval.
12.14 Copies of Documents. Administrative Agent shall promptly deliver to
-------------------
each of the Lenders copies of all notices of default and other formal notices
sent or received and according to Section 15.1 of this Agreement.
------------
Administrative Agent shall deliver to Lenders within ten (10) Business Days
following receipt, copies of all financial statements, certificates and notices
received regarding the Borrower's ratings except to the extent such items are
required to be furnished directly to the Lenders by Borrower hereunder. Within
ten (10) Business Days after a request by a Lender to the Administrative Agent
for other documents furnished to the Administrative Agent by the Borrower, the
Administrative Agent shall provide copies of such documents to such Lender
except where this Agreement obligates Administrative Agent to provide copies in
a shorter period of time.
12.15 Defaulting Lenders. At such time as a Lender becomes a Defaulting
------------------
Lender, such Defaulting Lender's right to vote on matters which are subject to
the consent or approval of the Majority Lenders, Required Lenders or all
Lenders, shall be immediately suspended until such time as the Lender is no
longer a Defaulting Lender and, during the period of such suspension, the
calculation of Majority Lenders and Required Lenders shall be made without
reference to such Defaulting Lender's Percentage. If a Defaulting Lender has
failed to fund its Percentage of any Advance and until such time as such
Defaulting Lender subsequently funds its Percentage of such Advance, all
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 of, interest on and fees relating to the Loans funded by
the other Lenders in connection with any such Advance in which the Defaulting
Lender has not funded its Percentage (such principal, interest and fees being
referred to as "Senior Loans" for the purposes of this section). All amounts
------------
paid by the Borrower and otherwise due to be applied to the Obligations owing to
such Defaulting Lender pursuant to the terms hereof shall be distributed by the
Administrative Agent to the other Lenders in accordance with their respective
Percentages (recalculated for the purposes hereof to exclude the Defaulting
Lender) until all Senior Loans have been paid in full. At that point, the
"Defaulting Lender" shall no longer be deemed a Defaulting Lender and the
remainder of the Advances due to such "Defaulting Lender" shall no longer be
subordinated but shall be payable on the same basis as payments to the other
Lenders. After the Senior Loans have been paid in full equitable adjustments
will be made in connection with future payments by the Borrower to the extent a
portion of the Senior Loans had been repaid with amounts that otherwise would
have been distributed to a Defaulting Lender but for the operation of this
Section 12.15. This provision governs only the relationship among the
- - -------------
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Administrative Agent, each Defaulting Lender and the other Lenders; nothing
hereunder shall limit the obligation of the Borrower to repay all Loans in
accordance with the terms of this Agreement. The provisions of this Section
-------
12.15 shall apply and be effective regardless of whether a Default or Event of
- - -----
Default occurs and is continuing, and notwithstanding (i) any other provision of
this Agreement to the contrary, (ii) any instruction of the Borrower as to its
desired application of payments or (iii) the suspension of such Defaulting
Lender's right to vote on matters as provided above.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
-------------------------------------------------
13.1 Successors and Assigns.
----------------------
The terms and provisions of the Loan Documents shall be binding upon
and inure to the benefit of Borrower and the Lenders and their respective
successors and assigns, except that the Borrower shall not have the right to
assign its rights or obligations under the Loan Documents without the consent of
all the Lenders and any assignment by any Lender must be made in compliance with
Section 13.3. The Administrative Agent may treat the payee of any Note as the
- - ------------
owner thereof for all purposes hereof unless and until such payee complies with
Section 13.3 in the case of an assignment thereof or, in the case of any other
- - ------------
transfer, a written notice of the transfer is filed with the Administrative
Agent. Any assignee or transferee of a Note agrees by acceptance thereof to be
bound by all the terms and provisions of the Loan Documents. Any request,
authority or consent of any Person who at the time of making such request or
giving such authority or consent is the holder of any Note, shall be conclusive
and binding on any subsequent holder, transferee or assignee of such Note or of
any Note or Notes issued in exchange therefor.
13.2 Participations.
--------------
13.2.1 Permitted Participants; Effect. With the prior written
------------------------------
consent of the Administrative Agent (and during the initial syndication of
the Facility, the Syndication Agent) and the Borrower (which consents shall
not be unreasonably withheld or delayed), any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any time
sell to one or more banks or other entities ("Participants") participating
------------
interests in any Advance owing to such Lender, any Note held by such
Lender, any Commitment of such Lender or any other interest of such Lender
under the Loan Documents, except that (i) no consent of Borrower shall be
required for any such sale if an Event of Default has occurred and is
continuing and (ii) no consent of any of the Administrative Agent, the
Syndication Agent or the Borrower shall ever be required (A) for any such
sale made to any Lender's Affiliate or (B) for any sale of a participating
interest in Competitive Bid Loans. In the event
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of any such sale by a Lender of participating interests to a Participant,
such Lender's obligations under the Loan Documents shall remain unchanged,
such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, such Lender shall remain the holder of
any such Note for all purposes under the Loan Documents, all amounts
payable by Borrower under this Agreement shall be determined as if such
Lender had not sold such participating interests, and Borrower and the
Administrative 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 the Loan Documents.
13.2.2 Voting Rights. Each Lender shall retain the sole right to
-------------
vote its Percentage of the Aggregate Commitment, without the consent of any
Participant, for the approval or disapproval of any amendment, modification
or waiver of any provision of the Loan Documents, provided that such Lender
may grant such Participant the right to approve any amendment, modification
or waiver which forgives principal, interest or fees or reduces the
interest rate or fees payable hereunder, postpones any date fixed for any
regularly-scheduled payment of principal of or interest on the Obligations,
or extends the Maturity Date, except as expressly provided for herein.
13. Assignments.
-----------
13.3.1 Permitted Assignments. Any Lender may, with the prior
---------------------
written consent of the Administrative Agent (and during the initial
syndication of the Facility, the Syndication Agent) and Borrower (which
consents shall not be unreasonably withheld or delayed), in accordance with
applicable law, at any time assign to one or more banks or other entities
(collectively, "Purchasers") all, or a portion equal to $5,000,000 of its
----------
Commitment or more, of its rights and obligations under the Loan Documents,
except that (i) no consent of Borrower shall be required if an Event of
Default has occurred and is continuing and (ii) no consent of the
Administrative Agent, the Syndication Agent or Borrower shall ever be
required for (A) any assignment to any Lender's Affiliate or (B) the pledge
or assignment by a Lender of such Lender's Note and other rights under the
Loan Documents to any Federal Reserve Bank in accordance with applicable
law. Such assignments and assumptions shall be substantially in the form
of Exhibit I hereto. Borrower shall execute any and all documents which
---------
are customarily required by such Lender (including, without limitation, a
replacement promissory note or notes in the forms provided hereunder) in
connection with any such assignment, but Borrower shall not be obligated to
pay any fees and expenses incurred by any Lender in connection with any
assignment pursuant to this Section. Any Lender selling all or any part of
its rights and obligation hereunder in a transaction requiring the consent
of the Administrative Agent shall pay to the Administrative Agent a fee of
$3,500.00 per assignee to reimburse the Administrative Agent for its
involvement in such assignment.
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13.3.2 Effect; Effective Date of Assignment. Upon delivery to the
------------------------------------
Administrative Agent of a notice of assignment executed by the assigning
Lender and the Purchaser, such assignment shall become effective on the
effective date specified in such notice of assignment. The notice of
assignment shall contain a representation by the Purchaser to the effect
that none of the consideration used to make the purchase of the Commitment
and the Loans under the applicable assignment agreement are "plan assets"
as defined under ERISA and that the rights and interests of the Purchaser
in and under the Loan Documents will not be "plan assets" under ERISA. On
and after the effective date of such assignment, such Purchaser shall for
all purposes be a Lender party to this Agreement and any other Loan
Document executed by the Lenders and shall have all the rights and
obligations of a Lender under the Loan Documents, to the same extent as if
it were an original party hereto, and no further consent or action by
Borrower, the Lenders, the Administrative Agent or the Syndication Agent
shall be required to release the transferor Lender with respect to the
percentage of the Commitment and Advances assigned to such Purchaser. Upon
the consummation of any assignment to a Purchaser pursuant to this Section
-------
13.3.2, the transferor Lender, the Administrative Agent and Borrower shall
------
make appropriate arrangements so that replacement Notes are issued to such
transferor Lender and new Notes or, as appropriate, replacement Notes, are
issued to such Purchaser, in each case in principal amounts reflecting
their respective Commitments, as adjusted pursuant to such assignment. The
Borrower shall not bear any of the costs associated with an assignment to a
Purchaser.
13.4 Dissemination of Information. Borrower authorizes each Lender to
----------------------------
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
----------
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of Borrower. Each Transferee shall agree in
writing to keep confidential any such information which is not publicly
available.
13.5 Tax Treatment. If any interest in any Loan Document is transferred to
-------------
any Transferee which is organized under the laws of any jurisdiction other than
the United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
all applicable provisions of the Code with respect to withholding and other tax
matters.
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ARTICLE XIV
GENERAL PROVISIONS
------------------
14.1 Survival of Representations. All representations and warranties
---------------------------
contained in this Agreement shall survive delivery of the Notes and the making
of the Advances herein contemplated.
14.2 Governmental Regulation. Anything contained in this Agreement to the
-----------------------
contrary notwithstanding, no Lender shall be obligated to extend credit to the
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
14.3 Taxes. Any recording and other taxes (excluding franchise, income or
-----
similar taxes) or other similar assessments or charges payable or ruled payable
by any governmental authority incurred in connection with the consummation of
the transactions contemplated by this Agreement shall be paid by the Borrower,
together with interest and penalties, if any.
14.4 Headings. Section headings in the Loan Documents are for convenience
--------
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
14.5 No Third Party Beneficiaries. This Agreement shall not be construed
----------------------------
so as to confer any right or benefit upon any Person other than the parties to
this Agreement and their respective successors and assigns.
14.6 Expenses; Indemnification. Subject to the provisions of this
-------------------------
Agreement, Borrower will pay (a) all reasonable and customary out-of-pocket
costs and expenses incurred by the Administrative Agent or the Competitive Bid
Option Agent (including the reasonable fees, out-of-pocket expenses and other
reasonable expenses of counsel, which counsel may be employees of the
Administrative Agent or the Competitive Bid Option Agent) in connection with the
documentation and administration of the Facility, including without limitation,
the preparation, execution and delivery of this Agreement, the Notes, the Loan
Documents and any other agreements or documents referred to herein or therein
and any amendments or waivers thereto, (b) all out-of-pocket costs and expenses
incurred by the Administrative Agent, the Competitive Bid Option Agent and the
Lenders (including the reasonable fees, out-of-pocket expenses and other
reasonable expenses of counsel to the Administrative Agent, the Competitive Bid
Option Agent and the Lenders, which counsel may be employees of Administrative
Agent, the Competitive Bid Option Agent and/or the Lenders) in connection with
the enforcement and protection of the rights of the Lenders under this
Agreement, the Notes, the Loan Documents or any other agreement or document
referred to herein or therein, and (c) all reasonable and customary costs and
expenses (excluding internal salary costs) of periodic reviews by the
Administrative Agent's personnel of the Borrower's and Guarantors' books and
records. The Borrower further agrees to indemnify the
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Administrative Agent, the Competitive Bid Option Agent and the Lenders
(including the reasonable fees, out-of-pocket expenses and other reasonable
expenses of counsel to the Administrative Agent, the Competitive Bid Option
Agent and the Lenders, which counsel may be employees of Administrative Agent,
the Competitive Bid Option Agent and/or the Lenders) in connection with the
enforcement and protection of the rights of the Lenders under this Agreement,
the Notes, the Loan Documents or any other agreement or document referred to
herein or therein, and (c) all reasonable and customary costs and expenses
(excluding internal salary costs) of periodic reviews by the Administrative
Agent's personnel of the Borrower's and Guarantors' books and records. The
Borrower further agrees to indemnify the Administrative Agent, the Competitive
Bid Option Agent, the Arranger, the Lenders, and their respective directors,
officers and employees against all losses, claims, damages, penalties,
judgments, liabilities and reasonable expenses (including, without limitation,
all expenses of litigation or preparation therefor whether or not one of them is
a party thereto) which any of them may pay or incur arising out of or relating
to this Agreement, the other Loan Documents, the transactions contemplated
hereby or the direct or indirect application or proposed application of the
proceeds of any Advance hereunder, except that the foregoing indemnity shall not
apply to any entity to the extent that any such losses, claims, etc. are the
result of such entity's gross negligence or wilful misconduct. The obligations
of the Borrower under this Section shall survive the termination of this
Agreement.
