U.S. Securities and Exchange Commission
Operations Center, Stop 0-7
6432 General Green Way
Alexandria, Virginia 22312
Re: Urban Shopping Centers, Inc.
Commission File No. 1-12278
Form 10-Q
Gentlemen:
Transmitted, for the above-captioned registrant is the
electronically filed executed copy of registrant's current report on Form 10-Q
for the quarter ended June 30, 1996.
Thank you.
Very truly yours,
URBAN SHOPPING CENTERS, INC.
By: ADAM S. METZ
Executive Vice President, Chief Financial
Officer, Treasurer, Director of Acquisitions
and Chief Accounting Officer
ASM/gd
Enclosures
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter
ended June 30, 1996 Commission file number 1-12278
URBAN SHOPPING CENTERS, INC.
(Exact name of registrant as specified in its charter)
Maryland 36-3886885
(State or other jurisdiction (I.R.S. Employer
of incorporation Identification No.)
or organization)
900 North Michigan Avenue, Chicago, Illinois 60611
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (312) 915-2000
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
The number of shares of Common Stock and Unit Voting Common Stock, $.01 par
value, outstanding on August 2, 1996 were 13,440,626 and 301,633, respectively.
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 19
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security
Holders 27
Item 6. Exhibits and Reports on Form 8-K 28
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
URBAN SHOPPING CENTERS, INC.
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1996 AND DECEMBER 31, 1995
(UNAUDITED)
($000's omitted, except share amounts)
ASSETS
------
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
------------ ------------
<S> <C> <C>
Investment properties:
Land, including peripheral land parcels $ 79,155 $ 79,331
Buildings and improvements 526,783 525,704
Equipment, furniture and fixtures 1,987 1,871
Construction in progress 41,496 18,912
------------ ------------
649,421 625,818
Accumulated depreciation (88,310) (79,544)
------------ ------------
Investment properties, net of accumulated
depreciation 561,111 546,274
Investments in unconsolidated partnerships 13,099 3,703
Investment in the Management Company 15,201 15,673
Cash, cash equivalents and short-term
investments 7,326 8,152
Interest, rents and other receivables 9,945 11,395
Deferred expenses and other assets 11,827 13,310
----------- ------------
$ 618,509 $ 598,507
============ ============
URBAN SHOPPING CENTERS, INC.
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
JUNE 30, DECEMBER 31,
1996 1995
------------ ------------
Liabilities:
Mortgage notes payable $ 272,156 $ 251,000
Land sale-leaseback proceeds 75,000 75,000
Deferred lease accrual 15,082 13,911
Accounts payable and other liabilities 22,543 18,663
Investments in unconsolidated partnerships 36,485 33,563
Commitments and contingencies
------------ ------------
Total liabilities 421,266 392,137
Minority interest 68,743 71,861
Stockholders' equity:
Common stock, $.01 par value, 140,000,000
shares authorized, 13,440,626 shares
issued and outstanding 134 134
Unit voting stock, $.01 par value,
5,000,000 shares authorized, 301,633
shares issued and outstanding 3 3
Additional paid-in capital 259,120 259,120
Retained earnings (deficit) (130,757) (124,748)
------------ ------------
Total stockholders' equity 128,500 134,509
------------ ------------
$ 618,509 $ 598,507
============ ============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
URBAN SHOPPING CENTERS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(UNAUDITED)
($000's omitted, except share amounts)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------- -------------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues:
Shopping center
revenues:
Minimum rents $ 14,875 $ 14,555 $ 29,871 $ 27,820
Percentage rents 881 1,049 1,611 1,360
Recoveries from
tenants 6,152 6,577 12,942 12,642
Other 550 936 795 1,390
---------- ---------- ---------- ----------
22,458 23,117 45,219 43,212
Interest income 441 876 863 1,717
---------- ---------- ---------- ----------
22,899 23,993 46,082 44,929
---------- ---------- ---------- ----------
Expenses:
Shopping center
expenses 6,999 8,413 15,227 15,761
Mortgage and other
interest 3,504 4,151 6,956 7,272
Ground rent 1,104 1,075 2,210 2,178
Depreciation and
amortization 5,290 5,050 10,459 9,426
General and
administrative 572 577 1,482 1,426
Write-off of assets 87 15 125 116
---------- ---------- ---------- ----------
17,556 19,281 36,459 36,179
