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EXHIBIT 4.2
TERM LOAN AGREEMENT
DATED AS OF MAY 12, 2000
BETWEEN
DEVELOPERS DIVERSIFIED REALTY CORPORATION,
AS BORROWER
AND
BANK OF AMERICA, NATIONAL ASSOCIATION,
AS LENDER
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TERM LOAN AGREEMENT
This Term Loan Agreement, dated as of May __, 2000, is between
Developers Diversified Realty Corporation, a corporation organized under the
laws of the State of Ohio ("BORROWER"), and Bank of America, National
Association ("LENDER").
RECITALS:
A. Borrower is primarily engaged in the business of purchasing,
developing, owning, operating, leasing and managing retail, office and
industrial properties.
B. Borrower is listed on the New York Stock Exchange and is qualified
as a real estate investment trust.
C. Borrower has requested that Lender make to it a term loan in the
amount of $100,000,000. Lender has agreed to do so on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained the sufficiency of which is hereby acknowledged, the parties
hereto agree as follows:
1. DEFINITIONS.
"ABR APPLICABLE MARGIN" means, as of any date, the Applicable Margin in
effect on such date with respect to Floating Rate Tranches.
"ACQUISITION" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which
Borrower or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or division thereof,
whether through purchase of assets, merger or otherwise or (ii) directly or
indirectly acquires (in one transaction or as the most recent transaction in a
series of transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for the election of
directors (other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage or voting power) of the
outstanding partnership interests of a partnership.
"ADVANCE" means the borrowing of the Loan Amount hereunder consisting
the Loan.
"AFFILIATE" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) 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.
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"AGREEMENT" means this Term Loan Agreement, as it may be amended or
modified and in effect from time to time.
"AGREEMENT EXECUTION DATE" means the date this Agreement has been fully
executed and delivered by all parties hereto.
"AIP" means American Industrial Properties REIT, a Texas real estate
investment trust.
"AIP CONDITIONS" means the following conditions (i) all Indebtedness of
AIP shall be nonrecourse to Borrower at all times; (ii) AIP shall be listed on
the New York Stock Exchange at all times; (iii) Borrower shall not hold 50% or
more of the total outstanding equity interests in AIP at any time; (iv) Borrower
shall not hold any ownership interest or right in AIP which will result in the
consolidation under GAAP of AIP's financial results with the financial results
of the Consolidated Group at any time; and (v) the Consolidated Group's
investment in AIP, as determined in accordance with GAAP shall be at all times
less than the greater of (a) $175,000,000 or (b) 5% of Consolidated Market Value
without giving effect to the Consolidated Group's investment in AIP.
"AIP TRANSITION PERIOD" means a period beginning on the first to occur
of (i) the date the AIP Conditions are not met or (ii) the date, if any, that
Borrower or one of its Wholly-Owned Subsidiaries first acquires Projects from
AIP in redemption or satisfaction of all or any portion of the Consolidated
Group's investment in AIP and ending on the last day of the second full fiscal
quarter of Borrower thereafter.
"ALTERNATE BASE RATE" means, for any day, a rate of interest per annum
equal to the higher of (i) the Reference Rate for such day and (ii) the sum of
Federal Funds Effective Rate for such day plus 1/2% per annum.
"APPLICABLE MARGIN" means for a Floating Rate Tranche, 0.00% and for a
LIBOR Tranche, 1.10%.
"ASSETS UNDER DEVELOPMENT" means, as of any date of determination, all
Projects and expansion areas of existing Projects owned by the Consolidated
Group and the Investment Affiliates which are then treated as assets under
development under GAAP and which have been designated by Borrower as "Assets
Under Development" in its most recent compliance certificate, both such land and
improvements under construction to be valued for purposes of this Agreement at
(i) 100% of then-current book value, as determined in accordance with GAAP, for
those Assets Under Development owned by members of the Consolidated Group and
(ii) the applicable Consolidated Group Pro Rata Share of then-current book
value, as determined in accordance with GAAP, for each Asset Under Development
owned by an Investment Affiliate; provided, however, in no event shall Assets
Under Development include (x) any Project or any expansion area of an existing
Project for more than 540 days or (y) with respect to Projects owned by
Investment Affiliates, any Project or expansion area of an existing Project
which is encumbered by a First Mortgage Receivable as designated by Borrower.
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"AUTHORIZED OFFICER" means any of the President, Chief Executive
Officer, Executive Vice President, Chief Operating Officer, Chief Financial
Officer, any Vice President, and General Counsel of Borrower, acting singly.
"BORROWER" means Developers Diversified Realty Corporation, a
corporation organized under the laws of the State of Ohio, and its successors
and assigns.
"BORROWING DATE" means the date hereof.
"BUSINESS DAY" means (i) with respect to any borrowing, payment or rate
selection of LIBOR Tranches, a day (other than a Saturday or Sunday) on which
banks generally are open in Chicago, Illinois and New York, New York for the
conduct of substantially all of their commercial lending activities and on which
dealings in United States dollars are carried on in the London interbank market
and (ii) for all other purposes, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago, Illinois and New York, New York for
the conduct of substantially all of their commercial lending activities.
"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.
"CAPITALIZED LEASE" of a Person means any lease of Property imposing
obligations on such Person, as lessee thereunder, which are required in
accordance with GAAP to be capitalized on a balance sheet of such Person.
"CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.
"CASH EQUIVALENTS" means, as of any date:
(i) securities issued or directly and fully guaranteed or
insured by the United States Government or any agency
or instrumentality thereof having maturities of not
more than one year from such date;
(ii) mutual funds organized under the United States
Investment Company Act rated AAm or AAm-G by S&P, P-1
by Moody's and A by Fitch;
(iii) certificates of deposit or other interest-bearing
obligations of a bank or trust company which is a
member in good standing of the Federal Reserve System
having a short term unsecured debt rating of not less
than A-1 by S&P, not less than P-1 by Moody's and F-1
by Fitch (or in each case, if no bank or trust
company is so rated, the highest comparable rating
then given to any bank or trust company, but in such
case only for funds invested overnight or over a
weekend) provided that
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such investments shall mature or be redeemable upon
the option of the holders thereof on or prior to a
date one month from the date of their purchase;
(iv) certificates of deposit or other interest-bearing
obligations of a bank or trust company which is a
member in good standing of the Federal Reserve System
having a short term unsecured debt rating of not less
than A-1 + by S&P, and not less than P-1 by Moody's
and which has a long term unsecured debt rating of
not less than Al by Moody's (or in each case, if no
bank or trust company is so rated, the highest
comparable rating then given to any bank or trust
company, but in such case only for funds invested
overnight or over a weekend) provided that such
investments shall mature or be redeemable upon the
option of the holders thereof on or prior to a date
three months from the date of their purchase;
(v) bonds or other obligations having a short term
unsecured debt rating of not less than A-1 + by S&P
and P-1 + by Moody's and having a long term debt
rating of not less than Al by Moody's issued by or by
authority of any state of the United States, any
territory or possession of the United States,
including the Commonwealth of Puerto Rico and
agencies thereof, or any political subdivision of any
of the foregoing;
(vi) repurchase agreements issued by an entity rated not
less than A-1 + by S&P, and not less than P-1 by
Moody's which are secured by U.S. Government
securities of the type described in clause (i) of
this definition maturing on or prior to a date one
month from the date the repurchase agreement is
entered into;
(vii) short term promissory notes rated not less than A-1 +
by S&P, and not less than P-1 by Moody's maturing or
to be redeemable upon the option of the holders
thereof on or prior to a date one month from the date
of their purchase; and
(viii) commercial paper (having original maturities of not
more than 365 days) rated at least A-1 + by S&P and
P-1 by Moody's and issued by a foreign or domestic
issuer who, at the time of the investment, has
outstanding long-term unsecured debt obligations
rated at least Al by Moody's.
"CODE" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"CONSOLIDATED CAPITALIZATION VALUE" means, as of any date, an amount
equal to the sum of (i) Consolidated Cash Flow for the most recent period of two
consecutive fiscal quarters for which Borrower has reported results (excluding
any portion of Consolidated Cash
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Flow attributable to (A) Assets Under Development, (B) Projects owned by
Investment Affiliates which are encumbered by First Mortgage Receivables, and
(C) Projects acquired by Borrower or its Subsidiaries during such period)
MULTIPLIED by 2, and DIVIDED by 0.095 plus (ii) with respect to each Project so
acquired by Borrower or its Subsidiaries during such period, Borrower's
estimated annual Net Operating Income for such Project based on leases in
existence at the date of such acquisition DIVIDED by 0.095.
"CONSOLIDATED CASH FLOW" means, for any period, an amount equal to (a)
Funds From Operations for such period PLUS (b) Consolidated Interest Expense for
such period.
"CONSOLIDATED DEBT SERVICE" means, for any period, without duplication,
(a) Consolidated Interest Expense for such period PLUS (b) the aggregate amount
of scheduled principal payments attributable to Consolidated Outstanding
Indebtedness (excluding optional prepayments and scheduled principal payments in
respect of any such Indebtedness which is not amortized through equal periodic
installments of principal and interest over the term of such Indebtedness)
required to be made during such period by any member of the Consolidated Group
PLUS (c) a percentage of all such scheduled principal payments required to be
made during such period by any Investment Affiliate on Indebtedness taken into
account in calculating Consolidated Interest Expense, equal to the greater of
(x) the percentage of the principal amount of such Indebtedness for which any
member of the Consolidated Group is liable and (y) the Consolidated Group Pro
Rata Share of such Investment Affiliate.
"CONSOLIDATED GROUP" means Borrower and all Subsidiaries which are
consolidated with it for financial reporting purposes under GAAP.
"CONSOLIDATED GROUP PRO RATA SHARE" means, with respect to any
Investment Affiliate or AIP, the percentage of the total equity ownership
interests held by the Consolidated Group in the aggregate, in such Investment
Affiliate or AIP, determined by calculating the greater of (i) the percentage of
the issued and outstanding stock, partnership interests or membership interests
in such Investment Affiliate or AIP, respectively, held by the Consolidated
Group in the aggregate and (ii) the percentage of the total book value of such
Investment Affiliate or AIP, respectively, that would be received by the
Consolidated Group in the aggregate, upon liquidation of such Investment
Affiliate or AIP after repayment in full of all Indebtedness of such Investment
Affiliate or AIP, respectively.
"CONSOLIDATED INTEREST EXPENSE" means, for any period without
duplication, the sum of (a) the amount of interest expense, determined in
accordance with GAAP, of the Consolidated Group for such period attributable to
Consolidated Outstanding Indebtedness during such period plus (b) the
Consolidated Group Pro Rata Share of any interest expense, determined in
accordance with GAAP, of any Investment Affiliate, for such period, whether
recourse or non-recourse less (c) with respect to each consolidated Subsidiary
of Borrower in which Borrower does not directly or indirectly hold a 100%
ownership interest, a percentage of the interest expense attributable to such
consolidated Subsidiary which is included under clause (a) of this definition
and which is not related to Indebtedness which is a Guarantee Obligation of
Borrower equal to the percentage ownership in such consolidated Subsidiary
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which is not held either (i) directly or indirectly by Borrower, or (ii) by
holders of operating partnership units in such consolidated Subsidiary which are
convertible into stock of Borrower.
"CONSOLIDATED MARKET VALUE" means, as of any date, an amount equal to
the sum of (a) the Consolidated Capitalization Value as of such date, PLUS (b)
the value of Unrestricted Cash and Cash Equivalents, PLUS (c) the lesser of (i)
the value of Assets Under Development, or (ii) 10% of the Consolidated
Capitalization Value, PLUS (d) the lesser of (i) 100% of the then-current value
under GAAP of all First Mortgage Receivables or (ii) 5% of the Consolidated
Capitalization Value, PLUS (e) the lesser of (i) 50% of the then-current book
value, as determined in accordance with GAAP, of Developable Land, or (ii)
$30,000,000, PLUS (f) the Consolidated Group's Investment in AIP, as determined
in accordance with GAAP (the "AIP VALUE"); provided, however, that AIP Value
shall only be included in the aforementioned calculation if Borrower is in
compliance with all of the AIP Conditions.
"CONSOLIDATED NET INCOME" means, for any period, consolidated net
income (or loss) of the Consolidated Group for such period determined on a
consolidated basis in accordance with GAAP; PLUS that portion of any amount
deducted as minority equity interest in calculating such consolidated net income
which is attributable to minority interest holders holding operating partnership
units in a member of the Consolidated Group which are convertible into stock in
Borrower, but PROVIDED that there shall be excluded (a) the income (or deficit)
of any other Person accrued prior to the date it becomes a Subsidiary of
Borrower or is merged into or consolidated with Borrower or any of its
Subsidiaries and (b) the undistributed earnings of any Subsidiary which has not
furnished a Subsidiary Guaranty to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any contractual obligation or requirement of law
applicable to such Subsidiary.
"CONSOLIDATED NET WORTH" means, as of any date of determination, an
amount equal to (a) Consolidated Market Value minus (b) Consolidated Outstanding
Indebtedness as of such date.
"CONSOLIDATED OUTSTANDING INDEBTEDNESS" means, as of any date of
determination, without duplication, the sum of (a) all Indebtedness of the
Consolidated Group outstanding at such date, determined on a consolidated basis
in accordance with GAAP, plus (b) the applicable Consolidated Group Pro Rata
Share of any Indebtedness of each Investment Affiliate other than Indebtedness
of such Investment Affiliate to a member of the Consolidated Group, less (c)
with respect to each consolidated Subsidiary of Borrower in which Borrower does
not directly or indirectly hold a 100% ownership interest, a percentage of any
Indebtedness of such consolidated Subsidiary which is not a Guarantee Obligation
of Borrower equal to the percentage ownership interest in such consolidated
Subsidiary which is not held directly or indirectly by Borrower.
"CONSOLIDATED SECURED INDEBTEDNESS" means, as of any date of
determination, without duplication, the sum of (a) the aggregate principal
amount of that portion of the Consolidated Outstanding Indebtedness which is
secured by any Lien on the Property of
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Borrower or its Subsidiaries, without regard to recourse, plus (b) the excess,
if any, over $5,000,000, of the sum of (x) the aggregate principal amount of all
Senior Unsecured Indebtedness of the Subsidiaries of Borrower which have not
furnished Subsidiary Guaranties, determined on a consolidated basis in
accordance with GAAP and (y) a percentage of the aggregate principal amount of
all Indebtedness of each Investment Affiliate equal to the greater of (x) the
percentage of such Indebtedness for which any member of the Consolidated Group
is liable and (z) the Consolidated Group Pro Rata Share of such Investment
Affiliate.
"CONSOLIDATED SENIOR UNSECURED INDEBTEDNESS" means, as of any date of
determination, the aggregate principal amount of all Senior Unsecured
Indebtedness of the Consolidated Group outstanding at such date, including
without limitation all the outstanding Indebtedness under this Agreement as of
such date, determined on a consolidated basis 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 Borrower or any of its Subsidiaries, are
treated as a single employer under Section 414 of the Code.
"CONVERSION/CONTINUATION NOTICE" is defined in SECTION 2.8.
"DEFAULT" means an event described in SECTION 7.
"DEVELOPABLE LAND" means land which is appropriately zoned, has access
to all necessary utilities, has access to publicly dedicated streets and is
prepared for the commencement of development in all material respects.
"DUFF & PHELPS" means Duff & Phelps, Inc. and its successors.
"ENVIRONMENTAL LAWS" means any and all foreign, Federal, state, local
or municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to 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 Borrower or any Subsidiary or any of their
respective assets or Projects.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"EQUITY VALUE" means, with respect to a Subsidiary owned as of the
Agreement Execution Date or owned and in operation for a period of two or more
consecutive full fiscal quarters after the Agreement Execution Date, by Borrower
or one of its other Subsidiaries, an amount equal to (A) the product of (i) the
sum of net income (or loss) for the most recent two consecutive fiscal quarters
without giving effect to depreciation and amortization, gains or losses from
extraordinary items, gains or losses on sales of real estate, and gains or
losses on
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investments in marketable securities for such period, PLUS the amount of
interest expense for such period on the aggregate principal amount of the
Indebtedness of such Subsidiary, MULTIPLIED BY (ii) 2, DIVIDED BY (B) 0.095, and
then MINUS (C) Indebtedness of the Subsidiary as of the date of determination.