14.7 Severability of Provisions. Any provision in any Loan Document that
--------------------------
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
14.8 Nonliability of the Lenders. The relationship between the Borrower
---------------------------
and the Lenders shall be solely that of borrower and lender. The Lenders shall
not have any fiduciary responsibilities to the Borrower. The Lenders undertake
no responsibility to the Borrower to review or inform the Borrower of any matter
in connection with any phase of the Borrower's business or operations.
14.9 Choice of Law. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
-------------
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
14.10 Consent to Jurisdiction. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO
-----------------------
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE
COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF THE LENDERS TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS
OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE
LENDERS OR ANY AFFILIATE
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OF THE LENDERS INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING
OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN
A COURT IN CHICAGO, ILLINOIS.
14.11 Waiver of Jury Trial. THE BORROWER, THE GUARANTORS, THE
--------------------
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
14.12 Successors and Assigns. The terms and provisions of the Loan
----------------------
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that the Borrower
shall not have the right to assign its rights or obligations under the Loan
Documents. Any assignee or transferee of the Notes agrees by acceptance thereof
to be bound by all the terms and provisions of the Loan Documents. Any request,
authority or consent of any Person, who at the time of making such request or
giving such authority or consent is the holder of the Notes, shall be conclusive
and binding on any subsequent holder, transferee or assignee of such Notes or of
any note or notes issued in exchange therefor.
14.13 Entire Agreement; Modification of Agreement. The Loan Documents
-------------------------------------------
embody the entire agreement among the Borrower, Guarantors, Competitive Bid
Option Agent, Administrative Agent, and Lenders and supersede all prior
conversations, agreements, understandings, commitments and term sheets among any
or all of such parties with respect to the subject matter hereof. Any
provisions of this Agreement may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrower, and
(a) each of the Lenders if such amendment or waiver
(i) reduces or forgives any payment of principal or
interest on the Obligations or any fees payable by Borrower to such
Lender hereunder; or
(ii) postpones the date fixed for any payment of principal
of or interest on the Obligations or any fees payable by Borrower to
such Lender hereunder; or
(iii) changes the amount of such Lender's Commitment (other
than pursuant to a Commitment reduction by the Borrower under Section
-------
2.18 or an assignment permitted under Section 13.3) or the unpaid
---- ------------
principal amount of such Lender's Note; or
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(iv) extends the Maturity Date, except as expressly
provided herein; or
(v) releases or limits the liability of a Guarantor under
the Loan Documents; or
(vi) changes the definition of Majority Lenders or Required
Lenders or modifies any requirement for consent by each of the
Lenders; or
(b) the Majority Lenders, to the extent expressly provided for herein;
or
(c) the Required Lenders, to the extent expressly provided for herein
and in the case of all other waivers or amendments if no percentage of Lenders
is specified herein.
14.14 Dealings with the Borrower. The Lenders and their affiliates may
--------------------------
accept deposits from, extend credit to and generally engage in any kind of
banking, trust or other business with the Borrower or other member of the
Consolidated Group regardless of the capacity of the Lenders hereunder.
14.15 Set-Off.
-------
(a) If an Event of Default shall have occurred, each Lender shall
have the right, at any time and from time to time without notice to the
Borrower, any such notice being hereby expressly waived, to set-off and to
appropriate or apply any and all deposits of money or property or any other
indebtedness at any time held or owing by such Lender to or for the credit or
the account of the Borrower against and on account of all outstanding
Obligations and all Obligations which from time to time may become due hereunder
and all other obligations and liabilities of the Borrower under this Agreement,
irrespective of whether or not such Lender shall have made any demand hereunder
and whether or not said obligations and liabilities shall have matured.
(b) Each Lender agrees that if it shall, by exercising any right of
set-off or counterclaim or otherwise, receive payment of a proportion of the
aggregate amount of principal, interest or fees due with respect to any Note
held by it (other than payments with respect to Senior Loans under Section
-------
12.15) which is greater than the proportion received by any other Lender in
respect of the aggregate amount of principal, interest or fees due with respect
to any Note held by such other Lender, the Lender receiving such proportionately
greater payment shall purchase such participations in the Notes held by the
other Lenders and such other adjustments shall be made as may be required so
that all such payments of principal, interest or Fees with respect to the Notes
held by the Lenders shall be shared by the Lenders pro rata according to their
respective Commitments.
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14.16 Counterparts. This Agreement may be executed in any number of
------------
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart. This Agreement shall be effective when it has been executed by the
Borrower, the Guarantors and each of the Lenders shown on the signature pages
hereof.
ARTICLE XV
NOTICES
-------
15.1 Giving Notice. All notices and other communications provided to any
-------------
party hereto under this Agreement or any other Loan Document shall be in writing
or by telex or by facsimile and addressed or delivered to such party at its
address set forth below or at such other address as may be designated by such
party in a notice to the other parties. Any notice, if mailed and properly
addressed with postage prepaid, shall be deemed given when received; any notice,
if transmitted by telex or facsimile, shall be deemed given when transmitted
(answerback confirmed in the case of telexes). Notice shall be given as
follows:
To the Borrower:
The Rouse Company
10275 Little Patuxent Parkway
Columbia, Maryland 21044-3456
Attention: Patricia H. Dayton
Telecopy: (410) 964-3412
To Guarantors:
The Howard Research And Development Corporation
10275 Little Patuxent Parkway
Columbia, Maryland 21044-3456
Attention: Patricia H. Dayton
Telecopy: (410) 964-3412
The Howard Hughes Corporation
Howard Hughes Properties, Inc.
3800 Howard Hughes Parkway
Las Vegas, Nevada 89109
Attention: General Counsel
Telecopy: (702) 791-4385
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Each of the above with a copy to:
The Rouse Company
10275 Little Patuxent Parkway
Columbia, Maryland 21044-3456
Attention: David R. Schwiesow
Telecopy: (410) 992-6392
To each Lender:
As shown below the Lenders' signatures.
To the Administrative Agent and/or the Competitive Bid Option Agent:
The First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670
Attention: Real Estate Finance Division
Telecopy: (312) 732-1117
With a copy to:
Sonnenschein Nath & Rosenthal
8000 Sears Tower
Chicago, Illinois 60606
Attention: Patrick G. Moran, Esq.
Telecopy: (312) 876-7934
-84-
<PAGE>
15.2 Change of Address. Each party may change the address for service of
-----------------
notice upon it by a notice in writing to the other parties hereto.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
BORROWER: THE ROUSE COMPANY
By:_______________________________________________
Title:____________________________________________
GUARANTORS: THE HOWARD HUGHES CORPORATION
By:_______________________________________________
Title:____________________________________________
HOWARD HUGHES PROPERTIES, INC.
By:_______________________________________________
Title:____________________________________________
THE HOWARD RESEARCH AND DEVELOPMENT CORPORATION
By:_______________________________________________
Title:____________________________________________
-85-
<PAGE>
LENDERS: THE FIRST NATIONAL BANK OF CHICAGO, for itself and as
Administrative Agent and Competitive Bid Option Agent
By:_______________________________________________
Title: Vice President
Commitment: $225,000,000
Percentage of Aggregate Commitment: 50%
Address for Notices:
One First National Plaza
Chicago, Illinois 60670
Attention: Real Estate Finance Division
Telephone: 312/732-1486
Telecopy: 312/732-1117
BANKERS TRUST COMPANY
By:_______________________________________________
Title: Managing Director
Commitment: $225,000,000
Percentage of Aggregate Commitment: 50%
Address for Notices:
Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Attention: Susan LeBoutillier
Telephone: 212/250-2418
Telecopy: 212/669-0752
-86-
<PAGE>
EXHIBIT D - FORM OF LIMITED GUARANTY
------------------------------------
LIMITED GUARANTY
----------------
(REVOLVING)
This Limited Guaranty (Revolving) made as of July 29, 1998 (the
"Guaranty"), by The Howard Hughes Corporation and Howard Hughes Properties, Inc.
--------
(individually, a "Guarantor" and collectively, "Guarantor"), to and for the
--------- ---------
benefit of Bankers Trust Company ("Bankers Trust") and The First National Bank
-------------
of Chicago ("First Chicago"), individually and as agents for themselves and the
-------------
lenders listed on the signature pages of the Revolving Credit Agreement (as
defined below) and their respective successors and assigns (collectively,
"Lender").
------
RECITALS
--------
A. The Rouse Company ("Borrower") and Guarantor have requested that
--------
Lender make an unsecured revolving credit facility available to Borrower in the
aggregate principal amount of up to $450,000,000 ("Revolving Facility").
------------------
B. Lender has agreed to make the Revolving Facility available to Borrower
pursuant to the terms and conditions set forth in an Amended and Restated
Unsecured Revolving Credit Agreement of even date herewith ("Revolving Credit
----------------
Agreement") among Borrower, the Lender, the entities comprising the Guarantor
- - ---------
and The Howard Research And Development Corporation (the "Other Guarantor").
---------------
All capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to such terms in the Revolving Credit Agreement.
C. Borrower has executed and delivered to Lender Promissory Notes each of
even date herewith in the aggregate principal amount of $450,000,000 as evidence
of its indebtedness to Lender with respect to the Revolving Facility. Borrower
has also executed and delivered to each Lender a Competitive Loan Note which
evidences any Competitive Bid Loans which may be made by such Lender under the
Revolving Credit Agreement. The Promissory Notes and Competitive Loan Notes
described above, together with any amendments or allonges thereto, or
restatements, replacements or renewals thereof, and/or new promissory notes to
new Lenders under the Revolving Credit Agreement, are collectively referred to
herein as the "Note".
----
-100-
<PAGE>
EXHIBIT D - FORM OF LIMITED GUARANTY
------------------------------------
D. Borrower is a stockholder, directly or indirectly, of each entity
comprising Guarantor, and Guarantor will receive advances from time to time from
the Borrower out of the proceeds of the Revolving Facility and, therefore,
Guarantor will derive financial benefit from the Revolving Facility evidenced by
the Note, Revolving Credit Agreement and the other Loan Documents. The
execution and delivery of this Guaranty by Guarantor and of another guaranty by
the Other Guarantor are conditions precedent to the performance by Lender of its
obligations under the Revolving Credit Agreement.