---------- ---------- ---------- ----------
URBAN SHOPPING CENTERS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------- -------------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
Operating income 5,343 4,712 9,623 8,750
Income from
unconsolidated
partnerships 649 190 937 632
Income from the
Management Company 199 367 497 1,276
---------- ---------- ---------- ----------
Income before other
gains and
minority interest 6,191 5,269 11,057 10,658
Other gains 720 664 720 664
Minority interest (2,443) (2,049) (4,182) (3,936)
---------- ---------- ---------- ----------
Net income $ 4,468 $ 3,884 $ 7,595 $ 7,386
========== ========== ========== ==========
Income per
common and unit
voting common
share $ .33 $ .28 $ .55 $ .54
========== ========== ========== ==========
Weighted average
common and unit
voting common
stock outstanding 13,742,259 13,742,259 13,742,259 13,742,259
========== ========== ========== ==========
Dividends declared
and paid $ .495 $ .485 $ .990 $ .970
========== ========== ========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
URBAN SHOPPING CENTERS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(UNAUDITED)
($000's omitted, except share amounts)
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 7,595 $ 7,386
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 10,459 9,426
Write-off of assets 125 116
Recovery for losses on accounts receivable (116) (19)
Income from unconsolidated partnerships (937) (632)
Income from the Management Company,
net of distributions 486 (188)
Minority interest 4,182 3,936
Deferred lease accrual 1,171 1,270
Other gains (720) (664)
Other, net (248) (587)
Other changes in assets and liabilities:
Interest, rents and other receivables 1,815 2,235
Deferred expenses and other assets 335 418
Accounts payable and other liabilities 2,324 3,196
------------ ------------
Net cash provided by operating activities 26,471 25,893
------------ ------------
URBAN SHOPPING CENTERS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1996 1995
------------ ------------
Cash flows from investing activities:
Additions to investment properties,
net of change in related payables (22,636) (32,634)
Acquisition of partnership interest (9,431) --
Acquisition of development parcels -- (5,568)
Proceeds from sale of option -- 664
Proceeds from the sale of development parcels,
net of selling costs 1,044 --
Net distributions (contributions) from the
Management Company (14) 134
Cash contributions to unconsolidated
partnerships (671) --
Cash distributions from unconsolidated
partnerships 4,421 1,432
Net sales and maturities (purchases) of
short-term investments (27) 14,781
Increase in restricted cash (272) (200)
Decrease in notes receivable 10 13
------------ ------------
Net cash used in investing activities (27,576) (21,378)
------------ ------------
Cash flows from financing activities:
Proceeds from issuance of debt,
net of issuance costs 28,156 23,912
Repayment of debt (7,000) (20,216)
Cash distributions to partners (7,300) (7,022)
Dividends paid (13,604) (13,330)
------------ ------------
Net cash provided by (used in)
financing activities 252 (16,656)
------------ ------------
Net decrease in cash and cash equivalents (853) (12,141)
Cash and cash equivalents at beginning
of period 7,866 17,842
------------ ------------
Cash and cash equivalents at end of period $ 7,013 $ 5,701
============ ============
Supplemental disclosure of cash flow
information:
Cash paid for mortgage and other interest,
net of amounts capitalized $ 6,658 $ 6,679
============ ============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
URBAN SHOPPING CENTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996 AND 1995
(UNAUDITED)
($000's omitted, except share amounts)
Readers of this quarterly report should refer to the Company's
audited financial statements for the year ended December 31, 1995,
which are incorporated by reference in the Company's 1995 annual report
on Form 10-K, as certain disclosures which would substantially
duplicate those contained in such audited financial statements have been
omitted from this report.
(1) BASIS OF PRESENTATION
In the opinion of management, all adjustments (consisting solely of
normal recurring adjustments) necessary for a fair presentation of the
consolidated financial statements have been included. The results
for the interim periods ended June 30, 1996 and 1995 are not necessarily
indicative of the results to be obtained for the full fiscal year.
