<PAGE>
CREDIT AGREEMENT
Among
PROLOGIS TRUST,
as a Borrower and Guarantor
PROLOGIS LOGISTICS SERVICES INCORPORATED,
as a Borrower
PROLOGIS DEVELOPMENT SERVICES INCORPORATED,
as a Borrower
BANK OF AMERICA, N.A.,
as Administrative Agent
COMMERZBANK AKTIENGESELLSCHAFT, NEW YORK BRANCH,
as Syndication Agent
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Documentation Agent
FIRST UNION NATIONAL BANK
and
SOCIETE GENERALE, SOUTHWEST AGENCY,
as Managing Agents
and
THE LENDERS NAMED HEREIN,
as Lenders
$450,000,000
As of
June 6, 2000
BANC OF AMERICA SECURITIES LLC,
Sole Lead Arranger and Book Manager
<PAGE>
<TABLE>
<CAPTION>
(viii)
Credit Agreement d-EXH10.WPD
TABLE OF CONTENTS
Page
<S> <C> <C> <C>
SECTION 1 DEFINITIONS AND TERMS...........................................................................1
1.1 Definitions.....................................................................................1
1.2 Time References................................................................................19
1.3 Other References...............................................................................19
1.4 Accounting Principles..........................................................................19
SECTION 2 COMMITMENT.....................................................................................19
2.1 Revolving Facility.............................................................................19
2.2 Borrowing Procedure............................................................................20
2.3 Termination....................................................................................21
2.4 Swing Line Subfacility.........................................................................21
2.5 Competitive Bid Subfacility....................................................................22
2.6 Lenders; Increase in Total Commitment..........................................................25
SECTION 3 TERMS OF PAYMENT...............................................................................25
3.1 Notes and Payments.............................................................................25
3.2 Interest and Principal Payments................................................................26
3.3 Interest Options...............................................................................26
3.4 Quotation of Rates.............................................................................27
3.5 Default Rate...................................................................................27
3.6 Interest Recapture.............................................................................27
3.7 Interest Calculations..........................................................................27
3.8 Maximum Rate...................................................................................27
3.9 Interest Periods...............................................................................28
3.10 Conversions and Continuations..................................................................28
3.11 Order of Application...........................................................................29
3.12 Sharing of Payments, Etc.......................................................................29
3.13 Offset.........................................................................................29
3.14 Booking Borrowings.............................................................................29
3.15 Basis Unavailable or Inadequate for the Eurodollar Rate........................................29
3.16 Additional Costs...............................................................................30
3.17 Change in Law..................................................................................31
3.18 Funding Loss...................................................................................31
3.19 Foreign Lenders................................................................................32
3.20 Extension of Termination Date..................................................................32
3.21 Option to Replace Lenders......................................................................32
SECTION 4 FEES...........................................................................................32
4.1 Treatment of Fees..............................................................................32
4.2 Administrative Agent Fees......................................................................33
4.3 Commitment Fees................................................................................33
4.4 Extension Fee..................................................................................33
4.5 Competitive Bid Fee............................................................................33
SECTION 5 CONDITIONS PRECEDENT...........................................................................33
SECTION 6 REPRESENTATIONS AND WARRANTIES.................................................................34
6.1 Purpose of Credit Facility.....................................................................34
6.2 Corporate Existence, Good Standing, Authority and Compliance...................................34
6.3 Affiliates.....................................................................................34
6.4 Authorization and Contravention................................................................34
6.5 Binding Effect.................................................................................34
6.6 Financial Statements; Fiscal Year..............................................................34
6.7 Litigation.....................................................................................35
6.8 Taxes..........................................................................................35
6.9 Environmental Matters..........................................................................35
6.10 Pension Plans..................................................................................36
6.11 Properties.....................................................................................36
6.12 Locations......................................................................................36
6.13 Government Regulations.........................................................................36
6.14 Transactions with Affiliates...................................................................36
6.15 Insurance......................................................................................36
6.16 Labor Matters..................................................................................36
6.17 Solvency.......................................................................................36
6.18 Full Disclosure................................................................................36
6.19 Exemption from ERISA; Plan Assets..............................................................37
6.20 Minority Interests.............................................................................37
<PAGE>
SECTION 7 AFFIRMATIVE COVENANTS..........................................................................37
7.1 Items to be Furnished..........................................................................37
7.2 Use of Proceeds................................................................................38
7.3 Books and Records..............................................................................38
7.4 Inspections....................................................................................38
7.5 Taxes..........................................................................................39
7.6 Expenses.......................................................................................39
7.7 Maintenance of Existence, Assets, and Business.................................................39
7.8 Insurance......................................................................................39
7.9 Preservation and Protection of Rights..........................................................40
7.10 Environmental Laws.............................................................................40
7.11 Indemnification................................................................................40
7.12 REIT Status....................................................................................40
7.13 Hedging Agreements.............................................................................40
7.14 Subsidiary Guaranties; Intercompany Indebtedness...............................................41
SECTION 8 NEGATIVE COVENANTS.............................................................................41
8.1 Payment of Liabilities.........................................................................41
8.2 Employee Plans.................................................................................41
8.3 Debt...........................................................................................41
8.4 Transactions with Affiliates...................................................................42
8.5 Compliance with Laws and Documents.............................................................42
8.6 Loans, Advances, and Investments...............................................................42
8.7 Dividends and Distributions....................................................................43
8.8 Sale of Assets.................................................................................43
8.9 Mergers and Dissolutions.......................................................................43
8.10 Assignment.....................................................................................44
8.11 Fiscal Year and Accounting Methods.............................................................44
8.12 New Businesses.................................................................................44
8.13 Government Regulations.........................................................................44
8.14 Negative Pledge Agreements.....................................................................44
SECTION 9 FINANCIAL COVENANTS............................................................................44
9.1 Leverage Ratio.................................................................................44
9.2 Minimum Consolidated Net Worth.................................................................44
9.3 Interest Expense Coverage Ratio................................................................44
9.4 Fixed Charge Coverage Ratio....................................................................44
9.5 Preferred Dividend Coverage Ratio..............................................................44
9.6 Unencumbered Debt Service Coverage Ratio.......................................................45
9.7 Unencumbered Property Value Ratio..............................................................45
SECTION 10 DEFAULT........................................................................................45
10.1 Payment of Obligation..........................................................................45
10.2 Covenants......................................................................................45
10.3 Debtor Relief..................................................................................45
10.4 Judgments and Attachments......................................................................45
10.5 Government Action..............................................................................45
10.6 Misrepresentation..............................................................................45
10.7 Default Under Other Agreements.................................................................46
10.8 Validity and Enforceability of Loan Documents..................................................46
10.9 Management Changes.............................................................................46
10.10 Plan Assets....................................................................................46
SECTION 11 RIGHTS AND REMEDIES............................................................................47
11.1 Remedies Upon Default..........................................................................47
11.2 Waivers. .....................................................................................47
11.3 Performance by Administrative Agent............................................................47
11.4 Not in Control.................................................................................47
11.5 Course of Dealing..............................................................................47
11.6 Cumulative Rights..............................................................................48
11.7 Application of Proceeds........................................................................48
11.8 Diminution in Value of Collateral..............................................................48
11.9 Certain Proceedings............................................................................48
SECTION 12 AGENTS AND LENDERS.............................................................................48
12.1 Agents.........................................................................................48
12.2 Delegation of Duties; Reliance.................................................................50
12.3 Limitation of Agents= Liability................................................................50
12.4 Limitation of Liability........................................................................51
12.5 Expenses.......................................................................................51
12.6 Proportionate Absorption of Losses.............................................................52
12.7 Relationship of Lenders........................................................................52
12.8 Benefits of Agreement..........................................................................52
12.9 Approval of Lenders............................................................................52
12.10 Default; Collateral............................................................................52
13.1 The Guaranty...................................................................................53
13.2 Bankruptcy.....................................................................................53
13.3 Nature of Liability............................................................................53
13.4 Independent Obligation.........................................................................54
13.5 Authorization..................................................................................54
13.6 Reliance.......................................................................................54
13.7 Subordination..................................................................................54
13.8 Waivers; Consents..............................................................................55
<PAGE>
SECTION 14 MISCELLANEOUS..................................................................................56
14.1 Headings.......................................................................................56
14.2 Nonbusiness Days; Time.........................................................................56
14.3 Communications.................................................................................56
14.4 Form and Number of Documents...................................................................56
14.5 Survival.......................................................................................56
14.6 Governing Law..................................................................................56
14.7 Invalid Provisions.............................................................................56
14.8 Venue; Service of Process; Jury Trial..........................................................57
14.9 Amendments, Consents, Conflicts, and Waivers...................................................57
14.10 Multiple Counterparts..........................................................................58
14.11 Successors and Assigns; Participations.........................................................58
14.12 Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances....................60
14.13 Confidentiality................................................................................60
14.14 Limitation of Liability of Trustees, Shareholders and Officers of ProLogis.....................61
14.15 Entirety.......................................................................................61
14.16 Limited Waiver. ..............................................................................61
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULES AND EXHIBITS
<S> <C>
Schedule 1 Parties, Addresses, Commitments and Wiring Information
Schedule 5 Closing Documents
Schedule 6.2 Jurisdictions of Incorporation, Business, and Names
Schedule 6.7 Litigation
Schedule 6.9 Environmental Matters
Schedule 6.10 Pension Plan Disclosures
Schedule 6.12 Chief Executive Office
Schedule 6.14 Affiliates Transactions
Schedule 6.20 Minority Interests
Schedule 7.14-1 Excluded Guarantors
Schedule 7.14-2 Existing Pledged Indebtedness-Unconsolidated Affiliates
Schedule 7.14-3 Unrestricted International Companies
Schedule 8.6 Permitted Minority Interests
Exhibit A-1 Form of Revolving Credit Note
Exhibit A-2 Form of Competitive Bid Note
Exhibit B-1 Borrowing Request
Exhibit B-2 Competitive Bid Request
Exhibit C Compliance Certificate
Exhibit D Form of Assignment and Acceptance
Exhibit E Form of Swing Line Note
Exhibit F Form of Competitive Bid
Exhibit G Form of Subsidiary Guaranty
Exhibit H-1 Form of Borrower Pledge Agreement
Exhibit H-2 Form of Subsidiary Pledge Agreement
</TABLE>
<PAGE>
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of June 6, 2000 (the "Closing Date"),
among PROLOGIS TRUST, a Maryland real estate investment trust ("ProLogis"),
PROLOGIS LOGISTICS SERVICES INCORPORATED, a Delaware corporation ("PLLS"),
PROLOGIS DEVELOPMENT SERVICES INCORPORATED, a Delaware corporation ("PLDS;" PLLS
and PLDS are individually called a "Subsidiary Borrower" and collectively called
"Subsidiary Borrowers;" ProLogis and Subsidiary Borrowers are individually
called a "Borrower" and collectively called "Borrowers"), the Lenders (defined
below), BANK OF AMERICA, N.A., a national banking association ("Bank of
America"), for itself and as Administrative Agent for the Lenders (in such
capacity, together with its successors and assigns, "Administrative Agent"),
COMMERZBANK AKTIENGESELLSCHAFT, NEW YORK BRANCH, for itself and as Syndication
Agent (in such capacity, together with its successors and assigns, "Syndication
Agent"), and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, for itself and as
Documentation Agent (in such capacity, together with its successors and assigns,
"Documentation Agent").
R E C I T A L S:
1. Borrowers have requested that Lenders provide to Borrowers a
revolving credit and competitive bid facility.
2. Lenders are willing to provide such facility to Borrowers on the
terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1 DEFINITIONS AND TERMS.
1.1 Definitions. Unless otherwise indicated, as used in the Loan
Documents:
"Actual Capital Expenditures" means any expenditures by a Person that
are properly classified in the relevant financial statements of such Person in
accordance with GAAP as a capital asset for (a) tenant improvements and
capitalized lease commissions on previously leased space, and (b) recurring
capital expenditures relating to any Property.
"Adjusted EBITDA" means, for any Person for any Period, (a) net
earnings determined in accordance with GAAP, plus (minus) (b) extraordinary
losses (extraordinary gains) determined in accordance with GAAP and reflected in
the determination of net earnings, plus (minus) (c) capital losses (gains) (in
each case exclusive of such amounts recognized in accordance with GAAP that are
attributable to bona fide sales to third parties (including Unconsolidated
Affiliates, to the extent of any third-party interests therein) by ProLogis,
PLDS, Kingspark, and International Consolidated Affiliates of Properties
developed by such Persons with the intention of reselling such Properties to
third parties), plus (minus) (d) any foreign exchange loss (gain) which is the
result of a period ending "mark to market" of intercompany (including
Consolidated Affiliates and Unconsolidated Affiliates) or third-party loans in
accordance with GAAP, plus (minus) (e) losses (gains) associated with mark to
market of Hedging Agreements, plus (f) all amounts deducted in calculating net
earnings, in conformity with GAAP, for interest expense, deferred taxes,
depreciation, and amortization. For purposes of calculating the Fixed Charge
Coverage Ratio, the Preferred Dividend Coverage Ratio, and the Unencumbered Debt
Service Coverage Ratio, Adjusted EBITDA shall be increased by the amount of any
operating lease payments related to transactions in which such Person or an
Affiliate of such Person leases, as lessee, any Property or other assets that it
owned and sold, transferred, or otherwise disposed of to the lessor (or a
predecessor in interest to the lessor).
<PAGE>
"Administrative Agent" is defined in the preamble to this Agreement.
"Affiliate" of a Person means any other individual or entity who
directly or indirectly controls, or is controlled by, or is under common control
with, that Person. For purposes of this definition "control," "controlled by,"
and "under common control with" mean possession, directly or indirectly, of
power to direct (or cause the direction of) management or policies (whether
through ownership of voting securities or other ownership interests, by
contract, or otherwise).
"Agents" means Administrative Agent, Documentation Agent, and
Syndication Agent, and "Agent" means any one of the Agents.
"Agreement" means this Credit Agreement, as amended, supplemented, or
restated from time to time.
"Applicable Facility Fee Percentage" means, at the time of
determination thereof, the percentage per annum set forth below based upon the
Rating Requirement:
<TABLE>
<CAPTION>
------------------------------------------------------- ===================
Rating Requirement Applicable
Percentage
------------------------------------------------------- ===================
------------------- ----------------- ----------------- ===================
<S> <C> <C> <C>
Moody's Rating S & P Rating Fitch
Rating
------------------- ----------------- ----------------- ===================
------------------- ----------------- ----------------- ===================
Less than Baa3 or Less than BBB- Less than BBB- 0.30%
not rated or not rated or not rated
------------------- ----------------- ----------------- ===================
------------------- ----------------- ----------------- ===================
Baa3 BBB- BBB- 0.20%
------------------- ----------------- ----------------- ===================
------------------- ----------------- ----------------- ===================
Baa2 BBB BBB 0.20%
------------------- ----------------- ----------------- ===================
------------------- ----------------- ----------------- ===================
Baa1 BBB+ BBB+ 0.15%
------------------- ----------------- ----------------- ===================
------------------- ----------------- ----------------- ===================
A3 A- A- 0.15%
------------------- ----------------- ----------------- ===================
------------------- ----------------- ----------------- ===================
A2 or better A or better A or better 0.10%
------------------- ----------------- ----------------- ===================
</TABLE>
"Applicable Margin" means, at the time of determination thereof, the
interest margin per annum over the Base Rate or the Eurodollar Rate, as the case
may be, based upon the Rating Requirement as follows:
<TABLE>
<CAPTION>
<S> <C>
------------------------------------------------------- ==========================================
Rating Requirement Applicable Margin
------------------------------------------------------- ==========================================
------------------- ----------------- ----------------- ------------------- ======================
Moody's Rating S & P Rating Fitch Base Rate Eurodollar
Rating Borrowings Borrowings
------------------- ----------------- ----------------- ------------------- ======================
------------------- ----------------- ----------------- ------------------- ======================
Less than Baa3 or Less than BBB- Less than BBB- 0.5% 1.50%
not rated or not rated or not rated
------------------- ----------------- ----------------- ------------------- ======================
------------------- ----------------- ----------------- ------------------- ======================
Baa3 BBB- BBB- 0% 1.00%
------------------- ----------------- ----------------- ------------------- ======================
------------------- ----------------- ----------------- ------------------- ======================
Baa2 BBB BBB 0% 0.80%
------------------- ----------------- ----------------- ------------------- ======================
------------------- ----------------- ----------------- ------------------- ======================
Baa1 BBB+ BBB+ 0% 0.75%
------------------- ----------------- ----------------- ------------------- ======================
------------------- ----------------- ----------------- ------------------- ======================
A3 A- A- 0% 0.65%
------------------- ----------------- ----------------- ------------------- ======================
------------------- ----------------- ----------------- ------------------- ======================
A2 or better A or better A or better 0% 0.60%
------------------- ----------------- ----------------- ------------------- ======================
</TABLE>
If the Maximum Leverage Ratio is increased from 0.55 to 0.60 pursuant to the
terms and conditions set forth in the definition of Maximum Leverage Ratio, then
the Applicable Margin shall be increased by 0.30% during the period of time in
which such increase in the Maximum Leverage Ratio is effective.
"Applicable Pension Laws" means, with respect to any Person, all
pension Laws applicable to such Person, including, without limitation, ERISA.
"Bank of America" is defined in the preamble to this Agreement.
"Base Rate" means, for any day, the greater of (a) the sum of the
Federal Funds Rate plus one-half of one percent (0.5%), and (b) the annual
interest rate most recently announced by Administrative Agent as its prime rate
(or, if the Person then acting as Administrative Agent under this Agreement is
not a bank organized under the Laws of the United States or any State, then the
rate announced by Bank of America as its prime rate) in effect at its office in
Dallas, Texas, automatically fluctuating upward and downward with and as
specified in each announcement without special notice to Borrowers or any other
Person (which prime rate may not necessarily represent the lowest or best rate
actually charged to a customer).
"Base Rate Borrowing" means a Borrowing bearing interest at the sum of
the Base Rate plus the Applicable Margin.
"Borrower" and "Borrowers" are defined in the preamble to this
Agreement.
"Borrowing" means (without duplication) any amount disbursed by (a) any
Credit Party to or on behalf of any Borrower under this Agreement (under the
Competitive Bid Subfacility, the Swing Line Subfacility, or otherwise), or (b)
any Credit Party in accordance with, and to satisfy the obligations of any
Company under, this Agreement.
"Borrowing Date" means for any Borrowing (a) the date for which funds
are requested by a Borrower, or (b) the date any Borrowing is converted
hereunder to another Type of Borrowing.
"Borrowing Request" means a request substantially in the form of
Exhibit B-1.
"Business Day" means (a) for all purposes, any day other than Saturday,
Sunday, and any other day that commercial banks are authorized by Law to be
closed in Texas or New York, and (b) for purposes of any Eurodollar Borrowing, a
day that satisfies the requirements of clause (a) and is a day when commercial
banks are open for domestic or international business in London.
"Capital Expenditures" means an amount equal to the sum of (a) in the
case of Properties that are not Refrigerated Warehouse Properties, the greater
of (i) Actual Capital Expenditures with respect to such Properties during the
four (4) fiscal quarters ending on the date of determination, and (ii) the
product of (A) the sum of the total square footage with respect to all completed
industrial space in all such Properties as of the last day of each of the
immediately preceding five (5) calendar quarters, divided by five (5), and (B)
$0.15, and (b) in the case of Properties that are Refrigerated Warehouse
Properties, the greater of (i) Actual Capital Expenditures with respect to such
Properties during the four (4) fiscal quarters ending on the date of
determination, and (ii) the product of (A) the sum of the total cubic footage
with respect to all completed space in all such Properties as of the last day of
each of the immediately preceding five (5) calendar quarters, divided by five
(5), and (B) $0.10.
<PAGE>
"Capital Lease" means any capital lease or sublease that has been (or
under GAAP should be) capitalized on a balance sheet.
"Cash Equivalents" means (a) investments and direct obligations of the
United States of America or any agency thereof, or obligations fully guaranteed
by the United States of America or any agency thereof, provided that such
obligations mature within one (1) year of the date of acquisition thereof, (b)
commercial paper rated "A-1" (or higher) according to S & P, or "P-1" (or
higher) according to Moody's and maturing not more than one hundred eighty (180)
days from the date of acquisition thereof, (c) time deposits with, and
certificates of deposit and bankers' acceptances issued by, Administrative
Agent, any Lender, or any United States bank having capital surplus and
undivided profits aggregating at least $1,000,000,000, and (d) mutual funds
whose investments are substantially limited to the foregoing.
"Change in Control" means, with respect to ProLogis, the transfer of
beneficial ownership of the outstanding Stock of ProLogis such that any Person
other than Security Capital Group Incorporated and/or its Affiliates owns,
directly or indirectly, more than (a) twenty percent (20%) of the Stock (other
than non-voting preferred Stock) of ProLogis, and (b) the percent of the Stock
(other than non-voting preferred Stock) of ProLogis owned by Security Capital
Group Incorporated and/or its Affiliates.
"Closing Date" is defined in the preamble to this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
"Commitment" means, for a Lender, the amount (which is subject to
reduction and cancellation as provided in this Agreement) stated beside such
Lender=s name on Schedule 1 as most recently amended under this Agreement.
"Companies" means, without duplication, ProLogis and each of its
Consolidated Affiliates, and ACompany" means any one of the Companies.
"Competitive Bid" means an offer by a Lender to fund a Borrowing under
the Competitive Bid Subfacility pursuant to Section 2.5.
"Competitive Bid Notes" means one of the promissory notes substantially
in the form of Exhibit A-2, and all renewals, extensions, modifications,
rearrangements, and replacements thereof and any and all substitutions therefor,
and "Competitive Bid Note" means any one of the Competitive Bid Notes.
"Competitive Bid Rate" means, as to any Competitive Bid made by a
Lender pursuant to Section 2.5, (a) in the case of a Eurodollar Borrowing, the
margin (which margin shall be adjusted by such Lender to reflect such Lender's
Reserve Requirement, if any, in effect for such Eurodollar Borrowing) which
shall be added to or subtracted from the Eurodollar Rate, and (b) in the case of
a Fixed Rate Borrowing, the fixed rate of interest, in each case, offered by the
Lender making such Competitive Bid.
"Competitive Bid Request" means a request for Competitive Bids made
pursuant to Section 2.5(b) substantially in the form of Exhibit B-2.
"Competitive Bid Subfacility" means the subfacility of the Total
Commitment as described in, and subject to the limitations of, Section 2.5.
"Competitive Borrowing" means any Borrowing under the Competitive Bid
Subfacility.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit C and signed by a Responsible Officer.
"Consolidated Affiliate" means, in respect of any Person (herein
referred to as the "Parent"), any other Person in whom such Parent holds Stock
and whose financial results would be consolidated under GAAP with the financial
results of such Parent on the consolidated financial statements of such Parent
prepared in accordance with GAAP.
"Consolidated Net Worth" means, for any Person as of any date, (a)
Total Assets, minus (b) all Liabilities of such Person, minus (c) the amount
determined in accordance with GAAP attributable to any minority interests in
Consolidated Affiliates of such Person.
"Constituent Documents" means, with respect to any Person, its articles
or certificate of incorporation, charter, bylaws, certificates of limited
partnership, partnership agreements, limited liability company agreements,
declaration of trust, organizational documents, and such other documents as may
govern such Person's formation or organization.
"Credit Parties" means Agents and Lenders, and ACredit Party" means any
one of the Credit Parties.
<PAGE>
"Current Financials" means, at any time, the consolidated Financial
Statements of the Companies most recently delivered to Administrative Agent
under Section 7.1(a) or 7.1(b), as the case may be (or, prior to delivery of any
such Financial Statements, the consolidated Financial Statements of the
Companies dated as of March 31, 2000).
"Customary Recourse Exceptions" means, with respect to any Non-Recourse
Debt, exclusions from the exculpation provisions with respect to such
Non-Recourse Debt for fraud, misapplication of cash, environmental claims, and
other circumstances customarily excluded by institutional lenders from
exculpation provisions and/or included in separate indemnification agreements in
non-recourse financings of real estate.
"Debt Service" means, for any Person for any period, the sum of (a)
Interest Expense, plus (b) any regularly scheduled principal payments on
Indebtedness, plus (c) any operating lease payments related to transactions in
which such Person or an Affiliate of such Person leases, as lessee, any Property
or other assets that it owned and sold, transferred, or otherwise disposed of to
the lessor (or a predecessor in interest to the lessor); provided that Debt
Service shall not include Excluded Debt Service.
"Debtor Relief Laws" means Title 11 of the United States Code and all
other applicable state or federal liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, suspension
of payments, or similar Laws affecting creditors' Rights in effect from time to
time.
"Dedicated Contracts" means a contract pursuant to which a wholly-owned
Subsidiary of PLLS agrees to manage the distribution operations for customers
consisting of major manufacturers, retailers, wholesalers, and food service
companies and agrees to manage a customer-owned facility using customer-owned
assets for which the PLLS Subsidiary earns a management fee.
"Default" is defined in Section 10.
"Defaulting Lender" means, as of any date, any Lender that has
defaulted on any of its obligations under this Agreement, which default has not
been cured or waived as of such date.
"Default Rate" means an annual rate of interest equal from day to day
to the lesser of (a) the then-existing Base Rate plus four percent (4%), and (b)
the Maximum Rate.
"Disqualified Stock" means any Company's Stock which by its terms (or
by the terms of any Stock into which it is convertible or for which it is
exchangeable or exercisable) (a) matures or is subject to mandatory redemption,
pursuant to a sinking fund obligation or otherwise, (b) is convertible into or
exchangeable or exercisable for a Liability or Disqualified Stock during the
term of this Agreement, (c) is redeemable during the term of this Agreement at
the option of the holder of such Stock, or (d) otherwise requires any mandatory
payments by any Company, in each case on or before the Termination Date;
provided that "Disqualified Stock" shall not include any preferred Stock solely
because such Stock requires the payment of Distributions with respect to such
Stock prior to the payment of Distributions with respect to any other class of
Stock.