E. Borrower has also entered into a Credit Agreement (Bridge Loan) of
even date herewith (the "Term Loan Agreement") among Borrower, the entities
-------------------
comprising the Guarantor, the Other Guarantor, First Chicago and Bankers Trust,
individually and as agents, and the lenders listed on the signature pages of
such Term Loan Agreement and their respective successors and assigns
(collectively, the "Term Lenders"). The Term Lenders have also required the
------------
Guarantor to execute and deliver a Limited Guaranty (Term) of even date herewith
(the "Term Guaranty") regarding Borrower's obligations under the Term Loan
-------------
Agreement.
AGREEMENTS
----------
NOW, THEREFORE, Guarantor, in consideration of the matters described in the
foregoing Recitals, which Recitals are incorporated herein and made a part
hereof, and for other good and valuable consideration, hereby agrees as follows:
1. Guarantor absolutely, unconditionally, and irrevocably guarantees to
Lender:
(a) the full and prompt payment of the principal of and interest on
the Note when due, whether at stated maturity, upon acceleration or
otherwise, and at all times thereafter, and the prompt payment of all sums
which may now be or may hereafter become due and owing under the Note, the
Revolving Credit Agreement, and the other Loan Documents;
(b) the payment of all Enforcement Costs (as hereinafter defined in
Paragraph 7 hereof); and
-----------
(c) the full, complete, and punctual observance, performance, and
satisfaction of all of the obligations, duties, covenants, and agreements of
Borrower under the Revolving Credit Agreement and the Loan Documents.
All amounts due, debts, liabilities, and payment obligations described in
subparagraphs (a) and (b) of this Paragraph 1 are referred to herein as the
-----------
"Facility Indebtedness." All
---------------------
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<PAGE>
EXHIBIT D - FORM OF LIMITED GUARANTY
------------------------------------
obligations described in subparagraph (c) of this Paragraph 1 are referred to
-----------
herein as the "Obligations." All obligations described in subparagraphs (a), (b)
-----------
and (c) of this Paragraph 1 are referred to collectively as the "Guaranteed
----------- ----------
Obligations". Guarantor and Lender agree that a Guarantor's obligations
- - -----------
hereunder shall not exceed the greater of: (i) the aggregate amount of all
monies received, directly or indirectly, by such Guarantor from Borrower after
the date of execution of the Existing Facility (whether by loan, capital
infusion or other means), or (ii) the maximum amount not subject to avoidance
under Title 11 of the United States Code, as same may be amended from time to
time, or any applicable state law (the "Bankruptcy Code"). To that end, to the
extent such obligations would otherwise be subject to avoidance under the
Bankruptcy Code if such Guarantor is not deemed to have received valuable
consideration, fair value or reasonably equivalent value for its obligations
hereunder, any such Guarantor's obligations hereunder shall be reduced to that
amount which, after giving effect thereto, would not render such Guarantor
insolvent, or leave such Guarantor with an unreasonably small capital to conduct
its business, or cause such Guarantor to have incurred debts (or intended to
have incurred debts) beyond its ability to pay such debts as they mature, as
such terms are determined, and at the time such obligations are deemed to have
been incurred, under the Bankruptcy Code. In the event either of the entities
comprising the Guarantor shall make any payment or payments under this Guaranty,
the other entity comprising the Guarantor shall contribute to such paying entity
an amount equal to such non-paying entity's pro rata share (based on their
respective maximum liabilities hereunder) of such payment or payments made by
such paying entity, provided that such contribution right shall be subordinate
and junior in right of payment to all the Guaranteed Obligations to Lender.
Notwithstanding anything herein to the contrary, the maximum aggregate
liability of both entities comprising the Guarantor (i) under this Guaranty to
the Lender and (ii) under the Term Guaranty to the Term Lenders with respect to
any portion of the aggregate principal balances outstanding under the Revolving
Credit Agreement and the Term Loan Agreement that becomes due and payable prior
to the "Limitation End Date" (as defined below) shall not exceed $250,000,000
(the "Maximum Principal Liability"). The Guarantor's Maximum Principal
---------------------------
Liability shall be reduced only by payments made by Guarantor to either Lender
or the Term Lenders during the continuance of (i) an Event of Default under the
Revolving Credit Agreement or (ii) an Event of Default under the Term Loan
Agreement (as such term is defined therein) which are expressly identified in
writing at the time of payment as being made for such purpose. Any principal
payments made by the Borrower, the Other Guarantor or from any other source
shall not reduce the Maximum Principal Liability, despite reducing the aggregate
principal balance outstanding under the Revolving Credit Agreement or the Term
Loan Agreement. Guarantor shall have no rights or obligations with respect to
the allocation of any payments made by Guarantor hereunder between the Revolving
Credit Agreement and the Term Loan Agreement, which allocation
-102-
<PAGE>
EXHIBIT D - FORM OF LIMITED GUARANTY
------------------------------------
shall be governed by separate agreement between Lender and the Term Lenders. The
limitation imposed on a Guarantor's liability shall expire, and such Guarantor
shall be liable for the full principal balance of the Facility Indebtedness
without regard to this paragraph, on the date that those obligations of Borrower
to deliver additional stock of Borrower to certain "Holders" on account of those
"Business Units" (as such terms are defined in the Contingent Stock Agreement
described below) which are held by such Guarantor have either been terminated
early by agreement or expired in accordance with the terms of that certain
Contingent Stock Agreement dated as of January 1, 1996 (the "Limitation End
--------------
Date"). Guarantor shall not take any action, or consent to any action by any
other party, which would extend the current Limitation End Date.
2. In the event of any default by Borrower in making payment of the
Facility Indebtedness, or in performance of the Obligations, as aforesaid, in
each case beyond the expiration of any applicable grace period, Guarantor
agrees, on demand by Lender or the holder of the Note, to pay all the Facility
Indebtedness and to perform all the Obligations as are or then or thereafter
become due and owing or are to be performed under the terms of the Note, the
Revolving Credit Agreement and the other Loan Documents. Lender shall have the
right, at its option, either before, during or after pursuing any other right or
remedy against Borrower or Guarantor, to perform any and all of the Obligations
by or through any agent, contractor or subcontractor, or any of their agents, of
its selection, all as Lender in its sole discretion deems proper, and Guarantor
shall indemnify and hold Lender free and harmless from and against any and all
loss, damage, cost, expense, injury, or liability Lender may suffer or incur in
connection with the exercise of its rights under this Guaranty or the
performance of the Obligations, except to the extent the same arises as a result
of the gross negligence or wilful misconduct of Lender.
All of the remedies set forth herein and/or provided by any of the Loan
Documents or law or equity shall be equally available to Lender, and the choice
by Lender of one such alternative over another shall not be subject to question
or challenge by Guarantor or any other person, nor shall any such choice be
asserted as a defense, set-off, or failure to mitigate damages in any action,
proceeding, or counteraction by Lender to recover or seeking any other remedy
under this Guaranty, nor shall such choice preclude Lender from subsequently
electing to exercise a different remedy. The parties have agreed to the
alternative remedies hereinabove specified in part because they recognize that
the choice of remedies in the event of a failure hereunder will necessarily be
and should properly be a matter of business judgment, which the passage of time
and events may or may not prove to have been the best choice to maximize
recovery by Lender at the lowest cost to Borrower and/or Guarantor. It is the
intention of the parties that such choice by Lender be given conclusive effect
regardless of such subsequent developments.
-103-
<PAGE>
EXHIBIT D - FORM OF LIMITED GUARANTY
------------------------------------
3. Guarantor does hereby waive (i) notice of acceptance of this Guaranty
by Lender and any and all notices and demands of every kind which may be
required to be given by any statute, rule or law, (ii) any defense, right of
set-off or other claim which Guarantor may have against the Borrower or which
Guarantor or Borrower may have against Lender or any holders of the Note (other
than defenses relating to payment of the Facility Indebtedness or the
correctness of any allegation by Lender that Borrower was in default in the
performance of the Obligations), (iii) presentment for payment, demand for
payment (other than as provided for in Paragraph 2 above), notice of nonpayment
-----------
(other than as provided for in Paragraph 2 above) or dishonor, protest and
-----------
notice of protest, diligence in collection and any and all formalities which
otherwise might be legally required to charge Guarantor with liability, (iv) any
failure by Lender to inform Guarantor of any facts Lender may now or hereafter
know about Borrower, the Revolving Facility, or the transactions contemplated by
the Revolving Credit Agreement, it being understood and agreed that Lender has
no duty so to inform and that the Guarantor is fully responsible for being and
remaining informed by the Borrower of all circumstances bearing on the existence
or creation, or the risk of nonpayment of the Facility Indebtedness or the risk
of nonperformance of the Obligations, and (v) any and all right to cause a
marshalling of assets of the Borrower or any other action by any court or
governmental body with respect thereto, or to cause Lender to proceed against
any other security given to Lender in connection with the Facility Indebtedness
or the Obligations. Credit may be granted or continued from time to time by
Lender to Borrower without notice to or authorization from Guarantor, regardless
of the financial or other condition of the Borrower at the time of any such
grant or continuation. Lender shall have no obligation to disclose or discuss
with Guarantor its assessment of the financial condition of Borrower. Guarantor
acknowledges that no representations of any kind whatsoever have been made by
Lender to Guarantor. No modification or waiver of any of the provisions of this
Guaranty shall be binding upon Lender except as expressly set forth in a writing
duly signed and delivered on behalf of Lender. Guarantor further agrees that
any exculpatory language contained in the Revolving Credit Agreement or the Note
shall in no event apply to this Guaranty, and will not prevent Lender from
proceeding against Guarantor to enforce this Guaranty.
4. Guarantor further agrees that Guarantor's liability as guarantor shall
in nowise be impaired by any renewals or extensions which may be made from time
to time, with or without the knowledge or consent of Guarantor, of the time for
payment of interest or principal under the Note or by any forbearance or delay
in collecting interest or principal under the Note, or by any waiver by Lender
under the Revolving Credit Agreement or any other Loan Documents, or by Lender's
failure or election not to pursue any other remedies it may have against
Borrower, or by any change or modification in the Note, Revolving Credit
Agreement or any other Loan Documents, or by the acceptance by Lender of any
additional security or any increase, substitution or change therein, or by the
release by Lender of any
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<PAGE>
EXHIBIT D - FORM OF LIMITED GUARANTY
------------------------------------
security or any withdrawal thereof or decrease therein, or by the application of
payments received from any source to the payment of any obligation other than
the Facility Indebtedness, even though Lender might lawfully have elected to
apply such payments to any part or all of the Facility Indebtedness, it being
the intent hereof that Guarantor shall remain liable as principal for payment of
the Facility Indebtedness and performance of the Obligations until all
indebtedness has been paid in full and the other terms, covenants and conditions
of the Revolving Credit Agreement and other Loan Documents and this Guaranty
have been performed and the Aggregate Commitment terminated, notwithstanding any
act or thing which might otherwise operate as a legal or equitable discharge of
a surety. Guarantor further understands and agrees that Lender may at any time
enter into agreements with Borrower to amend and modify the Note, Revolving
Credit Agreement or other Loan Documents, or any thereof, and may waive or
release any provision or provisions of the Note, the Revolving Credit Agreement
and other Loan Documents or any thereof, and, with reference to such
instruments, may make and enter into any such agreement or agreements as Lender
and Borrower may deem proper and desirable, without in any manner impairing this
Guaranty or any of Lender's rights hereunder or any of the Guarantor's
obligations hereunder.