For any Subsidiary formed or purchased after the Agreement Execution Date, until
it or its Properties have been owned and operated by Borrower or one of its
other Subsidiaries for two or more consecutive full fiscal quarters, "Equity
Value" shall mean Borrower's estimated annual Net Operating Income for the
Projects owned by such Subsidiary based on leases in existence at the date such
Subsidiary is formed or purchased DIVIDED by 0.095, and then minus the
Indebtedness of such Subsidiary as of the date of determination.
"EXISTING CREDIT FACILITY" shall mean that certain Second Amended and
Restated Credit Agreement among Borrower, Lender and sundry other institutions
dated as of November 16, 1998, as such agreement may be or may have been
modified or amended from time to time (including, without limitation, any
successor credit facility).
"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 a.m. (Chicago
time) on such day on such transactions received by Lender from three Federal
funds brokers of recognized standing selected by Lender in its sole discretion.
"FINANCEABLE GROUND LEASE" means, a ground lease satisfactory to the
Lender and its counsel in their reasonable discretion, which must provide
protections for a potential leasehold mortgagee ("MORTGAGEE") which include,
among other things (i) a remaining term, including any optional extension terms
exercisable unilaterally by the tenant, of no less than 25 years from the
Agreement Execution Date, (ii) that the ground lease will not be terminated
until the Mortgagee has received notice of a default, has had a reasonable
opportunity to cure or complete foreclosure, and has failed to do so, (iii)
provision for a new lease on the same terms to the Mortgagee as tenant if the
ground lease is terminated for any reason, (iv) non-merger of the fee and
leasehold estates, (v) transferability of the tenant's interest under the ground
lease without any requirement for consent of the ground lessor unless based on
reasonable objective criteria as to the creditworthiness of the transferee, and
(vi) that insurance proceeds and condemnation awards (from the fee interest as
well as the leasehold interest) will be applied pursuant to the terms of the
applicable leasehold mortgage.
"FINANCIAL UNDERTAKING" of a Person means (i) any transaction which is
the functional equivalent of or takes the place of borrowing but which does not
constitute a liability on the consolidated balance sheet of such Person, or (ii)
any agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, interest rate exchange agreements,
forward
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currency exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options.
"FIRST MORTGAGE RECEIVABLE" means any Indebtedness owing to a member of
the Consolidated Group which is secured by a first-priority mortgage or deed of
trust on commercial real estate having a value in excess of the amount of such
Indebtedness and which has been designated by Borrower as a "First Mortgage
Receivable" in its most recent compliance certificate.
"FITCH" means Fitch Investor Services, Inc. and its successors.
"FLOATING RATE" means, for any day, a rate per annum, equal to (i) the
Alternate Base Rate for such day plus (ii) ABR Applicable Margin for such day,
in each case changing when and as the Alternate Base Rate changes.
"FLOATING RATE TRANCHE" means a Tranche which bears interest at the
Floating Rate.
"FUNDING DATE" shall mean May __, 2000.
"FUNDS FROM OPERATIONS" means, for any period, the sum of (i)
Consolidated Net Income for such period, excluding (A) gains (losses) on sales
of property, (B) non-recurring charges and extraordinary items, (C) non-cash
charges (including, without limitation, depreciation and amortization, and
equity gains (losses) from each Investment Affiliate included therein, but
excluding any amortization of deferred finance costs), (D) any income
attributable to the Consolidated Group's investment in AIP, if, and only if,
Borrower is in compliance with all of the AIP Conditions, PLUS (ii) the
applicable Consolidated Group Pro Rata Share of funds from operations of each
Investment Affiliate that is due to the Consolidated Group for such period, all
determined on a consistent basis. With regard to the foregoing sentence, for
each consolidated Subsidiary of Borrower in which Borrower does not directly or
indirectly hold a 100% ownership interest, each of the clauses (A), (B) and (C)
shall exclude the portion of such item attributable to minority interest holders
which do not hold operating partnership units convertible to stock in Borrower.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time, applied in a manner consistent
with that used in preparing the financial statements referred to in SECTION 6.1.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"GUARANTEE OBLIGATION" means, 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,
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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, (iv) otherwise
to assure or hold harmless the owner of any such primary obligation against loss
in respect thereof, or (v) as partner of or in a partnership or joint venture
for the debts of such partnership or joint venture; PROVIDED, HOWEVER, that the
term Guarantee Obligation shall not include 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 Borrower in good faith.
"INDEBTEDNESS" of any Person at any date means without duplication, (a)
all indebtedness of such Person for borrowed money including without limitation
any repurchase obligation or liability of such Person with respect to
securities, accounts or notes receivable sold by such Person, (b) all
obligations of such Person for the deferred purchase price of property or
services (other than current trade liabilities 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 Capitalized Lease Obligations, (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 Consolidated Group, Guarantee
Obligations of one member of the Consolidated Group in respect of primary
obligations of any other member of the Consolidated Group), (g) all
reimbursement obligations of such Person for letters of credit and other
contingent liabilities, and (h) all liabilities secured by any lien (other than
liens for taxes not yet due and payable) on any property owned by such Person
even though such Person has not assumed or otherwise become liable for the
payment thereof.
"INTEREST PERIOD" means a LIBOR Interest Period.
"INVESTMENT" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade), deposit account or contribution of capital by such Person to any other
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Person or any investment in, or purchase or other acquisition of, the stock,
partnership interests, notes, debentures or other securities of any other Person
made by such Person.
"INVESTMENT AFFILIATE" means any Person in which the Consolidated
Group, directly or indirectly, has an ownership interest, whose financial
results are not consolidated under GAAP with the financial results of the
Consolidated Group; provided, however, that AIP shall not be deemed an
Investment Affiliate if Borrower is in compliance with all of the AIP Conditions
(i.e., if all AIP Conditions are not met, AIP would then be considered an
"Investment Affiliate" for purposes of all financial calculations under this
Agreement).
"LENDER" means Bank of America, National Association.
"LENDING INSTALLATION" means, with respect to Lender, any office,
branch, subsidiary or affiliate.
"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.
"LIBOR APPLICABLE MARGIN" means, as of any date with respect to any
LIBOR Interest Period, the Applicable Margin in effect for such LIBOR Interest
Period.
"LIBOR BASE RATE" means, with respect to a LIBOR Tranche for the
relevant LIBOR Interest Period, the rate per annum (rounded upward, if
necessary, to the nearest 1/100th of 1%) appearing on Telerate Page 3750 (or any
successor page) as the London interbank offered rate for deposits in U.S.
Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such LIBOR Interest Period, in the approximate amount of such LIBOR
Tranche and having a maturity approximately equal to such LIBOR Interest Period.
"LIBOR INTEREST PERIOD" means a period of one, two, three or six months
commencing on a Business Day selected by Borrower pursuant to this Agreement.
Such LIBOR Interest Period shall end on (but exclude) the day which corresponds
numerically to such date one, two, three or six months thereafter, provided,
however, that if there is no such numerically corresponding day in such next,
second, third or sixth succeeding month, such LIBOR Interest Period shall end on
the last Business Day of such next, second, third or sixth succeeding month. If
a LIBOR Interest Period would otherwise end on a day which is not a Business
Day, such LIBOR Interest Period shall end on the next succeeding Business Day,
provided, however, that if said next succeeding Business Day falls in a new
calendar month, such LIBOR Interest Period shall end on the immediately
preceding Business Day.
"LIBOR RATE" means, with respect to a LIBOR Tranche for the relevant
LIBOR Interest Period, the sum of (i) the quotient of (a) the LIBOR Base 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,
plus (ii) the LIBOR Applicable Margin in effect from time to time during such
LIBOR Interest Period.
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"LIBOR TRANCHE" means a Tranche that bears interest at the LIBOR Rate.
"LIEN" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"LOAN" means the Advance.
"LOAN AMOUNT" means $100,000,000.
"LOAN DOCUMENTS" means this Agreement, the Note, the Subsidiary
Guaranty, and any other document from time to time evidencing or securing
indebtedness incurred by Borrower under this Agreement, as any of the foregoing
may be amended or modified from time to time.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, Property or condition (financial or otherwise) of Borrower and its
Subsidiaries taken as a whole, (ii) the ability of Borrower to perform its
obligations under the Loan Documents, or (iii) the validity or enforceability of
any of the Loan Documents.
"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 Law, including, without limitation, asbestos,
polychlorinated biphenyls and ureaformaldehyde insulation.
"MATURITY DATE" means the date six months after the Agreement Execution
Date.
"MAXIMUM LEGAL RATE" means the maximum nonusurious interest rate, if
any, that at any time or from time to time may be contracted for, taken,
reserved, charged or received on the indebtedness evidenced by the Note and as
provided for herein or in the Note or other Loan Documents, under the laws of
such state or states whose laws are held by any court of competent jurisdiction
to govern the interest rate provisions of the Loan.
"MOODY'S" means Moody's Investors Service, Inc. and its successors.
"MULTIEMPLOYER PLAN" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which Borrower or any member of
the Controlled Group is a party to which more than one employer is obligated to
make contributions.
"NET OPERATING INCOME" means, with respect to any Project for any
period, "property rental and other income" (as determined by GAAP) attributable
to such Project accruing for such period MINUS the amount of all expenses (as
determined in accordance with GAAP) incurred in connection with and directly
attributable to the ownership and operation of such
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Project for such period, including, without limitation, Management Fees and
amounts accrued for the payment of real estate taxes and insurance premiums, but
excluding interest expense or other debt service charges and any non-cash
charges such as depreciation or amortization of financing costs. As used herein
"MANAGEMENT FEES", means, with respect to each Project for any period, an amount
equal to (i) 3% of the aggregate base rent and percentage rent due and payable
under leases with anchor tenants at such Project, PLUS (ii) 3% of the aggregate
base rent and percentage rent due and payable under leases with tenants other
than anchor tenants at such Project.
"NOTE" means the promissory note, in substantially the form of EXHIBIT
A hereto, duly executed by Borrower and payable to the order of a Lender in the
Loan Amount, including any amendment, modification, renewal or replacement of
such promissory note.
"OBLIGATIONS" means all unpaid principal of and accrued and unpaid
interest on the Notes, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of Borrower to Lender or any
indemnified party hereunder arising under the Loan Documents.
"PARTICIPANTS" is defined in SECTION 11.2.1.
"PASSIVE NON-REAL ESTATE INVESTMENTS" means stock or other equity
interests in or debt of entities not primarily involved in retail, office or
industrial real estate development or ownership.
"PAYMENT DATE" means, with respect to the payment of interest accrued
on any Tranche, the first day of each calendar month.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"PERMITTED ACQUISITIONS" are defined in SECTION 6.15.
"PERMITTED LIENS" are defined in SECTION 6.16.
"PERSON" means any natural person, corporation, firm, joint venture,
partnership, association, enterprise, trust or other entity or organization, or
any government or political subdivision or any agency, department or
instrumentality thereof.
"PLAN" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which Borrower or any member of the Controlled Group may have any
liability.
"PRE-LEASED PROJECT UNDER CONSTRUCTION" means a Project under
development (in accordance with GAAP) on which construction of buildings has
been commenced but which has not been substantially completed and occupied and
has been leased to a tenant or tenants pursuant to fully executed and binding
leases.
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"PROJECT" means any real estate asset owned by Borrower or any of its
Subsidiaries or any Investment Affiliate, and operated or intended to be
operated as a retail, office or industrial property.
"PROPERTY" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"PURCHASERS" is defined in SECTION 11.3.1.
"RECOURSE INDEBTEDNESS" means any Indebtedness of Borrower or any of
its Subsidiaries with respect to which the liability of the obligor is not
limited to the obligor's interest in specified assets securing such
Indebtedness, subject to customary limited exceptions for certain acts or types
of liability.
"REFERENCE RATE" means a rate per annum equal to the reference base
rate of interest announced by Lender from time to time, changing when and as
such corporate base rate changes.
"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 thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
"REGULATION U" means Regulation U 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 the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"REQUIREMENTS OF LAW" means, as to any Person, the charter and bylaws
or other organizational or governing documents of such Person, and any law, rule
or regulation, or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is subject
including, without limitation, the Securities Act, the Securities Exchange Act,
Regulations G, T, U and X, ERISA, the Fair Labor Standards Act, the Worker
Adjustment and Retraining Notification Act, Americans with Disabilities Act of
1990, any certificate of occupancy, zoning ordinance, building, environmental or
land use requirement.
"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, however, that a 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 waiver of the
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notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
"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.
"SECTION" means an article or numbered section of this Agreement,
unless another document is specifically referenced.
"SENIOR NOTES" means indebtedness in the stated principal amount of
$100,000,000 incurred pursuant to the Indenture, dated as of May 1, 1994, from
Borrower to National City Bank, Trustee.
"SENIOR UNSECURED INDEBTEDNESS" means all Indebtedness other than
Subordinated Indebtedness of any Person that is not secured by a Lien on any
asset of such Person.
"SINGLE EMPLOYER PLAN" means a Plan maintained by Borrower or any
member of the Controlled Group for employees of Borrower or any member of the
Controlled Group.
"S&P" means Standard & Poor's Ratings Group and its successors.
"SUBORDINATED INDEBTEDNESS" means Indebtedness which is contractually
subordinated to the Obligations on terms reasonably acceptable to Lender,
including, without limitation, the Senior Notes.
"SUBSIDIARY" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "SUBSIDIARY" shall mean a
Subsidiary of Borrower.
"SUBSIDIARY GUARANTOR" means each Subsidiary of Borrower which is
required to execute a Subsidiary Guaranty pursuant to SECTION 6.13.
"SUBSIDIARY GUARANTY" means the guaranty to be executed and delivered
by certain Subsidiaries of Borrower, substantially in the form of EXHIBIT F, as
the same may be amended, supplemented or otherwise modified from time to time.
"SUBSTANTIAL PORTION" means, with respect to the Property of Borrower
and its Subsidiaries, Property which (i) represents more than 10% of the assets
of the Consolidated Group as would be shown in the consolidated financial
statements of the Consolidated Group as at the beginning of the twelve-month
period ending with the month in which such determination is made, or (ii) is
responsible for more than 10% of the consolidated net sales or
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of the consolidated net income of the Consolidated Group as reflected in the
financial statements referred to in clause (i) above.
"TRANCHE" means a portion of the Loan.
"TRANSFEREE" is defined in SECTION 11.4.
"TYPE" means, with respect to any Tranche, its nature as a Floating
Rate Tranche or a LIBOR Tranche.
"UNENCUMBERED ASSET" means, with respect to any Project located in the
United States 100% of which is owned in fee simple or ground leased by Borrower
or a Subsidiary Guarantor (provided that a Project which is ground leased shall
be included as an Unencumbered Asset only if such ground lease is a Financeable
Ground Lease) which, as of any date of determination, (a) is not subject to any
Liens or claims (including restrictions on transferability or assignability) of
any kind (including any such Lien, claim or restriction imposed by the
organizational documents of any Subsidiary Guarantor) other than Permitted Liens
set forth in SECTIONS 6.16(i) through 6.16(iv)), (b) is not subject to any
agreement (including (i) any agreement governing Indebtedness incurred in order
to finance or refinance the acquisition of such asset, and (ii) if applicable,
the organizational documents of any Subsidiary Guarantor) which prohibits or
limits the ability of Borrower or any Subsidiary Guarantor to create, incur,
assume or suffer to exist any Lien upon any assets or Capital Stock of Borrower
or any Subsidiary Guarantor, including, without limitation, any negative pledge
or similar covenant or restriction, (c) is not subject to any agreement
(including any agreement governing Indebtedness incurred in order to finance or
refinance the acquisition of such asset) which entitles any Person to the
benefit of any Lien (other than Permitted Liens set forth in Sections 6.16(i)
through 6.16(iv)) on any assets or Capital Stock of Borrower or any Subsidiary
Guarantor, or would entitle any Person to the benefit of any Lien (other than
Permitted Liens set forth in SECTIONS 6.16(i) through 6.16(iv)) on such assets
or Capital Stock upon the occurrence of any contingency (including, without
limitation, pursuant to an "equal and ratable" clause), and (d) has been
improved with an income-producing building or buildings which are substantially
completed and occupied or is a Pre-Leased Project Under Construction. For the
purposes of this Agreement, any Project of a Subsidiary Guarantor shall not be
deemed to be unencumbered unless both (i) such Project and (ii) all Capital
Stock of such Subsidiary Guarantor held by Borrower is unencumbered.