"Distribution" means, with respect to any Stock of any Person, (a) the
payment of any dividend on or with respect to such Stock by such Person, (b) any
loan or advance by that Person to, or other investment by that Person in, the
holder of any of such Stock, and (c) any other payment by that Person with
respect to such Stock (other than a Redemption).
"Documentation Agent" is defined in the preamble to this Agreement.
"Dollars" and the symbol "$" mean lawful money of the United States of
America.
"Eligible Institution" means a commercial bank or a finance company,
insurance company, or other financial institution that is regularly engaged in
making, purchasing, or investing in loans, but shall not include any Person
which is an Affiliate of any Borrower.
<PAGE>
"Encumbered Properties" means, any Properties that are subject to any
Liens (other than Permitted Liens) securing any Liabilities.
"Environmental Law" means any Law that relates to the pollution or
protection of the environment or to Hazardous Substances.
"Equity Issuance" means the issuance or sale by any Person of any of
its Stock.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) which, together with ProLogis, are treated as a single employer
under Section 414(b) or (c) of the Code (and Section 414(m) or (o) of the Code
for purposes of provisions related to Section 412 of the Code).
"Eurodollar Borrowing" means either (a) a Borrowing (other than a
Competitive Borrowing) bearing interest at the sum of the Eurodollar Rate plus
the Applicable Margin, or (b) a Competitive Borrowing bearing interest at the
sum of the Eurodollar Rate plus or minus the margin indicated for such
Competitive Borrowing in the related Competitive Bid.
"Eurodollar Rate" means, for any Eurodollar Borrowing for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/10,000 of 1%) appearing on Dow Jones Markets Page 3750 (or any
successor page) as the London interbank offered rate (Eurodollar) for deposits
in Dollars at approximately 11:00 a.m. (London time) two (2) Business Days prior
to the first (1st) day of such Interest Period for a term comparable to such
Interest Period. If for any reason such rate is not available, then the term
"Eurodollar Rate" shall mean, for any Eurodollar Borrowing for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/10,000 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two (2) Business Days prior to the first (1st) day of such
Interest Period for a term comparable to such Interest Period; provided,
however, if more than one (1) rate is specified on Reuters Screen LIBO Page,
then the applicable rate shall be the arithmetic mean of all such rates (rounded
upwards, if necessary, to the nearest 1/10,000 of 1%).
"Excluded Debt Service" means, for any period, any regularly scheduled
principal payments on (a) any Indebtedness which pays such Indebtedness in full,
but only to the extent that the amount of such final payment is greater than the
scheduled principal payment immediately preceding such final payment, and (b)
any Indebtedness that is rated at least Baa3 and BBB-, as the case may be, by at
least two (2) of Moody's, S & P, and Fitch and issued prior to March 31, 2000.
"Existing Credit Agreement" means that certain Credit Agreement dated
as of March 29, 1999, executed by ProLogis, NationsBank, N.A., as Administrative
Agent, the Syndication Agent defined therein, the Documentation Agent defined
therein, and the Lenders defined therein.
"Extension Request" is defined in Section 3.20.
"Federal Funds Rate" means, on any day, the annual rate (rounded
upwards, if necessary, to the nearest 0.01%) determined by Administrative Agent
(which determination is conclusive and binding, absent manifest error) to be
equal to the weighted average of the rates on overnight federal funds
transactions with member banks of the Federal Reserve System arranged by federal
funds brokers as published by the Federal Reserve Bank of New York on the next
successive Business Day; provided, however, that (a) if such determination date
is not a Business Day, then the Federal Funds Rate for such day shall be the
rate for such transactions on the next preceding Business Day as published on
the next successive Business Day, and (b) if those rates are not published for
any Business Day, then the Federal Funds Rate shall be the average of the
quotations at approximately 10:00 a.m. on such Business Day received by
Administrative Agent from three (3) federal funds brokers of recognized standing
selected by Administrative Agent in its sole discretion.
"Financial Statements" of a Person means balance sheets and statements
of earnings, shareholders' equity, and cash flow prepared (a) according to GAAP,
(b) except as stated in Section 1.4, in comparative form to prior year-end
figures or corresponding periods of the preceding fiscal year, as applicable,
and (c) on a consolidated basis if that Person had any Consolidated Affiliates
during the applicable period; provided that Financial Statements for any fiscal
quarter may omit footnotes and shall be subject to normal audit adjustments.
<PAGE>
"Fitch" means Fitch, The International Rating Agency (or any successor
thereof) or, if Fitch no longer publishes ratings, then another ratings agency
selected by ProLogis and acceptable to Administrative Agent.
"Fitch Rating" means the most recently-announced rating from time to
time of Fitch assigned to any class of long-term senior, unsecured Liability
securities issued by ProLogis, as to which no letter of credit, guaranty, or
third party credit support is in place, regardless of whether all or any part of
such Liability has been issued at the time such rating was issued.
"Fixed Charge Coverage Ratio" means, as of any date, the ratio of (a)
(i) Adjusted EBITDA, minus (ii) Capital Expenditures, to (b) Debt Service in
respect of all Indebtedness, in each case for the Companies on a consolidated
basis (and including the Companies' Share of such amounts for their
Unconsolidated Affiliates) and for the four (4) fiscal quarters ending on the
date of determination.
"Fixed Rate Borrowing" means any Competitive Borrowing made from a
Lender pursuant to Section 2.5 based upon an actual percentage rate per annum
offered by such Lender, expressed as a decimal (to no more than four (4) decimal
places) and accepted by ProLogis.
"Frigoscandia" means Frigoscandia SA, an entity organized under the
laws of Luxembourg, and its Consolidated Affiliates and Unconsolidated
Affiliates.
"Funding Loss" means, without duplication, any loss, expense, or cost
incurred by any Lender (including any loss, expense, or cost incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by such
Lender to make or maintain any portion of any Borrowing as a Eurodollar
Borrowing or a Fixed Rate Borrowing, but excluding loss of anticipated profit)
when (a) any Borrower fails or refuses (for any reason other than any Lender's
failure to comply with this Agreement) to take any Borrowing that it has
requested under this Agreement, (b) any Borrower prepays or pays any Borrowing
or converts any Borrowing to a Borrowing of another Type, in each case, before
the last day of the applicable Interest Period, (c) any Borrower fails or
refuses to prepay a Eurodollar Borrowing on the date specified in any notice of
prepayment, (d) any Borrower fails or refuses to continue a Eurodollar Borrowing
on the date specified in a Borrowing Request, or (e) any Borrower fails or
refuses to convert a Base Rate Borrowing to a Eurodollar Borrowing on the date
specified in a Borrowing Request.
"Funds from Operations" means, for ProLogis for any period, net
earnings (before Distributions in respect of preferred Stock) plus depreciation
and amortization (exclusive of amortization of financing costs), all as
determined in accordance with GAAP; provided that there shall not be included in
such calculation (a) any proceeds of any insurance policy other than rental or
business interruption insurance received by such Person, (b) any gain or loss
which is classified as "extraordinary" in accordance with GAAP, (c) any capital
gains and taxes on capital gains (in each case exclusive of such amounts
recognized in accordance with GAAP that are attributable to bona fide sales to
third parties (including Unconsolidated Affiliates, to the extent of any
third-party interests therein) by ProLogis, PLDS, Kingspark, and International
Consolidated Affiliates of Properties developed by such Persons with the
intention of reselling such Properties to third parties), (d) any non-recurring
and non-cash event that is excluded from ProLogis' reported Funds from
Operations in its quarterly 10-Q and annual 10-K Financial Statements, (e) any
tax expense which is classified as Adeferred" in accordance with GAAP, (f) any
tax income which is classified as a tax benefit in accordance with GAAP, (g) any
foreign exchange gain or loss which is the result of a period ending "mark to
market" of intercompany (including Consolidated Affiliates and Unconsolidated
Affiliates) or third-party loans in accordance with GAAP, (h) gains or losses
associated with "mark to market" of Hedging Agreements, and (i) gains or losses
from sales of depreciated Properties. The Funds from Operations contribution
from Unconsolidated Affiliates shall be (i) included only to the extent that
such amounts have been, or are not prohibited on the last day of the applicable
period of determination from being, distributed (directly or indirectly) to a
Company, and (ii) calculated on the same basis as this definition. Funds from
Operations shall be calculated as if all minority interests in Consolidated
Affiliates have been converted into Stock of ProLogis.
<PAGE>
"GAAP" means generally accepted accounting principles of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board that are applicable on the date of this
Agreement, subject to changes permitted by Section 1.4.
"Garonor" means Garonor S.A., an entity organized under the laws of
Luxembourg, and its Consolidated Affiliates.
"Hazardous Substance" means any substance (a) the presence of which
requires removal, remediation, or investigation under any Environmental Law, or
(b) that is defined or classified as a hazardous waste, hazardous material,
pollutant, contaminant, or toxic or hazardous substance under any Environmental
Law.
"Hedging Agreements" means any and all agreements, devices, or
arrangements designed to protect at least one of the parties thereto from
fluctuations of interest rates, exchange rates, or forward rates applicable to
such party's assets, liabilities, or exchange transactions, including, without
limitation, dollar-denominated or cross-currency interest rate exchange
agreements, forward currency exchange agreements, interest rate cap, swap, or
collar protection agreements, and forward rate currency or interest rate
options, as the same may be amended or modified and in effect from time to time,
and any and all cancellations, buybacks, reversals, terminations, or assignments
of the foregoing.
"Indebtedness" means, for any Person, all Liabilities (without
duplication) of such Person that are (a) Liabilities for borrowed money of such
Person, (b) evidenced by bonds, debentures, notes, or similar instruments of
such Person, (c) obligations to pay the deferred purchase price of assets,
services, or Stock, except (i) accounts payables, (ii) obligations incurred in
the ordinary course of business to pay the purchase price of Stock so long as
such obligations are paid within customary settlement terms, and (iii)
obligations to purchase Stock (other than Stock of ProLogis or any of its
Affiliates, Consolidated Affiliates, or Unconsolidated Affiliates) pursuant to
subscription or Stock purchase agreements in the ordinary course of business,
(d) secured by a Lien existing on any Property of such Person or any interest of
such Person therein, whether or not such Liability shall have been assumed by
such Person, (e) Capital Leases, (f) a guaranty, endorsement, or other
contingent obligation of such Person (other than (i) endorsements in the
ordinary course of business of negotiable instruments or documents for deposit
or collection, and (ii) indemnification obligations and purchase price
adjustments pursuant to acquisition agreements entered into in the ordinary
course of business), and (g) accounts payable, accrued expenses, net obligations
arising under Hedging Agreements, and other Liabilities not included in the
calculation of (a) through (f) above which in the aggregate are in excess of
five percent (5%) of the amount of Total Assets of such Person, as of the date
of determination.
"Industrial Properties" means Properties that are used for
manufacturing, processing, or warehousing, including, without limitation,
Refrigerated Warehouse Properties.
"Interest Expense" means, for any Person for any period (without
duplication), (a) all interest expense on such Person's Indebtedness (whether
direct, indirect, or contingent, and including interest on all convertible
Liabilities) determined in accordance with GAAP, plus (b) capitalized interest
paid in cash that is not funded from construction loan proceeds, minus (c)
amortized loan fees to the extent previously paid in cash, plus (d)
Distributions of any kind or character or other proceeds paid or payable with
respect to any Disqualified Stock.
"Interest Expense Coverage Ratio" means, as of any date, the ratio of
(a) Adjusted EBITDA, to (b) Interest Expense, in each case for the Companies on
a consolidated basis (and including the Companies' Share of such amounts for
their Unconsolidated Affiliates) and for the four (4) fiscal quarters ending on
the date of determination.
<PAGE>
"Interest Period" has the meaning set forth in Section 3.9.
"International Properties" means each Property located outside the
United States, and AInternational Property" means any one of the International
Properties.
"International Consolidated Affiliates" means each Consolidated
Affiliate of ProLogis that is not organized under the laws of a state located in
the United States, and "International Consolidated Affiliate" means any one of
the International Consolidated Affiliates.
"International Holding Companies" mean each Consolidated Affiliate of
ProLogis that owns no assets other than Stock of International Consolidated
Affiliates, and "International Holding Company" means any one of the
International Holding Companies.
"Investment" in any Person means any investment, whether by means of
Stock purchase, loan, advance, extension of credit, capital contribution, or
otherwise, in or to such Person, the guaranty of any Liabilities of such Person,
or the subordination of any claim against such Person to other Liabilities of
such Person.
"Kingspark" means Kingspark Holding S.A., an entity organized under the
laws of Luxembourg, and its Consolidated Affiliates and Unconsolidated
Affiliates.
"Laws" means all applicable statutes, laws, treaties, ordinances,
rules, regulations, orders, writs, injunctions, decrees, judgments, opinions,
and interpretations of any Tribunal.
"Lenders" means the financial institutions named on Schedule 1 or on
the most recently amended Schedule 1, if any, delivered by Administrative Agent
under this Agreement, and, subject to this Agreement, their respective
successors and assigns (but not any Participant who is not otherwise a party to
this Agreement).
"Leverage Ratio" means, as of any date, the ratio of (a) the sum of (i)
all Liabilities of the Companies, on a consolidated basis, plus (ii) the
Companies' Share of all Liabilities of Unconsolidated Affiliates of the
Companies, to (b) Total Asset Value.
"Liabilities" means (without duplication), for any Person, (a) any
obligations required by GAAP to be classified upon such Person's balance sheet
as liabilities, (b) any liabilities secured (or for which the holder of the
Liability has an existing Right, contingent or otherwise, to be so secured) by
any Lien existing on property owned or acquired by that Person, (c) any
obligations that have been (or under GAAP should be) capitalized for financial
reporting purposes, and (d) any guaranties, endorsements, and other contingent
obligations with respect to Liabilities or obligations of others, and
"Liability" means any of the Liabilities; provided that "Liabilities" and
"Liability" shall not include any Purchase Liabilities.
"Lien" means any lien, mortgage, security interest, pledge, assignment,
charge, title retention agreement, or encumbrance of any kind and any other
substantially similar arrangement for a creditor's claim to be satisfied from
assets or proceeds prior to the claims of other creditors or the owners.
"Litigation" means any action by or before any Tribunal.
"Loan Documents" means (a) this Agreement (including the exhibits and
schedules to this Agreement), (b) the Notes, (c) the Subsidiary Guaranties, (d)
the Pledge Agreements, (e) any Hedging Agreements with any Lender relating to
the Obligation, (f) all other agreements, documents, and instruments in favor of
any Credit Party (or any Agent on behalf of the Credit Parties) ever delivered
in connection with or under this Agreement or otherwise delivered in connection
with all or any part of the Obligation, and (g) all renewals, extensions, and
restatements of, and amendments and supplements to, any of the foregoing.
"Managing Agents" means First Union National Bank and Societe Generale,
Southwest Agency.
"Material Adverse Event" means any circumstance or event that,
individually or collectively with other circumstances or events, reasonably is
expected to result in any (a) material impairment of the ability of ProLogis to
perform any of its payment or other material obligations under any Loan
Document, (b) material impairment of the ability of any Credit Party to enforce
(i) any of the material obligations of ProLogis under this Agreement or (ii) any
of its respective Rights under the Loan Documents, and, in the case of (i) and
(ii), such impairment shall substantially interfere with the realization of the
principal legal benefits provided by this Agreement and the other Loan
Documents, taken as a whole, (c) material and adverse effect on the financial
condition of the Companies as a whole as represented to Lenders in the Current
Financials, or (d) Default.
<PAGE>
"Maximum Amount" and "Maximum Rate" respectively mean, for a Lender,
the maximum non-usurious amount and the maximum non-usurious rate of interest
that, under applicable Law, such Lender is permitted to contract for, charge,
take, reserve, or receive on the Obligation.
"Maximum Leverage Ratio" means 0.55 to 1.0; provided that the Maximum
Leverage Ratio may be increased to up to 0.60 to 1.0 subject to the following
conditions: (a) such increase is at the request of ProLogis by written notice to
Administrative Agent and is a result of Liabilities incurred by ProLogis and
identified in writing to Administrative Agent to make an acquisition of Stock or
assets of a third party otherwise permitted hereunder; (b) such increase shall
not occur more than two (2) times during the term of this Agreement; and (c) all
such increases shall be in effect on the last day of not more than four (4)
fiscal quarters.
"Money Market Rate" means, as to any Swing Line Loan made from
Administrative Agent pursuant to Section 2.4, a rate per annum that shall be
determined for each Swing Line Loan by agreement between ProLogis and
Administrative Agent (but in no event to exceed the Base Rate).
"Moody's" means Moody's Investors Service, Inc. (or any successor
thereof) or, if Moody's no longer publishes ratings, another ratings agency
selected by ProLogis and acceptable to Administrative Agent.
"Moody's Rating" means the most recently-announced rating from time to
time of Moody's assigned to any class of long-term senior, unsecured Liability
securities issued by ProLogis, as to which no letter of credit, guaranty, or
third party credit support is in place, regardless of whether all or any part of
such Liability has been issued at the time such rating was issued.
"Net Proceeds" means, with respect to any Equity Issuance by any
Person, the amount of cash received by such Person in connection with such
transaction after deducting therefrom the aggregate, without duplication, of the
following amounts to the extent properly attributable to such transaction: (a)
reasonable brokerage commissions, attorneys' fees, finder's fees, financial
advisory fees, accounting fees, underwriting fees, investment banking fees, and
other similar commissions and fees and expenses and disbursements of any of the
foregoing, in each case to the extent paid or payable by such Person; (b)
printing and related expenses of filing and recording or registration fees or
charges or similar fees or charges paid by such Person; and (c) taxes paid or
payable by such Person to any Tribunal as a result of such transaction.
"New Ventures" means corporations, limited liability companies,
partnerships, joint ventures, and similar entities that are in the business of
providing logistics, distribution, or related services, but whose primary
business is not the ownership of Industrial Properties.
"NOI" means, for any period and any Property, the difference between
(a) any rentals, proceeds, expense reimbursements, or income received from such
Property (but excluding security or other deposits, late fees, early lease
termination, or other penalties of a non-recurring nature), less (b) all costs
and expenses (including interest on assessment bonds) incurred as a result of,
or in connection with, the development, operation, or leasing of such Property,
in each case determined in accordance with GAAP.
"Non-Industrial Properties" means Properties that are not Industrial
Properties.
"Non-Recourse Debt" means, for any Person, any Indebtedness of such
Person in which the holder of such Indebtedness may not look to such Person
personally for repayment, other than to the extent of any security therefor or
pursuant to Customary Recourse Exceptions.
"Notes" means the Revolving Credit Notes, the Swing Line Notes, and the
Competitive Bid Notes, and "Note" means any one of the Notes.
"Obligation" means all present and future indebtedness and obligations,
and all renewals, increases, and extensions thereof, or any part thereof, now or
hereafter owed to any Credit Party by any Company under any Loan Document,
together with all interest accruing thereon, fees, costs, and expenses
(including all reasonable attorneys' fees and expenses incurred in the
enforcement or collection thereof) payable under the Loan Documents or in
connection with the protection of Rights under the Loan Documents.
<PAGE>
"Parent Guaranty" means (a) the guaranty provided by ProLogis pursuant
to Section 13 of this Agreement, and (b) any amendments, modifications,
supplements, restatements, ratifications, or reaffirmations thereof made in
accordance with the Loan Documents.
"Participant" is defined in Section 14.11(b).
"Pension Plan" means an employee pension or benefit plan covered by
Title IV of ERISA or any other Applicable Pension Laws and established or
maintained by ProLogis or any ERISA Affiliate.
"Permitted Distributions" means, for ProLogis for any fiscal year of
ProLogis, an amount not to exceed the greater of (a) ninety-five percent (95%)
of Funds from Operations for such fiscal year, and (b) the amount of
Distributions required to be paid by ProLogis in order for ProLogis to qualify
as a REIT.
"Permitted Liens" means (a) Liens granted to any Agent to secure the
Obligation, (b) pledges or deposits made to secure payment of worker's
compensation (or to participate in any fund in connection with worker's
compensation insurance), unemployment insurance, pensions, or social security
programs, (c) encumbrances consisting of zoning restrictions, easements, or
other restrictions on the use of real property, provided that such items do not
materially impair the use of such property for the purposes intended and none of
which is violated in any material respect by existing or proposed structures or
land use, (d) the following: (i) Liens for taxes not yet due and payable or are
being contested in good faith by appropriate proceedings diligently conducted,
and for which reserves in accordance with GAAP or otherwise reasonably
acceptable to Administrative Agent have been provided; or (ii) Liens imposed by
mandatory provisions of law such as for materialmen's, mechanic's,
warehousemen's, and other like Liens arising in the ordinary course of business,
securing payment of any Liability whose payment is not yet due, (e) Liens for
taxes, assessments, and governmental charges or assessments that are being
contested in good faith by appropriate proceedings diligently conducted, and for
which reserves in accordance with GAAP or otherwise reasonably acceptable to
Administrative Agent have been provided, (f) Liens on Properties where the
applicable Company or Unconsolidated Affiliate is insured against such Liens by
title insurance or other similar arrangements satisfactory to Administrative
Agent, (g) Liens securing assessments or charges payable to a property owner
association or similar entity, which assessments are not yet due and payable or
are being contested in good faith by appropriate proceedings diligently
conducted, and for which reserves in accordance with GAAP or otherwise
reasonably acceptable to Administrative Agent have been provided, (h) Liens
securing assessment bonds, so long as no Company is in material default under
the terms thereof, (i) Liens granted to ProLogis by any other Company or an
Unconsolidated Affiliate of ProLogis, and (j) leases to tenants of space in
Properties that are entered into in the ordinary course of business.
"Permitted Redemptions" means the Redemption by ProLogis of its (a)
Series A Preferred Stock, (b) Series E Preferred Stock, and (c) common Stock
provided that the aggregate amount of common Stock redeemed shall not exceed
$100,000,000 in the aggregate during the term of this Agreement.
"Person" means any individual, entity, or Tribunal.
"PLDS" is defined in the preamble to this Agreement.
"PLLS" is defined in the preamble to this Agreement.
<PAGE>
"Pledge Agreements" means (a) the ProLogis Pledge Agreement executed by
ProLogis in substantially the form of Exhibit H-1, and (b) the Subsidiary Pledge
Agreement executed by ProLogis's Consolidated Affiliates in substantially the
form of Exhibit H-2, and "Pledge Agreement" means any one of the Pledge
Agreements.
"Potential Default" means the occurrence of any event or the existence
of any circumstance that would, upon notice or lapse of time or both, become a
Default.
"Preferred Dividend Coverage Ratio" means, as of any date, the ratio of
(a) (i) Adjusted EBITDA, minus (ii) Capital Expenditures, to (b) the sum of
(without duplication) (i) Debt Service in respect of all Indebtedness, plus (ii)
Preferred Dividends, in each case for the Companies on a consolidated basis (and
including the Companies' Share of such amounts for their Unconsolidated
Affiliates) and for the four (4) fiscal quarters ending on the date of
determination.
"Preferred Dividends" means, for any Person for any period,
Distributions of any kind or character or other proceeds paid or payable with
respect to any Stock except for common Stock.
"Principal Debt" means, with respect to any Borrowing or any Note, the
unpaid principal balance of such Borrowing or such Note, as the case may be.
"Properties" means real estate properties (including land) owned by a
Company or an Unconsolidated Affiliate of ProLogis, and AProperty" means any one
of the Properties.
"Pro Rata" and "Pro Rata Part" means, when determined for any Lender,
the proportion (stated as a percentage) that such Lender's Commitment bears to
the Total Commitment, or, if the Total Commitment shall have been terminated,
then the proportion (stated as a percentage) that the sum of the Principal Debt
owed to such Lender bears to the Total Principal Debt owed to all Lenders.
"Purchase Liabilities" means obligations of a wholly-owned Subsidiary
of PLLS incurred in connection with Dedicated Contracts where (a) such
Subsidiary has purchased a portion of a customer's assets, (b) such Subsidiary
has financed the entire purchase price pursuant to a long-term note payable to
the customer (or an Affiliate of the customer) secured by the assets purchased,
(c) debt service on such note is reimbursed by the customer as part of the
pass-through of operating expenses, and (d) in the event of a default under the
terms of such note or termination of such Dedicated Contracts by either party,
the customer's only recourse is to the assets purchased.
"Purchaser" is defined in Section 14.11(c).
"Rating Requirement" means, as of any date of determination, the lower
of the two (2) highest ratings of the Moody's Rating, the S & P Rating, and the
Fitch Rating. For purposes hereof, the correlation of the levels or grades of
the Moody's Rating, the S & P Rating, and the Fitch Rating shall be as set forth
in the table included herein in the definition of "Applicable Margin" in the
column labeled "Rating Requirement." Each change in the Rating Requirement shall
be effective commencing on the fifth (5th) Business Day following the earlier to
occur of (a) Administrative Agent's receipt of notice from ProLogis, as required
in Section 7.1(k), of an applicable change in the Moody's Rating, the S & P
Rating, or the Fitch Rating and (b) Administrative Agent's actual knowledge of
an applicable change in the Moody's Rating, the S & P Rating, or the Fitch
Rating.
<PAGE>
"Recourse Debt" means all Indebtedness that is not Non-Recourse Debt;
provided that "Recourse Debt" shall not include Recourse Debt of Unconsolidated
Affiliates of such Person unless the holder of such Recourse Debt has recourse
against such Person for the payment of such Recourse Debt other than to the
extent of any security therefor or pursuant to any Customary Recourse
Exceptions.