5. This is an absolute, unconditional, complete, present and continuing
guaranty of payment and performance and not of collection. Guarantor agrees
that this Guaranty may be enforced by Lender without the necessity at any time
of resorting to or exhausting any other security or collateral given in
connection herewith or with the Note, the Revolving Credit Agreement or any of
the other Loan Documents, or resorting to any other guaranties, and Guarantor
hereby waives the right to require Lender to join Borrower in any action brought
hereunder or to commence any action against or obtain any judgment against
Borrower or to pursue any other remedy or enforce any other right. Guarantor
further agrees that nothing contained herein or otherwise shall prevent Lender
from pursuing concurrently or successively all rights and remedies available to
it at law and/or in equity or under the Note, Revolving Credit Agreement or any
other Loan Documents, and the exercise of any of its rights or the completion of
any of its remedies shall not constitute a discharge of any of Guarantor's
obligations hereunder, it being the purpose and intent of the Guarantor that the
obligations of such Guarantor hereunder shall be primary, absolute, independent
and unconditional under any and all circumstances whatsoever. Neither
Guarantor's obligations under this Guaranty nor any remedy for the enforcement
thereof shall be impaired, modified, changed or released in any manner
whatsoever by any impairment, modification, change, release or limitation of the
liability of Borrower under the Note, Revolving Credit Agreement or other Loan
Documents or by reason of Borrower's bankruptcy or by reason of any creditor or
bankruptcy proceeding instituted by or against Borrower. This Guaranty shall
continue to be effective and be deemed to have continued in existence or be
reinstated (as the case may be) if at any time payment of all or any part of any
sum payable pursuant to the
-105-
<PAGE>
EXHIBIT D - FORM OF LIMITED GUARANTY
------------------------------------
Note, Revolving Credit Agreement or any other Loan Document is rescinded or
otherwise required to be returned by the payee upon the insolvency, bankruptcy,
or reorganization of the payor, all as though such payment to Lender had not
been made, regardless of whether Lender contested the order requiring the return
of such payment. The obligations of Guarantor pursuant to the preceding sentence
shall survive any termination, cancellation, or release of this Guaranty.
6. This Guaranty shall be assignable by Lender to any assignee of all or a
portion of Lender's rights under the Loan Documents.
7. If: (i) this Guaranty, the Note or any other Loan Document is placed
in the hands of attorneys for collection or is collected through any legal
proceeding; (ii) attorneys are retained to represent Lender in any bankruptcy,
reorganization, receivership, or other proceedings affecting creditors' rights
and involving a claim under this Guaranty, the Note, the Revolving Credit
Agreement, or any other Loan Document; (iii) attorneys are retained to provide
advice or other representation with respect to the Loan Documents in connection
with an enforcement action or potential enforcement action; or (iv) attorneys
are retained to represent Lender in any other legal proceedings whatsoever in
connection with this Guaranty, the Note, the Revolving Credit Agreement, any of
the other Loan Documents, or any property subject thereto (other than any action
or proceeding brought by any Lender or participant against the Administrative
Agent (as defined in the Revolving Credit Agreement) alleging a breach by the
Administrative Agent of its duties under the Loan Documents), then Guarantor
shall pay to Lender upon demand all reasonable attorneys' fees, costs and
expenses, including, without limitation, court costs, filing fees, recording
costs, expenses of foreclosure, title insurance premiums, survey costs, minutes
of foreclosure, and all other costs and expenses incurred in connection
therewith (all of which are referred to herein as "Enforcement Costs"), in
-----------------
addition to all other amounts due hereunder.
8. The parties hereto intend that each provision in this Guaranty comports
with all applicable local, state and federal laws and judicial decisions.
However, if any provision or provisions, or if any portion of any provision or
provisions, in this Guaranty is found by a court of law to be in violation of
any applicable local, state or federal ordinance, statute, law, administrative
or judicial decision, or public policy, and if such court should declare such
portion, provision or provisions of this Guaranty to be illegal, invalid,
unlawful, void or unenforceable as written, then it is the intent of all parties
hereto that such portion, provision or provisions shall be given force to the
fullest possible extent that they are legal, valid and enforceable, that the
remainder of this Guaranty shall be construed as if such illegal, invalid,
unlawful, void or unenforceable portion, provision or provisions were not
contained therein, and that the rights, obligations and interest of Lender or
any holder of the Note under the remainder of this Guaranty shall continue in
full force and effect.
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<PAGE>
EXHIBIT D-FORM OF LIMITED GUARANTY
----------------------------------
9. Any indebtedness of Borrower to Guarantor now or hereafter existing is
hereby subordinated to the Facility Indebtedness. Guarantor agrees that until
the entire Facility Indebtedness has been paid in full and the aggregate
Commitment is terminated, if an Event of Default under the Revolving Credit
Agreement exists and is continuing, (i) Guarantor will not seek, accept, or
retain for Guarantor's own account, any payment from Borrower on account of such
subordinated debt, and (ii) any such payments to Guarantor on account of such
subordinated debt shall be collected and received by Guarantor in trust for
Lender and shall be paid over to Lender on account of the Facility Indebtedness
without impairing or releasing the obligations of Guarantor hereunder.
10. Unless and until the Facility Indebtedness is repaid in full and the
Aggregate Commitment is terminated, Guarantor shall not assert any claim (within
the meaning of 11 U.S.C. (S) 101) which Guarantor may have against Borrower
arising from a payment made by Guarantor under this Guaranty and agrees not to
assert or take advantage of any subrogation rights of Guarantor or Lender or any
right of Guarantor or Lender to proceed against (i) Borrower for reimbursement,
or (ii) any other guarantor or any collateral security or guaranty or right of
offset held by Lender for the payment of the Facility Indebtedness and
performance of the Obligations, nor shall Guarantor seek or be entitled to seek
any contribution or reimbursement from Borrower or any other guarantor in
respect of payments made by Guarantor hereunder. It is expressly understood
that the waivers and agreements of Guarantor set forth above constitute
additional and cumulative benefits given to Lender for its security and as an
inducement for its extension of credit to Borrower.
11. Any amounts received by Lender from any source on account of any
indebtedness may be applied by Lender toward the payment of such indebtedness,
and in such order of application, as Lender may from time to time elect.
12. The Guarantor hereby submits to personal jurisdiction in the State of
Illinois for the enforcement of this Guaranty and waives any and all personal
rights to object to such jurisdiction for the purposes of litigation to enforce
this Guaranty. Guarantor hereby consents to the jurisdiction of either the
Circuit Court of Cook County, Illinois, or the United States District Court for
the Northern District of Illinois, in any action, suit, or proceeding which
Lender may at any time wish to file in connection with this Guaranty or any
related matter. Guarantor hereby agrees that an action, suit, or proceeding to
enforce this Guaranty may be brought in any state or federal court in the State
of Illinois and hereby waives any objection which Guarantor may have to the
laying of the venue of any such action, suit, or proceeding in any such court;
provided, however, that the provisions of this Paragraph shall not be deemed to
preclude Lender from filing any such action, suit, or proceeding in any other
appropriate forum.
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<PAGE>
EXHIBIT D-FORM OF LIMITED GUARANTY
----------------------------------
13. All notices and other communications provided to any party hereto under
this Agreement or any other Loan Document shall be in writing or by telex or by
facsimile and addressed or delivered to such party at its address set forth
below or at such other address as may be designated by such party in a notice to
the other parties. Any notice, if mailed and properly addressed with postage
prepaid, shall be deemed given when received; any notice, if transmitted by
telex or facsimile, shall be deemed given when transmitted (answerback confirmed
in the case of telexes and facsimiles). Notice may be given as follows:
To Guarantors:
The Howard Hughes Corporation
Howard Hughes Properties, Inc.
3800 Howard Hughes Parkway
Las Vegas, Nevada 89109
Attention: General Counsel
Telecopy: (702) 791-4385
With a copy to:
The Rouse Company
10275 Little Patuxent Parkway
Columbia, Maryland 21044-3456
Attention: David R. Schwiesow
Telecopy: (410) 992-6392
To the Lender:
c/o The First National Bank of Chicago, as agent
One First National Plaza
Chicago, Illinois 60670
Attention: Real Estate Finance Department
Telecopy: (312) 732-1117
With a copy to:
Sonnenschein Nath & Rosenthal
8000 Sears Tower
Chicago, Illinois 60606
Attention: Patrick G. Moran, Esq.
Telecopy: (312) 876-7934
-108-
<PAGE>
EXHIBIT D - FORM OF LIMITED GUARANTY
------------------------------------
or at such other address or to such other person as the party to be served with
notice may have furnished in writing to the party seeking or desiring to serve
notice as a place for the service of notice.
14. This Guaranty shall be binding upon the heirs, executors, legal and
personal representatives, successors and assigns of Guarantor and shall inure to
the benefit of Lender's successors and assigns. All liability of the entities
comprising the Guarantor shall be joint and several, subject to the limitations
set forth in Paragraph 1 hereof.
-----------
15. This Guaranty shall be construed and enforced under the internal laws
of the State of Illinois.
16. GUARANTOR AND LENDER, BY ITS ACCEPTANCE HEREOF, EACH HEREBY WAIVE ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHT UNDER THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR RELATING THERETO OR
ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS
-109-
<PAGE>
EXHIBIT D - FORM OF LIMITED GUARANTY
------------------------------------
GUARANTY AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
IN WITNESS WHEREOF, each entity comprising the Guarantor has delivered this
Guaranty in the State of Illinois as of the date first written above.
THE HOWARD HUGHES CORPORATION
By:_________________________________________
Its:________________________________________
HOWARD HUGHES PROPERTIES, INC.
By:_________________________________________
Its:________________________________________
ACCEPTED:
THE FIRST NATIONAL BANK OF CHICAGO,
not individually but as Administrative
Agent for the Lenders
By:_______________________________
Its:______________________________
-110-
<PAGE>
EXHIBIT D-1 - FORM OF UNLIMITED GUARANTY
----------------------------------------
UNLIMITED GUARANTY
------------------
(REVOLVING)
This Unlimited Guaranty (Revolving) made as of July 29, 1998 (the
"Guaranty"), by The Howard Research And Development Corporation ("Guarantor"),
-------- ---------
to and for the benefit of Bankers Trust Company ("Bankers Trust") and The First
-------------
National Bank of Chicago ("First Chicago"), individually and as agents for
-------------
themselves and the lenders listed on the signature pages of the Revolving Credit
Agreement (as defined below) and their respective successors and assigns
(collectively, "Lender").
------
RECITALS
--------
A. The Rouse Company ("Borrower") and Guarantor have requested that Lender
--------
make an unsecured revolving credit facility available to Borrower in the
aggregate principal amount of up to $450,000,000 ("Revolving Facility").
------------------
B. Lender has agreed to make the Revolving Facility available to Borrower
pursuant to the terms and conditions set forth in an Amended and Restated
Unsecured Revolving Credit Agreement of even date herewith ("Revolving Credit
----------------
Agreement") among The Howard Hughes Corporation and Howard Hughes Properties,
- - ---------
Inc. (individually and collectively, the "Other Guarantor"), Borrower, the
---------------
Lender, and Guarantor. All capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to such terms in the Revolving Credit
Agreement.
C. Borrower has executed and delivered to Lender Promissory Notes each of
even date herewith in the aggregate principal amount of $450,000,000 as evidence
of its indebtedness to Lender with respect to the Revolving Facility. Borrower
has also executed and delivered to each Lender a Competitive Loan Note which
evidences any Competitive Bid Loans which may be made by such Lender under the
Revolving Credit Agreement. The Promissory Notes and Competitive Loan Notes
described above, together with any amendments or allonges thereto, or
restatements, replacements or renewals thereof, and/or new promissory notes to
new Lenders under the Revolving Credit Agreement, are collectively referred to
herein as the "Note".