"UNFUNDED LIABILITIES" means the amount (if any) by which the present
value of all vested nonforfeitable benefits under all Single Employer Plans
exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans.
"UNMATURED DEFAULT" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"UNRESTRICTED CASH AND CASH EQUIVALENTS" means, in the aggregate, all
cash and Cash Equivalents which are not pledged or otherwise restricted for the
benefit of any creditor
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and which are owned by members of the Consolidated Group or Investment
Affiliates, to be valued for purposes of this Agreement at (i) 100% of its
then-current book value, as determined under GAAP, for any such items owned by a
member of the Consolidated Group or (ii) the applicable Consolidated Group Pro
Rata Share of its then-current book value, as determined under GAAP, for any
such items owned by an Investment Affiliate.
"UPFRONT FEE" is defined in SECTION 2.3.
"VALUE OF UNENCUMBERED ASSETS" means, as of any date, the sum of (A)
the amount determined by dividing the Net Operating Income for each Project
which is an Unencumbered Asset as of such date for a calculation period which
shall be either the immediately preceding two full fiscal quarters or, if so
requested by Borrower or Lender, the one immediately preceding full fiscal
quarter and the then current partial quarter (in all cases as annualized) by
0.095, provided that not more than 15% of the Value of Unencumbered Assets shall
be attributable to Unencumbered Assets which are ground leased, PLUS (B) for
each Pre-Leased Project Under Construction, 100% of the then-current book value,
as determined in accordance with GAAP, of such Pre-Leased Project Under
Construction, provided that the aggregate amount added to value under this
clause (B) shall not exceed $50,000,000. If a Project has been acquired during
such calculation period then Borrower shall be entitled to include pro forma Net
Operating Income (based on leases in existence at the date of such acquisition)
from such Project for the entire calculation period in the foregoing
calculation, except for purposes of the financial covenant comparing the Net
Operating Income from Unencumbered Assets to Consolidated Interest Expense under
SECTION 6.21(iv). If a Project is no longer owned as of the date of
determination, then no value shall be included based on capitalizing Net
Operating Income from such Project, except for purposes of such financial
covenant comparing the Net Operating Income from Unencumbered Assets to
Consolidated Interest Expense under SECTION 6.21(iv).
"WHOLLY-OWNED SUBSIDIARY" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, association, joint venture
or similar business organization 100% of the ownership interests having ordinary
voting power of which shall at the time be so owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
2. THE CREDIT.
2.1. COMMITMENTS; REDUCTION OR INCREASE IN LOAN AMOUNT. Subject
to the terms and conditions of this Agreement, Lender shall loan the Loan Amount
to Borrower on the Funding Date.
2.2. FINAL PRINCIPAL PAYMENT. Any outstanding Advances and all
other unpaid Obligations shall be paid in full by Borrower on the Maturity Date.
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2.3. UPFRONT FEE. Borrower agrees to pay to Lender a fee (the
"UPFRONT FEE") equal to 0.15% of the Loan Amount, payable on the Funding Date,
which shall be fully earned on such date.
2.4. ADMINISTRATION FEE. On the Funding Date Borrower shall pay a
$10,000 "ADMINISTRATION FEE" to Lender.
2.5. MINIMUM AMOUNT OF EACH ADVANCE. Each Tranche shall be in the
minimum amount of $1,000,000 (and in multiples of $100,000 if in excess
thereof).
2.6. OPTIONAL PRINCIPAL PAYMENTS. Borrower may from time to time
pay, without penalty or premium, all or any part of an outstanding Floating Rate
Tranche without prior notice to Lender. A LIBOR Tranche may be paid on the last
day of the applicable Interest Period or, if and only if Borrower pays any
amounts due to the Lender under SECTIONS 3.4 and 3.5 as a result of such
prepayment, on a day prior to such last day. In no event shall Borrower have the
right to reborrow any portion of the Loan which has been repaid prior to the
Maturity Date.
2.7. INITIAL METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR
TRANCHES. Prior to the Funding Date, Borrower shall select the Type of Tranche
and, in the case of each LIBOR Tranche, the Interest Period applicable to each
Tranche from time to time. Borrower shall give Lender irrevocable notice (an
"ELECTION NOTICE") not later than 10:00 a.m. Chicago time, at least three
Business Days before the Funding Date:
(i) the amount of each Tranche,
(ii) the Type of each Tranche selected, and
(iii) in the case of each LIBOR Tranche, the Interest
Period applicable thereto.
Lender will make the Loan Amount (minus any applicable fees or other
amounts owed to Lender pursuant to this Agreement) available to Borrower at
Lender's address.
No Interest Period may end after the Maturity Date and, unless Lender
otherwise agrees in writing, in no event may there be more than five (5)
different Interest Periods for LIBOR at any one time.
2.8. CONVERSION AND CONTINUATION OF OUTSTANDING ADVANCES.
Floating Rate Tranches shall continue as Floating Rate Tranches unless and until
such Floating Rate Tranches are converted into LIBOR Tranches. Each LIBOR
Tranche shall continue as a LIBOR Tranche until the end of the then applicable
Interest Period therefor, at which time such LIBOR Tranches shall be
automatically converted into a Floating Rate Tranche unless Borrower shall have
given Lender a Conversion/Continuation Notice requesting that, at the end of
such Interest Period, such LIBOR Tranche either continue as a LIBOR Tranche for
the same or another Interest Period or be converted to a Tranche of another
Type. Subject to the
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terms of SECTION 2.5, Borrower may elect from time to time to convert all or any
part of a Tranche of any Type into any other Type or Types of Tranches; provided
that any conversion of any LIBOR Tranche shall be made on, and only on, the last
day of the Interest Period applicable thereto. Borrower shall give Lender
irrevocable notice (a "CONVERSION/CONTINUATION NOTICE") of each conversion of a
Tranche to a LIBOR Tranche or continuation of a LIBOR Tranche not later than
three Business Days, in the case of a conversion into or continuation of a LIBOR
Tranche, prior to the date of the requested conversion or continuation,
specifying:
(i) the requested date which shall be a Business Day, of
such conversion or continuation;
(ii) the aggregate amount and Type of the Tranche which is
to be converted or continued; and
(iii) the amount and Type(s) of Tranche (s) into which such
Tranche is to be converted or continued and, in the
case of a conversion into or continuation of a LIBOR
Tranche, the duration of the Interest Period
applicable thereto.
2.9. CHANGES IN INTEREST RATE, ETC. Each Floating Rate Tranche
shall bear interest on the outstanding principal amount thereof, for each day
from and including the date such Tranche is funded or is converted from a LIBOR
Tranche into a Floating Rate Tranche pursuant to SECTION 2.8 to but excluding
the date it becomes due or is converted into a LIBOR Tranche pursuant to SECTION
2.8 hereof, at a rate per annum equal to the Floating Rate for such day. Changes
in the rate of interest on any Floating Rate Tranche will take effect
simultaneously with each change in the Alternate Base Rate. Each LIBOR Tranche
shall bear interest from and including the first day of the Interest Period
applicable thereto to (but not including) the last day of such Interest Period
at the interest rate determined as applicable to such LIBOR Tranche.
2.10. RATES APPLICABLE AFTER DEFAULT. Notwithstanding anything to
the contrary contained in SECTION 2.7 or 2.8, during the continuance of a
Default or Unmatured Default Lender may, at its option, by notice to Borrower
(which notice may be revoked at the option of Lender), declare that no Tranche
may be, converted into or continued as a LIBOR Tranche. During the continuance
of a Default, Lender may, at its option, by notice to Borrower (which notice may
be revoked at the option of Lender, declare that (i) each LIBOR Tranche shall
bear interest for the remainder of the applicable Interest Period at the rate
otherwise applicable to such Interest Period plus 2% per annum and (ii) each
Floating Rate Tranche shall bear interest at a rate per annum equal to the
Floating Rate otherwise applicable to the Floating Rate Tranche plus 2% per
annum.
2.11. METHOD OF PAYMENT.
(i) All payments of the Obligations hereunder shall be
made, without setoff, deduction, or counterclaim, in immediately available funds
to Lender at Lender's
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address specified pursuant to SECTION 12, or at any other Lending Installation
of Lender specified in writing by Lender to Borrower, by noon (local time) on
the date when due.
(ii) Lender is hereby authorized to charge the account of
Borrower maintained with Lender for each payment of principal, interest and fees
as it becomes due hereunder.
2.12. NOTES; TELEPHONIC NOTICES. Borrower hereby authorizes Lender to
extend, convert or continue Tranches, effect selections of Types of Tranches and
to transfer funds based on telephonic notices made by any Authorized Officer.
Borrower agrees to deliver promptly to Lender a written confirmation, if such
confirmation is requested by Lender, of each telephonic notice signed by an
Authorized Officer. If the written confirmation differs in any material respect
from the action taken by Lender, the records of Lender shall govern absent
manifest error.
2.13. INTEREST PAYMENT DATES; INTEREST AND FEE BASIS. Interest accrued
on each Floating Rate Tranche shall be payable on each Payment Date, commencing
with the first such date to occur after the date hereof, at maturity, whether by
acceleration or otherwise, and upon any termination of the Loan in its entirety
under SECTION 2.1 hereof. Interest accrued on each LIBOR Tranche shall be
payable on each Payment Date, on the last day of the Interest Period applicable
to such LIBOR Tranche, on any earlier date on which such LIBOR Tranche is
prepaid, and at maturity, whether by acceleration or otherwise. Interest shall
be calculated for actual days elapsed on the basis of a 360-day year. Interest
shall be payable for the Funding Date but not for the day of any payment on the
amount paid if payment is received prior to noon (Chicago time). If any payment
of principal of or interest on an Tranche shall become due on a day which is not
a Business Day, such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment.
2.14. LENDING INSTALLATIONS. Subject to SECTION 3.5, Lender may book
the Loan 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 Note shall be deemed held by Lender for
the benefit of such Lending Installation. Each Lender may, by written notice to
Borrower, designate a Lending Installation through which the Loan will be made
by it and for whose account Loan payments are to be made.
2.15. APPLICATION OF MONEYS RECEIVED. All moneys collected or received
by Lender on account of the Loan 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 Lender shall have given notice to
Borrower;
(ii) to the reimbursement of any yield protection due to
Lender in accordance with SECTION 3.1;
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(iii) to the payment of all fees to Lender;
(iv) to payment of the full amount of interest and principal
on the Loan as allocated to Tranches by Borrower or in the absence of
such allocation at the time of such payment, as may be allocated by
Lender in its sole discretion, and;
(v) any other sums due to Lender under any of the Loan
Documents.
2.16. USURY. This Agreement and the Note are subject to the express
condition that at no time shall Borrower be obligated or required to pay
interest on the principal balance of the Loan at a rate which could subject
Lender to either civil or criminal liability as a result of being in excess of
the Maximum Legal Rate. If by the terms of this Agreement or the Loan Documents,
Borrower is at any time required or obligated to pay interest on the principal
balance due hereunder at a rate in excess of the Maximum Legal Rate, the
interest rate or the Default Rate, as the case may be, shall be deemed to be
immediately reduced to the Maximum Legal Rate and all previous payments in
excess of the Maximum Legal Rate shall be deemed to have been payments in
reduction of principal and not on account of the interest due hereunder. All
sums paid or agreed to be paid to Lender for the use, forbearance, or detention
of the sums due under the Loan, shall, to the extent permitted by applicable
law, be amortized, prorated, allocated, and spread throughout the full stated
term of the Loan until payment in full so that the rate or amount of interest on
account of the Loan does not exceed the Maximum Legal Rate of interest from time
to time in effect and applicable to the Loan for so long as the Loan is
outstanding.
3. CHANGE IN CIRCUMSTANCES.
3.1. YIELD PROTECTION. If (i) any change in any law, governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law) in effect on the Agreement Execution Date, or a
change in any interpretation thereof, or the compliance by Lender therewith, or
(ii) the enactment following the Agreement Execution Date of any new law,
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 by Lender therewith, results in:
(i) Lender or any applicable Lending Installation being subjected
to any tax, duty, charge or withholding on or from payments due from
Borrower (excluding federal taxation of the overall net income of
Lender or any applicable Lending Installation), or the basis of
taxation of payments to any Lender in respect of its Loans or other
amounts due it hereunder being changed, or
(ii) any reserve, assessment, insurance charge, special deposit
or similar requirement against assets of, deposits with or for the
account of, or credit extended by, Lender or any applicable Lending
Installation (other than reserves and assessments taken into account
in determining the interest rate
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applicable to LIBOR Tranches) being imposed, increased or deemed
applicable, or
(iii) any other condition being imposed the result of which is to
increase the cost to Lender or any applicable Lending Installation of
making, funding or maintaining loans or reduces any amount receivable
by Lender or any applicable Lending Installation in connection with
loans, or Lender or any applicable Lending Installation being required
to make any payment calculated by reference to the amount of the Loan
held or interest received by it, by an amount deemed material by
Lender or any such Lending Installation,
then, within 30 days of demand by Lender, Borrower shall pay such Lender that
portion of such increased expense incurred or reduction in an amount received
which Lender in good faith determines is attributable to making, funding and
maintaining the Loan.
3.2. CHANGES IN CAPITAL ADEQUACY REGULATIONS. If Lender in good faith
determines the amount of capital required or expected to be maintained by
Lender, any Lending Installation of Lender or any corporation controlling Lender
is increased as a result of a Change (as hereinafter defined), then, within 30
days of demand by Lender, Borrower shall pay Lender the amount necessary to
compensate for any shortfall in the rate of return on the portion of such
increased capital which Lender in good faith determines is attributable to this
Agreement, or the Loan (after taking into account Lender's policies as to
capital adequacy). "Change" means (i) any change after the date of this
Agreement in the Risk-Based Capital Guidelines 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 Lender or any Lending Installation or any
corporation controlling 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.
3.3. AVAILABILITY OF TYPES OF ADVANCES. If Lender in good faith
determines that maintenance of any of its LIBOR Tranches at a suitable Lending
Installation would violate any applicable law, rule, regulation or directive,
whether or not having the force of law, Lender may suspend the availability of
the affected LIBOR Tranches and require any affected LIBOR Tranches to be
repaid; or if Lender in good faith determines that (i) deposits of a type or
maturity appropriate to match fund LIBOR Tranches are not available, Lender may
suspend the availability of the affected LIBOR Tranches with respect to any
LIBOR Tranches elected by Borrower after the date of any such determination, or
(ii) an interest rate applicable to a LIBOR Tranche does not accurately reflect
the cost of making available a LIBOR Tranche, then, if for any reason whatsoever
the provisions of SECTION 3.1 are inapplicable, Lender shall
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suspend the availability of LIBOR Tranches with respect to any LIBOR Tranches
made after the date of any such determination.
3.4. FUNDING INDEMNIFICATION. If any repayment of a LIBOR Tranche
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise Borrower will indemnify
Lender for any loss or cost incurred by it resulting therefrom, including
without limitation any loss or cost in liquidating or employing deposits
acquired to fund or maintain the LIBOR Tranche and shall pay all such losses or
costs within 15 days after written demand therefor. Without limitation of any
losses arising from changes in the LIBOR Rate adverse to Lender, in no event
will the administrative cost payable by Borrower as a result of such early
payment or failure to make an advance exceed $250 per occurrence.