The accompanying consolidated financial statements include the accounts of
Urban Shopping Centers, Inc. ("Urban"), Urban Shopping Centers, L.P. (the
"Operating Partnership") and all controlled affiliates (collectively, the
"Company"). The effect of all significant intercompany balances and
transactions have been eliminated in the consolidated presentation.
The equity method of accounting has been applied in the accompanying
consolidated financial statements with respect to the Company's interest in
Water Tower Joint Venture ("Water Tower Place"), Coral-CS/LTD Associates ("Coral
Square Mall"), West Dade County Associates ("Miami International Mall"),
Valencia Town Center Associates, L.P. ("Valencia Town Center") and Citrus Park
Venture ("Citrus Mall").
In accordance with the consensus reached in FASB Emerging Issues Task Force
Issue 95-6 "Accounting by a Real Estate Investment Trust for an Investment in a
Service Corporation" issued in September 1995, the Company has changed its
method of accounting for its preferred stock investment in Urban Retail
Properties Co. (the "Management Company") from the cost method to the equity
method. The accompanying consolidated financial statements for the three and
six months ended June 30, 1995, have been restated to reflect this change in
policy. For the three and six months ended June 30, 1995, net income decreased
$74 or $0.01 per share and increased $360 or $0.03 per share, respectively, as a
result of this change in policy.
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-
Based Compensation Plans" was issued in October 1995. The Statement is
effective for fiscal years beginning after December 15, 1995. As allowed by the
new Statement, the Company plans to continue to use Accounting Principals Board
Opinion No. 25, "Accounting for Stock Issued to Employees" in accounting for
its stock options. Certain pro forma and other information will be disclosed
as if the Company had measured compensation costs in a manner consistent with
the new Statement.
Certain amounts in the 1995 financial statements have been reclassified to
conform with the 1996 presentation.
URBAN SHOPPING CENTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
($000's omitted, except share amounts)
(1) BASIS OF PRESENTATION (CONTINUED)
Development costs, including interest and real estate taxes incurred in
connection with construction or expansion of certain investment properties,
are capitalized as a cost of the investment property and depreciated over the
estimated useful life of the related asset. During the six months ended June
30, 1996 and 1995, the Company incurred interest of $8,193 and $7,887,
respectively, and capitalized interest of $1,237 and $615, respectively.
Cash and cash equivalents (which aggregated $7,013 and $7,866 at
June 30, 1996 and December 31, 1995, respectively) include a treasury money
market fund which invests principally in U.S. Treasury notes and bills ($5,212
and $6,301 at June 30, 1996 and December 31, 1995, respectively). Other
short-term investments (generally with original maturities of one year or
less) are generally held to maturity and aggregated $313 and $286 at June 30,
1996 and December 31, 1995, respectively. Cash equivalents and other
short-term investments are held at cost which approximates market.
(2) INVESTMENTS IN UNCONSOLIDATED PARTNERSHIPS
The accompanying consolidated financial statements include investments in
certain partnerships in which the Company does not own a controlling interest.
These investments are reported using the equity method. To the extent the
Company's investment basis differs from its share of the capital of an
unconsolidated partnership, such difference is amortized over the depreciable
lives of the unconsolidated partnership's investment assets. Investments in
unconsolidated partnerships consist of the following:
Company's
Name Property Ownership
- - ----------------------- ------------------------- ---------
Water Tower Joint Water Tower Place,
Venture Chicago, IL 55% (a)
Coral-CS/LTD Associates Coral Square Mall,
Coral Springs, FL 50%
West Dade County Miami International Mall,
Associates Miami, FL 40% (b)
Valencia Town Center Valencia Town Center,
Associates, L.P. Valencia, CA 25% (c)
Citrus Park Venture Tampa, FL 50% (d)
(a) The Company owns a 55% interest in a retail property (Water Tower
Place) through its investment in Water Tower Joint Venture ("WTJV"). All major
decisions concerning the retail property require the approval of both partners
of WTJV and thus the Company does not control the partnership.