----
D. Borrower is a stockholder, directly or indirectly, of Guarantor, and
Guarantor will receive advances from time to time from the Borrower out of the
proceeds of the
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<PAGE>
EXHIBIT D-1 - FORM OF UNLIMITED GUARANTY
----------------------------------------
Revolving Facility and, therefore, Guarantor will derive financial benefit from
the Revolving Facility evidenced by the Note, Revolving Credit Agreement and the
other Loan Documents. The execution and delivery of this Guaranty by Guarantor
and of another guaranty by the Other Guarantor are conditions precedent to the
performance by Lender of its obligations under the Revolving Credit Agreement.
E. Borrower has also entered into a Credit Agreement (Bridge Loan) of even
date herewith (the "Term Loan Agreement") among Borrower, the Guarantor, the
-------------------
entities comprising the Other Guarantor, First Chicago and Bankers Trust,
individually and as agents, and the lenders listed on the signature pages of
such Term Loan Agreement and their respective successors and assigns
(collectively, the "Term Lenders"). The Term Lenders have also required the
------------
Guarantor to execute and deliver a Limited Guaranty (Term) of even date herewith
(the "Term Guaranty") regarding Borrower's obligations under the Term Loan
-------------
Agreement.
AGREEMENTS
----------
NOW, THEREFORE, Guarantor, in consideration of the matters described in the
foregoing Recitals, which Recitals are incorporated herein and made a part
hereof, and for other good and valuable consideration, hereby agrees as follows:
1. Guarantor absolutely, unconditionally, and irrevocably guarantees to
Lender:
(a) the full and prompt payment of the principal of and interest on the
Note when due, whether at stated maturity, upon acceleration or otherwise,
and at all times thereafter, and the prompt payment of all sums which may
now be or may hereafter become due and owing under the Note, the Revolving
Credit Agreement, and the other Loan Documents;
(b) the payment of all Enforcement Costs (as hereinafter defined in
Paragraph 7 hereof); and
-----------
(c) the full, complete, and punctual observance, performance, and
satisfaction of all of the obligations, duties, covenants, and agreements of
Borrower under the Revolving Credit Agreement and the Loan Documents.
All amounts due, debts, liabilities, and payment obligations described in
subparagraphs (a) and (b) of this Paragraph 1 are referred to herein as the
-----------
"Facility Indebtedness." All obligations described in subparagraph (c) of this
---------------------
Paragraph 1 are referred to herein as the "Obligations." All obligations
- - ----------- -----------
described in subparagraphs (a), (b) and (c) of this Paragraph 1
-----------
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EXHIBIT D-1 - FORM OF UNLIMITED GUARANTY
----------------------------------------
are referred to collectively as the "Guaranteed Obligations". Guarantor and
----------------------
Lender agree that Guarantor's obligations hereunder shall not exceed the greater
of: (i) the aggregate amount of all monies received, directly or indirectly, by
Guarantor from Borrower after the date of execution of the Existing Facility
(whether by loan, capital infusion or other means), or (ii) the maximum amount
not subject to avoidance under Title 11 of the United States Code, as same may
be amended from time to time, or any applicable state law (the "Bankruptcy
Code"). To that end, to the extent such obligations would otherwise be subject
to avoidance under the Bankruptcy Code if Guarantor is not deemed to have
received valuable consideration, fair value or reasonably equivalent value for
its obligations hereunder, Guarantor's obligations hereunder shall be reduced to
that amount which, after giving effect thereto, would not render Guarantor
insolvent, or leave Guarantor with an unreasonably small capital to conduct its
business, or cause Guarantor to have incurred debts (or intended to have
incurred debts) beyond its ability to pay such debts as they mature, as such
terms are determined, and at the time such obligations are deemed to have been
incurred, under the Bankruptcy Code.
2. In the event of any default by Borrower in making payment of the
Facility Indebtedness, or in performance of the Obligations, as aforesaid, in
each case beyond the expiration of any applicable grace period, Guarantor
agrees, on demand by Lender or the holder of the Note, to pay all the Facility
Indebtedness and to perform all the Obligations as are or then or thereafter
become due and owing or are to be performed under the terms of the Note, the
Revolving Credit Agreement and the other Loan Documents. Lender shall have the
right, at its option, either before, during or after pursuing any other right or
remedy against Borrower or Guarantor, to perform any and all of the Obligations
by or through any agent, contractor or subcontractor, or any of their agents, of
its selection, all as Lender in its sole discretion deems proper, and Guarantor
shall indemnify and hold Lender free and harmless from and against any and all
loss, damage, cost, expense, injury, or liability Lender may suffer or incur in
connection with the exercise of its rights under this Guaranty or the
performance of the Obligations, except to the extent the same arises as a result
of the gross negligence or wilful misconduct of Lender.
All of the remedies set forth herein and/or provided by any of the Loan
Documents or law or equity shall be equally available to Lender, and the choice
by Lender of one such alternative over another shall not be subject to question
or challenge by Guarantor or any other person, nor shall any such choice be
asserted as a defense, set-off, or failure to mitigate damages in any action,
proceeding, or counteraction by Lender to recover or seeking any other remedy
under this Guaranty, nor shall such choice preclude Lender from subsequently
electing to exercise a different remedy. The parties have agreed to the
alternative remedies hereinabove specified in part because they recognize that
the choice of remedies in the event of a failure hereunder will necessarily be
and should properly be a
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EXHIBIT D-1 - FORM OF UNLIMITED GUARANTY
----------------------------------------
matter of business judgment, which the passage of time and events may or may not
prove to have been the best choice to maximize recovery by Lender at the lowest
cost to Borrower and/or Guarantor. It is the intention of the parties that such
choice by Lender be given conclusive effect regardless of such subsequent
developments.
3. Guarantor does hereby waive (i) notice of acceptance of this Guaranty
by Lender and any and all notices and demands of every kind which may be
required to be given by any statute, rule or law, (ii) any defense, right of
set-off or other claim which Guarantor may have against the Borrower or which
Guarantor or Borrower may have against Lender or any holders of the Note (other
than defenses relating to payment of the Facility Indebtedness or the
correctness of any allegation by Lender that Borrower was in default in the
performance of the Obligations), (iii) presentment for payment, demand for
payment (other than as provided for in Paragraph 2 above), notice of nonpayment
-----------
(other than as provided for in Paragraph 2 above) or dishonor, protest and
-----------
notice of protest, diligence in collection and any and all formalities which
otherwise might be legally required to charge Guarantor with liability, (iv) any
failure by Lender to inform Guarantor of any facts Lender may now or hereafter
know about Borrower, the Revolving Facility, or the transactions contemplated by
the Revolving Credit Agreement, it being understood and agreed that Lender has
no duty so to inform and that the Guarantor is fully responsible for being and
remaining informed by the Borrower of all circumstances bearing on the existence
or creation, or the risk of nonpayment of the Facility Indebtedness or the risk
of nonperformance of the Obligations, and (v) any and all right to cause a
marshalling of assets of the Borrower or any other action by any court or
governmental body with respect thereto, or to cause Lender to proceed against
any other security given to Lender in connection with the Facility Indebtedness
or the Obligations. Credit may be granted or continued from time to time by
Lender to Borrower without notice to or authorization from Guarantor, regardless
of the financial or other condition of the Borrower at the time of any such
grant or continuation. Lender shall have no obligation to disclose or discuss
with Guarantor its assessment of the financial condition of Borrower. Guarantor
acknowledges that no representations of any kind whatsoever have been made by
Lender to Guarantor. No modification or waiver of any of the provisions of this
Guaranty shall be binding upon Lender except as expressly set forth in a writing
duly signed and delivered on behalf of Lender. Guarantor further agrees that
any exculpatory language contained in the Revolving Credit Agreement or the Note
shall in no event apply to this Guaranty, and will not prevent Lender from
proceeding against Guarantor to enforce this Guaranty.
4. Guarantor further agrees that Guarantor's liability as guarantor shall
in nowise be impaired by any renewals or extensions which may be made from time
to time, with or without the knowledge or consent of Guarantor, of the time for
payment of interest or principal
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EXHIBIT D-1 - FORM OF UNLIMITED GUARANTY
----------------------------------------
under the Note or by any forbearance or delay in collecting interest or
principal under the Note, or by any waiver by Lender under the Revolving Credit
Agreement or any other Loan Documents, or by Lender's failure or election not to
pursue any other remedies it may have against Borrower, or by any change or
modification in the Note, Revolving Credit Agreement or any other Loan
Documents, or by the acceptance by Lender of any additional security or any
increase, substitution or change therein, or by the release by Lender of any
security or any withdrawal thereof or decrease therein, or by the application of
payments received from any source to the payment of any obligation other than
the Facility Indebtedness, even though Lender might lawfully have elected to
apply such payments to any part or all of the Facility Indebtedness, it being
the intent hereof that Guarantor shall remain liable as principal for payment of
the Facility Indebtedness and performance of the Obligations until all
indebtedness has been paid in full and the other terms, covenants and conditions
of the Revolving Credit Agreement and other Loan Documents and this Guaranty
have been performed and the Aggregate Commitment terminated, notwithstanding any
act or thing which might otherwise operate as a legal or equitable discharge of
a surety. Guarantor further understands and agrees that Lender may at any time
enter into agreements with Borrower to amend and modify the Note, Revolving
Credit Agreement or other Loan Documents, or any thereof, and may waive or
release any provision or provisions of the Note, the Revolving Credit Agreement
and other Loan Documents or any thereof, and, with reference to such
instruments, may make and enter into any such agreement or agreements as Lender
and Borrower may deem proper and desirable, without in any manner impairing this
Guaranty or any of Lender's rights hereunder or any of the Guarantor's
obligations hereunder.
5. This is an absolute, unconditional, complete, present and continuing
guaranty of payment and performance and not of collection. Guarantor agrees
that this Guaranty may be enforced by Lender without the necessity at any time
of resorting to or exhausting any other security or collateral given in
connection herewith or with the Note, the Revolving Credit Agreement or any of
the other Loan Documents, or resorting to any other guaranties, and Guarantor
hereby waives the right to require Lender to join Borrower in any action brought
hereunder or to commence any action against or obtain any judgment against
Borrower or to pursue any other remedy or enforce any other right. Guarantor
further agrees that nothing contained herein or otherwise shall prevent Lender
from pursuing concurrently or successively all rights and remedies available to
it at law and/or in equity or under the Note, Revolving Credit Agreement or any
other Loan Documents, and the exercise of any of its rights or the completion of
any of its remedies shall not constitute a discharge of any of Guarantor's
obligations hereunder, it being the purpose and intent of the Guarantor that the
obligations of Guarantor hereunder shall be primary, absolute, independent and
unconditional under any and all circumstances whatsoever. Neither Guarantor's
obligations under this Guaranty nor any remedy for the enforcement thereof shall
be impaired, modified, changed or released in any manner whatsoever by any
impairment, modification, change, release or
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<PAGE>
limitation of the liability of Borrower under the Note, Revolving Credit
Agreement or other Loan Documents or by reason of Borrower's bankruptcy or by
reason of any creditor or bankruptcy proceeding instituted by or against
Borrower. This Guaranty shall continue to be effective and be deemed to have
continued in existence or be reinstated (as the case may be) if at any time
payment of all or any part of any sum payable pursuant to the Note, Revolving
Credit Agreement or any other Loan Document is rescinded or otherwise required
to be returned by the payee upon the insolvency, bankruptcy, or reorganization
of the payor, all as though such payment to Lender had not been made, regardless
of whether Lender contested the order requiring the return of such payment. The
obligations of Guarantor pursuant to the preceding sentence shall survive any
termination, cancellation, or release of this Guaranty.