3.5. LENDER STATEMENTS; SURVIVAL OF INDEMNITY. Lender shall deliver a
written statement of Lender as to the amount due, if any, under SECTIONS 3.1,
3.2 or 3.4. Such written statement shall set forth in reasonable detail the
calculations upon which 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
Tranche shall be calculated as though Lender funded the LIBOR Tranche through
the purchase of a deposit of the type and maturity corresponding to the deposit
used as a reference in determining the LIBOR Rate applicable to such Loan,
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 3.1, 3.2 and 3.4 shall survive payment of the Obligations and
termination of this Agreement.
4. CONDITIONS PRECEDENT.
Lender shall not be required to fund the Loan hereunder unless (a)
Borrower shall, prior to or concurrently with the Advance, have paid all fees
due and payable to Lender hereunder, and (b) Borrower shall have furnished to
Lender, the following:
(i) The duly executed originals of the Loan Documents, including
the Note, payable to the order of Lender, this Agreement and the
Subsidiary Guaranty;
(ii) (A) Certificates of good standing for Borrower and each
Subsidiary Guarantor, from the State of Ohio for Borrower and the
states of organization of each Subsidiary Guarantor, certified by the
appropriate governmental officer and dated not more than 30 days prior
to the Funding Date, and (B) foreign qualification certificates for
Borrower and each Subsidiary Guarantor, certified by the appropriate
governmental officer and dated not more than two years prior to the
Funding Date (with telephonic updates as practical not more than 10
days prior to the Funding Date), for each other jurisdiction where the
failure of Borrower or such Subsidiary Guarantor to so qualify or be
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licensed (if required) would have a Material Adverse Effect; provided,
however, that if any such document described in (A) or (B) are not
delivered on or prior to the Funding Date, Borrower shall deliver such
documents either (i) within 10 business days after the Funding Date or
(ii) within 30 days after the Funding Date for those certain
Subsidiary Guarantors listed on SCHEDULE 7 hereto.
(iii) Copies of the formation documents (including code of
regulations, if appropriate) of Borrower and each Subsidiary
Guarantor, certified by an officer of Borrower or such Subsidiary
Guarantor, as appropriate, together with all amendments thereto;
(iv) Incumbency certificates, executed by officers of Borrower
and each Subsidiary Guarantor, which shall identify by name and title
and bear the signature of the Persons authorized to sign the Loan
Documents and to make borrowings hereunder on behalf of Borrower, upon
which certificate Lender shall be entitled to rely until informed of
any change in writing by Borrower or any such Subsidiary Guarantor;
(v) Copies, certified by a Secretary or an Assistant Secretary of
Borrower and each Subsidiary Guarantor, of the Board of Directors'
resolutions (and resolutions of other bodies, if any are reasonably
deemed necessary by counsel for Lender) authorizing the Loan provided
for herein, with respect to Borrower, and the execution, delivery and
performance of the Loan Documents to be executed and delivered by
Borrower and each Subsidiary Guarantor hereunder;
(vi) A written opinion of Borrower's and Subsidiary Guarantors'
counsel, addressed to Lender in substantially the form of EXHIBIT B
hereto or such other form as Lender may reasonably approve;
(vii) A certificate, signed by an officer of Borrower, stating
that on the Funding Date no Default or Unmatured Default has occurred
and is continuing and that all representations and warranties of
Borrower are true and correct as of the Funding Date provided that
such certificate is in fact true and correct;
(viii) The most recent financial statements of Borrower;
(ix) UCC financing statement, judgment, and tax lien searches
with respect to Borrower from the State of Ohio;
(x) Written money transfer instructions, in substantially the
form of EXHIBIT E hereto, addressed to Lender and signed by an
Authorized Officer, together with such other related money transfer
authorizations as Lender may have reasonably requested;
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(xi) A pro forma compliance certificate in the form of EXHIBIT C
as of March 31, 2000, executed by Borrower's chief financial officer
or chief accounting officer;
(xii) Evidence that all amounts payable pursuant to the Senior
Notes have been paid, or will be, paid out of the proceeds of the
Loan;
(xiii) From the preparation date of the most recent financial
statements delivered to the Lenders through the Funding Date, there
was no change in the business, properties, or condition (financial or
otherwise) of Borrower and its Subsidiaries which could reasonably be
expected to have a Material Adverse Effect; and
(xiv) Such other documents as Lender or its counsel may have
reasonably requested, the form and substance of which documents shall
be reasonably acceptable to the parties and their respective counsel.
If all conditions in this SECTION 4 have not been satisfied on or prior to
May __, 2000, then this Agreement shall terminate and Lender shall have no
further obligation hereunder.
5. REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants to Lender that:
5.1. EXISTENCE. Borrower is a corporation duly organized and validly
existing under the laws of the State of Ohio, with its principal place of
business in Beachwood, Ohio and is duly qualified as a foreign corporation,
properly licensed (if required), in good standing and has all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted, except where the failure to be so qualified, licensed and in good
standing and to have the requisite authority would not have a Material Adverse
Effect. Each of Borrower's Subsidiaries is duly incorporated, validly existing
and in good standing under the laws of its jurisdiction of incorporation and has
all requisite authority to conduct its business in each jurisdiction in which
its business is conducted.
5.2. AUTHORIZATION AND VALIDITY. Borrower has the corporate power and
authority and legal right to execute and deliver the Loan Documents and to
perform its obligations thereunder. The execution and delivery by Borrower of
the Loan Documents and the performance of its obligations thereunder have been
duly authorized by proper corporate proceedings, and the Loan Documents
constitute legal, valid and binding obligations of Borrower enforceable against
Borrower in accordance with their terms, except as enforceability may be limited
by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally.
5.3. NO CONFLICT; GOVERNMENT CONSENT. Neither the execution and
delivery by Borrower of the Loan Documents, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof
will violate any law, rule,
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regulation, order, writ, judgment, injunction, decree or award binding on
Borrower or any of its Subsidiaries or Borrower's or any Subsidiary's articles
of incorporation or by-laws, or the provisions of any indenture, instrument or
agreement to which Borrower or any of its Subsidiaries is a party or is subject,
or by which it, or its Property, is bound, or conflict with or constitute a
default thereunder, except where such violation, conflict or default would not
have a Material Adverse Effect, or result in the creation or imposition of any
Lien in, of or on the Property of Borrower or a Subsidiary pursuant to the terms
of any such indenture, instrument or agreement. No order, consent, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection with
the execution, delivery and performance of, or the legality, validity, binding
effect or enforceability of, any of the Loan Documents other than the filing of
a copy of this Agreement, or the filing of information concerning this
Agreement, with the Securities and Exchange Commission.
5.4. FINANCIAL STATEMENTS; MATERIAL ADVERSE CHANGE. All consolidated
financial statements of Borrower and its Subsidiaries heretofore or hereafter
delivered to the Lenders were prepared in accordance with GAAP in effect on the
preparation date of such statements and fairly present in all material respects
the consolidated financial condition and operations of Borrower and its
Subsidiaries at such date and the consolidated results of their operations for
the period then ended, subject, in the case of interim financial statements, to
normal and customary year-end adjustments. From the preparation date of the most
recent financial statements delivered to the Lenders through the Agreement
Execution Date, there was no change in the business, properties, or condition
(financial or otherwise) of Borrower and its Subsidiaries which could reasonably
be expected to have a Material Adverse Effect.
5.5. TAXES. Borrower and its Subsidiaries have filed all United States
federal tax returns and all other tax returns which are required to be filed and
have paid all taxes due pursuant to said returns or pursuant to any assessment
received by Borrower or any of its Subsidiaries except such taxes, if any, as
are being contested in good faith and as to which adequate reserves have been
provided. No tax liens have been filed and remain outstanding for amounts in
excess of $250,000. The charges, accruals and reserves on the books of Borrower
and its Subsidiaries in respect of any taxes or other governmental charges are
adequate.
5.6. LITIGATION AND GUARANTEE OBLIGATIONS. Except as set forth on
SCHEDULE 3 hereto or as set forth in written notice to Lender from time to time,
there is no litigation, arbitration, governmental investigation, proceeding or
inquiry pending or, to the knowledge of any of their officers, threatened
against or affecting Borrower or any of its Subsidiaries which could reasonably
be expected to have a Material Adverse Effect. Notwithstanding the disclosure of
the litigation identified on SCHEDULE 3 Borrower, based on consultation with its
counsel, represents that Borrower is unlikely to suffer any material adverse
result in such litigation. Borrower has no material contingent obligations not
provided for or disclosed in the financial statements referred to in SECTION 6.1
or as set forth in written notices to Lender given from time to time after the
Agreement Execution Date on or about the date such material contingent
obligations are incurred.
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5.7. SUBSIDIARIES. SCHEDULE 1 hereto contains an accurate list of all
of the presently existing Subsidiaries of Borrower, setting forth their
respective jurisdictions of incorporation or formation and the percentage of
their respective capital stock or partnership or membership interest owned by
Borrower or other Subsidiaries. All of the issued and outstanding shares of
capital stock of such Subsidiaries that are corporations have been duly
authorized and issued and are fully paid and non-assessable.
5.8. ERISA. The Unfunded Liabilities of all Single Employer Plans do
not in the aggregate exceed $1,000,000. Neither Borrower nor any other member of
the Controlled Group has incurred, or is reasonably expected to incur, any
withdrawal liability to Multiemployer Plans in excess of $250,000 in the
aggregate. Each Plan complies in all material respects with all applicable
requirements of law and regulations, no Reportable Event has occurred with
respect to any Plan, neither Borrower nor any other members of the Controlled
Group has withdrawn from any Plan or initiated steps to do so, and no steps have
been taken to reorganize or terminate any Plan.
5.9. ACCURACY OF INFORMATION. All factual information heretofore or
contemporaneously furnished by or on behalf of Borrower or any of its
Subsidiaries to Lender for purposes of or in connection with this Agreement or
any transaction contemplated hereby is, and all other such factual information
hereafter furnished by or on behalf of Borrower or any of its Subsidiaries to
Lender will be, to the knowledge of Borrower, true and accurate (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 in light of the circumstances and
purposes for which such information was provided at such time.
5.10. REGULATION U. Borrower has not used any proceeds of the Loan to
buy or carry any margin stock (as defined in Regulation U) in violation of the
terms of this Agreement.
5.11. MATERIAL AGREEMENTS. Neither Borrower nor any Subsidiary is a
party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to have a Material
Adverse Effect. Neither Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in (i) any agreement to which it is a party, which default
could have a Material Adverse Effect, or (ii) any agreement or instrument
evidencing or governing Indebtedness, which default would constitute a Default
hereunder.
5.12. COMPLIANCE WITH LAWS. Borrower and its Subsidiaries have complied
with all applicable statutes, rules, regulations, orders and restrictions of any
domestic or foreign government or any instrumentality or agency thereof, having
jurisdiction over the conduct of their respective businesses or the ownership of
their respective Property, except for any non-compliance which would not have a
Material Adverse Effect. Neither Borrower nor any Subsidiary has received any
notice to the effect that its operations are not in material compliance with any
of the requirements of applicable federal, state and local environmental,
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health and safety statutes and regulations or the subject of any federal or
state investigation evaluating whether any remedial action is needed to respond
to a release of any toxic or hazardous waste or substance into the environment,
which non-compliance or remedial action could have a Material Adverse Effect.
5.13. OWNERSHIP OF PROPERTIES. Except as set forth on SCHEDULE 2
hereto, on the date of this Agreement, Borrower and its Subsidiaries will have
good and marketable title, free of all Liens other than those permitted by
SECTION 6.16, to all of the Property and assets reflected in the financial
statements as owned by it.
5.14. INVESTMENT COMPANY ACT. Neither Borrower nor any Subsidiary is an
"investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
5.15. PUBLIC UTILITY HOLDING COMPANY ACT. Neither Borrower nor any
Subsidiary is 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 meaning of the Public Utility Holding Company
Act of 1935, as amended.
5.16. SOLVENCY.
5.16.1. Immediately after the Agreement Execution Date and
immediately following the making of the Loan and after giving effect to the
application of the proceeds of such Loan, (a) the fair value of the assets of
Borrower and its Subsidiaries on a consolidated basis, at a fair valuation, will
exceed the debts and liabilities, subordinated, contingent or otherwise, of
Borrower and its Subsidiaries on a consolidated basis; (b) the present fair
saleable value of the Property of Borrower and its Subsidiaries on a
consolidated basis will be greater than the amount that will be required to pay
the probable liability of 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) 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) 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.
5.16.2. Borrower does not intend to, or to permit any of its
Subsidiaries to, and does not believe that it or any of its Subsidiaries will,
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.
5.17. INSURANCE. Borrower and its Subsidiaries carry insurance on their
Projects with financially sound and reputable insurance companies, in such
amounts, with such
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deductibles and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar Projects in localities where
Borrower and its Subsidiaries operate, including, without limitation:
(i) Property and casualty insurance (including coverage for
flood and other water damage for any Project located within a 100-year
flood plain) in the amount of the replacement cost of the improvements
at the Project;
(ii) Builder's risk insurance for any Project under
construction in the amount of the construction cost of such Project;
(iii) Loss of rental income insurance in the amount not less
than one year's gross revenues from the Projects; and
(iv) Comprehensive general liability insurance in the amount
of $20,000,000 per occurrence.
5.18. REIT STATUS. Borrower is in good standing on the New York Stock
Exchange, is qualified as a real estate investment trust and currently is in
compliance in all material respects with all provisions of the Code applicable
to the qualification of Borrower as a real estate investment trust.
5.19. ENVIRONMENTAL MATTERS. Each of the following representations and
warranties is true and correct on and as of the Agreement Execution Date except
to the extent that the facts and circumstances giving rise to any such failure
to be so true and correct, in the aggregate, could not reasonably be expected to
have a Material Adverse Effect:
5.19.1. To the best knowledge of Borrower, the Projects of
Borrower and its Subsidiaries do not contain any Materials of Environmental
Concern in amounts or concentrations which constitute a violation of, or could
reasonably give rise to liability of Borrower or any Subsidiary under,
Environmental Laws.
5.19.2. To the best knowledge of Borrower, (i) the Projects of
Borrower and its Subsidiaries and all operations at the Projects are in
compliance with all applicable Environmental Laws, and (ii) with respect to all
Projects owned by Borrower and/or its Subsidiaries (x) for at least two (2)
years, have in the last two years, or (y) for less than two years, have for such
period of ownership, been in compliance in all material respects with all
applicable Environmental Laws.
5.19.3. Neither Borrower nor any of its Subsidiaries has received
any notice of violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Projects, nor does Borrower have
knowledge or reason to believe that any such notice will be received or is being
threatened.
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5.19.4. To the best knowledge of Borrower, Materials of
Environmental Concern have not been transported or disposed of from the Projects
of Borrower and its Subsidiaries in violation of, or in a manner or to a
location which could reasonably give rise to liability of Borrower or any
Subsidiary under, Environmental Laws, nor have any Materials of Environmental
Concern been generated, treated, stored or disposed of at, on or under any of
the Projects of Borrower and its Subsidiaries in violation of, or in a manner
that could give rise to liability of Borrower or any Subsidiary under, any
applicable Environmental Laws.
5.19.5. No judicial proceedings or governmental or administrative
action is pending, or, to the knowledge of Borrower, threatened, under any
Environmental Law to which Borrower or any of its Subsidiaries is or, to
Borrower's knowledge, will be named as a party with respect to the Projects of
Borrower and its Subsidiaries, nor are there any consent decrees or other
decrees, consent orders, administrative order or other orders, or other
administrative of judicial requirements outstanding under any Environmental Law
with respect to the Projects of Borrower and its Subsidiaries.
5.19.6. To the best knowledge of Borrower, there has been no
release or threat of release of Materials of Environmental Concern at or from
the Projects of Borrower and its Subsidiaries, or arising from or related to the
operations of Borrower and its Subsidiaries in connection with the Projects in
violation of or in amounts or in a manner that could give rise to liability
under Environmental Laws.
5.20. UNENCUMBERED ASSETS. The Projects described on SCHEDULE 5 are all
Unencumbered Assets.