URBAN SHOPPING CENTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
($000's omitted, except share amounts)
(2) INVESTMENTS IN UNCONSOLIDATED PARTNERSHIPS (CONTINUED)
(b) Effective April 1, 1996, JMB/Miami International Associates (an
unconsolidated partnership) distributed its interest in West Dade County
Associates ("West Dade") to its partners (the Operating Partnership and two
affiliates of JMB Realty). Effective April 1, 1996, the Operating Partnership
purchased an approximate 18% interest in West Dade from one of the JMB Realty
affiliates for $9,431 in cash and the assumption of the seller's pro rata share
of all liabilities of West Dade. The remaining interests owned by the JMB
Realty affiliates were sold to the outside partner in West Dade for $5,375 in
cash and the assumption of the sellers' pro rata share of all liabilities of
West Dade. Subsequent to these transactions, the Operating Partnership owns a
40% interest in West Dade and the outside partner owns the other 60% interest.
(c) The outside partner has a right to all cash distributions until it
has received a return on and of its contributions to the partnership (as set
forth in the partnership agreement).
(d) On June 23, 1995, the Company acquired a 50% interest in Citrus Park
Venture (a 163 acre development parcel). The Management Company currently
owns the other 50% interest in Citrus Park Venture.
<TABLE>
URBAN SHOPPING CENTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
($000's omitted, except share amounts)
(2) INVESTMENTS IN UNCONSOLIDATED PARTNERSHIPS (CONTINUED)
Summarized financial information for the unconsolidated partnerships is
presented below.
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
------------ ------------
<S> <C> <C>
Assets:
Investment properties, net $ 293,768 $ 292,452
Other assets 25,355 28,817
------------ ------------
Less liabilities:
Mortgage notes payable 310,800 310,800
Other liabilities 17,897 16,624
------------ ------------
Total deficit (9,574) (6,155)
Less: Outside partners' capital 13,812 23,705
------------ ------------
Total investments in unconsolidated
partnerships $ (23,386) $ (29,860)
============ ============
Total investments in unconsolidated
partnerships are presented in the accompanying
consolidated balance sheets as follows:
Assets - Investments in unconsolidated
partnerships $ 13,099 $ 3,703
Liabilities - Investments in unconsolidated
partnerships 36,485 33,563
------------ ------------
$ (23,386) $ (29,860)
============ ============
</TABLE>
<TABLE>
URBAN SHOPPING CENTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
($000's omitted, except share amounts)
(2) INVESTMENTS IN UNCONSOLIDATED PARTNERSHIPS (CONTINUED)
Summarized financial information for the unconsolidated partnerships -
continued
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-------------------------------
1996 1995
------------ ------------
<S> <C> <C>
Revenues:
Shopping centers $ 38,644 $ 37,960
Interest income 189 232
Expenses:
Shopping centers (17,709) (17,034)
Mortgage and other interest and ground rent (12,633) (12,736)
Depreciation and amortization (5,674) (5,730)
------------ ------------
Net income $ 2,817 $ 2,692
============= ============
Company's share of:
Mortgage and other interest and ground rent $ (5,311) $ (5,210)
Depreciation and amortization (2,259) (2,189)
Net income 937 632
============ ============
</TABLE>
<TABLE>
URBAN SHOPPING CENTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
($000's omitted, except share amounts)
(3) INVESTMENT IN THE MANAGEMENT COMPANY
As restated, the Company's financial statements present its investment in
the Management Company under the equity method of accounting.
Summarized financial information for the Management Company is presented
below.