"Redemption" means, with respect to any Stock issued by a Person, the
retirement, redemption, purchase, tender, or other acquisition for value of such
Stock by such Person.
"Refrigerated Warehouse Properties" means each Property that is a
temperature-controlled facility, and "Refrigerated Warehouse Property" means any
one of the Refrigerated Warehouse Properties.
"REIT" means a "real estate investment trust" for purposes of the Code.
"Representatives" means representatives, officers, directors,
employees, attorneys, and agents.
"Required Lenders" means (a) as of any date of determination prior to
the termination of the Total Commitment, those Lenders (other than any
Defaulting Lenders) holding sixty-six and two-thirds percent (66-2/3%) or more
of the Total Commitment (excluding the Commitments of any Defaulting Lenders),
and (b) on any date of determination occurring after the Total Commitment has
terminated, those Lenders (other than any Defaulting Lenders) holding sixty-six
and two-thirds percent (66-2/3%) or more of the outstanding Principal Debt
(excluding the Principal Debt of any Defaulting Lenders).
"Reserve Requirement" means, with respect to any Eurodollar Borrowing
for the relevant Interest Period, the actual aggregate reserve requirements
(including all basic, supplemental, emergency, special, marginal, and other
reserves required by applicable Law) applicable to a member bank of the Federal
Reserve System for eurocurrency fundings or liabilities.
"Responsible Officer" means, with respect to any Borrower, any
chairman, president, chief executive officer, chief financial officer,
controller, secretary, senior vice president, or vice president of such
Borrower.
"Revolving Credit Notes" means one of the promissory notes
substantially in the form of Exhibit A-1, and all renewals, extensions,
modifications, rearrangements, and replacements thereof and any and all
substitutions therefor, and "Revolving Credit Note" means any one of the
Revolving Credit Notes.
"Rights" means rights, remedies, powers, privileges, and benefits.
"Secured Debt" means, for any Person, Indebtedness of such Person
secured by any Liens (other than Permitted Liens) in any of such Person's
Properties or other assets.
"Share" means, for any Person, such Person's share of the assets,
liabilities, revenues, income, losses, or expenses of an Unconsolidated
Affiliate based upon such Person's percentage ownership of Stock of such
Unconsolidated Affiliate.
"Solvent" means, as to a Person, that (a) the aggregate fair market
value of its assets exceeds its liabilities, (b) it has sufficient cash flow to
enable it to pay its Liabilities as they mature, and (c) it does not have
unreasonably small capital to conduct its businesses.
"S & P" means Standard & Poor's Rating Group, a division of McGraw
Hill, Inc., a New York corporation (or any successor thereof), or, if S & P no
longer publishes ratings, then another ratings agency selected by ProLogis and
acceptable to Administrative Agent.
<PAGE>
"S & P Rating" means the most recently-announced rating from time to
time of S & P assigned to any class of long-term senior, unsecured Liability
securities issued by ProLogis, as to which no letter of credit, guaranty, or
third party credit support is in place, regardless of whether all or any part of
such Liability has been issued at the time such rating was issued.
"Stock" means all shares, options, warrants, general or limited
partnership interests, membership interests, or other ownership interests
(regardless of how designated) of or in a corporation, partnership, limited
liability company, trust, or other entity, whether voting or nonvoting,
including common stock, preferred stock, or any other Aequity security" (as such
term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated
by the Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended).
"Subsidiary Borrower" and "Subsidiary Borrowers" are defined in the
preamble to this Agreement.
"Subsidiary Guaranties" means (a) any Unconditional Guaranty Agreement
in substantially the form of Exhibit G, executed by a Consolidated Affiliate
(other than International Consolidated Affiliates) of ProLogis pursuant to
Section 7.14, and (b) any Unconditional Guaranty Agreement in substantially the
form of Exhibit G and modified to the extent required under applicable Laws,
executed by an International Consolidated Affiliate of ProLogis pursuant to
Section 7.14, in each case as modified, amended, and supplemented from time to
time, and "Subsidiary Guaranty" means any one of the Subsidiary Guaranties.
"Subsidiary Guarantors" means each Consolidated Affiliate and each
Unconsolidated Affiliate of ProLogis executing a Subsidiary Guaranty.
"Swing Line Loan" means a Borrowing made pursuant to Section 2.4.
"Swing Line Notes" means those certain promissory notes executed by
each Borrower and payable to the order of Bank of America in the original
principal amount of $75,000,000 substantially in the form of Exhibit E, and all
renewals, extensions, modifications, rearrangements, and replacements thereof
and any and all substitutions therefor, and "Swing Line Note" means any one of
the Swing Line Notes.
"Swing Line Subfacility" means the subfacility under the Total
Commitment as described in, and subject to the limitations of, Section 2.4.
"Syndication Agent" is defined in the preamble to this Agreement.
"Taxes" means, for any Person, taxes, assessments, or other
governmental charges or levies imposed upon it, its income, or any of its
properties, franchises, or assets.
"Termination Date" means the earlier of (a) June 6, 2003 (subject to
any extension pursuant to Section 3.20), and (b) the effective date that
Lenders' commitments to lend hereunder are otherwise canceled or terminated in
accordance with this Agreement.
"Total Assets" means, for any Person as of any date, (a) such Person's
total assets determined in accordance with GAAP, plus (b) accumulated
depreciation with respect to such assets.
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"Total Asset Value" means, as of any date for the Companies on a
consolidated basis (and including the Companies' Share of the following amounts
for their Unconsolidated Affiliates), (a) the sum of (without duplication): (i)
the quotient of (A) the most recent fiscal quarter's NOI from Industrial
Properties (other than Refrigerated Warehouse Properties) multiplied by four
(4), plus management fee income from the most recent four (4) fiscal quarters
(not to exceed five percent (5%) of the total amount in (i)(A)), divided by (B)
nine percent (9.0%); plus (ii) the amount of Investments determined in
accordance with GAAP in Properties owned less than three (3) months and
Properties under construction; plus (iii) the amount of any cash and Cash
Equivalents (excluding tenant security and other restricted deposits); plus (iv)
the amount of Investments determined in accordance with GAAP in Refrigerated
Warehouse Properties and Kingspark; plus (v) the amount of Investments
determined in accordance with GAAP in all other assets not described in (i),
(ii), (iii), or (iv) above, less (b) the amount determined in accordance with
GAAP of all assets included in the calculation of (a)(v) above that would be
treated as intangible assets under GAAP (including goodwill, trademarks, trade
names, copyrights, patents, deferred charges, and unamortized debt discount and
expense), less (c) the amount of Investments determined in accordance with GAAP
in Unconsolidated Affiliates.
"Total Commitment" means, at any time, the sum of the Commitments of
all of the Lenders.
"Total Principal Debt" means, at any time, the sum of the Principal
Debt of all Borrowings of the Lenders.
"Tribunal" means any (a) local, state, or federal judicial, executive,
or legislative instrumentality, (b) private arbitration board or panel, or (c)
central bank.
"Type" means any type of Borrowing determined with respect to the
applicable interest option.
"Unconsolidated Affiliate" means, in respect of any Person, any other
Person in whom such Person holds Stock and whose financial results would not be
consolidated under GAAP with the financial results of such Person on the
consolidated financial statements of such Person.
"Unencumbered Companies" means Consolidated Affiliates of ProLogis
(other than Subsidiary Guarantors and Unrestricted International Companies) (a)
that have no Liabilities or Purchase Liabilities other than (i) trade payables
incurred in the ordinary course of business, (ii) intercompany Liabilities to
ProLogis or its Affiliates and, to the extent required hereunder, pledged to
Administrative Agent, for the benefit of the Credit Parties, (iii) in the case
of ProLogis Developments Ltd., contingent Liabilities consisting of
reimbursement obligations under undrawn letters of credit or similar surety
instruments (but only if such Liabilities are contingent and not outstanding),
and (iv) in the case of a Subsidiary Borrower, Liabilities in respect of the
Obligation, and (b) whose Stock is not subject to any Lien (other than Permitted
Liens); provided that (x) Unencumbered Companies shall not include any
Consolidated Affiliates of ProLogis if any direct or indirect holder of its
Stock (other than ProLogis) is not an Unencumbered Company, and (y) Unencumbered
Companies shall include Consolidated Affiliates of ProLogis that otherwise meet
the requirements of this definition even though one (1) or more of its
Consolidated Affiliates do not meet the requirements of this definition.
"Unencumbered Debt Service" means, for any period, all Debt Service in
respect of (a) all Unsecured Debt of the Companies (excluding any Unsecured Debt
of any Consolidated Affiliate of ProLogis that is not a Subsidiary Guarantor or
an Unencumbered Company so long as neither ProLogis, any Subsidiary Guarantor,
or any Unencumbered Company is obligated to pay (as guarantor or otherwise) such
Unsecured Debt), and (b) all other Indebtedness in which ProLogis, any
Subsidiary Guarantor, or any Unencumbered Subsidiary is obligated to pay (as
guarantor or otherwise).
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"Unencumbered Debt Service Coverage Ratio" means, as of any date, the
ratio of (a) Unencumbered EBITDA, to (b) Unencumbered Debt Service, in each case
for the four (4) fiscal quarters ending on the date of determination.
"Unencumbered EBITDA" means, for any period, Adjusted EBITDA of
ProLogis, Subsidiary Guarantors, and Unencumbered Companies (other than Adjusted
EBITDA attributable to any Encumbered Properties owned by ProLogis, a Subsidiary
Guarantor, or an Unencumbered Company) during such period; provided that (a)
there shall not be included in Unencumbered EBITDA any Adjusted EBITDA subject
to any Lien (other than Permitted Liens), (b) Adjusted EBITDA shall be adjusted
for a capital reserve of either (i) $0.20 per square foot in the case of
Properties that are not Refrigerated Warehouse Properties, or (ii) $0.10 per
cubic foot in the case of Properties that are Refrigerated Warehouse Properties,
(c) Unencumbered EBITDA attributable to Consolidated Affiliates of ProLogis
(other than PLDS and Kingspark) that are not Wholly-owned, directly or
indirectly, by ProLogis shall be limited to ten percent (10%) of Unencumbered
EBITDA, and (d) Unencumbered EBITDA attributable to International Consolidated
Affiliates of ProLogis and other assets, properties, or operations located in a
jurisdiction other than a state of the United States of America shall be limited
to thirty-five percent (35%) of Unencumbered EBITDA.
"Unencumbered Property Value" means, as of any date the sum of (without
duplication): (a) the quotient of (i) the most recent quarter's NOI from
Industrial Properties (other than Refrigerated Warehouse Properties and
Encumbered Properties) owned by ProLogis, a Subsidiary Guarantor, or an
Unencumbered Company multiplied by four (4), plus management fee income from the
most recent four (4) quarters (not to exceed seven and one-half percent (7.5%)
of the total amount in clause (a)(i)), divided by (ii) nine percent (9.0%); plus
(b) the amount of Investments determined in accordance with GAAP in Properties
(other than Encumbered Properties) owned by ProLogis, a Subsidiary Guarantor, or
an Unencumbered Company less than three (3) months; plus (c) the amount of
Investments determined in accordance with GAAP in Properties (other than
Encumbered Properties) owned by ProLogis, a Subsidiary Guarantor, or an
Unencumbered Company consisting of raw land and Properties (other than
Encumbered Properties) under construction not to exceed fifteen percent (15%) of
Unencumbered Property Value; plus (d) the amount of Investments determined in
accordance with GAAP in Refrigerated Warehouse Properties (other than Encumbered
Properties) owned by ProLogis, a Subsidiary Guarantor, or an Unencumbered
Company.
"Unencumbered Property Value Ratio" means, as of any date, the ratio of
(a) Unencumbered Property Value to (b) Recourse Debt of ProLogis, Subsidiary
Guarantors, and Unencumbered Companies.
"Unrestricted International Companies" means the International
Consolidated Affiliates that may be required to execute a Subsidiary Guaranty
pursuant to Section 7.14, but that ProLogis has designated in writing by notice
to Administrative Agent as "Unrestricted International Companies," and
"Unrestricted International Company" means any one of the Unrestricted
International Companies. ProLogis may, by written notice to Administrative
Agent, redesignate any International Consolidated Affiliate as no longer being
an Unrestricted International Company so long as such International Consolidated
Affiliate complies with Section 7.14. The initial Unrestricted International
Companies are listed on Schedule 7.14-3.
"Unsecured Debt" means, for any Person, Indebtedness of such Person
that is not Secured Debt.
"Unused Commitment" means, at any time, (a) the Total Commitment minus
(b) the Total Principal Debt.
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"Wholly-owned" when used in connection with any Consolidated Affiliate
of any Person shall mean a Consolidated Affiliate of which all of the issued and
outstanding shares of Stock shall be owned by such Person or one or more of its
Wholly-owned Consolidated Affiliates.
1.2 Time References. Unless otherwise specified in the Loan Documents
(a) time references are to time in Dallas, Texas, and (b) in calculating a
period from one date to another, the word "from" means "from and including" and
the word "to" or "until" means "to but excluding."
1.3 Other References. Unless otherwise specified in the Loan Documents
(a) where appropriate, the singular includes the plural and vice versa, and
words of any gender include each other gender, (b) headings and caption
references may not be construed in interpreting provisions, (c) monetary
references are to currency of the United States of America, (d) section,
paragraph, annex, schedule, exhibit, and similar references are to the
particular Loan Document in which they are used, (e) references to "telecopy,"
"facsimile," "fax," or similar terms are to facsimile or telecopy transmissions,
(f) references to "including" mean including without limiting the generality of
any description preceding that word, (g) the rule of construction that
references to general items that follow references to specific items are limited
to the same type or character of those specific items is not applicable in the
Loan Documents, (h) references to any Person include that Person's heirs,
personal representatives, successors, trustees, receivers, and permitted
assigns, (i) references to any Law include every amendment or supplement to it,
rule and regulation adopted under it, and successor or replacement for it, and
(j) references to any Loan Document or other document include every renewal and
extension of it, amendment and supplement to it, and replacement or substitution
for it.
1.4 Accounting Principles. Under the Loan Documents, unless otherwise
stated, (a) GAAP determines all accounting and financial terms and compliance
with financial covenants, (b) otherwise, all accounting principles applied in a
current period must be comparable in all material respects to those applied
during the preceding comparable period, and (c) while ProLogis has any
Consolidated Affiliates, all accounting and financial terms and compliance with
financial covenants must be on a consolidated basis, as applicable. If there is
a change in GAAP after the date hereof, the Compliance Certificate shall include
calculations setting forth the adjustments from the relevant financial items as
shown in the Current Financials, based on the then-current GAAP, to the
corresponding financial items based on GAAP as used in the Current Financials
delivered to Administrative Agent and Lenders on or prior to the date hereof, so
as to demonstrate how such financial covenant compliance was derived from the
Current Financials; provided that Administrative Agent or ProLogis may request
the other to, whereupon the other party shall, negotiate in good faith for a
period for not more than thirty (30) days regarding amendments to any affected
covenants to make such covenants consistent with the prior covenants and GAAP,
as then in effect, and, after any such revision as shall be agreed to by
ProLogis and Administrative Agent, this Agreement will be construed in
accordance with GAAP as then in effect.
SECTION 2 COMMITMENT.
2.1 Revolving Facility. Subject to the provisions of this Agreement,
each Lender severally and not jointly agrees to lend to each Borrower one or
more Borrowings (except for Competitive Borrowings and Swing Line Loans)
hereunder which each Borrower may borrow, repay, and reborrow under this
Agreement, subject to the following conditions:
(a) each Borrowing requested by a Borrower hereunder must occur on a
Business Day and no later than the Business Day immediately preceding the
Termination Date;
<PAGE>
(b) each Borrowing requested by a Borrower must be in an amount not
less than $1,000,000 or a greater integral multiple of $100,000 or, if less, the
Unused Commitment less the Principal Debt of any Swing Line Loans;
(c) the Total Principal Debt may not exceed the Total Commitment;
(d) no Lender's Principal Debt (other than the Principal Debt of such
Lender=s Competitive Borrowings) may exceed such Lender's Commitment;
(e) no Subsidiary Borrower may request any Borrowings hereunder unless
such Subsidiary Borrower is a Consolidated Affiliate of ProLogis;
(f) the aggregate Principal Debt of all Borrowings to PLLS shall not
exceed the lesser of (i) $235,000,000, and (ii) the Total Commitment; and
(g) the aggregate Principal Debt of all Borrowings to PLDS shall not
exceed the lesser of (i) $250,000,000, and (ii) the Total Commitment.
2.2 Borrowing Procedure. The following procedures apply to Borrowings
(other than Competitive Borrowings and Swing Line Loans):
(a) Any Borrower may request a Borrowing by submitting to
Administrative Agent a Borrowing Request. The Borrowing Request must be received
by Administrative Agent no later than 11:00 a.m. on (i) the third (3rd) Business
Day preceding the Borrowing Date for any Eurodollar Borrowing or (ii) the
Business Day preceding the Borrowing Date for any Base Rate Borrowing.
Administrative Agent shall promptly notify each Lender of its receipt of any
Borrowing Request and its contents. A Borrowing Request is irrevocable and
binding on the requesting Borrower.
(b) By 11:00 a.m. on the applicable Borrowing Date, each Lender shall
remit its Pro Rata Part of each requested Borrowing by wire transfer to
Administrative Agent pursuant to Administrative Agent's wire transfer
instructions on Schedule 1 (or as otherwise directed by Administrative Agent) in
funds that are available for immediate use by Administrative Agent. Subject to
receipt of such funds, Administrative Agent shall make such funds available to
the requesting Borrower in Dallas, Texas at 12:00 noon on such Borrowing Date
(unless it has actual knowledge that any applicable condition precedent has not
been satisfied by Borrowers).
<PAGE>
(c) Absent contrary written notice from a Lender, Administrative Agent
may assume that each Lender has made its Pro Rata Part of the requested
Borrowing available to Administrative Agent on the applicable Borrowing Date,
and Administrative Agent may, in reliance upon such assumption (but is not
required to), make available to the requesting Borrower a corresponding amount.
If a Lender fails to make its Pro Rata Part of any requested Borrowing available
to Administrative Agent on the applicable Borrowing Date, Administrative Agent
may recover the applicable amount on demand (i) from such Lender, together with
interest at the Federal Funds Rate for the period commencing on the date the
amount was made available to the requesting Borrower by Administrative Agent and
ending on (but excluding) the date Administrative Agent recovers the amount from
such Lender, or (ii) if such Lender fails to pay its amount upon demand, then
from the requesting Borrower, together with interest at an annual interest rate
equal to the rate applicable to the requested Borrowing for the period
commencing on the Borrowing Date and ending on (but excluding) the date
Administrative Agent recovers the amount from the requesting Borrower. No Lender
is responsible for the failure of any other Lender to make its Pro Rata Part of
any Borrowing.
2.3 Termination. Without premium or penalty, and upon giving at least
three (3) Business Days prior written and irrevocable notice to Administrative
Agent, ProLogis may terminate all or part of the unused portion of the Total
Commitment, provided that ProLogis may not partially terminate the unused
portion of the Total Commitment such that the Total Commitment is less than
$300,000,000. Each partial termination (a) must be in an amount of not less than
$1,000,000 or a greater integral multiple of $1,000,000, and (b) shall be Pro
Rata among all Lenders. Once terminated, the Total Commitment may not be
increased or reinstated.
2.4 Swing Line Subfacility.
(a) Subject to the terms and conditions hereof, if necessary to meet
any Borrower's funding deadlines, Bank of America agrees to make Swing Line
Loans to Borrowers at any time on or prior to the Termination Date, not to
exceed an amount in the aggregate for all Borrowers at any one time outstanding
equal to the lesser of (i) $75,000,000, and (ii) the difference between the
Total Commitment and the Total Principal Debt. Swing Line Loans shall constitute
"Borrowings" for all purposes hereunder, except that Swing Line Loans shall not
be considered a utilization of any Lender's Commitment. Notwithstanding the
foregoing, the Total Principal Debt (including, without limitation, all Swing
Line Loans) shall not at any time exceed the Total Commitment.
(b) Each request for a Swing Line Loan shall be in an amount equal to
$1,000,000 or a greater integral multiple of $50,000. A Borrower may request a
Swing Line Loan by submitting a Borrowing Request to Administrative Agent and
Bank of America. Such Borrowing Request must be received by Administrative Agent
and Bank of America no later than 11:00 a.m. on the Borrowing Date for such
Swing Line Loan, provided that the requesting Borrower shall have provided
telephonic notice to Administrative Agent and Bank of America no later than
11:00 a.m. on the Borrowing Date for such Swing Line Loan. Bank of America shall
make such Swing Line Loan available to the requesting Borrower in Dallas, Texas
at 1:00 p.m. on such Borrowing Date.
<PAGE>
(c) Upon the occurrence of a Default or in the event that any Swing
Line Loan shall be outstanding for more than five (5) Business Days,
Administrative Agent shall, on behalf of the applicable Borrower (which hereby
irrevocably directs and authorizes Administrative Agent to act on its behalf),
request a Base Rate Borrowing from Lenders (and each Lender shall fund its Pro
Rata Part thereof) in an amount sufficient to repay the Principal Debt
outstanding under such Swing Line Loan; provided that such Borrowing shall be
made notwithstanding any noncompliance with Section 5. The proceeds of such
Borrowing shall be immediately applied to repay such Swing Line Loan. If any
Lender does not promptly pay such amount upon Administrative Agent's demand
therefor, and until such time as such Lender makes the required Borrowing, Bank
of America shall be deemed to continue to have outstanding its Swing Line Loan
in the amount of such unpaid obligation. If, for any reason (including but not
limited to the filing of a petition in bankruptcy with respect to any Borrower),
a Borrowing may not be (as determined by Administrative Agent in its sole
discretion), or is not, made pursuant to this Section 2.4(c) to repay any Swing
Line Loan as required hereby, then, effective on the date such Borrowing would
otherwise have been made, each Lender severally, unconditionally, and
irrevocably agrees that it shall be deemed to have purchased an undivided
participating interest in such Swing Line Loan (an "Unrefunded Swing Line
Borrowing") to the extent of such Lender=s Pro Rata Part thereof. Each Lender
shall fund a Borrowing or a participation in the Unrefunded Swing Line
Borrowings no later than the close of business on the date notice of such
funding requirement is given by Administrative Agent if such notice was given
prior to 11:00 a.m. on any Business Day, or if made at any other time, on the
next Business Day following the date of such notice. All such amounts payable by
any Lender under this Section 2.3(c) shall include interest thereon from the
date on which such payment is payable by such Lender to, but not including, the
date such amount is paid by such Lender to Administrative Agent, at the Federal
Funds Rate. Each payment by a Borrower of all or any part of any Swing Line Loan
to such Borrower shall be paid to Administrative Agent for the benefit of Bank
of America and those Lenders who hold funded participations in such Swing Line
Loan under this Section 2.4(c); provided that with respect to any such
participation, all interest on the Principal Debt of such Swing Line Loan to
which such participation relates accruing prior to the date of funding such
participation, shall be payable solely to Administrative Agent for the account
of Bank of America (and all Lenders holding funded participations in any
Unrefunded Swing Line Borrowing prior to such date). Any Lender holding a
participation in any Unrefunded Swing Line Borrowing may exercise any and all
Rights of banker's lien, setoff, or counterclaim with respect to any and all
moneys owing by the applicable Borrower to such Lender by reason thereof as
fully as if such Lender had extended such Borrowing directly to such Borrower in
the amount of such participation. Whenever, at any time after Bank of America
has received from any Lender such Lender's participating interest in any Swing
Line Loan, Bank of America receives any payment on account thereof, Bank of
America will promptly distribute to such Lender its participating interest in
such amount (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender's participating interest was
outstanding and funded); provided, however, that in the event that such payment
received by Bank of America is required to be returned, such Lender will return
to Bank of America any portion thereof previously distributed by Bank of America
to it.
(d) Unless Administrative Agent knew when Bank of America funded a
Swing Line Loan that Borrowers had not satisfied the conditions in this
Agreement to obtain a Borrowing, each Lender=s obligation to make a Borrowing to
refund, or to purchase a participation interest in, its Pro Rata Part of all
Swing Line Loans as provided in Section 2.4(c) shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation (i) any set-off, counterclaim, recoupment, defense, or other right
which such Lender or any other Person may have against Bank of America or any
other Person for any reason whatsoever, (ii) the occurrence or continuance of a
Potential Default or Default or the termination of any Lender's Commitment,
(iii) the occurrence of any Material Adverse Event, (iv) any breach of this
Agreement or any other Loan Document by any Borrower, any of its Affiliates,
Administrative Agent, or any other Lender, or (v) any other circumstance,
happening, or event whatsoever, whether or not similar to any of the foregoing.
Any portion of a Swing Line Loan which has not been refunded by a Borrowing may
be treated by Bank of America as a Borrowing which was not funded by the
non-purchasing Lenders as contemplated in Section 2.2(c) of this Agreement, and
as a funding by Bank of America under the Total Commitment in excess of Bank of
America's Commitment. Each Swing Line Loan refunded by a Borrowing shall cease
to be a Swing Line Loan for the purposes of this Agreement, but shall be a
Borrowing made under the Total Commitment and each Lender's Commitment.