6. COVENANTS.
During the term of this Agreement:
6.1. FINANCIAL REPORTING. Borrower will maintain, for itself and each
Subsidiary, a system of accounting established and administered in accordance
with GAAP, and furnish to Lender:
6.1.1. As soon as available, but in any event not later than 45
days after the close of each fiscal quarter, for Borrower and its Subsidiaries,
an unaudited consolidated balance sheet as of the close of each such period and
the related unaudited consolidated statements of income and retained earnings
and of cash flows of Borrower and its Subsidiaries 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
Borrower's chief financial officer or chief accounting officer;
6.1.2. As soon as available, but in any event not later than 45
days after the close of each fiscal quarter, for Borrower and its Subsidiaries,
the following reports in form and substance reasonably satisfactory to Lender,
all certified by the entity's chief financial officer or chief accounting
officer: a statement of Funds From Operations, a
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statement of cash flows for each individual Project, a statement detailing
Consolidated Outstanding Indebtedness, Consolidated Secured Indebtedness, and
Consolidated Senior Unsecured Indebtedness, Consolidated Cash Flow (with a
breakdown between Unencumbered Assets and other assets), a listing of capital
expenditures, a report listing and describing all newly acquired Projects,
including their net operating income, cash flow, cost and secured or unsecured
Indebtedness assumed in connection with such acquisition, if any, summary
information and such other information on all Projects as may be reasonably
requested;
6.1.3. As soon as available, but in any event not later than 90
days after the close of each fiscal year, for Borrower and its Subsidiaries,
audited financial statements, (including a consolidated balance sheet as at the
end of such year and the related consolidated statements of income and retained
earnings and of cash flows for such year), setting forth in each case in
comparative form the figures for the previous year, without a "going concern" or
like qualification or exception, or qualification arising out of the scope of
the audit, prepared by PricewaterhouseCoopers (or other independent certified
public accountants of nationally recognized standing reasonably acceptable to
Lender);
6.1.4. As soon as available, but in any event not later than 90
days after the close of each fiscal year, for Borrower and its Subsidiaries, a
statement detailing the contributions to Consolidated Cash Flow from each
individual Project for the prior fiscal year in form and substance reasonably
satisfactory to Lender, certified by the entity's chief financial officer or
chief accounting officer;
6.1.5. Together with the quarterly and annual financial
statements required hereunder, a compliance certificate in substantially the
form of EXHIBIT C hereto signed by Borrower's chief financial officer or chief
accounting officer showing the calculations and computations necessary to
determine compliance with this Agreement and stating that, to such officer's
knowledge, no Default or Unmatured Default exists, or if, to such officer's
knowledge, any Default or Unmatured Default exists, stating the nature and
status thereof;
6.1.6. As soon as possible and in any event within 10 days after
a responsible officer of Borrower knows that any Reportable Event has occurred
with respect to any Plan, a statement, signed by the chief financial officer of
Borrower, describing said Reportable Event and the action which Borrower
proposes to take with respect thereto;
6.1.7. As soon as possible and in any event within 10 days after
receipt by a responsible officer of Borrower, a copy of (a) any notice or claim
to the effect that Borrower or any of its Subsidiaries is or may be liable to
any Person as a result of the release by Borrower, 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 Borrower or any of
its Subsidiaries, which, in either case, could have a Material Adverse Effect;
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6.1.8. Promptly upon the furnishing thereof to the shareholders
of Borrower, copies of all financial statements, reports and proxy statements so
furnished;
6.1.9. Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or other reports and any
other public information which Borrower or any of its Subsidiaries files with
the Securities Exchange Commission; and
6.1.10. Such other information (including, without limitation,
financial statements for Borrower and non-financial information) as Lender may
from time to time reasonably request.
6.2. USE OF PROCEEDS. Borrower will use the proceeds of the Loan only
to repay the Senior Notes.
6.3. NOTICE OF DEFAULT. Borrower will give, and will cause each of its
Subsidiaries to give, prompt notice in writing to Lender of the occurrence of
any Default or Unmatured Default and of any other development, financial or
otherwise, which could reasonably be expected to have a Material Adverse Effect.
6.4. CONDUCT OF BUSINESS. Borrower will do, and will cause each of its
Subsidiaries to do, all things necessary to remain duly incorporated or duly
qualified, validly existing and in good standing as a real estate investment
trust, corporation, general partnership or limited partnership, as the case may
be, in its jurisdiction of incorporation/formation and maintain all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted and to carry on and conduct their businesses in substantially the same
manner as they are presently conducted where the failure to do so could
reasonably be expected to have a Material Adverse Effect and, specifically,
neither Borrower nor its Subsidiaries may undertake any business other than the
acquisition, development, ownership, management, operation and leasing of
retail, office or industrial properties, and ancillary businesses specifically
related to such types of properties.
6.5. TAXES. Borrower will pay, and will cause each of its Subsidiaries
to pay, when due all taxes, assessments and governmental charges and levies upon
them of their income, profits or Projects, except those which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been set aside.
6.6. INSURANCE. Borrower will, and will cause each of its Subsidiaries
to, maintain with financially sound and reputable insurance companies insurance
on all their Property in such amounts and covering such risks as is consistent
with sound business practice, and Borrower will furnish to Lender upon
reasonable request full information as to the insurance carried.
6.7. COMPLIANCE WITH LAWS. Borrower will, and will cause each of its
Subsidiaries to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which they may be subject, the
violation of which could reasonably be expected to have a Material Adverse
Effect.
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6.8. MAINTENANCE OF PROPERTIES. Borrower will, and will cause each of
its Subsidiaries to, do all things necessary to maintain, preserve, protect and
keep their respective Projects and Properties, reasonably necessary for the
continuous operation of the Projects, in good repair, working order and
condition, ordinary wear and tear excepted.
6.9. INSPECTION. Borrower will, and will cause each of its Subsidiaries
to, permit the Lenders upon reasonable notice, by their respective
representatives and agents, to inspect any of the Projects, corporate books and
financial records of Borrower and each of its Subsidiaries, to examine and make
copies of the books of accounts and other financial records of Borrower and each
of its Subsidiaries, and to discuss the affairs, finances and accounts of
Borrower and each of its Subsidiaries with officers thereof, and to be advised
as to the same by, their respective officers at such reasonable times and
intervals as Lender may designate.
6.10. MAINTENANCE OF STATUS. Borrower shall at all times (i) remain a
corporation listed and in good standing on the New York Stock Exchange, and (ii)
maintain its status as a real estate investment trust in compliance with all
applicable provisions of the Code relating to such status.
6.11. DIVIDENDS. Provided there is no then-existing Default or (after
notice thereof to Borrower) Unmatured Default under this Agreement, Borrower and
its Subsidiaries shall be permitted to declare and pay dividends on their
Capital Stock from time to time in amounts determined by Borrower, PROVIDED,
HOWEVER, that in no event shall Borrower declare or pay dividends on its Capital
Stock if (a) dividends paid on account of any fiscal quarter, in the aggregate,
would exceed 95% of Funds From Operations for such fiscal quarter, or (b)
dividends paid on account of any fiscal year, in the aggregate, would exceed 90%
of Funds From Operations for such fiscal year. Notwithstanding the foregoing,
Borrower shall be permitted at all times to distribute whatever amount of
dividends is necessary to maintain its tax status as a real estate investment
trust under the Code.
6.12. MERGER; SALE OF ASSETS. Borrower will not, nor will it permit any
of its Subsidiaries to, enter into any merger (other than mergers in which such
entity is the survivor), consolidation, reorganization or liquidation or
transfer or otherwise dispose of all or a Substantial Portion of their
Properties, except for such transactions that occur between Wholly-Owned
Subsidiaries or between Borrower and a Wholly-Owned Subsidiary or as otherwise
approved in advance by Lender.
6.13. DELIVERY OF SUBSIDIARY GUARANTIES. Borrower shall cause each of
its existing Subsidiaries listed on SCHEDULE 6 to execute and deliver to Lender
the Subsidiary Guaranty. Borrower shall promptly notify Lender of any planned
formation or acquisition of any additional Subsidiaries. Within 10 days after
Borrower forms or acquires any Subsidiary other than a Subsidiary which is a
single-purpose entity formed solely for the purpose of owning Projects in
connection with securitized Indebtedness and which has restrictions on the
creation of additional Indebtedness and other safeguards typically imposed on
such single-purpose entities in securitized financings, Borrower shall cause
such Subsidiary to execute and deliver to Lender a Subsidiary Guaranty.
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6.14. SALE AND LEASEBACK. Borrower will not, nor will it permit any of
its Subsidiaries to, sell or transfer a Substantial Portion of its Property in
order to concurrently or subsequently lease such Property as lessee.
6.15. ACQUISITIONS AND INVESTMENTS. Borrower will not, nor will it
permit any Subsidiary to, make or suffer to exist any Investments (including
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or become or remain a partner in any
partnership or joint venture, or to make any Acquisition of any Person, except:
(i) Cash Equivalents;
(ii) Investments in existing Subsidiaries, Investments in
Subsidiaries formed for the purpose of acquiring Properties,
Investments in joint ventures and partnerships engaged solely
in the business of purchasing, developing, owning, operating,
leasing and managing retail properties and office and
industrial properties, and Investments in existence on the
Agreement Execution Date and described in SCHEDULE 1 hereto;
(iii) transactions permitted pursuant to SECTION 6.12; and
(iv) Acquisitions of Persons whose primary operations consist of
the ownership, development, operation and management of
retail, office or industrial properties;
provided that, after giving effect to such Acquisitions and Investments,
Borrower continues to comply with all its covenants herein. Acquisitions
permitted pursuant to this SECTION 6.15 shall be deemed to be "PERMITTED
ACQUISITIONS".
6.16. LIENS. Borrower will not, nor will it permit any of its
Subsidiaries to, create, incur, or suffer to exist any Lien in, of or on the
Property of Borrower or any of its Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or levies
on its 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
its books;
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the
ordinary course of business which secure payment of
obligations not more than 60 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) Easements, restrictions 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 Borrower
or its Subsidiaries;
(v) Liens on Projects existing on the date hereof which secure
Indebtedness as described in SCHEDULE 2 hereto; and
(vi) Liens other than Liens described in subsections (i) through
(iv) above arising in connection with any Indebtedness
permitted hereunder to the extent such Liens will not result
in a Default in any of Borrower's covenants herein.
Liens permitted pursuant to this SECTION 6.16 shall be deemed to be "PERMITTED
LIENS".
6.17. AFFILIATES. Borrower will not, nor will it permit any of its
Subsidiaries to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate except in the ordinary course of business and
pursuant to the reasonable requirements of Borrower's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to Borrower or
such Subsidiary than Borrower or such Subsidiary would obtain in a comparable
arms-length transaction.
6.18. FINANCIAL UNDERTAKINGS. Borrower will not enter into or remain
liable upon, nor will it permit any Subsidiary to enter into or remain liable
upon, any Financial Undertaking, except to the extent required to protect
Borrower and its Subsidiaries against increases in interest payable by them
under variable interest Indebtedness.
6.19. VARIABLE INTEREST INDEBTEDNESS. Borrower and its Subsidiaries
shall not at any time permit the outstanding principal balance of Indebtedness
which bears interest at an interest rate that is not fixed through the maturity
date of such Indebtedness to exceed $625,000,000, unless all of such
Indebtedness in excess of $625,000,000 is subject to a swap, rate cap or other
interest rate management program approved by Lender that effectively converts
the interest rate on such excess to a fixed rate.
6.20. CONSOLIDATED NET WORTH. Borrower shall maintain a Consolidated
Net Worth of not less than the sum of (i) $1,100,000,000 plus (ii) 90% of the
aggregate proceeds received by Borrower (net of customary related fees and
expenses) in connection with any offering of stock, including without
limitation, perpetual preferred stock in Borrower, after December 31, 1999 and
on or prior to the date such determination of Consolidated Net Worth
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<PAGE> 37
is made; provided that no proceeds shall be deemed received to the extent that
such offering involves only the replacement of reissuance of common or preferred
stock.
6.21. INDEBTEDNESS AND CASH FLOW COVENANTS. Borrower on a consolidated
basis with its Subsidiaries shall not permit any of the following:
(i) Consolidated Outstanding Indebtedness to exceed (i) 57.5% of
Consolidated Market Value as of any date during the AIP
Transition Period, or (ii) 55% of Consolidated Market Value as
of any other date.
(ii) Consolidated Secured Indebtedness to exceed 35% of
Consolidated Market Value, as of the last day of any fiscal
quarter.
(iii) The Value of Unencumbered Assets to be less than 1.75 times
the Consolidated Senior Unsecured Indebtedness, as of any
date.
(iv) The aggregate Net Operating Income for the two most recent
fiscal quarters of the Consolidated Group for which results
have been reported under SECTION 6.1 from all Unencumbered
Assets qualifying for inclusion in the Value of Unencumbered
Assets as of the date of determination to be less than 1.75
times the portion of Consolidated Interest Expense for such
two fiscal quarters attributable to Consolidated Senior
Unsecured Indebtedness, as of the last day of any fiscal
quarter.
(v) Consolidated Cash Flow to be less than 2.0 times the
Consolidated Debt Service, based on the most recent two fiscal
quarters, for which the Consolidated Group has reported
results under SECTION 6.1, annualized, as of the last day of
any fiscal quarter.
(vi) The ratio of Consolidated Cash Flow to Fixed Charges for the
prior quarter, to be less than 1.60 to 1. "FIXED CHARGES"
shall mean the sum of (i) Consolidated Interest Expense, (ii)
all scheduled principal payments due on account of
Consolidated Outstanding Indebtedness (excluding balloon
payments), (iii) all dividends payable on account of preferred
stock of Borrower or any other Person in the Consolidated
Group and (iv) all ground lease payments to the extent not
deducted as an expense in calculating Consolidated Cash Flow.
6.22. ENVIRONMENTAL MATTERS. Borrower and its Subsidiaries shall:
6.22.1. Comply with, and use all reasonable efforts to ensure
compliance by all tenants and subtenants, if any, with, all applicable
Environmental Laws and obtain and comply with and maintain, and use all
reasonable efforts to ensure that all tenants and subtenants obtain and comply
with and maintain, any and all licenses, approvals, notifications, registrations
or permits required by applicable Environmental Laws, except to the extent that
failure to do so could not be reasonably expected to have a Material Adverse
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<PAGE> 38
Effect; provided that in no event shall Borrower or its Subsidiaries be required
to modify the terms of leases, or renewals thereof, with existing tenants (i) at
Projects owned by Borrower or its Subsidiaries as of the date hereof, or (ii) at
Projects hereafter acquired by Borrower or its Subsidiaries as of the date of
such acquisition, to add provisions to such effect.
6.22.2. Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws, except to the extent that (i) the same are being contested in good faith
by appropriate proceedings and the pendency of such proceedings could not be
reasonably expected to have a Material Adverse Effect, or (ii) Borrower has
determined in good faith that contesting the same is not in the best interests
of Borrower and its Subsidiaries and the failure to contest the same could not
be reasonably expected to have a Material Adverse Effect.
6.22.3. Defend, indemnify and hold harmless Lender, and their
respective officers and directors, from and against any claims, demands,
penalties, fines, liabilities, settlements, damages, costs and expenses of
whatever kind or nature known or unknown, contingent or otherwise, arising out
of, or in any way relating to the violation of, noncompliance with or liability
under any Environmental Laws applicable to the operations of Borrower, its
Subsidiaries or the Projects, or any orders, requirements or demands of
Governmental Authorities related thereto, including, without limitation,
attorney's and consultant's fees, investigation and laboratory fees, response
costs, court costs and litigation expenses, except to the extent that any of the
foregoing arise out of the gross negligence or willful misconduct of the party
seeking indemnification therefor. This indemnity shall continue in full force
and effect regardless of the termination of this Agreement.
6.22.4. Prior to the acquisition of any new Project after the
Agreement Execution Date, perform or cause to be performed an environmental
investigation which investigation shall at a minimum comply with the
specifications and procedures attached hereto as EXHIBIT D. In connection with
any such investigation, Borrower shall cause to be prepared a report of such
investigation, to be made available to any Lenders upon reasonable request, for
informational purposes and to assure compliance with the specifications and
procedures.