6. This Guaranty shall be assignable by Lender to any assignee of all or a
portion of Lender's rights under the Loan Documents.
7. If: (i) this Guaranty, the Note or any other Loan Document is placed
in the hands of attorneys for collection or is collected through any legal
proceeding; (ii) attorneys are retained to represent Lender in any bankruptcy,
reorganization, receivership, or other proceedings affecting creditors' rights
and involving a claim under this Guaranty, the Note, the Revolving Credit
Agreement, or any other Loan Document; (iii) attorneys are retained to provide
advice or other representation with respect to the Loan Documents in connection
with an enforcement action or potential enforcement action; or (iv) attorneys
are retained to represent Lender in any other legal proceedings whatsoever in
connection with this Guaranty, the Note, the Revolving Credit Agreement, any of
the other Loan Documents, or any property subject thereto (other than any action
or proceeding brought by any Lender or participant against the Administrative
Agent (as defined in the Revolving Credit Agreement) alleging a breach by the
Administrative Agent of its duties under the Loan Documents), then Guarantor
shall pay to Lender upon demand all reasonable attorneys' fees, costs and
expenses, including, without limitation, court costs, filing fees, recording
costs, expenses of foreclosure, title insurance premiums, survey costs, minutes
of foreclosure, and all other costs and expenses incurred in connection
therewith (all of which are referred to herein as "Enforcement Costs"), in
-----------------
addition to all other amounts due hereunder.
8. The parties hereto intend that each provision in this Guaranty comports
with all applicable local, state and federal laws and judicial decisions.
However, if any provision or provisions, or if any portion of any provision or
provisions, in this Guaranty is found by a court of law to be in violation of
any applicable local, state or federal ordinance, statute, law, administrative
or judicial decision, or public policy, and if such court should declare such
portion, provision or provisions of this Guaranty to be illegal, invalid,
unlawful, void or unenforceable as written, then it is the intent of all parties
hereto that such portion, provision or provisions shall be given force to the
fullest possible extent that they are legal, valid and
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EXHIBIT D-1 - FORM OF UNLIMITED GUARANTY
----------------------------------------
enforceable, that the remainder of this Guaranty shall be construed as if such
illegal, invalid, unlawful, void or unenforceable portion, provision or
provisions were not contained therein, and that the rights, obligations and
interest of Lender or any holder of the Note under the remainder of this
Guaranty shall continue in full force and effect.
9. Any indebtedness of Borrower to Guarantor now or hereafter existing is
hereby subordinated to the Facility Indebtedness. Guarantor agrees that until
the entire Facility Indebtedness has been paid in full and the aggregate
Commitment is terminated, if an Event of Default under the Revolving Credit
Agreement exists and is continuing, (i) Guarantor will not seek, accept, or
retain for Guarantor's own account, any payment from Borrower on account of such
subordinated debt, and (ii) any such payments to Guarantor on account of such
subordinated debt shall be collected and received by Guarantor in trust for
Lender and shall be paid over to Lender on account of the Facility Indebtedness
without impairing or releasing the obligations of Guarantor hereunder.
10. Unless and until the Facility Indebtedness is repaid in full and the
Aggregate Commitment is terminated, Guarantor shall not assert any claim (within
the meaning of 11 U.S.C. (S) 101) which Guarantor may have against Borrower
arising from a payment made by Guarantor under this Guaranty and agrees not to
assert or take advantage of any subrogation rights of Guarantor or Lender or any
right of Guarantor or Lender to proceed against (i) Borrower for reimbursement,
or (ii) any other guarantor or any collateral security or guaranty or right of
offset held by Lender for the payment of the Facility Indebtedness and
performance of the Obligations, nor shall Guarantor seek or be entitled to seek
any contribution or reimbursement from Borrower or any other guarantor in
respect of payments made by Guarantor hereunder. It is expressly understood
that the waivers and agreements of Guarantor set forth above constitute
additional and cumulative benefits given to Lender for its security and as an
inducement for its extension of credit to Borrower.
11. Any amounts received by Lender from any source on account of any
indebtedness may be applied by Lender toward the payment of such indebtedness,
and in such order of application, as Lender may from time to time elect.
12. The Guarantor hereby submits to personal jurisdiction in the State of
Illinois for the enforcement of this Guaranty and waives any and all personal
rights to object to such jurisdiction for the purposes of litigation to enforce
this Guaranty. Guarantor hereby consents to the jurisdiction of either the
Circuit Court of Cook County, Illinois, or the United States District Court for
the Northern District of Illinois, in any action, suit, or proceeding which
Lender may at any time wish to file in connection with this Guaranty or any
related matter. Guarantor hereby agrees that an action, suit, or proceeding to
enforce this Guaranty may be brought in any state or federal court in the State
of Illinois and hereby waives any
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EXHIBIT D-1 - FORM OF UNLIMITED GUARANTY
----------------------------------------
objection which Guarantor may have to the laying of the venue of any such
action, suit, or proceeding in any such court; provided, however, that the
provisions of this Paragraph shall not be deemed to preclude Lender from filing
any such action, suit, or proceeding in any other appropriate forum.
13. All notices and other communications provided to any party hereto under
this Agreement or any other Loan Document shall be in writing or by telex or by
facsimile and addressed or delivered to such party at its address set forth
below or at such other address as may be designated by such party in a notice to
the other parties. Any notice, if mailed and properly addressed with postage
prepaid, shall be deemed given when received; any notice, if transmitted by
telex or facsimile, shall be deemed given when transmitted (answerback confirmed
in the case of telexes and facsimiles). Notice may be given as follows:
To Guarantors:
The Howard Research And Development Corporation
10275 Little Patuxent Parkway
Columbia, Maryland 21044-3456
Attention: Patricia H. Dayton
Telecopy: (410) 964-3412
With a copy to:
The Rouse Company
10275 Little Patuxent Parkway
Columbia, Maryland 21044-3456
Attention: David R. Schwiesow
Telecopy: (410) 992-6392
To the Lender:
c/o The First National Bank of Chicago, as agent
One First National Plaza
Chicago, Illinois 60670
Attention: Real Estate Finance Department
Telecopy: (312) 732-1117
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With a copy to:
Sonnenschein Nath & Rosenthal
8000 Sears Tower
Chicago, Illinois 60606
Attention: Patrick G. Moran, Esq.
Telecopy: (312) 876-7934
or at such other address or to such other person as the party to be served with
notice may have furnished in writing to the party seeking or desiring to serve
notice as a place for the service of notice.
14. This Guaranty shall be binding upon the heirs, executors, legal and
personal representatives, successors and assigns of Guarantor and shall inure to
the benefit of Lender's successors and assigns.
15. This Guaranty shall be construed and enforced under the internal laws
of the State of Illinois.
16. GUARANTOR AND LENDER, BY ITS ACCEPTANCE HEREOF, EACH HEREBY WAIVE ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHT UNDER THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR RELATING THERETO OR
ARISING
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FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS GUARANTY AND AGREE
THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY.
IN WITNESS WHEREOF, Guarantor has delivered this Guaranty in the State of
Illinois as of the date first written above.
THE HOWARD RESEARCH AND
DEVELOPMENT CORPORATION
By:_______________________________________
Its:______________________________________
ACCEPTED:
THE FIRST NATIONAL BANK OF CHICAGO,
not individually but as Administrative
Agent for the Lenders
By:______________________________
Its:_____________________________
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS...................................................................... 2
1.1 Definitions........................................................................................... 2
1.2 Financial Standards................................................................................... 21
ARTICLE II THE FACILITY........................................................................................ 22
2.1 The Facility.......................................................................................... 22
2.2 Principal Payments and Extension Option............................................................... 22
2.3 Requests for Advances; Responsibility for Advances.................................................... 22
2.4 Evidence of Credit Extensions......................................................................... 22
2.5 Ratable and Non-Pro Rata Loans........................................................................ 23
2.6 LIBOR Applicable Margins.............................................................................. 23
2.7 Facility Fee.......................................................................................... 23
2.8 Other Fees............................................................................................ 23
2.9 Minimum Amount of Each Advance........................................................................ 23
2.10 Interest.............................................................................................. 23
2.11 Selection of Rate Options and LIBOR Interest Periods.................................................. 24
2.12 Method of Payment..................................................................................... 26
2.13 Default............................................................................................... 27
2.14 Lending Installations................................................................................. 27
2.15 Non-Receipt of Funds by Administrative Agent.......................................................... 27
2.16 Application of Moneys Received........................................................................ 28
2.17 Competitive Bid Loans................................................................................. 28
2.18 Voluntary Reduction of Aggregate Commitment Amount.................................................... 33
2.19 The Pledge............................................................................................ 33
ARTICLE III THE LETTER OF CREDIT SUBFACILITY................................................................... 33
3.1 Obligation to Issue................................................................................... 33
3.2 Types and Amounts..................................................................................... 34
3.3 Conditions............................................................................................ 34
3.4 Procedure for Issuance of Facility Letters of Credit.................................................. 35
3.5 Reimbursement Obligations; Duties of Issuing Bank..................................................... 36
3.6 Participation......................................................................................... 36
3.7 Payment of Reimbursement Obligations.................................................................. 38
3.8 Compensation for Facility Letters of Credit........................................................... 39
3.9 Letter of Credit Collateral Account................................................................... 40
ARTICLE IV CHANGE IN CIRCUMSTANCES............................................................................. 40
4.1 Yield Protection...................................................................................... 40
4.2 Changes in Capital Adequacy Regulations............................................................... 41
4.3 Suspension of LIBOR Advances.......................................................................... 41
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4.4 Funding Indemnification.............................................................................. 42
4.5 Lender Statements; Survival of Indemnity............................................................. 42
ARTICLE V CONDITIONS PRECEDENT................................................................................. 42
5.1 Conditions Precedent to the Initial Advance.......................................................... 42
5.2 Conditions Precedent to Each Advance and Issuance of Facility Letters of Credit...................... 45
ARTICLE VI REPRESENTATIONS AND WARRANTIES....................................................................... 46
6.1 Existence............................................................................................ 46
6.2 Corporate Powers..................................................................................... 46
6.3 Power of Officers.................................................................................... 46
6.4 Government and Other Approvals....................................................................... 46
6.5 Solvency............................................................................................. 47
6.6 Compliance With Laws................................................................................. 47
6.7 Enforceability of Agreement.......................................................................... 47
6.8 Title to Property.................................................................................... 47
6.9 Litigation........................................................................................... 48
6.10 Events of Default.................................................................................... 48
6.11 Investment Company Act of 1940....................................................................... 48
6.12 Public Utility Holding Company Act................................................................... 48
6.13 Regulation U......................................................................................... 48
6.14 No Material Adverse Financial Change................................................................. 48
6.15 Financial Information................................................................................ 48
6.16 Factual Information.................................................................................. 49
6.17 ERISA................................................................................................ 49
6.18 Taxes................................................................................................ 49
6.19 Environmental Matters................................................................................ 49
6.20 Insurance............................................................................................ 50
6.21 No Brokers........................................................................................... 50
6.22 No Violation of Usury Laws........................................................................... 51
6.23 Not a Foreign Person................................................................................. 51
6.24 No Trade Name........................................................................................ 51
6.25 Subsidiaries......................................................................................... 51
6.26 Year 2000............................................................................................ 51
ARTICLE VII ADDITIONAL REPRESENTATIONS AND WARRANTIES........................................................... 52