2.5 Competitive Bid Subfacility
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(a) In addition to Borrowings otherwise provided for herein, but
subject to the terms and conditions of the Loan Documents, each Borrower may, as
set forth in this Section 2.5, request Lenders to make offers to make
Competitive Borrowings to such Borrower under the Total Commitment. Lenders may,
but shall have no obligation to, make any such offers, and such Borrower may,
but shall have no obligation to, accept any such offers. Any Competitive
Borrowings made available to a Borrower hereunder shall be subject, however, to
the conditions that on the Borrowing Date therefor: (i) the Moody's Rating is
Baa3 or better and the S & P Rating is BBB- or better; (ii) the aggregate
principal outstanding under all Competitive Borrowings made by all Lenders to
all Borrowers shall not exceed thirty-three and one-third percent (33-1/3%) of
the Total Commitment; and (iii) the Principal Debt of all Borrowings (whether
under the Competitive Bid Subfacility, the Swing Line Subfacility, or otherwise)
shall not exceed the Total Commitment. Each Borrowing under the Competitive Bid
Subfacility must occur on a Business Day and prior to the Business Day
immediately preceding the Termination Date.
(b) In order to request Competitive Bids, a Borrower shall deliver a
Competitive Bid Request to Administrative Agent no later than (i) 10:00 a.m.
Dallas, Texas time on the fifth (5th) Business Day preceding the Borrowing Date
for any requested Competitive Borrowing that will be comprised of Eurodollar
Borrowings, or (ii) 9:00 a.m. Dallas, Texas time one (1) Business Day before the
Borrowing Date for any requested Competitive Borrowing that will be comprised of
Fixed Rate Borrowings. A Competitive Bid Request that does not conform
substantially to the format of Exhibit B-2 may be rejected by Administrative
Agent, and Administrative Agent shall promptly notify the requesting Borrower of
such rejection. Each Competitive Bid Request shall refer to this Agreement and
shall specify (i) whether the Competitive Borrowing then being requested will be
comprised of Eurodollar Borrowings or Fixed Rate Borrowings, (ii) the Borrowing
Date of such Competitive Borrowing (which shall be a Business Day) and the
aggregate principal amount thereof (which shall be $10,000,000 or a greater
integral multiple of $1,000,000), and (iii) the Interest Period with respect
thereto (which may not be more than six (6) months and which may not extend
beyond the Termination Date). Promptly after its receipt of a Competitive Bid
Request that is not rejected as aforesaid, Administrative Agent shall notify
Lenders of the Competitive Bid Request on a form substantially similar to
Exhibit B-2, pursuant to which Lenders are invited to bid, subject to the terms
and conditions of this Agreement, to make Competitive Borrowings pursuant to
such Competitive Bid Request. Notwithstanding the foregoing, Administrative
Agent shall have no obligation to invite any Lender to make a Competitive Bid
pursuant to this Section 2.5 until such Lender has delivered a completed
administrative questionnaire to Administrative Agent.
(c) Each Lender may make one (1) or more Competitive Bids to the
requesting Borrower responsive to each respective Competitive Bid Request. Each
Competitive Bid by a Lender must be substantially in the form of Exhibit F and
must be received by Administrative Agent (i) no later than 11:00 a.m. Dallas,
Texas time on the fourth (4th) Business Day preceding the Borrowing Date for any
requested Competitive Borrowing that will be comprised of Eurodollar Borrowings,
or (ii) prior to 9:00 a.m. Dallas, Texas time on the Borrowing Date for any
requested Competitive Borrowing that will be comprised of Fixed Rate Borrowings.
Competitive Bids that do not conform substantially to the format of Exhibit F
may be rejected by Administrative Agent after conferring with, and upon the
instruction of, the requesting Borrower, and Administrative Agent shall notify
the appropriate Lender of such rejection as soon as practicable. Each
Competitive Bid shall refer to this Agreement and shall (x) specify the
principal amount (which shall be $5,000,000 or a greater integral multiple of
$1,000,000 and which may equal the entire principal amount of the Competitive
Borrowing requested by the requesting Borrower and may exceed such Lender's
Commitment, subject to the limitations set forth in Section 2.5(a)) of the
Competitive Borrowing such Lender is willing to make to the requesting Borrower,
(y) specify the Competitive Bid Rate at which such Lender is prepared to make
its Competitive Borrowing, and (z) confirm the Interest Period with respect
thereto specified by the requesting Borrower in its Competitive Bid Request. A
Competitive Bid submitted by a Lender pursuant to this Section 2.5(c) shall be
irrevocable.
(d) Administrative Agent shall promptly notify the requesting Borrower
of all Competitive Bids made and the Competitive Bid Rate and the principal
amount of each Competitive Borrowing in respect of which a Competitive Bid was
made and the identity of the Lender that made each bid.
<PAGE>
(e) The requesting Borrower may, subject only to the provisions of this
Section 2.5(e), accept or reject any or all of the Competitive Bids referred to
in Section 2.5(c); provided, however, that the aggregate amount of the
Competitive Bids so accepted by the requesting Borrower may not exceed the
principal amount of the Competitive Borrowing requested by the requesting
Borrower (subject to the further limitations of Section 2.5(a)). The requesting
Borrower shall notify Administrative Agent whether and to what extent it has
decided to accept or reject any or all of the bids referred to in Section 2.5(c)
(i) not later than 10:00 a.m. Dallas, Texas time three (3) Business Days before
the Borrowing Date specified for a proposed Competitive Borrowing that is deemed
a Eurodollar Borrowing or (ii) not later than 10:00 a.m., Dallas, Texas time on
the day specified for a proposed Competitive Borrowing that is deemed a Fixed
Rate Borrowing; provided, however, that (A) the failure by the requesting
Borrower to give such notice shall be deemed to be a rejection of all the bids
referred to in Section 2.5(c), (B) the requesting Borrower shall not accept a
bid in the same or lower principal amount made at a particular Competitive Bid
Rate if the requesting Borrower has decided to reject a bid made at a lower
Competitive Bid Rate, (C) if the requesting Borrower shall accept bids made at a
particular Competitive Bid Rate but shall be restricted by other conditions
hereof from borrowing the principal amount of the Competitive Borrowing in
respect of which bids at such Competitive Bid Rate have been made, then the
requesting Borrower shall accept a ratable portion of each bid made at such
Competitive Bid Rate based as nearly as possible on the respective principal
amounts of the Competitive Borrowing for which such bids were made, and (D) no
bid shall be accepted for a Competitive Borrowing unless the aggregate principal
amount to be funded pursuant to all accepted bids hereunder shall be in a
minimum amount of $10,000,000 and the amount to be funded by each Lender whose
bid is accepted is $5,000,000 or a greater integral multiple of $1,000,000.
Notwithstanding the foregoing, if it is necessary for the requesting Borrower to
accept a ratable allocation of the bids made in response to a Competitive Bid
Request (whether pursuant to the events specified in clause (C) above or
otherwise) and the available principal amount of the Competitive Borrowing to be
allocated among the Lenders submitting Competitive Bids is not sufficient to
enable Competitive Borrowings to be allocated to each such Lender in a minimum
principal amount of $5,000,000 or a greater integral multiple of $1,000,000,
then the requesting Borrower shall select the Lenders to be allocated such
Competitive Borrowings and shall round allocations up or down to the next higher
or lower multiple of $500,000 as it shall deem appropriate. A notice given by
the requesting Borrower pursuant to this Section 2.5(e) shall be irrevocable.
(f) Administrative Agent shall promptly notify each bidding Lender
whether or not its Competitive Bid has been accepted (which notice to such
Lenders whose Competitive Bids have been accepted will be given within one (1)
hour (except in the case of Fixed Rate Borrowings, in which case as soon as
possible) from the time such bid was accepted by the requesting Borrower and
shall further indicate in what amount and at what Competitive Bid Rate), and
each successful bidder will be obligated, subject to the other applicable
conditions hereof, to advance the Competitive Borrowing in respect of which its
bid has been accepted. After completing the notifications referred to in the
immediately preceding sentence, Administrative Agent shall notify each bidding
Lender of the aggregate principal amount of all Competitive Bids accepted for
and the range of Competitive Bid Rates submitted in connection with that
Competitive Borrowing.
(g) If Administrative Agent shall at any time elect to submit a
Competitive Bid in its capacity as a Lender, then it shall submit such bid
directly to the requesting Borrower one-half hour earlier than the latest time
at which the other Lenders are required to submit their bids to Administrative
Agent pursuant to Section 2.5(c).
<PAGE>
(h) The Principal Debt of each Competitive Borrowing and all unpaid
interest thereon shall be due and payable on the last day of the applicable
Interest Period; provided that if the requesting Borrower fails to repay any
Competitive Borrowing on such day, then the requesting Borrower shall be deemed
to have given a Notice of Borrowing requesting Lenders to make a Borrowing
hereunder in the amount of such Competitive Borrowing, subject to satisfaction
of the conditions specified in Section 5; provided that failure to repay such
Competitive Borrowing on the last day of the applicable Interest Period shall
not constitute a failure to satisfy such conditions.
2.6 Lenders; Increase in Total Commitment.
(a) The Lenders on the Closing Date shall be the Lenders set forth
on Schedule 1.1 on the Closing Date.
(b) After the Closing Date until March 31, 2001, Administrative Agent
may, from time to time at the request of Borrower, increase the Total Commitment
by (i) admitting additional Lenders hereunder (each a "Subsequent Lender"), or
(ii) increasing the Commitment of any Lender (each an "Increasing Lender"),
subject to the following conditions:
(A) each Subsequent Lender is an Eligible Assignee;
(B) each Borrower executes (A) a new Note payable to the order
of a Subsequent Lender, or (B) a replacement Note payable to the order
of an Increasing Lender;
(C) each Subsequent Lender executes a signature page to this
Agreement;
(D) after giving effect to the admission of any Subsequent
Lender or the increase in the Commitment of any Increasing Lender, the
aggregate of the Total Commitment does not exceed $500,000,000;
(E) each increase in the Total Commitment shall be in the
minimum amount of $10,000,000 or a greater integral multiple of
$1,000,000;
(F) no admission of any Subsequent Lender shall increase the
Commitment of any existing Lender without the written consent of such
Lender;
(G) no Lender shall be an Increasing Lender without the
written consent of such Lender;
(H) no Potential Default or Default exists;
(I) the amount of all increases in the Total Commitment
pursuant to this Section 2.6 shall not exceed $50,000,000 in the
aggregate; and
(J) Borrowers shall pay to Administrative Agent, for the
account of the applicable Credit Parties, all fees payable in
connection with an increase in the Total Commitment required pursuant
to any letter agreement between Administrative Agent and Borrowers.
After the admission of any Subsequent Lender or the increase in the Commitment
of any Increasing Lender, Administrative Agent shall promptly provide to each
Lender a new Schedule 1.1 to this Agreement.
SECTION 3 TERMS OF PAYMENT.
3.1 Notes and Payments.
<PAGE>
(a) The Total Principal Debt (other than Competitive Borrowings and
Swing Line Loans) shall be evidenced by the Revolving Credit Notes, one payable
to each Lender in the stated principal amount of its Commitment; provided that
the Revolving Credit Notes executed by a Subsidiary Borrower shall not exceed
the aggregate amount of the Total Commitment available to such Subsidiary
Borrower under Section 2.1. The Principal Debt of all Competitive Borrowings
shall be evidenced by the Competitive Bid Notes. The Principal Debt of all Swing
Line Loans shall be evidenced by the Swing Line Notes.
(b) Borrowers must make each payment and prepayment on the Obligation,
without offset, counterclaim, or deduction, to Administrative Agent's principal
office in Dallas, Texas, in funds that will be available for immediate use by
Administrative Agent by 12:00 noon on the day due. Payments received after such
time shall be deemed received on the next Business Day. Administrative Agent
shall pay to each Lender any payment to which such Lender is entitled on the
same day Administrative Agent receives the funds from a Borrower if
Administrative Agent receives the payment before 12:00 noon, and otherwise
before 12:00 noon on the following Business Day. If and to the extent that
Administrative Agent does not make payments to Lenders when due, then unpaid
amounts shall accrue interest at the Federal Funds Rate from the due date until
(but not including) the payment date.
3.2 Interest and Principal Payments.
(a) Interest Payments. Accrued interest on each Borrowing (other than
Competitive Borrowings) is due and payable monthly as it accrues on the first
(1st) day of each month during the term hereof (commencing on July 1, 2000) and
on the Termination Date. Accrued interest on each Competitive Borrowing is due
and payable on the last day of its respective Interest Period; provided that if
any such Interest Period is a period greater than three (3) months, then accrued
interest on such Competitive Borrowing shall also be due and payable on the date
ending each three (3) month period after the commencement of such Interest
Period.
(b) Principal Payments. The Total Principal Debt is due and payable on
the Termination Date.
(c) Voluntary Prepayment. Any Borrower may voluntarily prepay all or
any part of the Total Principal Debt at any time without premium or penalty,
subject to the following conditions:
(i) Administrative Agent must receive such Borrower's written
prepayment notice by 11:00 a.m. on the Business Day preceding the date
of prepayment, which notice shall specify the payment date and the Type
and amount of the Borrowing(s) to be paid, and which shall constitute
an irrevocable and binding obligation of such Borrower to make a
prepayment on the designated date;
(ii) each partial prepayment must be in the amount of
$1,000,000 or a greater integral multiple of $100,000, or, if less, the
Total Principal Debt; and
(iii) such Borrower shall pay any related Funding Loss upon
demand.
Notwithstanding anything contained herein to the contrary, no Borrower shall
voluntarily prepay any Competitive Borrowing to such Borrower prior to the last
day of the Interest Period therefor.
<PAGE>
3.3 Interest Options. Except as specifically otherwise provided,
Borrowings (other than Competitive Borrowings and Swing Line Loans) shall bear
interest at an annual rate equal to the lesser of (a) the Base Rate plus the
Applicable Margin, or the Eurodollar Rate plus the Applicable Margin (in each
case as designated or deemed designated by the requesting Borrower and, in the
case of Eurodollar Borrowings, for the Interest Period designated by the
requesting Borrower), and (b) the Maximum Rate. Except as specifically otherwise
provided, Competitive Borrowings shall bear interest at an annual rate of
interest equal to the lesser of (i) the Competitive Bid Rate, and (ii) the
Maximum Rate. Except as specifically otherwise provided, Swing Line Loans shall
bear interest at an annual rate equal to the lesser of (A) the Money Market Rate
plus the Applicable Margin, and (B) the Maximum Rate. Each change in the Base
Rate, Money Market Rate, or Maximum Rate is effective, without notice to
Borrowers or any other Person, upon the effective date of such change.
3.4 Quotation of Rates. A Representative of any Borrower may call
Administrative Agent before delivering a Borrowing Request to receive an
indication of the interest rates then in effect, but the indicated rates do not
bind any Credit Party or affect the interest rate that is actually in effect
when such Borrower delivers its Borrowing Request or on the Borrowing Date.
3.5 Default Rate. If permitted by Law, all past-due Principal Debt
and past-due interest shall bear interest from the date due (stated or by
acceleration) at the Default Rate until paid, regardless whether payment is made
before or after entry of a judgment.
3.6 Interest Recapture. If the designated interest rate applicable to
any Borrowing exceeds the Maximum Rate, then the interest rate on that Borrowing
is limited to the Maximum Rate, but any subsequent reductions in the designated
rate shall not reduce the interest rate thereon below the Maximum Rate until the
total amount of accrued interest equals the amount of interest that would have
accrued if the designated rate had always been in effect. If at maturity (stated
or by acceleration), or at final payment of the Notes, the total interest paid
or accrued is less than the interest that would have accrued if the designated
rates had always been in effect, then, at that time and to the extent permitted
by applicable Law, the applicable Borrower shall pay an amount equal to the
difference between (a) the lesser of the amount of interest that would have
accrued if the designated rates had always been in effect and the amount of
interest that would have accrued if the Maximum Rate had always been in effect,
and (b) the amount of interest actually paid or accrued on the Notes.
3.7 Interest Calculations.
(a) Interest will be calculated on the basis of actual number of days
elapsed (including the first day but excluding the last day) but computed as if
each calendar year consisted of 360 days in the case of all Borrowings (other
than Base Rate Borrowings) (unless the calculation would result in an interest
rate greater than the Maximum Rate, in which event interest will be calculated
on the basis of a year of 365 or 366 days, as the case may be), and 365 or 366
days, as the case may be, in the case of Base Rate Borrowings. All interest rate
determinations and calculations by Administrative Agent are conclusive and
binding absent manifest error.
(b) The provisions of this Agreement relating to calculation of the
Base Rate, the Eurodollar Rate, and the Competitive Bid Rate are included only
for the purpose of determining the rate of interest or other amounts to be paid
under this Agreement that are based upon those rates. Each Lender may fund and
maintain its funding of all or any part of each Borrowing as it selects.
<PAGE>
3.8 Maximum Rate. Regardless of any provision contained in any Loan
Document or any document related thereto, it is the intent of the parties to
this Agreement that no Credit Party contract for, charge, take, reserve,
receive, or apply, as interest on all or any part of the Obligation any amount
in excess of the Maximum Rate or the Maximum Amount or receive any unearned
interest in violation of any applicable Law, and, if Lenders ever do so, then
any excess shall be treated as a partial repayment or prepayment of principal
and any remaining excess shall be refunded to the applicable Borrower. In
determining if the interest paid or payable exceeds the Maximum Rate, each
Borrower and Lenders shall, to the maximum extent permitted under applicable
Law, (a) treat all Borrowings as but a single extension of credit (and Lenders
and each Borrower agree that this is the case and that provision in this
Agreement for multiple Borrowings is for convenience only), (b) characterize any
non-principal payment as an expense, fee, or premium rather than as interest,
(c) exclude voluntary repayments or prepayments and their effects, and (d)
amortize, prorate, allocate, and spread the total amount of interest throughout
the entire contemplated term of the Obligation. However, if the Obligation is
paid in full before the end of its full contemplated term, and if the interest
received for its actual period of existence exceeds the Maximum Amount, then
Lenders shall refund any excess (and Lenders may not, to the extent permitted by
Law, be subject to any penalties provided by any Laws for contracting for,
charging, taking, reserving or receiving interest in excess of the Maximum
Amount). If the Laws of the State of Texas are applicable for purposes of
determining the "Maximum Rate" or the "Maximum Amount," then those terms mean
the "weekly ceiling" from time to time in effect under Texas Finance Code '
303.001, as amended, as limited by Texas Finance Code ' 303.305. Each Borrower
agrees that Chapter 346 of the Texas Finance Code, as amended (which regulates
certain revolving credit loan accounts and revolving tri-party accounts), does
not apply to the Obligation.
3.9 Interest Periods. When any Borrower requests any Eurodollar
Borrowing or a Fixed Rate Borrowing, such Borrower may elect the applicable
interest period (each an "Interest Period"), which may be, at such Borrower's
option, one (1), two (2), three (3) or six (6) months for Eurodollar Borrowings
and any period of up to six (6) months (for Fixed Rate Borrowings), subject to
the following conditions: (a) the initial Interest Period for a Eurodollar
Borrowing commences on the applicable Borrowing Date or conversion date, and
each subsequent Interest Period applicable to such Borrowing commences on the
day when the next preceding applicable Interest Period expires; (b) if any
Interest Period for a Eurodollar Borrowing begins on a day for which there
exists no numerically corresponding Business Day in the calendar month at the
end of the Interest Period ("Ending Calendar Month"), then the Interest Period
ends on the next succeeding Business Day of the Ending Calendar Month, unless
there is no succeeding Business Day in the Ending Calendar Month in which case
the Interest Period ends on the next preceding Business Day of the Ending
Calendar Month; (c) no Interest Period may extend beyond the Termination Date;
and (d) there may not be in effect at any one time more than twelve (12)
Interest Periods (including, without limitation, Interest Periods for
Competitive Borrowings). Notwithstanding the foregoing, subject to the foregoing
conditions and the consent of Administrative Agent (such consent to be in
Administrative Agent's reasonable discretion), any Borrower may, in anticipation
of such Borrower's prepayment of Borrowings from equity or debt offerings or
financings or asset sales, elect Interest Periods of seven (7) days, fourteen
(14) days, or twenty-one (21) days.
<PAGE>
3.10 Conversions and Continuations. Any Borrower may (a) on the last
day of the applicable Interest Period convert all or part of a Eurodollar
Borrowing of such Borrower to a Base Rate Borrowing, (b) at any time convert all
or part of a Base Rate Borrowing of such Borrower to a Eurodollar Borrowing, and
(c) on the last day of an Interest Period, elect a new Interest Period for a
Eurodollar Borrowing of such Borrower; provided that no conversions to or
elections of new Interest Periods for any Eurodollar Borrowings shall be
permitted while a Default exists unless Required Lenders otherwise consent in
writing. Any such conversion is subject to the dollar limits and denominations
of Section 2.1 and may be accomplished by delivering a Borrowing Request to
Administrative Agent no later than 11:00 a.m. (i) on the third (3rd) Business
Day before (A) the conversion date for conversion to a Eurodollar Borrowing and
(B) the last day of the Interest Period, for the election of a new Interest
Period, and (ii) one (1) Business Day before the last day of the Interest Period
for conversion to a Base Rate Borrowing. Absent the applicable Borrower's notice
of conversion or election of a new Interest Period, a Eurodollar Borrowing of
such Borrower shall be converted to a Base Rate Borrowing when the applicable
Interest Period expires.
3.11 Order of Application.
(a) If no Default exists, any payment shall be applied to the
Obligation in the order and manner specified by the applicable Borrower.
(b) If a Default exists, any payment (including proceeds from the
exercise of any Rights) shall be applied in the following order: (i) to all fees
and expenses for which the Credit Parties have not been paid or reimbursed in
accordance with the Loan Documents (and if such payment is less than all unpaid
or unreimbursed fees and expenses, then the payment shall be paid against unpaid
and unreimbursed fees and expenses in the order of incurrence or due date); (ii)
to accrued interest on the Principal Debt; (iii) to the Principal Debt of any
Swing Line Loans; and (iv) to the remaining Obligation in the order and manner
as Administrative Agent deems appropriate.
All payments to or for the account of Lenders shall be shared by such Lenders on
a Pro Rata basis.
3.12 Sharing of Payments, Etc. If any Lender obtains any amount(whether
voluntary, involuntary or otherwise, including as a result of exercising its
Rights under Section 3.13) that exceeds the part of that payment that such
Lender is then entitled to receive under the Loan Documents, then such Lender
shall purchase from the other Lenders participations that will cause the
purchasing Lender to share the excess amount ratably with each other Lender. If
all or any portion of any excess amount is subsequently recovered from the
purchasing Lender, then the purchase shall be rescinded and the purchase price
restored to the extent of the recovery. Each Borrower agrees that any Lender
purchasing a participation from another Lender under this Section 3.12 may, to
the fullest extent permitted by Law, exercise all of its Rights of payment
(including the Right of offset) with respect to that participation as fully as
if such Lender were the direct creditor of such Borrower in the amount of that
participation.
3.13 Offset. If a Default exists, then each Lender is entitled, but
is not obligated, to exercise (for the benefit of all Lenders in accordance with
Section 3.12) the Rights of offset and banker's Lien against each and every
account and other property, or any interest therein, that each Borrower may now
or hereafter have with, or which is now or hereafter in the possession of, that
Lender to the extent of the full amount of the Obligation of such Borrower.
3.14 Booking Borrowings. To the extent permitted by Law, any Lender
may make, carry or transfer its Borrowings at, to, or for the account of any of
its branch offices or the office of any of its Affiliates. However, no Affiliate
is entitled to receive any greater payment under this Agreement than the
transferor Lender would have been entitled to receive with respect to those
Borrowings.
<PAGE>
3.15 Basis Unavailable or Inadequate for the Eurodollar Rate. If prior
to the first (1st) day of any Interest Period, (a) Administrative Agent
determines that the basis for determining the applicable rate is not available,
or (b) Lenders holding fifty percent (50%) of the Total Commitment notify
Administrative Agent that such Lenders have determined that the rate determined
by Administrative Agent as the Eurodollar Rate for any Interest Period does not
accurately reflect the cost to such Lenders of making or converting Borrowings
at that rate for such Interest Period, then Administrative Agent shall promptly
notify Borrowers and Lenders of that determination (which is conclusive and
binding on Borrowers absent manifest error), and all affected Borrowings shall
bear interest at the sum of the Base Rate plus the Applicable Margin. Until
Administrative Agent notifies Borrowers that such circumstances no longer exist,
Lenders' commitments under this Agreement to make, or to convert to, affected
Borrowings will be suspended.
3.16 Additional Costs. With respect to any Law, requirement, request,
directive, or change affecting banking institutions generally:
(a) Eurocurrency Reserves. If any Lender shall be required under any
Reserve Requirement (other than a Reserve Requirement in effect on the first
(1st) day of the respective Interest Period with respect to any Competitive
Borrowings) to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities, then (i) such Lender
(through Administrative Agent) shall, within sixty (60) days after the end of
any Interest Period with respect to any Eurodollar Borrowing during which such
Lender was so required to maintain reserves, deliver to the applicable Borrower
a certificate stating (A) that such Lender was required to maintain reserves and
as a result such Lender incurred additional costs in connection with making such
Eurodollar Borrowing and (B) in reasonable detail, such Lender=s computations of
the amount of additional interest payable by such Borrower, pursuant to the
provisions below, and (ii) such Borrower shall, within ten (10) days after
receipt of any such certificate, pay to Administrative Agent, for the account of
such Lender, additional interest on the unpaid principal amount of such
Eurodollar Borrowing of such Lender made to it outstanding during the Interest
Period with respect to which the above-referenced certificate was delivered to
Administrative Agent, at a rate per annum equal to the difference obtained by
subtracting (x) the Eurodollar Rate for such Interest Period from (y) the rate
obtained by dividing such Eurodollar Rate by a percentage equal to 100% minus
the Reserve Requirement of such Lender for such Interest Period. The amount of
interest payable by any Borrower to any Lender as stated in any certificate
delivered to Administrative Agent pursuant to the provisions of this Section
3.16(a) shall be conclusive and binding for all purposes, absent manifest error.
The provisions of this Section 3.16(a) shall survive the termination of this
Agreement.