6.23. INVESTMENTS IN AIP AND INVESTMENT AFFILIATES. The
Consolidated Group's Investment in AIP, as determined in accordance with GAAP,
PLUS the Consolidated Group's Investment in Investment Affiliates, as determined
in accordance with GAAP, shall not at any time exceed 30% of Consolidated Market
Value.
6.24. LIMITS ON CERTAIN REAL ESTATE INVESTMENTS. The portion of
the Consolidated Capitalization Value attributable to the following assets shall
not exceed the following percentages as of any date:
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<TABLE>
<CAPTION>
--------------------------------------------- -------------------------------------------
Not to exceed % of
Consolidated Capitalization Value
--------------------------------------------- -------------------------------------------
<S> <C>
Developable Land
7.5%
--------------------------------------------- -------------------------------------------
Passive Non-Real Estate Investments
7.5%
--------------------------------------------- -------------------------------------------
First Mortgage Receivables
5%
--------------------------------------------- -------------------------------------------
Assets Under Development
15%
--------------------------------------------- -------------------------------------------
Aggregate permitted for all categories above
25%
--------------------------------------------- -------------------------------------------
</TABLE>
Developable Land, Passive Non-Real Estate Investments and First Mortgage
Receivables will be valued at the lower of acquisition cost or market value.
6.25. CHANGES IN EXISTING CREDIT FACILITY. From time to time,
concurrent with any changes to covenants of Borrower under the Existing Credit
Facility (including the addition of new covenants), Borrower shall execute and
deliver to Lender and Lender shall execute (to the extent such changes are
reasonably acceptable to Lender) and deliver to Borrower an amendment to this
Agreement making comparable changes to this Agreement.
7. DEFAULTS.
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Nonpayment of any principal payment on the Note when due.
7.2. Nonpayment of interest upon any Note or of any fee or other
payment Obligations under any of the Loan Documents within five Business Days
after the same becomes due.
7.3. The breach of any of the terms or provisions of SECTION 4(b)(ii),
SECTION 6.2, SECTIONS 6.10 through 6.21, SECTION 6.23 and SECTION 6.24.
7.4. Any representation or warranty made or deemed made by or on behalf
of Borrower or any of its Subsidiaries to Lender under or in connection with
this Agreement, any Loan, or any material certificate or information delivered
in connection with this Agreement or any other Loan Document shall be materially
false on the date as of which made.
7.5. The breach by Borrower (other than a breach which constitutes a
Default under SECTION 7.1, 7.2, 7.3 or 7.4) of any of the terms or provisions of
this Agreement which is not remedied within 15 days after written notice from
Lender.
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7.6. Failure of Borrower or any of its Subsidiaries to pay when due (A)
any Recourse Indebtedness in excess of $10,000,000 in the aggregate or (B) any
Indebtedness, in excess of $40,000,000 in the aggregate, or the default by
Borrower or any of its Subsidiaries in the performance of any term, provision or
condition contained in any agreement, or any other event shall occur or
condition exist, which causes or permits (A) any Recourse Indebtedness of
Borrower or any of its Subsidiaries in excess of $10,000,000 in the aggregate or
(B) any Indebtedness, in excess of $40,000,000 in the aggregate to be due and
payable or required to be prepaid (other than by a regularly scheduled payment)
prior to the stated maturity thereof (provided that the failure to pay any such
Indebtedness shall not constitute a Default so long as Borrower or its
Subsidiaries is diligently contesting the payment of the same by appropriate
legal proceedings and Borrower or its Subsidiaries have set aside, in a manner
reasonably satisfactory to Lender, a sufficient reserve to repay such
Indebtedness plus all accrued interest thereon calculated at the default rate
thereunder and costs of enforcement in the event of an adverse outcome).
7.7. Borrower, or any Subsidiary having more than $10,000,000 of Equity
Value, shall (i) have an order for relief entered with respect to it under the
Federal bankruptcy laws as now or hereafter in effect, (ii) make an assignment
for the benefit of creditors, (iii) 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 Property, (iv)
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, (v) take any corporate
action to authorize or effect any of the foregoing actions set forth in this
SECTION 7.7, (vi) fail to contest in good faith any appointment or proceeding
described in SECTION 7.8 or (vii) admit in writing its inability to pay its
debts generally as they become due.
7.8. A receiver, trustee, examiner, liquidator or similar official
shall be appointed for Borrower or any Subsidiary having more than $10,000,000
of Equity Value, or for any Substantial Portion of the Property of Borrower or
such Subsidiary, or a proceeding described in SECTION 7.7(iv) shall be
instituted against Borrower or any such Subsidiary and such appointment
continues undischarged or such proceeding continues undismissed or unstayed for
a period of 90 consecutive days.
7.9. Borrower or any of its Subsidiaries shall fail within 60 days to
pay, bond or otherwise discharge any judgments or orders for the payment of
money in an amount which, when added to all other judgments or orders
outstanding against Borrower or any Subsidiary would exceed $10,000,000 in the
aggregate, which have not been stayed on appeal or otherwise appropriately
contested in good faith.
7.10. Borrower or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that it has incurred
withdrawal liability to
39
<PAGE> 41
such Multiemployer Plan in an amount which, when aggregated with all other
amounts required to be paid to Multiemployer Plans by Borrower or any other
member of the Controlled Group as withdrawal liability (determined as of the
date of such notification), exceeds $1,000,000 or requires payments exceeding
$500,000 per annum.
7.11. Borrower or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of Title IV
of ERISA, if as a result of such reorganization or termination the aggregate
annual contributions of Borrower and the other members of the Controlled Group
(taken as a whole) to all Multiemployer Plans which are then in reorganization
or being terminated have been or will be increased over the amounts contributed
to such Multiemployer Plans for the respective plan years of each such
Multiemployer Plan immediately preceding the plan year in which the
reorganization or termination occurs by an amount exceeding $500,000.
7.12. Failure to remediate within the time period permitted 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 at Properties
owned by Borrower or any of its Subsidiaries or Investment Affiliates if the
estimated costs of remediation at all such Properties in the aggregate exceed
$20,000,000.
7.13. The occurrence of any "Default" as defined in any Loan Document
or the breach of any of the terms or provisions of any Loan Document, which
default or breach continues beyond any period of grace therein provided.
7.14. The occurrence of any Material Adverse Effect.
7.15. The occurrence of any default under the Existing Credit Facility.
8. ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES.
8.1. ACCELERATION. If any Default described in SECTION 7.7 or 7.8
occurs with respect to Borrower, the Obligations shall immediately become due
and payable without any election or action on the part of Lender. If any other
Default occurs, Lender, at any time prior to the date that such Default has been
fully cured, may declare the Obligations to be due and payable, or both,
whereupon (i) the Obligations shall become immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which Borrower hereby
expressly waives and (ii) Lender may undertake efforts to collect, including
without limitation, by filing and diligently pursuing judicial action, all
amounts owed by Borrower and any Subsidiary Guarantor under the Loan Documents.
No amendment of any provision of this Agreement shall be effective without the
written agreement of Borrower and Lender.
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<PAGE> 42
8.2. PRESERVATION OF RIGHTS. No delay or omission of Lender to exercise
any right under the Loan Documents shall impair such right or be construed to be
a waiver of any Default or an acquiescence therein, and the making of the Loan
notwithstanding the existence of a Default or the inability of Borrower to
satisfy the conditions precedent to such Loan 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 Lender, 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 Lender until the Obligations have been
paid in full.
9. GENERAL PROVISIONS.
9.1. SURVIVAL OF REPRESENTATIONS. All representations and warranties of
Borrower contained in this Agreement shall survive delivery of the Notes and the
making of the Loans herein contemplated.
9.2. GOVERNMENTAL REGULATION. Anything contained in this Agreement to
the contrary notwithstanding, Lender shall not be obligated to extend credit to
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
9.3. TAXES. Any taxes (excluding taxes on the overall net income of
Lender) or other similar assessments or charges made by any governmental or
revenue authority in respect of the Loan Documents shall be paid by Borrower,
together with interest and penalties, if any.
9.4. 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.
9.5. ENTIRE AGREEMENT. The Loan Documents embody the entire agreement
and understanding between Borrower and Lender and supersede all prior
commitments, agreements and understandings between Borrower and Lender relating
to the subject matter thereof.
9.6. EXPENSES; INDEMNIFICATION. Borrower shall reimburse Lender for any
costs, internal charges and out-of-pocket expenses (including, without
limitation, all reasonable fees for consultants and fees and reasonable expenses
for attorneys for Lender, which attorneys may be employees of Lender) paid or
incurred by Lender in connection with the preparation, amendment, modification,
and enforcement of the Loan Documents. Borrower also agrees to reimburse Lender
for any reasonable costs, internal charges and out-of-pocket expenses
(including, without limitation, all fees and reasonable expenses for attorneys
for Lender, which attorneys may be employees of Lender) paid or incurred by
Lender in connection with the collection and enforcement of the Loan Documents
(including, without limitation, any workout). Borrower further agrees to
indemnify Lender, its directors and
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<PAGE> 43
officers against all costs, losses, claims, damages, penalties, judgments,
liabilities and expenses (including, without limitation, all expenses of
litigation or preparation therefor whether or not Lender 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 Projects, the transactions contemplated hereby or
the direct or indirect application or proposed application of the proceeds of
the Loan hereunder, except to the extent that any of the foregoing arise out of
the gross negligence or willful misconduct of the party seeking indemnification
therefor. The obligations of Borrower under this Section shall survive the
termination of this Agreement.
9.7. ACCOUNTING. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP.
9.8. 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.
9.9. NONLIABILITY OF LENDER. The relationship between Borrower, on the
one hand, and Lender, on the other, shall be solely that of borrower and lender.
Lender shall not have any fiduciary responsibilities to Borrower. Lender does
not undertake any responsibility to Borrower to review or inform Borrower of any
matter in connection with any phase of Borrower's business or operations.
9.10. 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.
9.11. CONSENT TO JURISDICTION. BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE
COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO ANY LOAN DOCUMENTS AND 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
LENDER TO BRING PROCEEDINGS AGAINST BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY BORROWER AGAINST LENDER OR ANY
AFFILIATE OF LENDER INVOLVING,
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<PAGE> 44
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.
9.12. WAIVER OF JURY TRIAL. BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LITIGATION ARISING IN ANY WAY IN CONNECTION WITH THIS AGREEMENT, THE NOTE OR ANY
OF THE OTHER LOAN DOCUMENTS, OR ANY OTHER STATEMENTS OR ACTIONS OF BORROWER OR
LENDER. BORROWER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF
THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL
SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS DISCUSSED THIS WAIVER WITH SUCH
LEGAL COUNSEL. BORROWER FURTHER ACKNOWLEDGES THAT (i) IT HAS READ AND
UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS WAIVER, (ii) THIS WAIVER HAS
BEEN REVIEWED BY BORROWER AND BORROWER'S COUNSEL AND IS A MATERIAL INDUCEMENT
FOR LENDER TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, (iii) THIS
WAIVER SHALL BE EFFECTIVE AS TO EACH OF THE OTHER LOAN DOCUMENTS AS IF FULLY
INCORPORATED THEREIN.
10. SETOFF.
In addition to, and without limitation of, any rights of the Lender
under applicable law, if Borrower becomes insolvent, however evidenced, or any
Default occurs, any and all deposits (including all account balances, whether
provisional or final and whether or not collected or available) and any other
Indebtedness at any time held or owing by Lender to or for the credit or account
of Borrower may be offset and applied toward the payment of the Obligations
owing to Lender at any time prior to the date that such Default has been fully
cured, whether or not the Obligations, or any part hereof, shall then be due.
11. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.
11.1. SUCCESSORS AND ASSIGNS. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of Borrower and Lender
and their respective successors and assigns, except that Borrower shall not have
the right to assign its rights or obligations under the Loan Documents. Lender
may at any time, without the consent of Borrower or Lender, assign all or any
portion of its rights under this Agreement and its Notes to a Federal Reserve
Bank.
11.2. PARTICIPATIONS.
11.2.1. PERMITTED PARTICIPANTS; EFFECT. Lender may, in the
ordinary course of its business and in accordance with applicable law, at any
time sell to one or more banks, financial institutions, pension funds, or any
other funds or entities ("PARTICIPANTS") participating interests in the Loan. In
the event of any such sale by a Lender of participating
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interests to a Participant, 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 Lender had not sold such participating
interests, and Borrower shall continue to deal solely and directly with Lender
in connection with such Lender's rights and obligations under the Loan
Documents.
11.2.2. BENEFIT OF SETOFF. Borrower agrees that each Participant
which has previously advised Borrower in writing of its purchase of a
participation in Lender's interest in the Loan shall be deemed to have the right
of setoff provided in SECTION 10 in respect of its participating interest in
amounts owing under the Loan Documents to the same extent as if the amount of
its participating interest were owing directly to it as Lender under the Loan
Documents. Lender shall retain the right of setoff provided in SECTION 10 with
respect to the amount of participating interests sold to each Participant,
provided that Lender and each such Participant may not each setoff amounts
against the same portion of the Obligations, so as to collect the same amount
from Borrower twice.
11.3. ASSIGNMENTS.
11.3.1. PERMITTED ASSIGNMENTS. Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any time assign
to any of such Lender's affiliates or to one or more banks, financial
institutions or pension funds, or with the prior approval of Borrower, which
shall not be unreasonably withheld or delayed, any other entity ("PURCHASERS")
all or any portion of its rights and obligations under the Loan Documents.
Notwithstanding the foregoing, no approval of Borrower shall be required for any
such assignment if a Default has occurred and is then continuing.
11.3.2. EFFECT: EFFECTIVE DATE. Upon the consummation of any
assignment to a Purchaser pursuant to this SECTION 11.3.2, the transferor Lender
and Borrower shall make appropriate arrangements so that a replacement Note is
issued to such transferor Lender and a Note or, as appropriate, a replacement
Note, is issued to such Purchaser, in each case in principal amounts reflecting
their portion of the Loan Amount, as adjusted pursuant to such assignment.
11.4. DISSEMINATION OF INFORMATION. Borrower authorizes 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 and its Subsidiaries, subject to
SECTION 11.5.
11.5. CONFIDENTIALITY. Lender agrees to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all
nonpublic information provided to them by Borrower or by any other Person on
Borrower's behalf in connection with the Loan Documents and agrees and
undertakes that neither it nor any of its Affiliates shall disclose any such
information for any purpose or in any manner other than pursuant to the terms
contemplated by the Loan Documents. Lender may disclose such information (1) at
the
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request of any regulatory authority with jurisdiction over Lender or in
connection with an examination of such Person by any such authority, (2)
pursuant to subpoena or other process of a court having jurisdiction over
Lender, (3) when required to do so in accordance with the provisions of any
applicable law, (4) at the express direction of any other governmental
authority, with jurisdiction over Lender, of any State of the United States of
America or of any other jurisdiction in which such Person conducts its business,
(5) to such Person's independent auditors, attorneys and other professional
advisors, (6) if such information has become public other than through
disclosure by such Person or Lender, (7) in connection with any litigation
involving such Person, and (8) to any Affiliate of such Person which agrees to
be bound by this SECTION 11.5.. Notwithstanding the foregoing, Borrower
authorizes Lender to disclose to ANY prospective or actual Transferee such
financial and other information in its possession (i) which has been delivered
to such Person pursuant to the Loan Documents or which has been delivered to
such Person by Borrower prior to entering into the Loan Documents, or (ii) which
is reasonably necessary to effectuate the purposes of this Agreement and the
Loan Documents, provided that, unless otherwise AGREED by Borrower; such
Transferee shall agree to keep such information confidential to the same extent
required of Lender hereunder.
12. NOTICES.
12.1. GIVING NOTICE. Except as otherwise permitted by SECTION 2.12 with
respect to borrowing notices, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing or by facsimile and addressed or delivered to such party at its address
set forth below its signature hereto 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.
12.2. CHANGE OF ADDRESS. Borrower and Lender may each change the
address for service of notice upon it by a notice in writing to the other party
hereto.
13. 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 Borrower and Lender.
[PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement as
of the date first above written.
BORROWER:
DEVELOPERS DIVERSIFIED REALTY CORPORATION
By:_________________________________
Print Name:_________________________
Title:______________________________
3300 Enterprise Parkway
Beachwood, Ohio 44122
Phone: 216/755-5500
Facsimile: 216/755-5775
LENDER:
BANK OF AMERICA, NATIONAL ASSOCIATION,
a national banking association
By:_________________________________
Print Name:_________________________
Title:______________________________
231 South LaSalle Street
IL1-231-12-18
Chicago, Illinois 60697
Phone: 312/828-5149
Facsimile: 312/974-4970
Attention: Richard G. Baer, Jr., Principal
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<PAGE> 48
EXHIBIT A
NOTE
$100,000,000.00 May __, 2000
Developers Diversified Realty Corporation, a corporation organized
under the laws of the State of Ohio ("BORROWER"), promises to pay to the order
of Bank of America, National Association ("LENDER") the principal sum of
one-hundred million Dollars ($100,000,000) in immediately available funds at the
main office of Lender in Chicago, Illinois, together with interest on the unpaid
principal amount hereof at the rates and on the dates set forth in the
Agreement. Borrower shall pay remaining unpaid principal of and accrued and
unpaid interest on the Loan in full on the Maturity Date or such earlier date as
may be required under the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder.
This Note is issued pursuant to, and is entitled to the benefits of,
the Term Loan Agreement (the "AGREEMENT"), dated as of May __, 2000 between
Borrower and Lender, as it may be amended from time to time, reference is hereby
made for a statement of the terms and conditions governing this Note, including
the terms and conditions under which this Note may be prepaid or its maturity
date accelerated. Capitalized terms used herein and not otherwise defined herein
are used with the meanings attributed to them in the Agreement.
If there is a Default under the Agreement or any other Loan Document
and Lender exercises the remedies provided under the Agreement and/or any of the
Loan Documents, then in addition to all amounts recoverable by Lender under such
documents, Lender shall be entitled to receive reasonable attorneys fees and
expenses incurred by Lender in connection with the exercise of such remedies.
Borrower and all endorsers severally waive presentment, protest and
demand, notice of protest, demand and of dishonor and nonpayment of this Note,
and any and all lack of diligence or delays in collection or enforcement of this
Note, and expressly agree that this Note, or any payment hereunder, may be
extended from time to time, and expressly consent to the release of any party
liable for the obligation secured by this Note, the release of any of the
security for this Note, the acceptance of any other security therefor, or any
other indulgence or forbearance whatsoever, all without notice to any party and
without affecting the liability of Borrower and any endorsers hereof.
This Note shall be governed and construed under the internal laws of
the State of Illinois.
BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHT THAT IT MAY HAVE TO A TRIAL BY
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<PAGE> 49
JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH THIS AGREEMENT, THE
NOTE OR ANY OF THE OTHER LOAN DOCUMENTS, OR ANY OTHER STATEMENTS OR ACTIONS OF
BORROWER OR LENDER. BORROWER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED IN THE
SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL
COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS DISCUSSED THIS WAIVER
WITH SUCH LEGAL COUNSEL. BORROWER FURTHER ACKNOWLEDGES THAT (I) IT HAS READ AND
UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS WAIVER, (II) THIS WAIVER HAS
BEEN REVIEWED BY BORROWER AND BORROWER'S COUNSEL AND IS A MATERIAL INDUCEMENT
FOR LENDER TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, (III) THIS
WAIVER SHALL BE EFFECTIVE AS TO EACH OF THE OTHER LOAN DOCUMENTS AS IF FULLY
INCORPORATED THEREIN.
DEVELOPERS DIVERSIFIED REALTY
CORPORATION, an Ohio corporation
By:_______________________________
Print Name:_______________________
Title:____________________________
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<PAGE> 50
SCHEDULE OF TRANCHES AND PAYMENTS OF PRINCIPAL
TO NOTE OF DEVELOPERS DIVERSIFIED REALTY CORPORATION,
DATED MAY __, 2000
Maturity
Principal Maturity Principal Total
Amount of of Interest Amount Unpaid
Date Tranche Period Paid Loan Balance
---- ------- ------ ---- ------------
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
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EXHIBIT B
FORM OF OPINION
[ATTACHED HERETO]
B-1
<PAGE> 52
EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
[ATTACHED HERETO.]
C-1
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EXHIBIT D
ENVIRONMENTAL INVESTIGATION SPECIFICATIONS AND PROCEDURES
Phase I Environmental Site Assessments to be prepared in accordance
with the ASTM Standard Practice for Environmental Site Assessments: Phase I
Environmental Site Assessment Process (ASTM Designation E1527-94), a summary of
which follows:
This ASTM practice is generally considered the industry standard for
conducting a Phase I Environmental Site Assessment (ESA). The purpose
of this standard is to "define good commercial and customary practice
in the United States of America for conducting an ESA of a parcel of
commercial real estate with respect to the range of contaminants within
the scope of the Comprehensive Environmental Response, Compensation and
Liability Act (CERCLA) and petroleum products." The ASTM Phase I ESA is
intended to permit a user to satisfy one of the requirements to qualify
for the innocent landowner defense to CERCLA liability; that is, the
practice that constitutes "all appropriate inquiry into the previous
ownership and uses of the property consistent with good commercial or
customary practices" as defined in 42 USC 9601(35)(B).
The goal of the ASTM Phase I ESA is to identify "recognized
environmental conditions." Recognized environmental conditions means
the presence or likely presence of any hazardous substances or
petroleum products on a property under conditions that indicate an
existing release, a past release, or a material threat of a release of
any hazardous substances or petroleum products into structures on the
property or into the ground, groundwater, or surface water of the
property. The term includes hazardous substances or petroleum products
even under conditions in compliance with laws. The term is not intended
to include de minimus conditions that generally would not be the
subject of an enforcement action if brought to the attention of
appropriate governmental agencies.
The ASTM standard indicates that a Phase I ESA should consist of four
main components: 1) Records Review; 2) Site Reconnaissance; 3)
Interviews, and 4) Report. The purpose of the records review is to
obtain and review records that will help identify recognized
environmental conditions in connection with the property. The site
reconnaissance involves physical observation of the property's exterior
and interior, as well as an observation of adjoining properties.
Interviews with previous and current owners and occupants, and local
government officials provides insight into the presence or absence of
recognized environmental conditions in connection with the property.
The final component of the ESA, the report, contains the findings of
the ESA and conclusions regarding the presence or absence of recognized
environmental conditions in connection with the property. It includes
documentation to support the analysis, opinions, and conclusions found
in the report.
While the use of this practice is intended to constitute appropriate inquiry for
purposes of CERCLA's innocent landowner defense, it is not intended that its use
be limited to that
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purpose. The ASTM standard is intended to be an approach to conducting an
inquiry designed to identify recognized environmental conditions in connection
with a property, and environmental site assessments.
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<PAGE> 55
EXHIBIT E
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To: Bank of America, National Association
as Lender ("LENDER")
under the Term Loan Agreement Described Below
Re: Term Loan Agreement, dated May __, 2000 (as the same may be amended or
modified, the "LOAN AGREEMENT"), between Developers Diversified Realty
Corporation, a corporation organized under the laws of the State of
Ohio (the "BORROWER") and Lender. Terms used herein and not otherwise
defined shall have the meanings assigned thereto in the Loan Agreement.
Lender is specifically authorized and directed to act upon the
following standing money transfer instructions with respect to the proceeds of
Advances or other extensions of credit from time to time until receipt by Lender
of a specific written revocation of such instructions by Borrower, provided,
however, that Lender may otherwise transfer funds as hereafter directed in
writing by Borrower in accordance with SECTION 12.1 of the Loan Agreement or
based on any telephonic notice made in accordance with SECTION 2.12 of the Loan
Agreement.
Transfer Funds To:
Bank Name:__________________________________________
ABA No.:____________________________________________
Bank Address:_______________________________________
For Account No.________________________________________________________________
Account Name:_______________________________________
Reference/ Attention To________________________________________________________
Authorized Officer (Customer Representative) Date______________
___________________________________________ _____________________________
(Please Print) Signature
Bank Officer Name Date______________________
___________________________________________ _____________________________
(Please Print) Signature
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<PAGE> 56
EXHIBIT F
SUBSIDIARY GUARANTY
This Guaranty (this "GUARANTY") is made as of May __, 2000 by
________________________ ("GUARANTOR"), to and for the benefit of Bank of
America, National Association ("LENDER").
RECITALS
A. Developers Diversified Realty Corporation, a corporation organized
under the laws of the State of Ohio ("BORROWER"), and Guarantor have requested
that Lender make a term loan to Borrower in the principal amount of $100,000,000
(the "LOAN").
B. Lender has agreed to make the Loan to Borrower pursuant to the terms
and conditions set forth in that certain Term Loan Agreement (the "LOAN
AGREEMENT") as amended, modified or restated from time to time, of even date
herewith between Borrower and Lender. All capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to such terms in the Loan
Agreement.
C. Borrower has executed and delivered or will execute and deliver to
Lender a promissory note in the principal amount of the Loan as evidence of
Borrower's indebtedness to each such Lender with respect to the Loan (the
promissory note described above, together with any amendments or allonges
thereto, or restatements, replacements or renewals thereof, and/or new
promissory notes issued pursuant to the Loan Agreement, are referred to herein
as the "NOTE").
D. Guarantor is a subsidiary of Borrower. Guarantor acknowledges that
the extension of credit by Lender pursuant to the Loan Agreement will benefit
Guarantor by making funds available to Guarantor through Borrower and by
enhancing the financial strength of the consolidated group of which Guarantor
and Borrower are members. The execution and delivery of this Guaranty by
Guarantor is a condition precedent to the performance by the Lender of its
obligations under the 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
each of the Lenders:
(a) the full and prompt payment of the principal of and interest
on the Notes when due, whether at stated maturity, upon
acceleration or otherwise, and at all times thereafter, and
the prompt payment of all sums which
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may now be or may hereafter become due and owing under the
Note, the Loan Agreement, and the other Loan Documents;
(b) the payment of all Enforcement Costs (as hereinafter defined
in SECTION 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 Loan Agreement and the Loan
Documents.
All amounts due, debts, liabilities, and payment obligations described in
subparagraphs (a) and (b) of this SECTION 1 are referred to herein as the "LOAN
INDEBTEDNESS". All obligations described in subparagraph (c) of this SECTION 1
are referred to herein as the "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 of the Loan Indebtedness 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. In the event Guarantor shall make any payment or
payments under this Guaranty each other guarantor of the Loan Indebtedness shall
contribute to Guarantor an amount equal to such non-paying guarantor's pro rata
share (based on their respective maximum liabilities hereunder and under such
other guaranty) of such payment or payments made by Guarantor, provided that
such contribution right shall be subordinate and junior in right of payment in
full of all the Loan Indebtedness to Lender.
2. In the event of any default by Borrower in making payment of the
Loan 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 a Note, to pay all the Loan Indebtedness and
to perform all the Obligations as are then or thereafter become due and owing or
are to be performed under the terms of the Note, the Loan Agreement, and the
other Loan Documents.
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 Borrower or which
Guarantor or Borrower may have against Lender or the holder of the Note, (iii)
presentment for payment, demand for payment (other than as provided
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for in SECTION 2 above), notice of nonpayment (other than as provided for in
SECTION 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
Loan, or the transactions contemplated by the Loan Agreement, it being
understood and agreed that Lender has no duty so to inform and that Guarantor is
fully responsible for being and remaining informed by Borrower of all
circumstances bearing on the existence or creation, or the risk of nonpayment of
the Loan Indebtedness or the risk of nonperformance of the Obligations, and (v)
any and all right to cause a marshalling of assets of 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 Loan 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 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 by Lender. Guarantor further agrees
that any exculpatory language contained in the Loan Agreement, the Note, and the
other Loan Documents 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 no way 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 Loan Agreement, or any other Loan Documents, or by Lender's
failure or election not to pursue any other remedies they may have against
Borrower, or by any change or modification in the Note, the Loan Agreement, or
any other Loan Documents, or by the acceptance by Lender of any 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 Loan Indebtedness, even though Lender might lawfully have elected to apply
such payments to any part or all of the Loan Indebtedness, it being the intent
hereof that Guarantor shall remain liable as principal for payment of the Loan
Indebtedness and performance of the Obligations until all indebtedness has been
paid in full and the other terms, covenants and conditions of the Loan
Agreement, and other Loan Documents and this Guaranty have been performed,
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, the Loan Agreement or any of the other Loan Documents, or any thereof,
and may waive or release any provision or provisions of the Note, the Loan
Agreement, or any other Loan Document and, with reference to such instruments,
may make and enter into any such agreement or agreements as Lender may deem
proper and desirable, without in any manner
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impairing this Guaranty or any of Lender's rights hereunder or any of
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
its obligations hereunder shall be joint and several with any and all other
guarantees given in connection with the Loan from time to time. Guarantor agrees
that this Guaranty may be enforced by Lender without the necessity at any time
of resorting to or exhausting any security or collateral, if any, given in
connection herewith or with the Note, the Loan Agreement, or any of the other
Loan Documents or by 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
them at law and/or in equity or under the Note, the Loan Agreement or any other
Loan Documents, and the exercise of any of their rights or the completion of any
of their remedies shall not constitute a discharge of any of Guarantor's
obligations hereunder, it being the purpose and intent of 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, the Loan Agreement or any other Loan
Document 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, the 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 of the Loan Documents are
placed in the hands of an attorney for collection or is collected through any
legal proceeding; (ii) an attorney is 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 Loan
Agreement, or any Loan Document; (iii) an attorney is retained to enforce any of
the other Loan Documents or to provide advice or other representation with
respect to the Loan Documents in connection with an enforcement action or
potential enforcement action; or (iv) an attorney is retained to represent
Lender in any other legal proceedings whatsoever in connection with this
Guaranty, the Note, the Loan Agreement, any of the Loan Documents, or
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any property subject thereto, then Guarantor shall pay to Lender or such Lender
upon demand all reasonable attorney's fees, costs and expenses, including,
without limitation, court costs, filing fees 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 the 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 Loan Indebtedness. Guarantor will not seek,
accept, or retain for Guarantor's own account, any payment from Borrower on
account of such subordinated debt at any time when an Unmatured Default or
Default exists under the Loan Agreement or the Loan Documents, and any such
payments to Guarantor made while any Default or Unmatured Default then exists
under the Loan Agreement or the Loan Documents 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 Loan Indebtedness without impairing or
releasing the obligations of Guarantor hereunder.
10. Guarantor hereby subordinates to the Loan Indebtedness any and all
claims and rights, including, without limitation, subrogation rights,
contribution rights, reimbursement rights and set-off rights, which Guarantor
may have against Borrower arising from a payment made by Guarantor under this
Guaranty and agrees that, until the entire Loan Indebtedness is paid in full,
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 Loan
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 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.
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<PAGE> 61
12. 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 facsimile, shall be deemed given when transmitted. Notice may be given as
follows:
To Guarantor: c/o Developers Diversified Corporation
3000 Enterprise Parkway
Beachwood, Ohio 44022
Attention: Joan U. Allgood, Esq.
Telephone: (216) 755-5500
Facsimile: (216) 755-5775
With a copy to: c/o Developers Diversified Realty
Corporation
3000 Enterprise Parkway
Beachwood, Ohio 44022
Attention: Scott A. Wolstein
Telephone: (216) 755-5500
Facsimile: (216) 755-5775
To Lender: Bank of America, National Association
231 South LaSalle Street
IL1-231-12-18
Chicago, Illinois 60697
Attention: Richard G. Baer, Jr.,
Principal
Telephone: (312) 828-5149
Facsimile: (312) 974-4970
F-6
<PAGE> 62
With a copy to: Barack Ferrazzano Kirschbaum Perlman & Nagelberg
333 West Wacker Drive
Suite 2700
Chicago, Illinois 60606
Attention: Douglas W. Anderson, Esq.
Telephone: (312) 984-3100
Facsimile: (312) 984-3150
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 THEIR 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.