7.1 Existence............................................................................................ 52
7.2 Corporate Powers..................................................................................... 52
7.3 Power of Officers.................................................................................... 52
7.4 Government and Other Approvals....................................................................... 52
7.5 Solvency............................................................................................. 52
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7.6 Compliance With Laws.............................................................................. 53
7.7 Enforceability of Guaranty........................................................................ 53
7.8 Title to Properties............................................................................... 53
7.9 Litigation........................................................................................ 54
7.10 Events of Default................................................................................. 54
7.11 Investment Company Act of 1940.................................................................... 54
7.12 Public Utility Holding Company Act................................................................ 54
7.13 No Material Adverse Financial Change.............................................................. 54
7.14 Financial Information............................................................................. 54
7.15 Factual Information............................................................................... 54
7.16 ERISA............................................................................................. 55
7.17 Taxes............................................................................................. 55
7.18 Environmental Matters............................................................................. 55
7.19 Insurance......................................................................................... 56
7.20 Subsidiaries...................................................................................... 56
ARTICLE VIII AFFIRMATIVE COVENANTS............................................................................. 57
8.1 Notices........................................................................................... 57
8.2 Financial Statements, Reports, Etc................................................................ 58
8.3 Existence and Conduct of Operations............................................................... 60
8.4 Maintenance of Properties......................................................................... 60
8.5 Insurance......................................................................................... 61
8.6 Payment of Obligations............................................................................ 61
8.7 Compliance with Laws.............................................................................. 61
8.8 Adequate Books.................................................................................... 61
8.9 ERISA............................................................................................. 61
8.10 Maintenance of Status............................................................................. 61
8.11 Use of Proceeds................................................................................... 61
8.12 Pre-Acquisition Environmental Investigations............................................. 61
8.13 Year 2000......................................................................................... 62
ARTICLE IX NEGATIVE COVENANTS.................................................................................. 62
9.1 Change in Business................................................................................ 62
9.2 Change of Property Management..................................................................... 62
9.3 Change of Borrower Control........................................................................ 62
9.4 Use of Proceeds................................................................................... 63
9.5 Transfers of Properties........................................................................... 63
9.6 Liens............................................................................................. 63
9.7 Regulation U...................................................................................... 64
9.8 Variable Rate Debt................................................................................ 64
9.9 Negative Pledge................................................................................... 64
9.10 Indebtedness and Cash Flow Covenants.............................................................. 65
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9.11 Mergers and Dispositions............................................................................. 66
9.12 Dividends............................................................................................ 67
9.13 Encumbrances......................................................................................... 67
9.14 Restrictions on Dividends and Distributions.......................................................... 67
9.15 Limitations on Indebtedness.......................................................................... 67
9.16 Limitations on PSS Assets............................................................................ 68
ARTICLE X DEFAULTS............................................................................................. 68
10.1 Nonpayment of Principal.............................................................................. 68
10.2 Certain Covenants.................................................................................... 68
10.3 Nonpayment of Interest and Other Obligations......................................................... 68
10.4 Cross Default........................................................................................ 68
10.5 Loan Documents....................................................................................... 68
10.6 Representation or Warranty........................................................................... 68
10.7 Covenants, Agreements and Other Conditions........................................................... 69
10.8 Borrower Status...................................................................................... 69
10.9 Material Adverse Financial Change.................................................................... 69
10.10 Bankruptcy........................................................................................... 69
10.11 Legal Proceedings.................................................................................... 69
10.12 Failure to Satisfy Judgments......................................................................... 70
10.13 ERISA................................................................................................ 70
10.14 Environmental Remediation............................................................................ 70
ARTICLE XI ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES...................................................... 70
11.1 Acceleration......................................................................................... 70
11.2 Preservation of Rights; Amendments................................................................... 71
ARTICLE XII THE ADMINISTRATIVE AGENT........................................................................... 71
12.1 Appointment.......................................................................................... 71
12.2 Powers............................................................................................... 72
12.3 General Immunity..................................................................................... 72
12.4 No Responsibility for Loans, Recitals, etc........................................................... 72
12.5 Action on Instructions of Lenders.................................................................... 72
12.6 Employment of Administrative Agents and Counsel...................................................... 72
12.7 Reliance on Documents; Counsel....................................................................... 73
12.8 Administrative Agent's Reimbursement and Indemnification............................................. 73
12.9 Rights as a Lender................................................................................... 73
12.10 Lender Credit Decision............................................................................... 73
12.11 Successor Administrative Agent....................................................................... 74
12.12 Notice of Defaults................................................................................... 74
12.13 Requests for Approval................................................................................ 75
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12.14 Copies of Documents............................................................................... 75
12.15 Defaulting Lenders................................................................................ 75
ARTICLE XIII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS................................................. 76
13.1 Successors and Assigns............................................................................ 76
13.2 Participations.................................................................................... 76
13.2.1 Permitted Participants; Effect............................................................ 76
13.2.2 Voting Rights............................................................................. 77
13.3 Assignments....................................................................................... 77
13.3.1 Permitted Assignments..................................................................... 77
13.3.2 Effect; Effective Date of Assignment...................................................... 78
13.4 Dissemination of Information...................................................................... 78
13.5 Tax Treatment..................................................................................... 78
ARTICLE XIV GENERAL PROVISIONS................................................................................. 79
14.1 Survival of Representations....................................................................... 79
14.2 Governmental Regulation........................................................................... 79
14.3 Taxes............................................................................................. 79
14.4 Headings.......................................................................................... 79
14.5 No Third Party Beneficiaries...................................................................... 79
14.6 Expenses; Indemnification......................................................................... 79
14.7 Severability of Provisions........................................................................ 80
14.8 Nonliability of the Lenders....................................................................... 80
14.9 Choice of Law..................................................................................... 80
14.10 Consent to Jurisdiction........................................................................... 80
14.11 Waiver of Jury Trial.............................................................................. 81
14.12 Successors and Assigns............................................................................ 81
14.13 Entire Agreement; Modification of Agreement....................................................... 81
14.14 Dealings with the Borrower........................................................................ 82
14.15 Set-Off........................................................................................... 82
14.16 Counterparts...................................................................................... 83
ARTICLE XV NOTICES............................................................................................. 83
15.1 Giving Notice..................................................................................... 83
15.2 Change of Address................................................................................. 85
</TABLE>
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<PAGE>
TABLE OF CONTENTS
-----------------
(CONTINUED)
PAGE
----
EXHIBITS
- - --------
A - Pricing Grid
B-1 - Form of Note
B-2 - Form of Competitive Bid Note
C-1 - Form of Competitive Bid Quote Request
C-2 - Invitation for Competitive Bid Quotes
C-3 - Competitive Bid Quote
D - Form of Limited Guaranty
D-1 - Form of Unlimited Guaranty
E - Opinion of Borrower's Counsel
F - Opinion of Guarantors' Counsel
G - Wiring Instructions
H - Form of Compliance Certificate
I - Form of Assignment Agreement
J - Description of Summerlin and Columbia Properties
K - Form of Initial Facility Letter of Credit
SCHEDULES
6.19 Environmental Compliance (Borrower)
6.25 Subsidiaries (Borrower)
7.18 Environmental Compliance (Guarantors)
7.20 Subsidiaries (Guarantors)
9.13 Existing Encumbrances
WITH THE EXCEPTION OF EXHIBITS D AND D-1, THE EXHIBITS AND SCHEDULES ARE
OMITTED. ANY OMITTED EXHIBIT OR SCHEDULE WILL BE FURNISHED SUPPLEMENTALLY TO
THE COMMISSION UPON REQUEST.
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<PAGE>
EXHIBIT 10.4
UNSECURED REVOLVING CREDIT AGREEMENT
------------------------------------
THIS FIRST AMENDMENT TO AMENDED AND RESTATED UNSECURED REVOLVING CREDIT
AGREEMENT (the "Amendment") is made as of the 14th day of August, 1998, by and
among THE ROUSE COMPANY, a Maryland corporation ("Borrower"), THE HOWARD HUGHES
CORPORATION ("HHC"), HOWARD HUGHES PROPERTIES, INC. ("HHP"), THE HOWARD RESEARCH
AND DEVELOPMENT CORPORATION ("HRD"; HHC, HHP and HRD are collectively referred
to herein as "Guarantors"), THE FIRST NATIONAL BANK OF CHICAGO, a national
banking association ("First Chicago"), in First Chicago's capacity as
Administrative Agent, Competitive Bid Agent and Lender under the Credit
Agreement described below, BANKERS TRUST COMPANY, a New York banking corporation
("Bankers Trust"), in Bankers Trust's capacity as Syndication Agent and Lender
under the Credit Agreement (First Chicago and Bankers Trust in their capacities
as Lenders being referred to as the "Original Lenders") and the additional banks
identified on the signature pages of this Amendment (the "New Lenders").
RECITALS
--------
A. Borrower, Guarantors and the Original Lenders entered into a certain
Amended and Restated Unsecured Revolving Credit Agreement dated as of July 29,
1998 (the "Credit Agreement"). All capitalized terms used in this Agreement and
not otherwise defined herein shall have the meanings ascribed to such terms in
the Credit Agreement.
B. Pursuant to the terms of the Credit Agreement, the Original Lenders
agreed to provide Borrower with a revolving credit facility in an aggregate
principal amount of up to $450,000,000. The parties hereto desire to amend the
Credit Agreement in order to, among other things, (i) admit each of the New
Lenders as a "Lender" under the Credit Agreement without increasing the
Aggregate Commitment; (ii) adjust the respective Percentages and Commitments of
the Lenders; and (iii) make certain other modifications to the Credit Agreement.
NOW, THEREFORE, in consideration of the foregoing Recitals and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
AGREEMENTS
----------
1. The foregoing Recitals to this Amendment hereby are incorporated into
and made a part of this Amendment.
2. From and after the "Effective Date", as defined below, each of the
Original Lenders and each New Lender shall be considered a "Lender" under the
Credit Agreement
<PAGE>
and the Loan Documents. Borrower, Guarantors and the Original Lenders hereby
consent to the addition of each of the New Lenders as a Lender. From and after
the Effective Date, each New Lender's Commitment and Percentage shall be as
shown below such New Lender's signature block on this Amendment. The adjusted
Commitments and Percentages for the Original Lenders are also shown on the
signature pages to this Amendment.