(b) Reserves. With respect to any Eurodollar Borrowing or any Fixed
Rate Borrowing, if (i) any change in present Law, any change in the
interpretation or application of any present Law, or any future Law imposes,
modifies, or deems applicable (or if compliance by any Lender with any such
requirement of any Tribunal results in) any requirement that any reserves
(including any marginal, emergency, supplemental or special reserves) be
maintained, and (ii) those reserves reduce any sums receivable by such Lender
under this Agreement or increase the costs incurred by such Lender in advancing
or maintaining any portion of any Eurodollar Borrowing or any Fixed Rate
Borrowing, then (unless the effect is already reflected in the rate of interest
then applicable under this Agreement) such Lender (through Administrative Agent)
shall deliver to the applicable Borrower a certificate setting forth in
reasonable detail the calculation of the amount necessary to compensate it for
such reduction or increase (which certificate is conclusive and binding absent
manifest error), and such Borrower shall within ten (10) days after receipt of
such certificate pay that amount to Administrative Agent, for the account of
such Lender. Such Lender shall notify Administrative Agent and such Borrower of
any such determination as soon as practicable (but in any event within 120 days)
after such Lender obtains actual knowledge of the event or condition prompting
such Lender to make such determination, and such Borrower shall not be liable
for any such amount or amounts that accrue between the date such notification is
required to be given and the date notice was actually given. The provisions of
and undertakings and indemnification set forth in this Section 3.13(b) shall
survive the satisfaction and payment of the Obligation and termination of this
Agreement.
<PAGE>
(c) Capital Adequacy. With respect to any Borrowing, if any change in
present Law or any future Law regarding capital adequacy or compliance by any
Credit Party with any request, directive, or requirement now existing or
hereafter imposed by any Tribunal regarding capital adequacy, or any change in
its written policies or in the risk category of this transaction, reduces the
rate of return on its capital as a consequence of its obligations under this
Agreement to a level below that which it otherwise could have achieved (taking
into consideration its policies with respect to capital adequacy) by an amount
deemed by it to be material (and it may, in determining the amount, use
reasonable assumptions and allocations of costs and expenses and use any
reasonable averaging or attribution method), then (unless the effect is already
reflected in the rate of interest then applicable under this Agreement) such
Credit Party (through Administrative Agent) shall notify the applicable Borrower
and deliver to such Borrower a certificate setting forth in reasonable detail
the calculation of the amount necessary to compensate it (which certificate is
conclusive and binding absent manifest error), and such Borrower shall within
ten (10) days after receipt of such certificate pay that amount to
Administrative Agent, for the account of such Credit Party. Such Credit Party
shall notify Administrative Agent and such Borrower of any such determination as
soon as practicable (but in any event within 120 days) after such Credit Party
obtains actual knowledge of the event or condition prompting such Lender to make
such determination, and such Borrower shall not be liable for any such amount or
amounts that accrue between the date such notification is required to be given
and the date notice was actually given. The provisions of and undertakings and
indemnification set forth in this Section 3.13(c) shall survive the satisfaction
and payment of the Obligation and termination of this Agreement.
(d) Taxes. Any Taxes payable by any Credit Party or ruled (by a
Tribunal) payable by any Credit Party in respect of this Agreement or any other
Loan Document shall, if permitted by Law, be paid by Borrowers, together with
interest and penalties, if any (except for (i) (1) Taxes imposed on or measured
by the overall net income of such Credit Party, (2) franchise or similar taxes
of such Credit Party, and (3) amounts requested to be withheld for Taxes
pursuant to the last sentence of Section 3.19, and (ii) such interest and
penalties incurred as a result of the gross negligence or willful misconduct of
any Credit Party). Such Credit Party (through Administrative Agent) shall notify
Borrowers and deliver to Borrowers a certificate setting forth in reasonable
detail the calculation of the amount of payable Taxes, which certificate is
conclusive and binding (absent manifest error), and Borrowers shall within ten
(10) days after receipt of such certificate pay that amount to Administrative
Agent for its account or the account of such Credit Party, as the case may be.
If such Credit Party subsequently receives a refund of the Taxes paid to it by
Borrowers, then the recipient shall promptly pay the refund to Borrowers.
3.17 Change in Law. If any Law makes it unlawful for any Lender
to make or maintain Eurodollar Borrowings, then such Lender shall promptly
notify Borrowers and Administrative Agent, and with respect to such Lender's
Borrowings (a) as to undisbursed funds, that requested Borrowing shall be made
as a Base Rate Borrowing, and (b) as to any outstanding Borrowing, (i) if
maintaining the Borrowing until the last day of the applicable Interest Period
is unlawful, the Borrowing shall be converted to a Base Rate Borrowing as of the
date of notice, and the applicable Borrower shall pay any related Funding Loss,
or (ii) if not prohibited by Law, the Borrowing shall be converted to a Base
Rate Borrowing as of the last day of the applicable Interest Period, or (iii) if
any conversion will not resolve the unlawfulness, then the applicable Borrower
shall promptly prepay the Borrowing, without penalty, together with any related
Funding Loss.
<PAGE>
3.18 Funding Loss. EACH BORROWER AGREES TO INDEMNIFY EACH LENDER
AGAINST, AND PAY TO EACH LENDER WITHIN TEN (10) DAYS AFTER DEMAND, ANY FUNDING
LOSS OF SUCH LENDER WITH RESPECT TO ANY BORROWING OF SUCH BORROWER. When any
Lender demands that any Borrower pay any Funding Loss, such Lender shall deliver
to such Borrower and Administrative Agent a certificate setting forth in
reasonable detail the basis for such Funding Loss and the calculation of the
amount, which calculation is conclusive and binding absent manifest error. The
provisions of and undertakings and indemnification set forth in this Section
3.18 shall survive the satisfaction and payment of the Obligation and
termination of this Agreement.
3.19 Foreign Lenders. Each Lender that is organized under the Laws
of any jurisdiction other than the United States of America or any State thereof
(a) represents to Administrative Agent and Borrowers that (i) no Taxes are
required to be withheld by Administrative Agent or Borrowers with respect to any
payments to be made to it in respect of the Obligation, and (ii) it has
furnished to Administrative Agent and Borrowers two duly completed copies of
U.S. Internal Revenue Service Form W-8 BEN, Form W-8 ECI, or any other tax form
acceptable to Administrative Agent (wherein it claims entitlement to complete
exemption from U.S. federal withholding tax on all interest payments under the
Loan Documents), and (b) covenants to (i) provide Administrative Agent and
Borrowers a new tax form upon the expiration or obsolescence of any previously
delivered form according to Law, duly executed and completed by it, and (ii)
comply from time to time with all Laws with regard to the withholding tax
exemption. If any of the foregoing is not true or the applicable forms are not
provided, then Borrowers or Administrative Agent (without duplication) may
deduct and withhold from interest payments under the Loan Documents United
States federal income tax at the full rate applicable under the Code.
3.20 Extension of Termination Date. ProLogis may request a one-year
extension of the Termination Date to June 6, 2004 by making such request in
writing (an "Extension Request") to Administrative Agent between sixty (60) and
ninety (90) days prior to June 6, 2003. The Termination Date shall be
automatically extended to June 6, 2004 if at the time of such request (a)
Borrowers pay to Administrative Agent the extension fee set forth in Section
4.4, and (b) no Default or Potential Default exists.
3.21 Option to Replace Lenders. If any Lender shall make demand for
payment or reimbursement pursuant to Section 3.16, or notify Borrowers of the
occurrence of the circumstances described in Section 3.17, then, provided that
(a) no Default has occurred and is continuing, and (b) the circumstances
resulting in such demand for payment or reimbursement are not applicable to all
Lenders, Borrowers may terminate the Commitment of such Lender, in whole but not
in part, by either (i) (A) giving such Lender and Administrative Agent not less
than five (5) Business Days' written notice thereof, which notice shall be
irrevocable and effective only upon receipt thereof by such Lender and
Administrative Agent and shall specify the date of such termination, and (B)
paying such Lender (and there shall become due and payable) on such date the
outstanding Principal Debt of all Borrowings made by such Lender, all interest
thereon, and any other Obligation owed to such Lender (including under Section
3.18), if any, and/or (ii) pursuant to the provisions of Section 14.11,
proposing the introduction of a replacement Lender reasonably satisfactory to
Administrative Agent, or obtaining the agreement of one or more existing
Lenders, to assume all or a portion of the Commitment of the Lender whose
Commitment is being terminated, on the effective date of such termination. Upon
the satisfaction of all of the foregoing conditions, such Lender that is being
terminated shall cease to be a "Lender" for purposes of this Agreement, provided
that Borrowers shall continue to be obligated to such Lender under Section 7.12
with respect to Indemnified Liabilities (as defined in Section 7.12) arising
prior to such termination.
SECTION 4 FEES.
<PAGE>
4.1 Treatment of Fees. The fees described in this Section 4 (a) are
not compensation for the use, detention, or forbearance of money, (b) are in
addition to, and not in lieu of, interest and expenses otherwise described in
this Agreement, (c) are payable in accordance with Section 3.1(b), (d) are
non-refundable, (e) to the fullest extent permitted by Law, bear interest, if
not paid when due, at the Default Rate, and (f) are calculated on the basis of
actual number of days (including the first day but excluding the last day)
elapsed, but computed as if each calendar year consisted of 360 days, unless
computation would result in an interest rate in excess of the Maximum Rate in
which event the computation is made on the basis of a year of 365 or 366 days,
as the case may be. The fees described in this Section 4 are in all events
subject to the provisions of Section 3.8.
4.2 Administrative Agent Fees. Borrowers shall pay to Administrative
Agent, solely for its own account, the fees described in the letter agreement
between Borrowers and Administrative Agent dated of even date herewith.
4.3 Commitment Fees.
(a) Borrowers shall pay to Administrative Agent the fees specified in
the letter agreement between Administrative Agent and Borrowers, which fee shall
be for the account of Administrative Agent and for the account of Lenders as
shall be agreed to between Administrative Agent and each Lender.
(b) Borrowers shall pay to Administrative Agent, for the ratable
account of each Lender, a facility fee equal to the product of (i) the average
daily amount of the Total Commitment (regardless of usage) for the period from
and including the Closing Date up to but excluding the Termination Date, times
(ii) a rate per annum equal to the Applicable Facility Fee Percentage. Such
facility fee shall be payable quarterly in arrears on the first (1st) day of
each January, April, July, and October during the term hereof, commencing on
July 1, 2000.
4.4 Extension Fee. Upon the extension of the Termination Date, as
provided in Section 3.20, Borrowers agree to pay Administrative Agent, on or
before June 6, 2003, for the ratable account of Lenders, an extension fee equal
to one-quarter of one percent (.25%) of the Commitments of Lenders.
4.5 Competitive Bid Fee. Each Competitive Bid Request hereunder
submitted by a Borrower to Administrative Agent shall be accompanied by a
competitive bid fee of $2,500 (payable solely to Administrative Agent for its
own account) and shall only request bids for a single Borrowing Date.
<PAGE>
SECTION F CONDITIONS PRECEDENT. Administrative Agent will not be obligated
to fund the initial Borrowing unless: (a) Administrative Agent has timely
received a Borrowing Request and all of the items described on Schedule 5; and
(b) prior to, or contemporaneously with, such initial Borrowing, all
Indebtedness under the Existing Credit Agreement is paid in full and all
commitments thereunder are terminated. In addition, Administrative Agent will
not be obligated to make any Borrowing (including any Competitive Borrowing),
unless on the applicable Borrowing Date (and after giving effect to the
requested Borrowing): (i) Administrative Agent shall have timely received a
Borrowing Request or Competitive Bid Request, as the case may be; (ii)
Administrative Agent shall have received any applicable fees; (iii) all of the
representations and warranties of Borrowers in the Loan Documents are true and
correct in all material respects (unless they speak to a specific date or are
based on facts which have changed by transactions contemplated or permitted by
this Agreement); (iv) no Default or Potential Default exists; and (v) the
funding of the Borrowing is permitted by Law. Upon Administrative Agent's
request, each Borrower shall deliver to Administrative Agent evidence
substantiating any of the matters in the Loan Documents that are necessary to
enable such Borrower to qualify for the Borrowing. Each condition precedent in
this Agreement (including those on Schedule 5) is material to the transactions
contemplated by this Agreement, and time is of the essence with respect to each
condition precedent. Lenders may fund any Borrowing without all conditions being
satisfied, but, to the extent permitted by Law, that funding and issuance shall
not be deemed to be a waiver of the requirement that each condition precedent be
satisfied as a prerequisite for any subsequent funding or issuance, unless
Lenders specifically waive each item in writing.
SECTION 6 REPRESENTATIONS AND WARRANTIES. Each Borrower represents and
warrants to the Credit Parties as follows:
6.1 Purpose of Credit Facility. Borrowers will use proceeds of the
Borrowings hereunder for working capital and general business purposes of the
Companies and their Unconsolidated Affiliates. No Borrower is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any "margin stock" within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System,
as amended. No part of the proceeds of any Borrowing will be used, directly or
indirectly, for a purpose that violates any Law, including the provisions of
Regulation U.
6.2 Corporate Existence, Good Standing, Authority and Compliance. Each
Company is duly formed, validly existing, and in good standing under the Laws of
the jurisdiction in which it is incorporated or formed as identified on Schedule
6.2 (as supplemented from time to time). Each Company (a) is duly qualified to
transact business and is in good standing as a foreign trust, corporation,
partnership, limited liability company, or other entity in each jurisdiction
where the nature and extent of its business and properties require due
qualification and good standing, (b) possesses all requisite authority, permits,
and power to conduct its business as is now being, or is contemplated by this
Agreement to be, conducted, and (c) is in compliance with all applicable Laws,
except in any such case where violation of the foregoing could not reasonably be
expected to result in a Material Adverse Event.
6.3 Affiliates. As of the date of this Agreement, ProLogis has
no Consolidated Affiliates or Unconsolidated Affiliates except as disclosed on
Schedule 6.2 (as supplemented from time to time to reflect changes as a result
of transactions permitted by this Agreement).
6.4 Authorization and Contravention. The execution and delivery by
each Borrower of each Loan Document or related document to which it is a party
and the performance by it of its obligations thereunder (a) are within its
trust, corporate, partnership, or limited liability company power, as the case
may be, (b) have been duly authorized by all necessary trust, corporate,
partnership, or limited liability company action, as the case may be, (c)
require no action by or filing with any Tribunal (other than any action or
filing that has been taken or made on or before the date of this Agreement), (d)
do not violate any provision of its Constituent Documents, (e) do not violate
any provision of Law or order of any Tribunal applicable to it, (f) do not
violate any material agreements to which it is a party, or (g) do not result in
the creation or imposition of any Lien on any asset of any Company, except in
such case where failure to do so could not reasonably be expected to result in a
Material Adverse Event.
6.5 Binding Effect. Upon execution and delivery by all parties
thereto, each Loan Document to which it is a party will constitute a legal and
binding obligation of each Borrower, enforceable against it in accordance with
its terms, subject to applicable Debtor Relief Laws and general principles of
equity.
<PAGE>
6.6 Financial Statements; Fiscal Year. The Current Financials were
prepared in accordance with GAAP (except that quarterly Financial Statements may
omit footnotes required by GAAP) and present fairly, in all material respects,
the consolidated financial condition, results of operations, and cash flows of
the Companies as of, and for the portion of the fiscal year ending on, the date
or dates thereof (subject only to normal audit adjustments). All material
liabilities of the Companies as of the date or dates of the Current Financials
are reflected therein or in the notes thereto. Except for transactions directly
related to, or specifically contemplated by, the Loan Documents or disclosed in
the Current Financials, no subsequent material adverse changes have occurred in
the consolidated financial condition of the Companies from that shown in the
Current Financials, nor has any Company incurred any subsequent material
liability. The fiscal year of the Companies ends on December 31.
6.7 Litigation. Except as disclosed on Schedule 6.7 and as
otherwise disclosed pursuant to Section 7.1(d)(i), no Company is subject to, or
aware of the threat of, any Litigation that is reasonably likely to be
determined adversely to such Company and which, if so adversely determined, is
reasonably likely to result in a Material Adverse Event. Except as permitted
under Section 10.4, no outstanding and unpaid judgments against any Company
exist.
6.8 Taxes.
(a) All Tax returns of the Companies required to be filed have been
filed (or extensions have been granted) before delinquency, except for returns
for which the failure to file could not reasonably be expected to result in a
Material Adverse Event, and all Taxes imposed upon the Companies that are due
and payable have been paid before delinquency or are being contested in good
faith by appropriate proceedings diligently conducted and for which reserves in
accordance with GAAP or otherwise reasonably acceptable to Administrative Agent
have been provided.
(b) As of the date hereof, no United States federal income tax returns
of the "affiliated group" (as defined in the Code) of which any Borrower is a
member have been examined and closed. The members of such affiliated group have
filed all United States Federal income tax returns and all other material tax
returns which are required to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment received by or any of
them. The charges, accruals, and reserves on the books of each Borrower in
respect of taxes or other governmental charges are, in the opinion of Borrowers,
adequate.
(c) ProLogis qualifies as a REIT.
6.9 Environmental Matters. Except as disclosed on Schedule 6.9,
and except for any of the following which could not reasonably be expected to
result in a Material Adverse Event, (a) no environmental condition or
circumstance exists that adversely affects any Company's properties or
operations, (b) no Company has received any report of any Company's violation of
any Environmental Law, (c) no Company knows that any Company is under any
obligation to remedy any violation of any Environmental Law, or (d) no facility
of any Company is used for, or to the knowledge of any Company has been used
for, storage, treatment, or disposal of any Hazardous Substance, except for (i)
the storage and use of cleaning and maintenance materials, used and stored in
commercially reasonable quantities and in compliance with applicable
Environmental Laws, and (ii) light manufacturing and distribution activities of
tenants, in compliance with applicable Environmental Laws, provided that such
tenants are not primarily engaged in the treatment, processing, recycling or
disposal of any Hazardous Substance or in any other activity that would give
rise to the release of any Hazardous Substance on such facility. Each Company
has taken prudent steps to determine that its properties and operations do not
violate any Environmental Law, other than violations that, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Event.
<PAGE>
6.10 Pension Plans. Except as disclosed on the Financial Statements
of ProLogis dated as of December 31, 1999, and except to the extent that any
such termination, liability, penalty, or fine would not (either individually or
in the aggregate) reasonably be expected to have a Material Adverse Event, (a)
no steps have been taken to terminate any Pension Plan, and no contribution
failure has occurred with respect to any Pension Plan sufficient to give rise to
a Lien under any Applicable Pension Laws, (b) no condition exists or event or
transaction has occurred with respect to any Pension Plan which could reasonably
be expected to result in the incurrence by any Borrower or any ERISA Affiliate
of any material liability with respect to any contribution thereto, fine, or
penalty, and (c) neither any Borrower nor any ERISA Affiliate has any material
contingent liability with respect to any post-retirement benefit under a Pension
Plan.
6.11 Properties. Each Company has good title to all its property
reflected on the Current Financials (except for property that is obsolete or
that has been disposed in the ordinary course of business or, after the date of
this Agreement, as otherwise permitted by Section 8.8 or Section 8.9).
6.12 Locations. Each Borrower's chief executive office is located
at the address on Schedule 6.12 (as supplemented from time to time). Each
Borrower's books and records are located at its chief executive office.
6.13 Government Regulations. No Company is subject to regulation
under the Investment Company Act of 1940, as amended, or the Public Utility
Holding Company Act of 1935, as amended.
6.14 Transactions with Affiliates. Except as disclosed on Schedule
6.14 (as supplemented from time to time) (if the disclosures are approved by
Administrative Agent) or as permitted by Section 8.4, no Company is a party to a
material transaction with any of its Affiliates, other than transactions in the
ordinary course of business and upon fair and reasonable terms not materially
less favorable than it could obtain or could become entitled to in an
arm=s-length transaction with a Person that was not its Affiliate.
6.15 Insurance. Each Company maintains with financially sound,
responsible, and reputable insurance companies or associations (or, as to
workers= compensation or similar insurance, with an insurance fund or by
self-insurance authorized by the jurisdictions in which it operates) insurance
concerning its properties and businesses against casualties and contingencies
and of types and in amounts (and with co-insurance and deductibles) as is
customary in the case of similar businesses.
6.16 Labor Matters. No actual or, to any Borrower's knowledge,
threatened strikes, labor disputes, slow downs, walkouts, or other concerted
interruptions of operations by the employees of any Company that could
reasonably be expected to result in a Material Adverse Event exist. All payments
due from each Company for employee health and welfare insurance have been paid
or accrued as a liability on its books, other than non-payments that are not,
individually or collectively, reasonably expected to result in a Material
Adverse Event.
6.17 Solvency. On each Borrowing Date, each Borrower is, and after
giving effect to the requested Borrowing will be, Solvent.
<PAGE>
6.18 Full Disclosure. Each material fact or condition relating to the
financial condition or business of any Company which could reasonably be
expected to result in a Material Adverse Event has been disclosed to
Administrative Agent. All information previously furnished, furnished on the
date of this Agreement, and furnished in the future, by any Company to
Administrative Agent in connection with the Loan Documents (a) was, is, and will
be, true and accurate in all material respects or based on good faith estimates
on the date the information is stated or certified, and (b) did not, does not,
and will not, fail to state any material fact the omission of which would
otherwise make any such information materially misleading, in each case taken as
a whole.
6.19 Exemption from ERISA; Plan Assets. The assets of each Borrower
are not "plan assets" as defined in 29 C.F.R.Section 2510.3-101(a)(1) (or any
successor regulation) of any Pension Plan.
6.20 Minority Interests. All Consolidated Affiliates of ProLogis
having minority interests are set forth on Schedule 6.20 (as supplemented from
time to time).
SECTION 7 AFFIRMATIVE CONVENANTS. So long as Lenders are committed to fund
any Borrowings under this Agreement and until the Obligation is paid in full,
each Borrower covenants and agrees that, unless Required Lenders otherwise
consent in writing (except as provided in Section 14.9 with respect to matters
requiring consent or approval of all Lenders):
7.1 Items to be Furnished. ProLogis shall cause the following to be
furnished to Administrative Agent (with sufficient copies for each Lender):
(a) Promptly after preparation, and no later than one hundred (100)
days after the last day of each fiscal year of ProLogis, Financial Statements
showing the consolidated financial condition and results of operations of the
Companies as of, and for the year ended on, that last day, accompanied by:
(i) the unqualified opinion of the firm of Arthur Andersen &
Co. or another firm of nationally-recognized independent certified
public accountants, based on an audit using generally accepted auditing
standards, that the Financial Statements were prepared in accordance
with GAAP and present fairly, in all material respects, the
consolidated financial condition and results of operations of the
Companies;
(ii) any management letter prepared by the accounting firm
delivered in connection with its audit;
(iii) a certificate from the accounting firm to Administrative
Agent indicating that during its audit it obtained no knowledge of any
Default or Potential Default or, if it obtained knowledge, the nature
and period of existence thereof; and
(iv) a Compliance Certificate with respect to the Financial
Statements.
(b) Promptly after preparation, and no later than fifty (50) days after
the last day of each fiscal quarter (except the last) of ProLogis, (i) Financial
Statements showing the consolidated financial condition and results of
operations of the Companies for the fiscal quarter and for the period from the
beginning of the current fiscal year to the last day of the fiscal quarter, and
(ii) a Compliance Certificate with respect to the Financial Statements.
(c) Promptly after receipt, a copy of each interim or special audit
report and management letter issued by independent accountants with respect to
any Company or its financial records.
<PAGE>
(d) Notice, promptly after a Responsible Officer of any Borrower knows
of (i) the existence and status of any Litigation that, if determined adversely
to any Company, could reasonably be expected to result in a Material Adverse
Event, (ii) any change in any material fact or circumstance represented or
warranted by any Company in any Loan Document, (iii) the receipt by any Company
of notice of any violation or alleged violation of any Applicable Pension Law or
any Environmental Law which individually or collectively with other violations
or allegations could reasonably be expected to result in a Material Adverse
Event, or (iv) a Default or Potential Default, specifying the nature thereof and
what action such Borrower has taken, is taking, or proposes to take with respect
thereto.
(e) Promptly after filing, true, correct, and complete copies of all
material reports or filings filed by or on behalf of any Company with any
Tribunal (including copies of each Form 10-K, Form 10-Q, and Form S-8 filed by
or on behalf of any Company with the Securities and Exchange Commission).
(f) Promptly after the mailing or delivery thereof, copies of all
material reports or other information from ProLogis generally to the holders of
its common or preferred Stock.
(g) Promptly upon the consummation thereof, a description in reasonable
detail of any acquisition of material assets other than investments in
Industrial Properties.
(h) Promptly upon any Change in Control, notice of such event together
with a description of the transaction giving rise thereto.
(i) Promptly upon written request by Administrative Agent and to the
extent available after reasonable inquiry by ProLogis, a list of all registered
major holders of Stock of ProLogis.
(j) Promptly upon the filing thereof, the annual report of ProLogis
filed with the Maryland Department of Corporations.
(k) Promptly upon the receipt of notice thereof, and in any event
within five (5) Business Days after any change in the Moody's Rating, the S & P
Rating or the Fitch Rating, notice of such change.
(l) Promptly upon reasonable request by Administrative Agent,
information (not otherwise required to be furnished under the Loan Documents)
respecting the business affairs, assets, and liabilities of the Companies.
7.2 Use of Proceeds. Each Borrower shall use the proceeds of
Borrowings only for the purposes represented in this Agreement.
7.3 Books and Records. Each Borrower shall, and shall cause each of
the other Companies to, maintain books, records, and accounts necessary to
prepare financial statements in accordance with GAAP.