-----------------------------------
By:
--------------------------------
By:
-----------------------------
Its:
----------------------------
F-7
<PAGE> 63
SCHEDULE 1
SUBSIDIARIES
[UPDATE]
<TABLE>
<CAPTION>
<S> <C> <C>
1. DEVELOPERS DIVERSIFIED FINANCE CORPORATION - Ohio corporation
DDRC 100% shareholder
2. COMMUNITY CENTERS ONE L.L.C. - Delaware limited liability company (SECURITIZED)
DD Community Centers One, Inc 50% ownership interest
DRA Opportunity Fund 28.95%
DD Retail Partners II, L.P. 10.05%
DD Retail Partners III, L.P. 5.50%
DD Retail Partners IV, L.P. 5.50%
3. COMMUNITY CENTERS TWO L.L.C. - Delaware limited liability company (SECURITIZED)
DD Community Centers Two, Inc 50% ownership interest
DRA Opportunity Fund 28.95%
DD Retail Partners 11, L.P. 10.05%
DD Retail Partners 111, L.P. 5.50%
DD Retail Partners IV, L.P. 5.50%
4. COMMUNITY CENTERS THREE, L.L.C. - Delaware limited liability company (SECURITIZED)
DDRC 50% ownership interest
DRA Opportunity Fund 28.95%
DD Retail Partners II, L.P. 10.05%
DD Retail Partners III, L.P. 5.50%
DD Retail Partners IV, L.P. 5.50%
5. SHOPPERS WORLD COMMUNITY CENTER, L.P. - Delaware limited partnership (SECURITIZED)
DD Community Centers Three, Inc. 1% (General partner interest)
SW Opp Sub, Inc. 1% (General partner interest)
DDRC 49% (Limited partner interest)
DR-A Opportunity Fund 27.95% (Limited partner interest)
DD Retail Partners II, L.P. 10.05% (Limited partner interest)
DD Retail Partners III, L.P. 5.50% (Limited partner interest)
DD Retail Partners IV, L.P. 5.50% (Limited partner interest)
6. DD COMMUNITY CENTERS ONE, INC. - Ohio corporation (SECURITIZED)
DDRC 100% shareholder
7. DD COMMUNITY CENTERS TWO, INC. - Ohio corporation (SECURITIZED)
DDRC 100% shareholder
8. DD COMMUNITY CENTERS THREE, INC. - Ohio corporation (SECURITIZED)
DDRC 100% shareholder
9. DEVELOPERS DIVERSIFIED OF ALABAMA, INC. - Alabama corporation
DDRC 100% shareholder
10. ARIZONA CROSSING LIMITED LIABILITY COMPANY (FKA ARROWHEAD CROSSING
COMPANY LTD.) - Ohio limited liability company (NO ASSETS. TO BE
DISSOLVED.)
</TABLE>
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<PAGE> 64
<TABLE>
<S> <C> <C>
11. EASTCHASE MARKET INC. - Ohio corporation
(NO ASSETS. TO BE DISSOLVED.)
DDRC 100% shareholder
12. EASTCHASE MARKET L.P. - Texas limited partnership
(NO ASSETS. TO BE DISSOLVED.)
Eastchase Market Inc. 1% (General partner)
DDFC 99% (Limited partner)
13. HIGHLAND GROVE LIMITED LIABILITY COMPANY - Ohio limited liability company
(NO ASSETS. TO BE DISSOLVED.)
14. MAPLE GROVE CROSSING LIMITED LIABILITY COMPANY - Ohio limited liability company
(NO ASSETS. TO BE DISSOLVED.)
16. DEVELOPERS DIVERSIFIED OF PENNSYLVANIA, INC. - Ohio corporation
DDRC 100% shareholder
17. PEDRO COMMUNITY CENTERS, INC. - Ohio corporation (SECURITIZED)
DDRC 100% shareholder
18. FOOTHILLS TOWNE CENTER II INC. - Ohio corporation (NO ASSETS. TO BE DISSOLVED.)
DDRC 100% shareholder
19. FOOTHILLS TOWNE CENTER III, INC. - Ohio corporation (NO ASSETS. TO BE DISSOLVED.)
DDRC 100% shareholder
20. DDRC GREAT NORTHERN LIMITED PARTNERSHIP - Ohio limited partnership
DDRC 1,341,463 (General partner units)
DDFC 1 (Limited partner unit)
21. DEVELOPERS DIVERSIFIED COOK'S CORNER LP - Ohio limited partnership
DDRC 97.85% (General partner)
Brunswick Realty Trust and
Brunswick Associates Trust,
jointly 2.15% (Limited partner)
22. DEVELOPERS DIVERSIFIED BROADVIEW VILLAGE LP - Ohio limited partnership
(NO ASSETS. TO BE DISSOLVED.)
23. DEVELOPERS DIVERSIFIED CENTENNIAL PROMENADE LP - Ohio limited partnership
DDRC 902,474.90 (General partner units)
Koelbel Promenade L.L.C. 30 (Limited partner units)
Loftus Developments, L.L.C. 3 (Limited partner units)
Centennial Promenade, Ltd. 5 (Limited partner units)
24. DEVELOPERS DIVERSIFIED LANSING LANDINGS LP - Ohio limited partnership
(NO ASSETS. TO BE DISSOLVED.)
25. DEVELOPERS DIVERSIFIED OF INDIANA, INC. - Ohio corporation
DDRC 100% shareholder
</TABLE>
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<PAGE> 65
<TABLE>
<S> <C> <C>
26. DDR NASSAU PARK II INC. - Ohio corporation (SECURITIZED)
DDRC 100% shareholder
27. DDR NASSAU PAVILION INC. - Ohio corporation
DDRC 100% shareholder
28. DEVELOPERS DIVERSIFIED OF MISSISSIPPI, INC. - Ohio corporation
DDRC 100% shareholder
29. DDRC MICHIGAN LLC - Ohio limited liability company
DDRC 99.5% (Managing member)
DD Development Company .5% (Member)
30. DDR BP OPPORTUNITY LLC - Ohio limited liability company
(NO ASSETS. SHELL LLC.)
31. DDR OPPORTUNITY, INC. - Ohio corporation
(NO ASSETS. SHELL LLC.)
32. DDR NASSAU PAVILION ASSOCIATES LP - Georgia limited partnership
DDR Nassau Pavilion Inc. 99.9% (General partner)
Hendon Investments Inc. .01% (Limited partner)
Nassau Pavilion, Inc. .00001% (Limited partner)
33. DDR CONTINENTAL LP - Ohio limited partnership
DDRC 87.63% (General partner)
Franklin E. Kass 5.76% (Limited partner)
John E. Lucks, Jr. 5.63% (Limited partner)
Richard H. Kirk .43% (Limited partner)
William Sorren .38% (Limited partner)
Larry Lehring .17% (Limited partner)
34. DDR CONTINENTAL INC. - Ohio corporation (SECURITIZED)
DDRC 100% shareholder
35. DDR HENDON NASSAU PARK II LP - Georgia limited partnership (SECURITIZED)
DDR Nassau Park 11 Inc. 84.74% (General partner)
Hendon Investments, Inc. 15.17% (Limited partner)
Hendon Princeton No. 3., Inc. .09% (Limited partner)
36. DDR OFFICE FLEX CORPORATION - Delaware corporation
DDRC 100% shareholder
37. DDR OFFICE FLEX LP - Ohio limited partnership
SHELL ENTITY)
DDRC (General partner)
38. DDR REALTY COMPANY (FKA DDR REALTY TRUST, INC.) - Maryland Real Estate
Investment Trust
DDRC 100% shareholder
</TABLE>
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<PAGE> 66
<TABLE>
<S> <C>
39. ORIX SANSONE BRENTWOOD L.L.C. - Illinois limited liability company
(name changing to Sansone DDRC Brentwood LLQ
DDR Realty Trust, Inc. 100% (Sole member)
40. THE PLAZA AT SUNSET HILLS, L.L.C. - Missouri limited liability company
DDR Realty Trust, Inc. 100% (Sole member)
41. THE SHOPPES AT SUNSET HILLS, L.L.C. - Missouri limited liability company
DDR Realty Trust, Inc. 100% (Sole member)
42. DDR FAMILY CENTERS LP - Delaware limited partnership
DDRC 72.7% (General partner)
Nancy Vidalakis 12.6034% (Limited partner)
Perry N. Vidalakis 3.0180% (Limited partner)
John N. Vidalakis 3.0180% (Limited partner)
Nicole K. Vidalakis 3.0180% (Limited partner)
George N. Vidalakis 3.0180% (Limited partner)
Dr. Nicholas S. Vidalakis 2.1195% (Limited partner)
JRJ Investments, LC 0.1155% (Limited partner)
J. Rees Jensen 0.4133% (Limited partner)
43. DDR FAMILY CENTERS I INC. - Ohio corporation
DDRC 100% shareholder
44. DDR DB OPPORTUNITY SUB, INC. - Ohio corporation
DDRC 100% shareholder
45. DD COMMUNITY CENTERS FIVE INC. - Ohio corporation (SECURITIZED)
DDRC 100% shareholder
46. DDR GG OPPORTUNITY SUB, INC. - Ohio corporation
DDRC 100% shareholder
47. EASTON MARKET LIMITED LIABILITY COMPANY - Delaware limited liability company
DDR Continental LP 100% (Sole member)
48. HERMES ASSOCIATES - Utah general partnership
DDR Family Centers I Inc. .5% (General partner)
DDR Family Centers LP 99.5% (General partner)
49. HERMES ASSOCIATES, LTD. - Utah limited partnership
DDR Family Centers LP 99.5% (General partner)
DDR Family Centers I Inc. .5% (Limited partner)
50. UNIVERSITY SQUARE ASSOCIATES, LTD. - Utah limited partnership
DDR Family Centers LP 99.5% (General partner)
DDR Family Centers I Inc. .5% (Limited partner)
5 1. VIDALAKIS INVESTMENT COMPANY, LTD. - Utah limited partnership
DDR Family Centers LP 99.5% (General partner)
DDR Family Centers I Inc. .5% (Limited partner)
52. VIDALAKIS INVESTMENT COMPANY II LTD. - Utah limited partnership
</TABLE>
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<PAGE> 67
<TABLE>
<S> <C>
DDR Family Centers LP 99.5% (General partner)
DDR Family Centers I Inc. .5% (Limited partner)
53. BIG V ASSOCIATES, LTD.- Utah limited partnership
DDR Family Centers LP 99.5% (General partner)
DDR Family Centers I Inc. .5% (Limited partner)
54. RIVERDALE RETAIL ASSOCIATES L.C. - Utah limited liability company
DDR Family Centers LP 99.5% (Managing member)
DDR Family Centers I Inc. .5% (Member)
55. TFCM ASSOCIATES, LLC - Utah limited liability company
DDR Family Centers LP 99.5% (Managing member)
DDR Family Centers I Inc. .5% (Member)
56. FORT UNION ASSOCIATES, L.C. - Utah limited liability company
DDR Family Centers LP 99.5% (Managing member)
DDR Family Centers I Inc. .5% (Member)
57. ROCKY MOUNTAIN REAL ESTATE L.L.C. - Utah limited liability company
(This entity is a subsidiary of Riverdale Retail Associates L.C.)
FAMILY CENTER AT RIVERDALE (SHOPPING CENTER PROPERTY):
-----------------------------------------------------
Riverdale Retail Associates L.C. 67% (Managing member)
H&P Investments 33% (Member)
FAMILY CENTER AT WEBER (SHOPPING CENTER PROPERTY):
-------------------------------------------------
Riverdale Retail Associates L.C. 60% (Managing member)
H&P Investments 40% (Member)
58. RETAIL VALUE MANAGEMENT LTD. - Ohio limited liability company
(Name to be changed to Coventry Real Estate Partners, Ltd.)
DDRC 85% (Member
Peter Henkle 15% (Member)
</TABLE>
1-5
<PAGE> 68
SCHEDULE 2
INDEBTEDNESS AND LIENS
(See Sections 5.13 and 6.16)
2-1
<PAGE> 69
SCHEDULE 3
LITIGATION
(See Section 5.6)
1. NORTHEAST COMMERCIAL DEVELOPMENT GROUP, LTD. V. DEVELOPERS DIVERSIFIED
REALTY CORPORATION, 11th Judicial Court, Dade County, Florida, Case
No. 00-6017-CA02.
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<PAGE> 70
SCHEDULE 4
ENVIRONMENTAL MATTERS
(SEE SECTION 5.19)
None
4-1
<PAGE> 71
SCHEDULE 5
LIST OF UNENCUMBERED ASSETS
(SEE SECTION 5.20)
5-1
<PAGE> 72
SCHEDULE 6
LIST OF SUBSIDIARY GUARANTORS
[UPDATE]
Developers Diversified Finance Corporation - Ohio corporation
Developers Diversified of Pennsylvania, Inc. - Ohio corporation
Developers Diversified Cook's Corner LP - Ohio limited partnership
Developers Diversified Centennial Promenade LP - Ohio limited partnership
Developers Diversified of Indiana, Inc. - Ohio corporation
Developers Diversified of Mississippi, Inc. - Ohio corporation
DDR Nassau Pavilion Associates LP - Georgia limited partnership
Arizona Crossing Limited Liability Company (fka Arrowhead Crossing Company Ltd.)
- Ohio limited liability company
Eastchase Market, Inc. - Ohio corporation
Eastchase Market L.P. - Texas limited partnership
Highland Grove Limited Liability Company - Ohio limited liability company
Maple Grove Crossing Limited Liability Company - Ohio limited liability company
Foothills Towne Center II, Inc. Ohio corporation
Foothills Towne Center III, Inc. Ohio corporation
Developers Diversified of Alabama, Inc. - Ohio corporation
DDRC Great Northern Limited Partnership - Ohio limited partnership
DDR Nassau Pavilion Inc. - Ohio corporation
DDRC Michigan LLC - Ohio limited liability company
DDR Continental LP - Ohio limited partnership
DDR Office Flex Corporation - Delaware corporation
DDR Realty Company (fka DDR Realty Trust, Inc.) - Maryland Business Trust
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<PAGE> 73
ORIX Sansone DDRC Brentwood L.L.C. - Missouri limited liability company
The Plaza at Sunset Hills, L.L.C. - Missouri limited liability company
The Shoppes at Sunset Hills, L.L.C. - Missouri limited liability company
DDR Family Centers LP - Delaware limited partnership
DDR Family Centers I Inc. - Ohio corporation
DDR DB Opportunity Sub, Inc. - Ohio corporation
DDR GG Opportunity Sub, Inc. - Ohio corporation
Easton Market Limited Liability Company - Delaware limited liability company
Hermes Associates - Utah general partnership
Hermes Associates, Ltd. - Utah limited partnership
University Square Associates, Ltd. - Utah limited partnership
Vidalakis Investment Company - Utah limited partnership
Vidalakis Investment Company II, Ltd. - Utah limited partnership
Big V Associates, Ltd. - Utah limited partnership
Riverdale Retail Associates, L.C. - Utah limited liability company
TFCM Associates, LLC - Utah limited liability company
Fort Union Associates, L.C. - Utah limited liability company
Rocky Mountain Real Estate, L.L.C. - Utah limited liability company
Developers Diversified Broadview Village LP - Ohio limited partnership
Developers Diversified Lansing Landings LP - Ohio limited partnership
DDR BP Opportunity LLC - Ohio limited liability company
DDR Opportunity, Inc. - Ohio corporation
DDR Office Flex LP - Ohio Limited Partnership
COVENTRY REAL ESTATE PARTNERS, LTD. - OHIO LIMITED LIABILITY COMPANY
6-2
<PAGE> 74
SCHEDULE 7
SUBSIDIARY GUARANTORS
1. DDR Office Flex Corporation
2. DD Community Centers Seven, Inc.
3. DDRC PDK Salisbury LLC
4. Developers Diversified of Alabama, Inc.
5. DDR Nassau Pavilion Associates LP
6. DDR Nassau Pavilion Inc.
7. ORIX Sansone Brentwood L.L.C.
8. DDR DownREIT LLC
7-1