3. The "Effective Date" shall be the date on which all of the following
conditions shall have been fulfilled (or waived by the Original Lenders and New
Lenders):
(i) no Default or Event of Default then exists;
(ii) Borrower shall have executed and delivered to the
Administrative Agent for delivery to each New Lender two Notes, one in the
form attached hereto as Exhibit B-3 in the amount of such New Lender's
Commitment (each a "Primary Note") and one in the form attached hereto as
Exhibit B-5 with respect to Competitive Bid Loans;
(iii) Borrower shall have executed and delivered to the
Administrative Agent for delivery to the Original Lenders two amended and
restated Notes, one in the form attached hereto as Exhibit B-4 in the
adjusted amount of such Original Lender's Commitment (each a "Primary
Note") and one in the form attached hereto as Exhibit B-6 with respect to
Competitive Bid Loans;
(iv) if any LIBOR Advances are then outstanding, it shall be
the last day of the LIBOR Interest Period for such LIBOR Advances, and the
only other Advances outstanding on such date shall be Alternate Base Rate
Advances;
(v) Borrower shall have executed and delivered, or caused to
be executed and delivered, to the Administrative Agent (and, upon receipt
from Borrower, the Administrative Agent shall deliver to the other Lenders)
a certificate dated as of the Effective Date signed by Borrower (i)
confirming that no Default or Event of Default exists under the Loan
Documents; and (ii) representing and warranting that the Loan Documents are
then in full force and effect and that, to the best of their knowledge,
Borrower then has no defenses or offsets to, or claims or counterclaims
relating to, its obligations under the Loan Documents;
(vi) the Original Lenders shall have paid in equal shares to
each of the New Lenders the agreed upon upfront fee payable to each such
New Lender; and
(vii) the Borrower, the Guarantors, the Administrative Agent,
the Original Lenders and the New Lenders shall have executed this Amendment.
If the Effective Date has not occurred by August 31, 1998, either Borrower or
any New Lender may, by written notice to all other parties hereto, elect to
terminate this Amendment
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<PAGE>
which thereupon shall have no further force or effect and the Credit Agreement
shall continue as if this Amendment had not been executed. The Administrative
Agent shall return (or caused to be returned) to the Borrower the Notes
previously executed and delivered by the Borrower to First Chicago and Bankers
Trust dated July 29, 1998, in the respective amounts of $225,000,000 each, and
the Competitive Bid Notes previously executed and delivered by the Borrower to
First Chicago and Bankers Trust dated July 29, 1998, on or promptly after the
Effective Date.
4. Each New Lender, on the Effective Date, agrees to purchase from each
of the Original Lenders, in equal shares, and each of the Original Lenders
hereby agrees to sell to each New Lender, in equal shares, without recourse, a
portion of the Obligations equal to such New Lender's Percentage of the then
outstanding principal balance of each Advance then outstanding and held by the
Original Lenders. Such purchases by each New Lender shall not change the
aggregate principal amount of all Advances outstanding on the Effective Date.
Each such purchase shall be effected by wire transfer of immediately available
funds in the appropriate amounts to the Administrative Agent for remittance to
each of the Original Lenders on the Effective Date. Borrower irrevocably and
unconditionally agrees that from and after the Effective Date the portion of
Obligations so funded by each of the New Lenders shall be evidenced by and shall
be deemed to be an Advance by such New Lender under such New Lender's Primary
Note as of the date of such purchase and shall be treated as such for purposes
of calculating interest and fees accruing from and after the date of such
purchase under the Credit Agreement (as amended by this Amendment). All interest
and fees accruing on such portion of the Obligations prior to the date of such
purchase shall be paid when due to the Administrative Agent for remittance to
the Original Lenders, as described in the Credit Agreement.
5. Section 1.1 of the Credit Agreement is hereby amended by adding the
following definition before the definition of "Gross Asset Value":
"Governmental Authority" means any nation or government, any state or
----------------------
other political subdivision thereof and any quasi-governmental agency
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
6. Section 1.1 of the Credit Agreement is hereby amended by adding the
following definition before the definition of "Total Outstanding Indebtedness":
"The Hughes Corporation" means that certain Delaware corporation which
----------------------
is one of the Pledgors under the Pledge.
7. Section 2.16(iv)(b) of the Credit Agreement is hereby amended by
adding the word "Funded" before the words "Percentages of the Lenders".
-3-
<PAGE>
8. Section 2.16(vi) of the Credit Agreement is hereby amended by adding
the word "Funded" before the word "Percentages" in the second line thereof.
9. Section 2.17(c) of the Credit Agreement is hereby amended by adding
the words "(and in any event before the close of business on the same Business
Day of)" before the word "receipt" in the first line thereof.
10. Section 3.7(a) of the Credit Agreement is hereby amended by adding the
words "(as described in Section 3.5(a))" after the words "Advances for
--------------
Reimbursement Obligations" in the second line thereof.
11. Section 3.9 of the Credit Agreement is hereby amended by adding the
words "and proceeds thereof" after the words "including income earned thereon"
in the ninth line thereof.
12. Paragraph 5 of Exhibit H of the Credit Agreement is hereby amended by
adding the words "Combined EBITDA," before the words "Funds From Operations" in
the sixth line thereof.
13. Paragraph 3 of Exhibit I of the Credit Agreement is hereby amended by
adding the word "Administrative" before the word "Agent" in the fourth line
thereof.
14. Section 7(d) of Exhibit M of the Credit Agreement is hereby amended by
adding the Roman numeral "(i)" before the word "sell" in the first line thereof
and adding after the words "to do so" in the third line thereof the phrase ", or
(ii) sell, assign, exchange or otherwise transfer, or encumber in any manner,
any Indebtedness (as defined in the Credit Agreement) owed to such Pledgor by
either HHC or HHP, or attempt or contract to do so."
15. Except as specifically modified hereby, the Credit Agreement is and
remains unmodified and in full force and effect and is hereby ratified and
confirmed. All references in the Loan Documents to the "Agreement" or the
"Revolving Credit Agreement" henceforth shall be deemed to refer to the Credit
Agreement as amended by this Amendment. Each Guarantor, in its capacity as a
Guarantor under the Guaranty, hereby consents to this Amendment and specifically
acknowledges and agrees that its obligations under the Guaranty continue in full
force and effect with respect to all of the "Facility Indebtedness" and all
"Obligations" (as defined in the Guaranty) which are now or hereafter due to the
Lenders or the Administrative Agent under the Credit Agreement as amended by
this Amendment.
16. This Amendment may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Amendment by signing any such counterpart. This
Amendment shall be construed in accordance with the internal laws (and not the
law of conflicts) of the State of Illinois, but giving effect to federal laws
applicable to national banks. This Amendment shall be effective on the
Effective Date.
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<PAGE>
17. The Syndication Agent hereby advises the Borrower, and all parties
hereto agree, that the initial syndication of the Facility has been completed as
of the date hereof.
[BALANCE OF PAGE INTENTIONALLY BLANK]
-5-
<PAGE>
IN WITNESS WHEREOF, the Borrower, the Guarantors, the Original Lenders, the
New Lenders, and the Administrative Agent have executed this Amendment as of the
date first above written.
THE ROUSE COMPANY, a Maryland
corporation
By:_________________________________________
Title:______________________________________
THE HOWARD HUGHES CORPORATION
By:_________________________________________
Title:______________________________________
HOWARD HUGHES PROPERTIES, INC.
By:_________________________________________
Title:______________________________________
THE HOWARD RESEARCH AND
DEVELOPMENT CORPORATION
By:_________________________________________
Title:______________________________________
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<PAGE>
THE FIRST NATIONAL BANK OF
CHICAGO, as Original Lender and as
Administrative Agent and Competitive
Bid Agent
By:_________________________________________
Title:______________________________________
Commitment: $74,531,250
Percentage of Aggregate Commitment: 16.5625%
Address for Notices:
One First National Plaza
Chicago, Illinois 60670
Attention: Real Estate Finance Division
Telephone: (312) 732-1486
Facsimile: (312) 732-1117
BANKERS TRUST COMPANY, as Original
Lender and as Syndication Agent
By:_________________________________________
Title:______________________________________
Commitment: $74,531,250
Percentage of Aggregate Commitment: 16.5625%
Address for Notices:
Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Attention: Susan LeBoutillier
Telephone: (212) 250-2418
Facsimile: (212) 669-0752
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<PAGE>
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as New Lender
By:_________________________________________
Title:______________________________________
Commitment: $56,250,000
Percentage of Aggregate Commitment: 12.5000%
Address for Notices:
60 Wall Street
New York, New York 10260
Attention: Glenda Irving
Telephone: (212) 648-4690
Facsimile: (212) 648-5249
THE CHASE MANHATTAN BANK, N.A., as
New Lender
By:_________________________________________
Title:______________________________________
Commitment: $56,250,000
Percentage of Aggregate Commitment: 12.5000%
Address for Notices:
380 Madison Avenue, 10th Floor
New York, New York 10017
Attention: Charles Hoagland
Telephone: (212) 622-3270
Facsimile: (212) 622-3369
-8-
<PAGE>
NATIONSBANK N.A., as New Lender
By:_________________________________________
Title:______________________________________
Commitment: $56,250,000
Percentage of Aggregate Commitment: 12.5000%
Address for Notices:
6610 Rockledge Drive, 6th Floor
Bethesda, Maryland 20217
Attention: Mr. Matt Juall
Telephone: (301) 897-7513
Facsimile: (301) 493-2885
BANK OF AMERICA NATIONAL TRUST & SAVINGS
ASSOCIATION, as New Lender
By:_________________________________________
Title:______________________________________
Commitment: $42,187,500
Percentage of Aggregate Commitment: 9.3750%
Address for Notices:
Real Estate Group
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Michael Edwards
Telephone: (312) 828-5175
Facsimile: (312) 974-4970
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<PAGE>
DRESDNER BANK AG, NEW YORK
BRANCH AND GRAND CAYMAN BRANCH,
as New Lender
By:_________________________________________
Title:______________________________________
Commitment: $42,187,500
Percentage of Aggregate Commitment: 9.3750%
Address for Notices:
75 Wall Street
New York, New York 10005-2889
Attention: Neil J. Crawford
Telephone: (212) 429-2657
Facsimile: (212) 429-2781
COMMERZBANK AKTIENGESELLSCHAFT,
NEW YORK BRANCH AND GRAND
CAYMAN BRANCH, as New Lender
By:_________________________________________
Title:______________________________________
Commitment:$28,125,000
Percentage of Aggregate Commitment: 6.2500%
Address for Notices:
2 World Financial Center, 34th Floor
New York, New York 10281
Attention: Mr. Douglas Traynor
Telephone: (212) 266-7569
Telecopy: (212) 266-7565
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<PAGE>
AMSOUTH BANK, as New Lender
By:_________________________________________
Title:______________________________________
Commitment: $19,687,500
Percentage of Aggregate Commitment: 4.3750%
Address for Notices:
Commercial Real Estate - Loan Department
1900 Fifth Avenue, North
Birmingham, Alabama 35203
Attention: Lawrence B. Clark
Telephone: (205) 581-7493
Telecopy: (205) 326-4075
EXHIBITS
B-3 - Form of Note
B-4 - Form of Amended and Restated Note
B-5 - Form of Competitive Bid Note
B-6 - Form of Amended and Restated Competitive Bid Note
EXHIBITS B-3, B-4, B-5, AND B-6 ARE OMITTED. ANY OMITTED EXHIBIT WILL BE
FURNISHED SUPPLEMENTALLY TO THE COMMISSION UPON REQUEST.
-11-
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements of
The Rouse Company on Form S-3 (File Nos. 2-78898, 2-95596, 33-52458, 33-57347,
33-57707 and 333-20781), Form S-8 (File Nos. 2-83612, 33-56231, 33-56233,
33-56235 and 333-32277) and Form S-4 (File No. 333-1693) of our report dated
June 15, 1998, on our audit of the statement of revenues and certain expenses of
the Valley Fair Property for the year ended December 31, 1997 and of our report
dated June 15, 1998, on our audit of the statement of revenues and certain
expenses of the Park Meadows Mall Property for the year ended December 31, 1997
which reports are included in this filing on Form 8-K/A.
PricewaterhouseCoopers LLP
Newport Beach, California
October 6, 1998