<PAGE>
7.4 Inspections. Upon reasonable request, and subject to Section
14.13, each Borrower shall, and shall cause each of the other Companies to,
allow Administrative Agent (or its Representatives who may be accompanied by
Representatives of one (1) or more Lenders) to inspect any of its properties, to
review reports, files, and other records and to make and take away copies, to
conduct tests or investigations, and to discuss (provided that such Borrower is
given the opportunity to be present for such discussions), any of its affairs,
conditions, and finances with its other creditors, directors, officers,
employees, or representatives from time to time, during reasonable business
hours.
7.5 Taxes. Each Borrower shall, and shall cause each of the other
Companies to, (a) promptly pay when due any and all Taxes (other than property
and franchise Taxes), and (b) promptly pay any and all property and franchise
Taxes when due or (in circumstances where there is no material risk of any levy
or execution of any Lien on the assets or revenues in relation to which such
property or franchise Taxes are imposed prior to or during the thirty (30) day
period referred to below and no material risk of attachment or similar process
in relation to such assets or revenues prior to or during the thirty (30) day
period referred to below and provided that in such circumstances the aggregate
amount of such property or franchise Taxes does not exceed $10,000,000) within
thirty (30) days of receipt of notice by the relevant Company that such Taxes
are due and payable. This Section 7.5 shall not apply to Taxes which are being
contested in good faith by lawful proceedings diligently conducted, against
which reserve or other provision required by GAAP has been made, and in respect
of which levy and execution of any Lien have been and continue to be stayed.
7.6 Expenses. Each Borrower shall promptly pay upon reasonable
notice (a) all costs, fees, and expenses paid or incurred by Administrative
Agent in connection with the arrangement, syndication, and negotiation of the
loan evidenced by this Agreement and the other Loan Documents and the
negotiation, preparation, delivery, and execution of the Loan Documents and any
related amendment, waiver, or consent (including in each case the reasonable
fees and expenses of Administrative Agent's counsel), and (b) all costs, fees,
and expenses of Administrative Agent and, after the occurrence and during the
continuance of a Default, each Credit Party incurred by each Credit Party in
connection with the enforcement of the obligations of any Borrower or Borrowers
arising under the Loan Documents or the exercise of any Rights arising under the
Loan Documents (including reasonable attorneys= fees, expenses, and costs paid
or incurred in connection with any workout or restructure and any action taken
in connection with any Debtor Relief Laws), all of which shall be a part of the
Obligation and shall bear interest, if not paid within ten (10) days after
Borrowers= receipt of an invoice in reasonable detail, at the Default Rate until
repaid.
7.7 Maintenance of Existence, Assets, and Business. Except as
otherwise permitted by Section 8.09, each Borrower shall, and shall cause each
of the other Companies to, continue to engage in business of the same general
type as now conducted by such Company, and will preserve, renew, and keep in
full force and effect, and will cause each other Company to preserve, renew, and
keep in full force and effect, their respective trust or corporate existence and
their respective rights, privileges and franchises necessary or desirable in the
normal conduct of business, except in any such case where failure to do so would
not reasonably be expected to result in a Material Adverse Event.
7.8 Insurance. Each Borrower shall, and shall cause each of the
other Companies to, maintain with financially sound, responsible, and reputable
insurance companies or associations (or, as to workers' compensation or similar
insurance, with an insurance fund or by self-insurance authorized by the
jurisdictions in which it operates) insurance concerning its properties and
businesses against casualties and contingencies and of types and in amounts (and
with co-insurance and deductibles) as is customary in the case of similar
businesses. Each Borrower shall deliver to Administrative Agent (i) at
Administrative Agent's request from time to time, full information as to the
insurance carried, (ii) within five (5) days of receipt of notice from any
insurer, a copy of any notice of cancellation or material change in coverage
from that existing on the date of this Agreement, and (iii) forthwith, notice of
any cancellation or non-renewal of coverage by such Borrower. At Administrative
Agent=s request, each Borrower shall, and shall cause each of the other
Companies to, deliver to Administrative Agent evidence of insurance for each
policy of insurance and evidence of payment of all premiums.
<PAGE>
7.9 Preservation and Protection of Rights. Each Borrower shall,
and shall cause each of the other Companies to, perform the acts and duly
authorize, execute, acknowledge, deliver, file, and record any additional
writings as Administrative Agent may reasonably deem necessary or appropriate to
preserve and protect the Rights of Administrative Agent and Lenders under any
Loan Document.
7.10 Environmental Laws. Each Borrower shall, and shall cause each
of the other Companies to (a) conduct its business so as to comply with all
applicable Environmental Laws and shall promptly take corrective action to
remedy any non-compliance with any Environmental Law, except where failure to
comply or take action could not reasonably be expected to result in a Material
Adverse Event, and (b) establish and maintain a management system designed to
ensure compliance with applicable Environmental Laws and minimize financial and
other risks to the Companies arising under applicable Environmental Laws or as
the result of environmentally related injuries to Persons or property. Each
Borrower shall deliver reasonable evidence of compliance with the foregoing
covenant to Administrative Agent within thirty (30) days after any request from
Administrative Agent.
7.11 Indemnification. EACH BORROWER SHALL, AND SHALL CAUSE EACH
OF THE SUBSIDIARY GUARANTORS TO INDEMNIFY, PROTECT, AND HOLD THE CREDIT PARTIES
AND THEIR RESPECTIVE REPRESENTATIVES, SUCCESSORS, AND ASSIGNS (INCLUDING ALL
OFFICERS, DIRECTORS, EMPLOYEES, AND AGENTS) (COLLECTIVELY, THE "INDEMNIFIED
PARTIES") HARMLESS FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS,
LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, CLAIMS, AND PROCEEDINGS
AND ALL COSTS, EXPENSES (INCLUDING ALL REASONABLE ATTORNEYS' FEES AND LEGAL
EXPENSES WHETHER OR NOT SUIT IS BROUGHT) AND DISBURSEMENTS OF ANY KIND OR NATURE
(THE "INDEMNIFIED LIABILITIES") THAT MAY AT ANY TIME BE IMPOSED ON, INCURRED BY
OR ASSERTED AGAINST THE INDEMNIFIED PARTIES, IN ANY WAY RELATING TO OR ARISING
OUT OF (A) THE DIRECT OR INDIRECT RESULT OF THE VIOLATION BY ANY COMPANY OF ANY
ENVIRONMENTAL LAW, (B) ANY COMPANY'S GENERATION, MANUFACTURE, PRODUCTION,
STORAGE, RELEASE, THREATENED RELEASE, DISCHARGE, DISPOSAL, OR PRESENCE IN
CONNECTION WITH ITS PROPERTIES OF A HAZARDOUS SUBSTANCE (INCLUDING (I) ALL
DAMAGES OF ANY USE, GENERATION, MANUFACTURE, PRODUCTION, STORAGE, RELEASE,
THREATENED RELEASE, DISCHARGE, DISPOSAL, OR PRESENCE, OR (II) THE COSTS OF ANY
ENVIRONMENTAL INVESTIGATION, MONITORING, REPAIR, CLEANUP, OR DETOXIFICATION AND
THE PREPARATION AND IMPLEMENTATION OF ANY CLOSURE, REMEDIAL, OR OTHER PLANS), OR
(C) THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN. ALTHOUGH
EACH INDEMNIFIED PARTY HAS THE RIGHT TO BE INDEMNIFIED UNDER THE LOAN DOCUMENTS
FOR ITS OWN ORDINARY NEGLIGENCE, NO INDEMNIFIED PARTY HAS THE RIGHT TO BE
INDEMNIFIED UNDER THE LOAN DOCUMENTS FOR ITS OWN FRAUD, GROSS NEGLIGENCE, OR
WILLFUL MISCONDUCT. THE PROVISIONS OF AND UNDERTAKINGS AND INDEMNIFICATION SET
FORTH IN THIS SECTION 7.12 SHALL SURVIVE THE SATISFACTION AND PAYMENT OF THE
OBLIGATION AND TERMINATION OF THIS AGREEMENT.
7.12 REIT Status. At all times, ProLogis (including its organization
and method of operations and those of its subsidiaries) shall qualify as a REIT.
7.13 Each Borrower shall, promptly after the date hereof, enter into
such Hedging Agreements in respect of interest rate and currency risks as are
reasonably acceptable to Administrative Agent.
<PAGE>
7.14 Subsidiary Guaranties; Intercompany Indebtedness.
(a) ProLogis shall cause each of its Consolidated Affiliates (other
than Subsidiary Borrowers, International Holding Companies, International
Consolidated Affiliates, and the Consolidated Affiliates listed on Schedule
7.14-1) to execute a Subsidiary Guaranty. To the fullest extent permitted under
applicable Laws, ProLogis shall cause each of its International Consolidated
Affiliates (other than Frigoscandia and Kingspark if either is or becomes a
Consolidated Affiliate) and its International Holding Companies to execute a
Subsidiary Guaranty, except to the extent that the execution of a Subsidiary
Guaranty would result in material adverse tax Liabilities to any Borrower in the
United States.
(b) Pursuant to the Pledge Agreements, ProLogis shall, and shall cause
each of its Consolidated Affiliates to, grant to Administrative Agent, for the
benefit of the Credit Parties, a first-priority Lien in all Indebtedness of (i)
each Consolidated Affiliate of ProLogis that is not a Subsidiary Guarantor, and
(ii) each Unconsolidated Affiliate (and its Consolidated Affiliates) to any
Company if the aggregate amount of Indebtedness of such Unconsolidated Affiliate
(and its Consolidated Affiliates) to any Company or Companies equals or exceeds
$10,000,000, including, without limitation, the existing Indebtedness listed on
Schedule 7.14-2, except to the extent that the granting of such Lien would
result in material adverse tax Liabilities to any Borrower in the United States.
SECTION I NEGATIVE COVENANTS. So long as Lenders are committed to fund
Borrowings and until the Obligation is paid in full, each Borrower covenants and
agrees that, unless Required Lenders otherwise consent in writing (except as
provided in Section 14.9 with respect to matters requiring consent or approval
of all Lenders):
8.1 Payment of Liabilities. Borrowers shall not, and shall not
permit any other Company to, voluntarily prepay principal of, or interest on,
any Liabilities other than the Obligation, if a Default or Potential Default
exists.
8.2 Employee Plans. Except where a Material Adverse Event would not
result, Borrowers shall not, and shall not permit any ERISA Affiliate to, permit
any of the events or circumstances described in Section 6.10 to exist or occur.
8.3 Debt.
(a) Secured Debt. Borrowers shall not, and shall not permit any other
Company to, as of any date during the term hereof, create, incur, or suffer to
exist any Secured Debt, other than Secured Debt that is either:
(i) on-Recourse Debt not to exceed in the aggregate at any
time outstanding twenty-five percent (25%) of Total Asset Value; and
(ii) Recourse Debt secured by International Properties not to
exceed $300,000,000 in the aggregate at any time outstanding.
<PAGE>
(b) Recourse Debt. Borrowers shall not, and shall not permit any other
Company to, become obligated (as guarantor or otherwise) with respect to any
Indebtedness of any Unconsolidated Affiliate other than Indebtedness of (i)
Unconsolidated Affiliates that guarantee the Obligation pursuant to a guaranty
agreement in form and substance acceptable to Administrative Agent, (ii) Garonor
not to exceed 200,000,000 French Francs, (iii) Frigoscandia not to exceed
180,000,000 Deutsche Marks, and (iv) Kingspark not to exceed 15,000,000 British
Pound Sterling.
8.4 Transactions with Affiliates. Except as disclosed on Schedule
6.14 (as supplemented from time to time to reflect changes as a result of
transactions permitted by this Agreement or approved by Required Lenders),
Borrowers shall not, and shall not permit any other Company to, enter into any
material transaction with any of its Affiliates, other than (a) transactions
with existing shareholders of Consolidated Affiliates and Unconsolidated
Affiliates, (b) transactions in the ordinary course of business and upon fair
and reasonable terms not materially less favorable than it could obtain or could
become entitled to in an arm's-length transaction with a Person that was not its
Affiliate or that comply with the requirements of the North America Security
Administrators Association's Statement of Policy of Real Estate Investment
Trusts, (c) payments to or from such Affiliates under leases of commercial space
on market terms, (d) payment of fees under property management agreements under
terms and conditions available from qualified management companies, (e)
intercompany Liabilities and other Investments between any Company and its
Consolidated Affiliates and Unconsolidated Affiliates otherwise permitted
pursuant to this Agreement, (f) transactions between Companies, and (g)
transactions otherwise permitted hereunder.
8.5 Compliance with Laws and Documents. Borrowers shall not, and
shall not permit any other Company to, (a) violate the provisions of any Laws
applicable to it or of any material agreement to which it is a party if that
violation alone, or when aggregated with all other violations, could reasonably
be expected to result in Material Adverse Event, (b) violate the provisions of
its charter or bylaws, or (c) repeal, replace or amend any provision of its
charter or bylaws if that action could reasonably be expected to result in a
Material Adverse Event.
8.6 Loans, Advances, and Investments. ProLogis shall not permit,
as of any date, any Company or the Companies, on a consolidated basis, to have
or make any direct or indirect Investments in:
(a) Raw land (other than land under development or planned for
commencement of development within twelve (12) months following the date such
land was acquired) exceeding in the aggregate ten percent (10%) of Total Asset
Value;
(b) Non-Industrial Properties and New Ventures exceeding in the
aggregate ten percent (10%) of Total Asset Value;
(c) Refrigerated Warehouse Properties (including Investments through
Unconsolidated Affiliates) exceeding in the aggregate twenty percent (20%) of
Total Asset Value;
(d) International Properties, Consolidated Affiliates domiciled outside
of the United States, Unconsolidated Affiliates domiciled outside of the United
States, and loans or advances to Consolidated Affiliates and Unconsolidated
Affiliates for international purposes exceeding in the aggregate forty percent
(40%) of Total Asset Value;
(e) The Stock of any Person (other than Consolidated Affiliates) not to
exceed (i) from the Closing Date through December 31, 2000, thirty percent (30%)
of Total Asset Value, and (ii) thereafter, twenty-five percent (25%) of Total
Asset Value; and
<PAGE>
(f) Loans, advances, and extensions of credit to Persons other than (i)
loans, advances, and extensions of credit to Consolidated Affiliates and
Unconsolidated Affiliates to the extent permitted hereunder, (ii) loans,
advances, and extensions of credit to Persons secured by valid and enforceable
first priority liens on real estate for the purpose of acquiring and developing
such property for eventual ownership by, or to be acquired by, a Borrower prior
to, or within a reasonable period of time consistent with a business purpose
after, the completion of construction or development of such property, (iii)
loans and advances to directors, officers, and employees pursuant to ProLogis'
existing long-term incentive plan or similar incentive compensation
arrangements, and (iv) travel and similar advances to officers and employees in
the ordinary course of business.
ProLogis shall not permit, as of any date, the Companies= aggregate direct and
indirect Investments of the types described in (a), (b), (c), and (d) above to
exceed in the aggregate fifty percent (50%) of Total Asset Value.
For purposes of the foregoing, (i) the amount of any Investment held by ProLogis
and its Consolidated Affiliates shall be calculated as the amount of such
Investment determined in accordance with GAAP plus accumulated depreciation with
respect to such Investment, and (ii) the amount of Investments held through
Unconsolidated Affiliates shall be calculated using the Companies= Share of the
amount of the underlying Properties or other assets of such Unconsolidated
Affiliates determined in accordance with GAAP plus accumulated depreciation with
respect to such Properties or other assets.
8.7 Dividends and Distributions. ProLogis shall not, on a consolidated
basis, declare, make, or pay any Distributions or Redemptions, other than (a)
Permitted Distributions, (b) Permitted Redemptions, and (c) Distributions
declared, made, or paid by (i) ProLogis wholly in the form of its Stock, and
(ii) to the extent it can do so, any Consolidated Affiliate to ProLogis or any
other Company. ProLogis shall not, and shall not permit any other Company to,
enter into or permit to exist any arrangement or agreement (other than this
Agreement, restrictions similar to those contained in this Agreement contained
in that certain Multicurrency Revolving Credit Facility Agreement dated December
17, 1999, executed by ProLogis, as Guarantor, PLD Europe Financial B.V. and PLD
UK Finance B.V., as Borrowers, ABN Amro Bank N.V., as Arranger, Agent, and L/C
Issuing Bank, and the Banks defined therein, and customary restrictions in loan
documents evidencing Indebtedness of PLLS and Frigoscandia otherwise permitted
hereunder) that prohibits it from paying Distributions to the holders of its
Stock.
8.8 Sale of Assets. Borrowers shall not, and shall not permit any
other Company to, sell, assign, lease, transfer, or otherwise dispose of any of
its assets, other than to a Company, and except for (a) occasional sales,
leases, or other dispositions of immaterial assets for consideration not less
than fair market value, (b) sales, leases, or other dispositions of assets that
are obsolete or have negligible fair market value, (c) sales of equipment for a
fair and adequate consideration (but if replacement equipment is necessary for
the proper operation of the business of the seller, the seller must promptly
replace the sold equipment), and (d) sales or other transfers of Properties
during any twelve (12) month period having a fair market value of not more than
twenty percent (20%) of the fair market value of all Properties of the Companies
prior to such sale or transfer.
8.9 Mergers and Dissolutions. Borrowers shall not, and shall not
permit any other Company to, merge or consolidate with any other Person or
liquidate, wind up or dissolve (or suffer any liquidation or dissolution);
provided, however, that the foregoing shall not operate to prevent (a) mergers
or consolidations of any Consolidated Affiliate of a Borrower into such Borrower
or any Consolidated Affiliate of such Borrower (if such transaction does not
reduce the net worth of such Borrower determined in accordance with GAAP, except
for minor transaction costs related to such merger or consolidation), or (b) a
merger or consolidation in which a Borrower is the surviving entity and,
immediately after giving effect to such merger or consolidation, no Change in
Control has occurred.
<PAGE>
8.10 Assignment. Borrowers shall not, and shall not permit any
other Company to, assign or transfer any of its Rights, duties, or obligations
under any of the Loan Documents.
8.11 Fiscal Year and Accounting Methods. No Borrower shall change
its fiscal year or its method of accounting (other than immaterial changes in
methods or as required by GAAP).
8.12 New Businesses. Borrowers shall not, and shall not permit
any other Company to, engage in any business except (a) the businesses in which
they are presently engaged and any other reasonably related business (including
distribution and logistics services), and (b) New Ventures (so long as the
Investment in such New Ventures is otherwise permitted by Section 8.6).
8.13 Government Regulations. Borrowers shall not, and shall not
permit any other Company to, conduct its business in a way that it becomes
regulated under the Investment Company Act of 1940, as amended, or the Public
Utility Holding Company Act of 1935, as amended.
8.14 Negative Pledge Agreements. Borrowers shall not, and shall not
permit any other Company to, enter into any negative pledge or other agreement
with any other Person such that ProLogis, any Subsidiary Borrower, or any
Unencumbered Company shall be prohibited from granting to Administrative Agent,
for the benefit of the Credit Parties, a first priority Lien in any Unencumbered
Property whose Adjusted EBITDA is used in the calculation of Unencumbered Debt
Service Coverage Ratio. Nothing herein should be construed as creating a Lien.
SECTION 9 FINANCIAL COVENANTS. So long as Lenders are committed to fund
Borrowings under this Agreement and until the Obligation is paid and performed
in full, ProLogis covenants and agrees with the Credit Parties that ProLogis
will not directly or indirectly permit:
9.1 Leverage Ratio. The Leverage Ratio, as of any date, to exceed the
Maximum Leverage Ratio.
9.2 Minimum Consoldiated Net Worth. Consolidated Net Worth of the
Companies on a consolidated basis, as of any date, to be less than the sum of
(a) $2,500,000,000, plus (b) seventy percent (70%) of the amount of Net Proceeds
of any Equity Issuances (other than the Net Proceeds from the issuance of
preferred Stock in substitution and replacement of other preferred Stock that
ProLogis redeemed or otherwise acquired pursuant to a Permitted Redemption to
the extent such Net Proceeds do not exceed the amount of such Permitted
Redemption) by ProLogis or any other Company (except for Equity Issuance to any
other Company) subsequent to the Closing Date.
9.3 Interest Expense Coverage Ratio. The Interest Expense Coverage
Ratio, as of the last day of each fiscal quarter during the term hereof, to be
less than 2.0 to 1.0.
9.4 Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio,
as of the last day of each fiscal quarter during the term hereof, to be less
than 1.75 to 1.0.
9.5 Preferred Dividend Coverage Ratio. The Preferred Dividend
Coverage Ratio, as of the last day of each fiscal quarter during the term
hereof, to be less than 1.5 to 1.0.
<PAGE>
9.6 Unemcumbered Debt Service Coverage Ratio. The Unencumbered Debt
Service Coverage Ratio, as of the last day of each fiscal quarter during the
term hereof, to be less than 1.75 to 1.0.
9.7 Unencumbered Property Value Ratio. The Unencumbered Property
Value Ratio, as of any date, to be less than 1.50 to 1.0.
SECTION 10 DEFAULT. The term "Default" means the occurrence of any one or
more of the following events:
10.1 Payment of Obligation. The failure of any Borrower (a) to pay
any part of the Obligation (other than the Principal Debt or any other principal
of the Obligation) within three (3) days after it becomes due and payable under
the Loan Documents, and (b) to pay any Principal Debt or any other principal of
the Obligation when it becomes due and payable under the Loan Documents.
10.2 Covenents. The failure of any Borrower (and, if applicable,
any other Company) to punctually and properly perform, observe and comply with:
(a) Any applicable covenant or agreement contained in Sections 7.15,
8.3, 8.7, 8.14, and 9; or
(b) Any other covenant or agreement contained in any Loan Document
(other than the covenants to pay the Obligation and the covenants in clause (a)
preceding), and such failure continues for thirty (30) days after the first to
occur of (i) a Responsible Officer of any Borrower obtaining knowledge or (ii)
Borrowers' receipt of notice from Administrative Agent, of such failure.
10.3 Debtor Relief. Any Company (a) is not Solvent, (b) fails to pay
its Liabilities generally as they become due, (c) voluntarily seeks, consents
to, or acquiesces in the benefit of any Debtor Relief Law, or (d) becomes a
party to or is made the subject of any proceeding provided for by any Debtor
Relief Law, other than as a creditor or claimant, that could suspend or
otherwise adversely affect the Rights of any Credit Party granted in the Loan
Documents (unless, if the proceeding is involuntary, the applicable petition is
dismissed within ninety (90) days after its filing).
10.4 Judgments and Attachments. Any Company fails, within sixty (60)
days after entry, to pay, bond or otherwise discharge any judgment or order for
the payment of money in excess of $5,000,000 (individually or collectively) or
any warrant of attachment, sequestration or similar proceeding against any
Company's assets having a value (individually or collectively) in excess of
$5,000,000 which is neither (a) stayed on appeal nor (b) diligently contested in
good faith by appropriate proceedings and for which adequate reserves have been
set aside on its books in accordance with GAAP.
10.5 Government Action. (a) A final non-appealable order is issued by
any Tribunal (including the United States Justice Department) requiring any
Company to divest all or a substantial portion of its assets under any
antitrust, restraint of trade, unfair competition, industry regulation or
similar Laws, or (b) any Tribunal condemns, seizes, or otherwise appropriates,
or takes custody or control of all or any substantial portion of the assets of
the Companies, taken as a whole.
10.6 Misrepresentation. Any material representation or warranty made
by any Borrower or any Subsidiary Guarantor contained in any Loan Document or in
any certificate or report delivered under this Agreement at any time proves to
have been incorrect in any material respect when made.
<PAGE>
10.7 Default Under Other Agreements.
(a) Any Company shall fail to make any payment in respect of any
Liability when due or within any applicable grace period; provided that the
failure of any Company to make any payment when due or within any applicable
grace period in respect of (i) any Recourse Debt arising in one or more related
or unrelated transactions in an aggregate principal amount not exceeding
$10,000,000, and (ii) any non-recourse Liabilities arising in one or more
related or unrelated transactions in an aggregate principal amount not exceeding
$50,000,000, shall not constitute a Default hereunder; or
(b) the acceleration of the maturity of any Liabilities of any Company
or default shall occur in the payment of any Liabilities of any Company or in
respect of any note or credit agreement relating to any such Liabilities and
such default shall continue for more than the period of grace, if any, specified
therein or otherwise granted by the lender thereof; provided that the
acceleration of the maturity of (i) any Recourse Debt arising in one or more
related or unrelated transactions in an aggregate principal amount not exceeding
$10,000,000, and (ii) any non-recourse Liabilities arising in one or more
related or unrelated transactions in an aggregate principal amount not exceeding
$50,000,000 shall not constitute a Default hereunder;
10.8 Validity and Enforceability of Loan Documents. Except in
accordance with its terms or as otherwise expressly permitted by this Agreement,
any Loan Document at any time after its execution and delivery ceases to be in
full force and effect in any material respect or is declared by a Tribunal to be
null and void or its validity or enforceability is contested by any Company or
any Company denies that it has any further liability or obligations under any
Loan Document to which it is a party (including the termination or revocation of
any guaranty of the Obligation other than as a result of a sale or dissolution
of any Subsidiary Guarantor otherwise permitted hereunder).
10.9 Management Changes.
(a) During any period of twelve (12) consecutive calendar months,
individuals who were directors or trustees of ProLogis on the first day of such
period shall cease to constitute a majority of the board of directors or
trustees of ProLogis; provided, however, that the directors or trustees of
ProLogis may include new directors or trustees that (i) are an officer or
employee of an Affiliate, or (ii) that are required in order (as a practical
matter) for the majority of the board of directors or trustees of ProLogis to be
independent directors or trustees.
(b) Any Borrower shall change its present executive management, which
change could result in a Material Adverse Event.
(c) ProLogis shall cease to own more than fifty percent (50%) of the
issued and outstanding voting Stock of any Subsidiary Borrower unless all
Borrowings of such Subsidiary Borrower have been paid in full.
10.10 Plan Assets. The assets of any Borrower at any time constitute
"plan assets" as defined in 29 C.F.R. Section 2510.3-101(a)(1) (or any successor
regulation).
<PAGE>
SECTION 11 RIGHTS AND REMEDIES.
11.1 Remedies Upon Default.
(a) If a Default (i) occurs under Section 10.3(c) or (ii) occurs and is
continuing under Section 10.3(a), (b) or (d), the commitment to extend credit
under this Agreement automatically terminates and the entire unpaid balance of
the Obligation automatically becomes due and payable without any action of any
kind whatsoever.
(b) If a Default occurs and is continuing, subject to the terms of
Section 12.3(b) and Section 12.10, Administrative Agent may, and upon the
request of Required Lenders shall, do any one or more of the following: (i) if
the maturity of the Obligation has not already been accelerated under Section
11.1(a), declare the entire unpaid balance of all or any part of the Obligation
immediately due and payable, whereupon it is due and payable; (ii) terminate the
commitments of Lenders to extend credit under this Agreement; (iii) reduce any
claim to judgment; (iv) to the extent permitted by Law, exercise (or request
each Lender to, and each Lender is entitled to, exercise) the Rights of offset
or banker=s Lien against the interest of each Company in and to every account
and other property of such Company that are in the possession of any Credit
Party to the extent of the full amount of the Obligation (and to the extent
permitted by Law, each Company is deemed directly obligated to each Credit Party
in the full amount of the Obligation for this purpose); and (v) exercise any and
all other legal or equitable Rights afforded by the Loan Documents, the Laws of
the State of Texas, or any other applicable jurisdiction.
11.2 Waivers. To the extent permitted by Law, each Borrower waives
presentment and demand for payment, protest, notice of intention to accelerate,
notice of acceleration, and notice of protest and nonpayment, and agrees that
its liability with respect to all or any part of the Obligation is not affected
by any renewal or extension in the time of payment of all or any part of the
Obligation, by any indulgence, or by any release or change in any security for
the payment of all or any part of the Obligation.
11.3 Performance by Administrative Agent. If any covenant, duty,
or agreement of any Company is not performed in accordance with the terms of the
Loan Documents, then Administrative Agent may, while a Default exists, at its
option, perform or attempt to perform that covenant, duty or agreement on behalf
of such Company (and any amount expended by Administrative Agent in its
performance or attempted performance is payable by Borrowers to Administrative
Agent on demand, becomes part of the Obligation, and bears interest at the
Default Rate from the date of Administrative Agent=s expenditure until paid).
However, no Credit Party assumes or shall have, except by its express written
consent, any liability or responsibility for the performance of any covenant,
duty, or agreement of any Company.
11.4 Not in Control. None of the covenants or other provisions
contained in any Loan Document shall, or shall be deemed to, give any Credit
Party the Right to exercise control over the assets (including real property),
affairs, or management of any Company; the power of each Credit Party is limited
to the Right to exercise the remedies provided in this Section 11.
<PAGE>
11.5 Course of Dealing. The acceptance by any Credit Party of any
partial payment on the Obligation shall not be deemed to be a waiver of any
Default then existing. No waiver by any Credit Party of any Default shall be
deemed to be a waiver of any other then-existing or subsequent Default. No delay
or omission by any Credit Party in exercising any Right under the Loan Documents
will impair that Right or be construed as a waiver thereof or any acquiescence
therein, nor will any single or partial exercise of any Right preclude other or
further exercise thereof or the exercise of any other Right under the Loan
Documents or otherwise.
11.6 Cumulative Rights. All Rights available to the Credit Parties
under the Loan Documents are cumulative of and in addition to all other Rights
granted to the Credit Parties at law or in equity, whether or not the Obligation
is due and payable and whether or not any Credit Party has instituted any suit
for collection, foreclosure, or other action in connection with the Loan
Documents.
11.7 Application of Proceeds. Any and all proceeds ever received
by any Credit Party from the exercise of any Rights pertaining to the Obligation
shall be applied to the Obligation according to Section 3.11.
11.8 Diminution in Value of Collateral. No Credit Party has any
liability or responsibility whatsoever for any diminution in or loss of value of
any collateral now or hereafter securing payment or performance of all or any
part of the Obligation (other than diminution in or loss of value caused by its
gross negligence or willful misconduct).
11.9 Certain Proceedings. Each Borrower will promptly execute
and deliver, or cause the execution and delivery of, all applications,
certificates, instruments, registration statements, and all other documents and
papers any Credit Party reasonably requests in connection with the obtaining of
any consent, approval, registration, qualification, permit, license, or
authorization of any Tribunal or other Person necessary or appropriate for the
effective exercise of any Rights under the Loan Documents. Because each Borrower
agrees that the Credit Parties' remedies at Law for failure of any Borrower to
comply with the provisions of this paragraph would be inadequate and that
failure would not be adequately compensable in damages, each Borrower agrees
that the covenants of this Section 11.9 may be specifically enforced.
SECTION 12 AGENTS AND LENDERS.
12.1 Agents.
(a) Appointment. Each Lender appoints Administrative Agent (and
Administrative Agent accepts appointment) as its nominee and agent, in its name
and on its behalf: (i) to act as its nominee and on its behalf in and under all
Loan Documents; (ii) to arrange the means whereby its funds are to be made
available to Borrowers under the Loan Documents; (iii) to take any action that
it properly requests under the Loan Documents (subject to the concurrence of
other Lenders as may be required under the Loan Documents); (iv) to receive all
documents and items to be furnished to it under the Loan Documents; (v) to be
the secured party, mortgagee, beneficiary, recipient, and similar party in
respect of any collateral, if any, for the benefit of Lenders; (vi) to promptly
distribute to it all Financial Statements, notices received hereunder, and other
items specifically required to be delivered to it hereunder and, upon request,
such other material information, requests, documents, and items received from
any Borrower under the Loan Documents; (vii) to promptly distribute to it its
ratable part of each payment or prepayment (whether voluntary, as proceeds of
collateral upon or after foreclosure, as proceeds of insurance thereon, or
otherwise) in accordance with the terms of the Loan Documents; (viii) to deliver
to the appropriate Persons requests, demands, approvals, and consents received
from it; and (ix) to arrange for inspections pursuant to Section 7.4. However,
Administrative Agent may not be required to take any action that exposes it to
personal liability or that is contrary to any Loan Document or applicable Law.
<PAGE>
(b) Successor. Administrative Agent may assign all of its Rights and
obligations as Administrative Agent under the Loan Documents to any of its
Affiliates, which Affiliate shall then be the successor Administrative Agent
under the Loan Documents. Administrative Agent may also voluntarily resign by
giving thirty (30) days' prior written notice to Borrowers and Lenders, and
shall resign upon the request of the Required Lenders for cause (i.e.,
Administrative Agent is continuing to fail to perform its responsibilities as
Administrative Agent under the Loan Documents). If the initial or any successor
Administrative Agent ever ceases to be a party to this Agreement or if the
initial or any successor Administrative Agent ever resigns (whether voluntarily
or at the request of the Required Lenders), then the Required Lenders shall
(which, if no Default or Potential Default exists, is subject to Borrowers'
approval that may not be unreasonably withheld) appoint the successor
Administrative Agent from among Lenders (other than the resigning Administrative
Agent). If the Required Lenders fail to appoint a successor Administrative Agent
within thirty (30) days after the resigning Administrative Agent has given
notice of resignation or the Required Lenders have removed the resigning
Administrative Agent, then the resigning Administrative Agent may, on behalf of
Lenders, appoint a successor Administrative Agent (which, if no Default or
Potential Default exists, is subject to Borrowers' approval that may not be
unreasonably withheld), which must be a commercial bank having a combined
capital and surplus of at least $10,000,000,000 (as shown on its most recently
published statement of condition) and whose debt obligations (or whose parent's
debt obligations) are rated not less than Baa1 by Moody's or BBB+ by S & P. If
no successor Administrative Agent has been appointed by the Required Lenders or
Administrative Agent, as provided above, then the retiring Administrative
Agent's resignation shall nevertheless become effective forty-five (45) days
after the retiring Administrative Agent's notice of resignation and the Required
Lenders shall thereafter perform all of the duties of Administrative Agent
hereunder and/or under any other Loan Documents until such time, if any, as the
Required Lenders appoint a successor Administrative Agent, as provided in this
Section 12.1(b). Upon its acceptance of appointment as successor Administrative
Agent, the successor Administrative Agent succeeds to and becomes vested with
all of the Rights of the prior Administrative Agent, and the prior
Administrative Agent is discharged from its duties and obligations as
Administrative Agent under the Loan Documents, and each Lender shall execute the
documents that any Lender, the resigning or removed Administrative Agent, or the
successor Administrative Agent reasonably requests to reflect the change. After
any Administrative Agent=s resignation or removal as Administrative Agent under
the Loan Documents, the provisions of this Section inure to its benefit as to
any actions taken or not taken by it while it was Administrative Agent under the
Loan Documents. If any Borrower fails to respond to any written request for any
consent required in this Section 12.1(b) within ten (10) days after the date
that Borrower receives such request, then such Borrower shall be deemed to have
given its consent to such request.
(c) Syndication Agent. Syndication Agent, in such capacity, shall have
no rights, duties, or obligations hereunder, except as specifically provided in
this Agreement. Syndication Agent (i) may voluntarily resign by notice to
Administrative Agent, Lenders, and Borrowers, and (ii) shall resign upon the
request of the Required Lenders for cause. Upon the resignation of Syndication
Agent, Administrative Agent may elect to designate a successor Syndication Agent
(which, if no Default or Potential Default exists, is subject to Borrowers'
approval that may not be unreasonably withheld), which must be a Lender who is a
commercial bank having a combined capital and surplus of at least
$10,000,000,000 (as shown on its most recently published statement of condition)
and whose debt obligations (or whose parent's debt obligations) are rated not
less than Baa1 by Moody's or BBB+ by S & P.
<PAGE>
(d) Documentation Agent. Documentation Agent, in such capacity, shall
have no rights, duties, or obligations hereunder, except as specifically
provided in this Agreement. Documentation Agent (i) may voluntarily resign by
notice to Administrative Agent, Lenders, and Borrowers, and (ii) shall resign
upon the request of the Required Lenders for cause. Upon the resignation of
Documentation Agent, Administrative Agent may elect to designate a successor
Documentation Agent (which, if no Default or Potential Default exists, is
subject to Borrowers' approval that may not be unreasonably withheld), which
must be a Lender who is a commercial bank having a combined capital and surplus
of at least $10,000,000,000 (as shown on its most recently published statement
of condition) and whose debt obligations (or whose parent's debt obligations)
are rated not less than Baa1 by Moody's or BBB+ by S & P.
(e) Managing Agents. Managing Agents, in such capacity, shall have no
rights, duties, or obligations hereunder, except as specifically provided in
this Agreement.
12.2 Delegation of Duties; Reliance. Lenders may perform any of
their duties or exercise any of their Rights under the Loan Documents by or
through Administrative Agent, and Lenders and Administrative Agent may perform
any of their duties or exercise any of their Rights under the Loan Documents by
or through their respective Representatives. The Credit Parties and their
respective Representatives (a) are entitled to rely upon (and shall be protected
in relying upon) any written or oral statement believed by it or them to be
genuine and correct and to have been signed or made by the proper Person and,
with respect to legal matters, upon opinion of counsel selected by
Administrative Agent or any Lender (but nothing in this clause (a) permits
Administrative Agent to rely on (i) oral statements if a writing is required by
this Agreement or any other Loan Document or (ii) any other writing if a
specific writing is required by this Agreement or any other Loan Document), (b)
are entitled to deem and treat each Lender as the owner and holder of its
portion of the Obligation for all purposes until written notice of the
assignment or transfer is given to and received by Administrative Agent (and any
request, authorization, consent, or approval of any Lender is conclusive and
binding on each subsequent holder, assignee, or transferee of such Lender=s
portion of the Obligation until that notice is given and received), (c) are not
deemed to have notice of the occurrence of a Default unless a responsible
officer of Administrative Agent, who handles matters associated with the Loan
Documents and transactions thereunder, has actual knowledge or Administrative
Agent has been notified by a Lender or a Borrower, and (d) are entitled to
consult with legal counsel (including counsel for Borrowers), independent
accountants, and other experts selected by Administrative Agent and are not
liable for any action taken or not taken in good faith by it in accordance with
the advice of counsel, accountants, or experts.
12.3 Limitation of Agents' Liability.
(a) Exculpation. Neither Administrative Agent nor any of its
Representatives will be liable for any action taken or omitted to be taken by it
or them under the Loan Documents in good faith and believed by it or them to be
within the discretion or power conferred upon it or them by the Loan Documents
or be responsible for the consequences of any error of judgment (except for
fraud, gross negligence, or willful misconduct), and neither Administrative
Agent nor any of its Representatives has a fiduciary relationship with any
Lender by virtue of the Loan Documents (but nothing in this Agreement negates
the obligation of Administrative Agent to account for funds received by it for
the account of any Lender).
<PAGE>
(b) Indemnity. Unless indemnified to its satisfaction against loss,
cost, liability, and expense, Administrative Agent may not be compelled to do
any act under the Loan Documents or to take any action toward the execution or
enforcement of the powers thereby created or to prosecute or defend any suit in
respect of the Loan Documents. If Administrative Agent requests instructions
from Lenders, with respect to any act or action in connection with any Loan
Document, then Administrative Agent is entitled to refrain (without incurring
any liability to any Person by so refraining) from that act or action unless and
until it has received instructions. In no event, however, may Administrative
Agent or any of its Representatives be required to take any action that it or
they determine could incur for it or them criminal or onerous civil liability.
Without limiting the generality of the foregoing, no Lender has any right of
action against Administrative Agent as a result of Administrative Agent's acting
or refraining from acting under this Agreement in accordance with instructions
of Required Lenders.
(c) Reliance. No Agent is responsible to any Lender or any Participant
for, and each Lender represents and warrants that it has not relied upon any
Agent in respect of, (i) the creditworthiness of any Company and the risks
involved to such Lender, (ii) the effectiveness, enforceability, genuineness,
validity, or due execution of any Loan Document (except by such Agent), (iii)
any representation, warranty, document, certificate, report, or statement made
therein (except by such Agent) or furnished thereunder or in connection
therewith, (iv) the adequacy of any collateral now or hereafter securing the
Obligation or the existence, priority, or perfection of any Lien now or
hereafter granted or purported to be granted on the collateral under any Loan
Document, or (v) observation of or compliance with any of the terms, covenants,
or conditions of any Loan Document on the part of any Company.
(d) Indemnification. EACH LENDER AGREES TO INDEMNIFY ADMINISTRATIVE
AGENT AND ITS REPRESENTATIVES AND HOLD THEM HARMLESS FROM AND AGAINST (BUT
LIMITED TO SUCH LENDER'S PRO RATA PART OF) ANY AND ALL LIABILITIES, OBLIGATIONS,
LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, REASONABLE
EXPENSES, AND REASONABLE DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER THAT MAY
BE IMPOSED ON, ASSERTED AGAINST, OR INCURRED BY THEM IN ANY WAY RELATING TO OR
ARISING OUT OF THE LOAN DOCUMENTS OR ANY ACTION TAKEN OR OMITTED BY THEM UNDER
THE LOAN DOCUMENTS IF ADMINISTRATIVE AGENT AND ITS REPRESENTATIVES ARE NOT
REIMBURSED FOR SUCH AMOUNTS BY BORROWERS. ALTHOUGH ADMINISTRATIVE AGENT AND ITS
REPRESENTATIVES HAVE THE RIGHT TO BE INDEMNIFIED UNDER THIS AGREEMENT FOR ITS OR
THEIR OWN ORDINARY NEGLIGENCE, ADMINISTRATIVE AGENT AND ITS REPRESENTATIVES DO
NOT HAVE THE RIGHT TO BE INDEMNIFIED UNDER THIS AGREEMENT FOR ITS OR THEIR OWN
FRAUD, GROSS NEGLIGENCE, OR WILLFUL MISCONDUCT.
12.4 Limitation of Liability. No Lender or any Participant will
incur any liability to any other Lender or Participant except for acts or
omissions in bad faith, and neither Administrative Agent nor any Lender or
Participant will incur any liability to any other Person for any act or omission
of any other Lender or any Participant.
12.5 Expenses. Should Administrative Agent commence any proceeding
or in any way seek to enforce its Rights under the Loan Documents, each Lender,
upon demand therefor from time to time, shall contribute its share (based on its
Pro Rata Part) of the reasonable costs and/or expenses of any such enforcement,
including, but not limited to, fees of receivers or trustees, court costs, title
company charges, filing and recording fees, appraisers' fees and fees and
expenses of attorneys to the extent not otherwise reimbursed by Borrowers.
Without limiting the generality of the foregoing, each Lender shall contribute
its share (based on its Pro Rata Part) of all reasonable costs and expenses
incurred by Administrative Agent (including reasonable attorneys' fees and
expenses) if Administrative Agent employs counsel for advice or other
representation (whether or not any suit has been or shall be filed) with respect
to any of the Loan Documents, or to enforce any rights of Administrative Agent
or any of Borrowers' or any other Company's obligations under any of the Loan
Documents, but not with respect to any dispute between Administrative Agent and
any other Lender(s). Any loss of principal and interest resulting from any
Default shall be shared by Lenders in accordance with their respective Pro Rata
Parts. It is understood and agreed that if Administrative Agent determines that
it is necessary to engage counsel for Lenders from and after the occurrence of a
Potential Default or Default, then said counsel shall be selected by
Administrative Agent and written notice of the same shall be delivered to
Lenders. Administrative Agent shall exercise commercially reasonable efforts to
collect the cost and expenses described above from Borrowers.
<PAGE>
12.6 Proportionate Absorption of Losses. Except as otherwise provided
in the Loan Documents, nothing in the Loan Documents gives any Lender any
advantage over any other Lender insofar as the Obligation is concerned or
relieves any Lender from ratably absorbing any losses sustained with respect to
the Obligation (except to the extent unilateral actions or inactions by any
Lender result in any Borrower or any other obligor on the Obligation having any
credit, allowance, setoff, defense, or counterclaim solely with respect to all
or any part of such Lender's Pro Rata Part of the Obligation).
12.7 Relationship of Lenders. The Loan Documents do not create a
partnership or joint venture among Administrative Agent and Lenders or among
Lenders.
12.8 Benefits of Agreement. None of the provisions of this Section
inure to the benefit of any Company or any other Person except Administrative
Agent and Lenders. Therefore, no Company nor any other Person is responsible or
liable for, entitled to rely upon, or entitled to raise as a defense -- in any
manner whatsoever -- the failure of any Credit Party to comply with these
provisions.
12.9 Approval of Lenders.
(a) All communications from Administrative Agent to any Lender
requesting such Lender's determination, consent, approval, or disapproval (i)
shall be given in the form of a written notice to each Lender, (ii) shall be
accompanied by a description of the matter or thing as to which such
determination, approval, consent, or disapproval is requested, or shall advise
each Lender where such matter or thing may be inspected, or shall otherwise
describe the matter or issue to be resolved, (iii) shall include, if reasonably
requested by a Lender and to the extent not previously provided to such Lender,
written materials and a summary of all oral information provided to
Administrative Agent by Borrowers in respect of the matter or issue to be
resolved, and (iv) shall include Administrative Agent's recommended course of
action or determination in respect thereof. Each Lender shall reply promptly,
but in any event (x) within thirty (30) days (or such lesser period as may be
required under the Loan Documents for Administrative Agent to respond) for those
matters requiring the consent by all Lenders, and (y) within fifteen (15)
Business Days (or such lesser period as may be required under the Loan Documents
for Administrative Agent to respond) for those matters requiring the consent by
the Required Lenders, in each instance, after receipt of the request therefor by
Administrative Agent (in either event, the "Lender Reply Period").
(b) Unless a Lender shall give written notice to Administrative Agent
that it objects to the recommendation or determination of Administrative Agent
(together with a written explanation of the reasons behind such objection)
within the Lender Reply Period, such Lender shall be deemed to have approved of
or consented to such recommendation or determination.
<PAGE>
12.10 Default; Collateral. Upon the occurrence and during the
continuance of a Default, the Credit Parties agree to promptly confer in order
that Required Lenders or Lenders, as the case may be, may agree upon a course of
action for the enforcement of the Rights of the Credit Parties; and
Administrative Agent shall be entitled to refrain from taking any action
(without incurring any liability to any Person for so refraining) unless and
until Administrative Agent shall have received instructions from Required
Lenders or Lenders, as the case may be. All rights of action under this
Agreement and under the Notes and all rights to any collateral, if any,
hereunder may be enforced by Administrative Agent and any suit or proceeding
instituted by Administrative Agent in furtherance of such enforcement shall be
brought in its respective name as Administrative Agent without the necessity of
joining as plaintiffs or defendants any other Credit Party, and the recovery of
any judgment shall be for the benefit of the Credit Parties subject to the
expenses of Administrative Agent. In actions with respect to any property of any
Company, Administrative Agent is acting for the ratable benefit of each Credit
Party.
SECTION 13 GUARANTY.
13.1 The Guaranty. In order to induce the Credit Parties to enter
into this Agreement and to extend credit hereunder and in recognition of the
direct benefits to be received by ProLogis from the proceeds of the Borrowings
made to Subsidiary Borrowers hereunder, ProLogis hereby, unconditionally and
irrevocably, guarantees the full and prompt payment when due, whether upon
maturity, by acceleration or otherwise, of any and all of the Obligation of each
Subsidiary Borrower (the "Guaranteed Debt"). If any or all of the Guaranteed
Debt becomes due and payable, ProLogis unconditionally promises to pay such
Guaranteed Debt to the Credit Parties, on demand, together with any and all
expenses which may be incurred by each Credit Party in collecting any of the
Guaranteed Debt. The word "Guaranteed Debt" is used in this Section 13 in its
most comprehensive sense and includes any and all advances, debts, obligations
(including obligations which, but for any automatic stay under Section 362(a) of
the Bankruptcy Code, would become due), and obligations of each Subsidiary
Borrower arising in connection with this Agreement or any other Loan Document,
in each case, heretofore, now, or hereafter made, incurred, or created, whether
voluntarily or involuntarily, absolute or contingent, liquidated or
unliquidated, determined or undetermined, whether or not such indebtedness is
from time to time reduced, or extinguished and thereafter increased or incurred,
whether any Subsidiary Borrower may be liable individually or jointly with
others, whether or not recovery upon such indebtedness may be or hereafter
become barred by any statute of limitations, and whether or not such
indebtedness may be or hereafter become otherwise unenforceable.
13.2 Bankruptcy. Additionally, ProLogis unconditionally and
irrevocably guarantees the payment of any and all indebtedness of any Subsidiary
Borrower to the Credit Parties whether or not due or payable by such Subsidiary
Borrower upon the occurrence in respect of such Subsidiary Borrower of any of
the events specified in Section 10.3, and unconditionally promises to pay such
indebtedness to the Credit Parties, on demand, in lawful money of the United
States.
<PAGE>
13.3 Nature of Liability. The liability of ProLogis hereunder is
exclusive and independent of any security for or other guaranty of the
indebtedness of any Subsidiary Borrower whether executed by ProLogis, any other
guarantor, or by any other party, and the liability of ProLogis hereunder shall
not be affected or impaired by (a) any direction as to application of payment by
any Subsidiary Borrower, or by any other party, or (b) any other continuing or
other guaranty, undertaking, or maximum liability of a guarantor or of any other
party as to the indebtedness of any Subsidiary Borrower, or (c) any payment on
or in reduction of any such other guaranty or undertaking, or (d) any
dissolution of any Subsidiary Borrower, or (e) any payment made to any Credit
Party on the indebtedness which such Credit Party repays any Subsidiary Borrower
pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium, or other debtor relief proceeding, and ProLogis waives any right to
the deferral or modification of its obligations hereunder by reason of any such
proceeding. This Parent Guaranty is intended to be an irrevocable, absolute,
continuing guaranty of payment and is not a guaranty of collection. This Parent
Guaranty may not be revoked by ProLogis; provided, however, if, according to
applicable Law, it shall ever be determined or held that a guarantor under a
continuing guaranty such as this Parent Guaranty shall have the absolute right,
notwithstanding the express agreement of such a guarantor otherwise, to revoke
such guaranty as to any Guaranteed Debt which has then not yet arisen, then
ProLogis may deliver to Administrative Agent written notice that ProLogis will
not be liable hereunder for any of the Guaranteed Debt created, incurred, or
arising after the giving of such notice, and such notice will be effective as to
ProLogis from and after (but not before) such times as said written notice is
actually delivered to and received by and receipted for in writing by
Administrative Agent; provided that such notice shall not in anywise affect,
impair, or limit the liability and responsibility of any other person or entity
with respect to any of the Guaranteed Debt theretofore existing or thereafter
existing, arising, renewed, extended, or modified; provided, further, that such
notice shall not affect, impair, or release the liability and responsibility of
ProLogis with respect to any of the Guaranteed Debt created, incurred, or
arising prior to the receipt of such notice by Administrative Agent as
aforesaid, or in respect of any renewals, extensions, or modifications of such
Guaranteed Debt, or in respect of interest or costs of collection thereafter
incurred on or with respect to such Guaranteed Debt, or with respect to
attorneys' fees thereafter becoming payable hereunder with respect to such
Guaranteed Debt, and shall continue to be effective with respect to any
Guaranteed Debt arising or created after any attempted revocation by ProLogis to
the extent such Guaranteed Debt arises under any commitments existing at or
prior to such revocation.
13.4 Independent Obligation. The obligations of ProLogis hereunder
are independent of the obligations of any other guarantor or any Subsidiary
Borrower, and a separate action or actions may be brought and prosecuted against
ProLogis whether or not action is brought against any other guarantor or any
Subsidiary Borrower and whether or not any other guarantor or any Subsidiary
Borrower be joined in any such action or actions. ProLogis waives, to the
fullest extent permitted by Law, the benefit of any statute of limitations
affecting its liability hereunder or the enforcement thereof. Any payment by any
Subsidiary Borrower or other circumstance which operates to toll any statute of
limitations as to any Subsidiary Borrower shall operate to toll the statute of
limitations as to ProLogis.
13.5 Authorization. ProLogis authorizes the Credit Parties without
notice or demand (except as shall be required by applicable Law and cannot be
waived), and without affecting or impairing its liability hereunder, from time
to time to (a) renew, compromise, extend, increase, accelerate, or otherwise
change the time for payment of, or otherwise change the terms of, the Guaranteed
Debt or any part thereof in accordance with this Parent Guaranty, including any
increase or decrease of the rate of interest thereon, (b) take and hold security
from any guarantor or any other party for the payment of the Guaranteed Debt and
exchange, enforce, waive, and release any such security, (c) apply such security
and direct the order or manner of sale thereof as Administrative Agent, at the
direction of the Required Lenders in their discretion, may determine, and (d)
release or substitute any one or more endorsers, guarantors, Subsidiary
Borrowers, or other obligors.
13.6 Reliance. It is not necessary for any Credit Party to inquire
into the capacity or powers of any Company or the officers, directors, partners,
or agents acting or purporting to act on its behalf, and any indebtedness made
or created in reliance upon the professed exercise of such powers shall be
guaranteed hereunder.
13.7 Subordination. Any indebtedness of any Subsidiary Borrower now
or hereafter held by ProLogis is hereby subordinated to the indebtedness of such
Subsidiary Borrower to the Credit Parties; and such indebtedness of such
Subsidiary Borrower to ProLogis, if Administrative Agent, while a Default
exists, so requests, shall be collected, enforced, and received by ProLogis as
trustee for the Credit Parties and be paid over to Administrative Agent, for the
ratable benefit of the Credit Parties, on account of the indebtedness of such
Subsidiary Borrower to the Credit Parties, but without affecting or impairing in
any manner the liability of ProLogis under the other provisions of this Parent
Guaranty. Prior to the transfer by ProLogis of any note or negotiable instrument
evidencing any indebtedness of any Subsidiary Borrower to ProLogis, ProLogis
shall mark such note or negotiable instrument with a legend that the same is
subject to this subordination. Notwithstanding the foregoing, ProLogis does not
waive or release (expressly or impliedly) any rights of subrogation,
reimbursement, or contribution which it may have, after payment in full of the
Guaranteed Debt, against others liable on the Guaranteed Debt; ProLogis' rights
of subrogation, reimbursement, or contribution are, however, subordinate to the
rights and claims of the Credit Parties.
<PAGE>
13.8 Waivers; Consents.
(a) ProLogis waives any right (except as shall be required by
applicable Law and cannot be waived) to require any Credit Party to (i) proceed
against any Subsidiary Borrower, any other guarantor, or any other party, (ii)
proceed against or exhaust any security held from any Subsidiary Borrower, any
other guarantor, or any other party, or (iii) pursue any other remedy in any
Credit Party=s power whatsoever. ProLogis waives any defense based on or arising
out of any defense of any Subsidiary Borrower, any other guarantor, or any other
party other than payment in full of the indebtedness, including, without
limitation, any defense based on or arising out of the disability of any
Subsidiary Borrower, any other guarantor, or any other party, or the
unenforceability of the indebtedness or any part thereof from any cause, or the
cessation from any cause of the liability of any Subsidiary Borrower other than
payment in full of the indebtedness. The Credit Parties may, at their election,
foreclose on any security held by any Credit Party by one or more judicial or
nonjudicial sales, or exercise any other right or remedy any Credit Party may
have against any Subsidiary Borrower or any other party, or any security,
without affecting or impairing in any way the liability of ProLogis hereunder
except to the extent the indebtedness has been paid. ProLogis waives any defense
arising out of any such election by the Credit Parties, even though such
election operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of ProLogis against any Subsidiary Borrower
or any other party or any security.
(b) ProLogis waives all presentments, demands for performance,
protests, and notices, including without limitation notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Parent
Guaranty, and notices of the existence, creation, or incurring of new or
additional indebtedness. ProLogis assumes all responsibility for being and
keeping itself informed of each Subsidiary Borrower=s financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the indebtedness and the nature, scope, and extent of the risks which ProLogis
assumes and incurs hereunder, and agrees that the Credit Parties shall have no
duty to advise ProLogis of information known to them regarding such
circumstances or risks.
<PAGE>
(c) Any Credit Party may at any time and from time to time without the
consent of, or notice to, ProLogis, without incurring responsibility to
ProLogis, without impairing or releasing the obligations of ProLogis hereunder,
upon or without any terms or conditions and in whole or in part: (i) change the
manner, place, or terms of payment of, and/or change or extend the time of
payment of, renew, or alter, any of the Guaranteed Debt, any security therefor,
or any liability incurred directly or indirectly in respect thereof, and the
guaranty herein made shall apply to the Guaranteed Debt as so changed, extended,
renewed, or altered; (ii) sell, exchange, release, surrender, realize upon, or
otherwise deal with in any manner and in any order any property by whomsoever at
any time pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Debt or any liabilities (including any of those hereunder) incurred directly or
indirectly in respect thereof or hereof, and/or any offset there against; (iii)
exercise or refrain from exercising any rights against any Subsidiary Borrower,
any other guarantor, or others or otherwise act or refrain from acting; (iv)
settle or compromise any of the Guaranteed Debt, any security therefor, or any
liability (including any of those hereunder) incurred directly or indirectly in
respect thereof or hereof, and may subordinate the payment of all or any part
thereof to the payment of any liability (whether due or not) of any Subsidiary
Borrower to creditors of any Subsidiary Borrower (other than the Credit
Parties); (v) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of any Subsidiary Borrower to the Credit Parties
regardless of what liabilities of such Subsidiary Borrower remain unpaid; (vi)
consent to or waive any breach of, or any act, omission, or default under, any
of the Loan Documents, or any of the instruments or agreements referred to
therein, or otherwise amend, modify, or supplement any of the Loan Documents or
any of such other instruments or agreements; and/or (vii) act or fail to act in
any manner referred to in this Parent Guaranty which may deprive ProLogis of its
right to subrogation against any Subsidiary Borrower to recover full indemnity
for any payments made pursuant to this Parent Guaranty.
SECTION 14 MISCELLANEOUS.
14.1 Headings. The headings, captions, and arrangements used in
any of the Loan Documents are, unless specified otherwise, for convenience only
and shall not be deemed to limit, amplify, or modify the terms of the Loan
Documents, nor affect the meaning thereof.
14.2 Nonbusiness Days; Time. Any payment or action that is due
under any Loan Document on a non-Business Day may be delayed until the
next-succeeding Business Day (but interest shall continue to accrue on any
applicable payment until payment is in fact made) unless the payment concerns a
Eurodollar Borrowing, in which case if the next-succeeding Business Day is in
the next calendar month, then such payment shall be made on the next-preceding
Business Day.
14.3 Communications. Unless otherwise specifically provided, whenever
any Loan Document requires or permits any consent, approval, notice, request,
demand, or other communication from one party to another, communication must be
in writing (which may be by telex or telecopy) to be effective and shall be
deemed to have been given (a) if by telex, when transmitted to the appropriate
telex number and the appropriate answerback is received, (b) if by telecopy,
when transmitted to the appropriate telecopy number (and all communications sent
by telecopy must be confirmed promptly thereafter by telephone; but any
requirement in this parenthetical shall not affect the date when the telecopy
shall be deemed to have been delivered), (c) if by mail, on the fifth (5th)
Business Day after it is enclosed in an envelope and properly addressed,
stamped, sealed, certified mail, return receipt requested, and deposited in the
appropriate official postal service, or (d) if by any other means, when actually
delivered. Until changed by notice pursuant to this Agreement, the address (and
telecopy number) for each party to this Agreement is set forth on Schedule 1.
14.4 Form and Number of Documents. The form, substance, and number of
counterparts of each writing to be furnished under this Agreement must be
satisfactory to Administrative Agent and its counsel.
14.5 Survival. All covenants, agreements, undertakings, representa-
tions, and warranties made in any of the Loan Documents survive all closings
under the Loan Documents and, except as otherwise indicated, are not affected by
any investigation made by any party.
14.6 Governing Law. EXCEPT AS EXPRESSLY PROVIDED IN A LOAN DOCUMENT,
THE LAWS (OTHER THAN CONFLICT-OF-LAWS PROVISIONS) OF THE STATE OF TEXAS AND OF
THE UNITED STATES OF AMERICA GOVERN THE RIGHTS AND DUTIES OF THE PARTIES TO THE
LOAN DOCUMENTS AND THE VALIDITY, CONSTRUCTION, ENFORCEMENT, AND INTERPRETATION
OF THE LOAN DOCUMENTS.
<PAGE>
14.7 Invalid Provisions. Any provision in any Loan Document held to
be illegal, invalid or unenforceable is fully severable; the appropriate Loan
Document shall be construed and enforced as if that provision had never been
included; and the remaining provisions shall remain in full force and effect and
shall not be affected by the severed provision. The Credit Parties and Borrowers
agree to negotiate, in good faith, the terms of a replacement provision as
similar to the severed provision as may be possible and be legal, valid and
enforceable. However, if the provision held to be illegal, invalid or
unenforceable is a material part of this Agreement, such invalid, illegal or
unenforceable provision shall be, to the extent permitted by Law, replaced by a
clause or provision judicially construed and interpreted to be as similar in
substance and content to the original terms of such illegal, invalid or
unenforceable clause or provision as the context thereof would reasonably allow,
so that such clause or provision would thereafter be legal, valid and
enforceable.
14.8 Venue; Service of Process; Jury Trial. EACH PARTY TO ANY LOAN
DOCUMENT, IN EACH CASE FOR ITSELF, ITS SUCCESSORS AND ASSIGNS (AND IN THE CASE
OF BORROWERS, FOR EACH OF THE OTHER COMPANIES), (a) IRREVOCABLY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS OF THE STATE OF TEXAS,
(b) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY LITIGATION
ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS AND THE OBLIGATION
BROUGHT IN DISTRICT COURTS OF DALLAS OR HARRIS COUNTY, TEXAS, OR IN THE UNITED
STATES DISTRICT COURT FOR THE NORTHERN OR SOUTHERN DISTRICT OF TEXAS, DALLAS OR
HOUSTON DIVISION, (c) IRREVOCABLY WAIVES ANY CLAIMS THAT ANY LITIGATION BROUGHT
IN ANY OF THE AFOREMENTIONED COURTS HAS BEEN BROUGHT IN AN INCONVENIENT FORUM,
(d) IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THOSE COURTS IN
ANY LITIGATION BY THE MAILING OF COPIES THEREOF BY CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, POSTAGE PREPAID, BY HAND-DELIVERY, OR BY DELIVERY BY A
NATIONALLY RECOGNIZED COURIER SERVICE, AND SERVICE SHALL BE DEEMED COMPLETE UPON
DELIVERY OF THE LEGAL PROCESS AT ITS ADDRESS SET FORTH IN THIS AGREEMENT, (e)
IRREVOCABLY AGREES THAT ANY LEGAL PROCEEDING AGAINST ANY PARTY TO ANY LOAN
DOCUMENT ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS OR THE
OBLIGATION MAY BE BROUGHT IN ONE OF THE AFOREMENTIONED COURTS, AND (f)
IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW, ITS RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY
LOAN DOCUMENT. The scope of each of the foregoing waivers is intended to be
all-encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this transaction, including contract claims,
tort claims, breach of duty claims, and all other common law and statutory
claims. Each Borrower (for itself and on behalf of each of the other Companies)
acknowledges that these waivers are a material inducement to each Credit Party's
agreement to enter into a business relationship, that each Credit Party has
already relied on these waivers in entering into this Agreement, and that each
Agent and each Lender will continue to rely on each of these waivers in related
future dealings. Each Borrower (for itself and on behalf of each other Company)
further warrants and represents that it has reviewed these waivers with its
legal counsel, and that it knowingly and voluntarily agrees to each waiver
following consultation with legal counsel. THE WAIVERS IN THIS SECTION 14.8 ARE
IRREVOCABLE, MEANING THAT THEY MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THESE WAIVERS SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS, OR
REPLACEMENTS TO OR OF THIS OR ANY OTHER LOAN DOCUMENT. In the event of
Litigation, this Agreement may be filed as a written consent to a trial by the
court.
14.9 Amendments, Consents, Conflicts, and Waivers.
(a) Required Lenders. Unless otherwise specifically provided the
provisions of this Agreement may be amended, modified, or waived only by an
instrument in writing executed by each Borrower and the Required Lenders and
supplemented only by documents delivered or to be delivered in accordance with
the express terms of this Agreement.
<PAGE>
(b) All Lenders. Except as specifically otherwise provided in this
Section 14.9, any amendment to or consent or waiver under this Agreement or any
Loan Document that purports to accomplish any of the following must be by an
instrument in writing executed by each Borrower and executed (or approved, as
the case may be) by Administrative Agent and each Lender (other than any
Defaulting Lender): (i) extends the Termination Date (except as set forth in
Section 3.20); (ii) extends the due date or decreases the amount of any
scheduled payment or amortization of the Obligation beyond the date specified in
the Loan Documents; (iii) decreases any rate or amount of interest, fees,
principal, or other sums payable to any Credit Party under this Agreement
(except such reductions as are contemplated by this Agreement); (iv) changes the
definition of "Commitment," "Pro Rata," "Pro Rata Part," "Required Lenders," or
"Total Commitment;" (v) waives the requirement of, compliance with, amends, or
fully or partially releases any guaranty (including the Parent Guaranty) or any
substantial part of any collateral, if any (except as expressly permitted by the
terms of the Loan Documents); (vi) permits any Borrower to assign any of its
rights hereunder; or (vii) changes this clause (b) or any other matter
specifically requiring the consent of all Lenders under this Agreement.
(c) Administrative Agent. No amendment, modification, consent or waiver
which modifies the rights, duties, or obligations of any Agent shall be
effective without the consent of such Agent.
(d) Conflicts. Any conflict or ambiguity between the terms and
provisions of this Agreement and terms and provisions in any other Loan Document
is controlled by the terms and provisions of this Agreement.
(e) Course of Dealing. No course of dealing or any failure or delay by
any Credit Party or any of its respective Representatives with respect to
exercising any Right of such Credit Party under this Agreement operates as a
waiver thereof. Any waiver will be effective only in the specific instance and
for the specific purpose for which it is given.
14.10 Multiple Counterparts. Any Loan Document may be executed
in a number of identical counterparts, each of which shall be deemed an original
for all purposes and all of which constitute, collectively, one agreement; but,
in making proof thereof, it shall not be necessary to produce or account for
more than one counterpart. Each Lender need not execute the same counterpart of
this Agreement so long as identical counterparts are executed by each Borrower,
each Lender, and each Agent. This Agreement shall become effective when
counterparts of this Agreement have been executed and delivered to
Administrative Agent by each Lender, each Agent, and each Borrower, or, in the
case only of the Credit Parties, when Administrative Agent has received
telecopied, telexed, or other evidence satisfactory to it that each Credit Party
has executed and is delivering to Administrative Agent a counterpart of this
Agreement.
14.11 Successors and Assigns; Participations.
(a) Each Loan Document binds and inures to the benefit of the parties
thereto, any intended beneficiary thereof, and each of their respective
successors and permitted assigns. No Lender may, without the prior written
consent of Administrative Agent and, so long as no Default has occurred and is
continuing, Borrowers, transfer, pledge, assign, sell any participation in, or
otherwise encumber its portion of the Obligation, except as specifically
permitted by this Section 14.11.
<PAGE>
(b) Subject to the provisions of this Section 14.11 and in accordance
with applicable Law, any Lender having a Commitment equal to or greater than
$25,000,000, or if the Total Commitment has been terminated, then Notes having
outstanding Principal Debt equal to or greater than $25,000,000, may, in the
ordinary course of its commercial banking business, at any time sell to one or
more Persons (each a "Participant") participating interests in its portion of
the Obligation; provided that (i) each such participation is not less than
$10,000,000, (ii) except in the case of participations of Competitive Borrowings
or to any of such Lender's Affiliates, the Lender granting such participation
shall have provided written notice to Administrative Agent of such
participation, and (iii) after giving effect to such participation, the Lender
granting such participation shall retain a Commitment of at least $15,000,000,
or if the Total Commitment has been terminated, then Notes having outstanding
Principal Debt of at least $15,000,000. The selling Lender shall remain a
"Lender" under this Agreement (and the Participant shall not constitute a
"Lender" under this Agreement) and its obligations under this Agreement shall
remain unchanged. The selling Lender shall remain solely responsible for the
performance of its obligations under the Loan Documents and shall remain the
holder of its share of the Principal Debt for all purposes under this Agreement.
Borrowers and Administrative Agent shall continue to deal solely and directly
with the selling Lender in connection with such Lender's Rights and obligations
under the Loan Documents. Participants have no Rights under the Loan Documents,
other than certain voting Rights as provided below. Subject to the following,
each Lender may obtain (on behalf of its Participants) the benefits of Section 3
with respect to all participations in its part of the Obligation outstanding
from time to time so long as no Borrower is obligated to pay any amount in
excess of the amount that would be due to such Lender under Section 3 calculated
as though no participations have been made. No Lender may sell any participating
interest under which the Participant has any Rights to approve any amendment,
modification or waiver of any Loan Document, except to the extent the amendment,
modification or waiver extends the due date for payment of any principal,
interest or fees due under the Loan Documents, reduces the interest rate or the
amount of principal or fees applicable to the Obligation (except reductions
contemplated by this Agreement), or releases any guaranty or any substantial
part of the collateral, if any, for the Obligation. However, if a Participant is
entitled to the benefits of Section 3 or a Lender grants Rights to its
Participants to approve amendments to or waivers of the Loan Documents
respecting the matters described in the previous sentence, then such Lender must
include a voting mechanism in the relevant participation agreement whereby a
majority of its portion of the Obligation (whether held by it or participated)
shall control the vote for all of such Lender's portion of the Obligation.
<PAGE>
(c) Subject to the provisions of this Section 14.11, any Lender may at
any time, in the ordinary course of its commercial banking business, (i) without
the consent of any Borrower or Administrative Agent, assign all or any part of
its Rights and obligations under the Loan Documents to any of its Affiliates so
long as such Affiliate is an Eligible Institution (each a "Purchaser") and (ii)
upon the prior written consent of Administrative Agent, and so long as no
Default has occurred and is continuing, each Borrower, such consents by
Administrative Agent and each Borrower not to be unreasonably withheld or
delayed, assign to any other Eligible Institution (each of which is also a
"Purchaser") a proportionate part (not less than $10,000,000 and an integral
multiple of $1,000,000, or if less, all of the assigning Lender's Commitment or,
if the Total Commitment has been terminated, Principal Debt) of its Rights and
obligations under the Loan Documents; provided that (x) each such assignment
shall exclude Competitive Borrowings, unless the assigning Lender is selling all
of its Rights and obligations under the Loan Documents, and (y) after giving
effect to such assignment, unless the assigning Lender is assigning all of its
Rights and Commitments hereunder, the Lender granting such assignment shall
retain a Commitment of at least $15,000,000, or if the Total Commitment has been
terminated, then Notes having outstanding Principal Debt of at least
$15,000,000. Notwithstanding the foregoing, each Agent shall, at all times prior
to its resignation or replacement as an Agent hereunder, retain a minimum
Commitment of at least the lesser of (x) $15,000,000, and (y) three percent (3%)
of the Total Commitment, or if the Total Commitment has been terminated, then
Notes having outstanding Principal Debt of the lesser of (x) $15,000,000, and
(y) three percent (3%) of the Total Principal Debt. In each case, the Purchaser
shall assume those Rights and obligations under an assignment agreement
substantially in the form of Exhibit D. Upon (i) delivery of an executed copy of
the assignment agreement to Borrowers and Administrative Agent and (ii) payment
of a fee of $3,500 from the transferor to Administrative Agent, from and after
the assignment=s effective date (which shall be after the date of delivery), the
Purchaser shall for all purposes be a Lender party to this Agreement and shall
have all the Rights and obligations of a Lender under this Agreement to the same
extent as if it were an original party to this Agreement with commitments as set
forth in the assignment agreement, and the transferor Lender shall be released
from its obligations under this Agreement to a corresponding extent, and, except
as provided in the following sentence, no further consent or action by
Borrowers, Lenders, or any Agent shall be required. Upon the consummation of any
transfer to a Purchaser under this clause (c), the then-existing Schedule 1
shall automatically be deemed to reflect the name, address, and Commitment of
such Purchaser, Administrative Agent shall deliver to Borrowers and Lenders an
amended Schedule 1 reflecting those changes, Borrowers shall execute and deliver
to each of the transferor Lender and the Purchaser substitute Revolving Credit
Notes in the face amount of its respective Commitment following transfer, and,
upon receipt of its new Revolving Credit Notes, the transferor Lender shall
return to Borrower the Revolving Credit Notes previously delivered to it under
this Agreement. A Purchaser is subject to all the provisions in this Section as
if it were a Lender signatory to this Agreement as of the date of this
Agreement.
(d) Any Lender may at any time, without the consent of any Borrower or
Administrative Agent, assign all or any part of its Rights under the Loan
Documents to a Federal Reserve Bank without releasing the transferor Lender from
its obligations thereunder.
(e) Notwithstanding any contrary provision in this Agreement, a Lender
may not sell or participate any of its interests for a purchase price that,
directly or indirectly, reflects a discount from face value, without first
offering the sale or participation to the other Lenders on a Pro Rata basis
(which must be accepted or rejected within five (5) Business Days after the
offer).
(f) Each Borrower is entitled to deem and treat each Lender as the
owner and holder of its portion of the Obligation for all purposes until written
notice of the assignment pursuant to this Section 14.11 is received by such
Borrower.
14.12 Discharge Only Upon Payment in Full; Reinstatement in Certain
Circumstances. Each Borrower's obligations under the Loan Documents remain in
full force and effect until the Total Commitment is terminated and the
Obligation is paid in full (except for provisions under the Loan Documents which
by their terms expressly survive payment of the Obligation and termination of
the Loan Documents). If at any time any payment of the principal of or interest
on any Note or any other amount payable by any Borrower or any other obligor on
the Obligation under any Loan Document is rescinded or must be restored or
returned upon the insolvency, bankruptcy, or reorganization of such Borrower or
otherwise, the obligations of such Borrower under the Loan Documents with
respect to that payment shall be reinstated as though the payment had been due
but not made at that time.
<PAGE>
14.13 Confidentiality. Each Lender agrees to hold any confidential
information which (a) it has received prior to the Closing Date from any
Borrower which is confidential and is not otherwise publicly available, and (b)
it may receive from any Borrower pursuant to this Agreement after the Closing
Date which such Borrower has marked "confidential" and is not otherwise publicly
available, in confidence, except (i) to other Lenders, (ii) to legal counsel,
accountants, and other professional advisors to such Lender who agree to be
bound by the terms of this Section, (iii) to regulatory officials, but only to
the extent required by such officials, (iv) if legally permitted, upon prior
notice to such Borrower (which Lenders agree shall be delivered as promptly as
practicable), in connection with or response to compliance with any Law or at
the request of any Tribunal, but only to the extent required by such Law or
Tribunal, (v) if legally permitted, upon prior notice to such Borrower (which
Lenders agree shall be delivered as promptly as practicable), in connection with
any legal proceedings to which such Lender is a party, but only to the extent
required by such proceedings, and (vi) to prospective Participants or Purchasers
who agree to be bound by the terms of this Section.
14.14 Limitation of Liability of Trustees, Shareholders and Officers
of ProLogis. ANY OBLIGATION OR LIABILITY WHATSOEVER OF PROLOGIS WHICH MAY ARISE
AT ANY TIME UNDER THIS AGREEMENT OR ANY OBLIGATION OR LIABILITY WHICH MAY BE
INCURRED BY PROLOGIS PURSUANT TO ANY OTHER INSTRUMENT, TRANSACTION, OR
UNDERTAKING CONTEMPLATED HEREBY SHALL BE SATISFIED OUT OF PROLOGIS' ASSETS ONLY.
NO SUCH OBLIGATION OR LIABILITY SHALL BE PERSONALLY BINDING UPON, NOR SHALL
RESORT FOR THE ENFORCEMENT THEREOF BE HAD TO, THE PROPERTY OF ANY OF PROLOGIS'
TRUSTEES, SHAREHOLDERS, OFFICERS, EMPLOYEES, OR AGENTS, REGARDLESS OF WHETHER
SUCH OBLIGATION OR LIABILITY IS IN THE NATURE OF CONTRACT, TORT, OR OTHERWISE.
14.15 Entirety. THIS AGREEMENT AND THE OTHER WRITTEN LOAN DOCUMENTS
(EACH AS AMENDED IN WRITING FROM TIME-TO-TIME) EXECUTED BY ANY BORROWER OR ANY
CREDIT PARTY REPRESENT THE FINAL AGREEMENT AMONG BORROWERS AND THE CREDIT
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES.
14.16 Limited Waiver. Each of the Lenders hereunder that is a Lender
under the Existing Credit Agreement hereby waives the requirement set forth in
Section 2.3 of the Existing Credit Agreement that Borrower provide three (3)
Business Days prior notice of the termination of the commitments thereunder. The
waiver set forth herein is limited as provided herein and shall not be deemed to
be a waiver or consent to any deviation from the terms of this Agreement or the
other Loan Documents.
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