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
------------ ------------
<S> <C> <C>
Assets:
Investments in land parcels (a) $ 37,870 $ 36,795
Cash, cash equivalents and short-term
investments 792 3,251
Receivables and deferred expenses 11,453 11,274
------------- ------------
$ 50,115 $ 51,320
============= ============
Liabilities:
Notes payable (b) $ 70,000 $ 70,000
Accounts payable and other liabilities 2,147 3,589
------------- ------------
72,147 73,589
Owners' deficit (22,032) (22,269)
------------- ------------
$ 50,115 $ 51,320
============= ============
</TABLE>
<TABLE>
URBAN SHOPPING CENTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
($000's omitted, except share amounts)
(3) INVESTMENT IN THE MANAGEMENT COMPANY (CONTINUED)
Summarized financial information for the Management Company - continued
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-------------------------------
1996 1995
------------ ------------
<S> <C> <C>
Revenues $ 19,200 $ 18,867
------------ ------------
Expenses:
Management, leasing and development services 15,279 13,605
Mortgage and other interest 2,597 2,523
Land parcels 255 20
Depreciation and amortization 209 179
------------ ------------
18,340 16,327
------------ ------------
Operating income 860 2,540
Income tax provision (438) (1,027)
Loss on sale of land parcel -- (639)
------------ ------------
Net income $ 422 $ 874
============ ============
</TABLE>
URBAN SHOPPING CENTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
($000's omitted, except share amounts)
(3) INVESTMENT IN THE MANAGEMENT COMPANY (CONTINUED)
(a) Includes 50% of the outstanding mortgage loan receivable of an
affiliated joint venture which was not part of the JMB Retail
Group. The mortgage loan, with a 50% face value of $25,750, was
acquired by the JMB Retail Group on December 29, 1992, for $19,312
resulting in a discount of $6,438. The loan bears interest at a
variable rate based on market interest rates (as defined) and is
secured by the affiliated joint venture's interest in a land
parcel located in Chicago, IL. Interest is recorded for
financial reporting purposes when received. Accordingly, accretion of
the discount has also not been recorded.
(b) Includes $51,000 of indebtedness secured by the Management
Company's interest in certain management contracts and a guarantee
by Penn Square Mall Limited Partnership (a consolidated venture) which
is secured by Penn Square Mall. The $51,000 bears interest at 7.54%
per annum and matures on August 1, 2001. Also includes $9,000 of
indebtedness owed to affiliates of JMB Realty Corporation ("JMB Realty")
which bore no interest through the original maturity of May 20,
1996, at which time it was extended to September 1, 2001, at an
interest rate of 7.0%. The effective interest rate on the
aggregate $60,000 of indebtedness is 7.46% through September 1, 2001.
The Management Company also is indebted under a $10,000 note payable
to the Company. Such note bears interest at 12% per annum and matures
on September 1, 2001.
The Management Company provides management, leasing and development
services to the Company's consolidated and unconsolidated
investment properties, to affiliated entities and to third parties.
During 1995, management contracts for six of the Company's consolidated
investment properties were terminated and new management contracts were
entered into with the Operating Partnership. In connection therewith,
the Operating Partnership entered into a service agreement with the
Management Company to provide supervisory services by Management
Company personnel at 105% of the Management Company's cost thereof. During
the six months ended June 30, 1996, the Management Company received
such reimbursements from the Operating Partnership of approximately $309.
During the six months ended June 30, 1996 and 1995, management, leasing
and development revenues of approximately $4,746 and $4,158, respectively,
resulted from services provided to affiliated entities. In addition,
the Management Company received reimbursements (at cost) of payroll and
other operating expenses from affiliated entities for activities performed
on their behalf. Such reimbursements were approximately $7,987 and
$1,325 during the six months ended June 30, 1996 and 1995,
respectively. The Management Company did not renew the administrative
services agreement with JMB Service Bureau Co. at December 31, 1995.
Commencing January 1, 1996, the Management Company began employing its
own personnel to perform the services previously provided under the
administrative services agreement. Additionally, rent expense, including
building expenses, paid by the Management Company to affiliates of
JMB Realty during the six months ended June 30, 1996 and 1995 were
$459 and $461, respectively.
URBAN SHOPPING CENTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
($000's omitted, except share amounts)
(3) INVESTMENT IN THE MANAGEMENT COMPANY (CONTINUED)
The Company has options to purchase certain development
parcels from the Management Company at the lower of fair market value
or 110% of allocable cost (all terms as defined) until October 2000.
In addition, the sale or development of any development parcels by
the Management Company is subject to a right of first offer in favor
of the Company on the same conditions as described above. On May
25, 1995, the Company exercised its option to acquire the Management
Company's 50% interest in a 30 acre development parcel in Memphis
as further discussed in Note 6 of Notes to Consolidated
Financial Statements. On August 17, 1995, the Company sold its option
to purchase Woodbury (a development parcel) in Minneapolis from the
Management Company to an unaffiliated third party. The unaffiliated
third party exercised its option and purchased Woodbury from
the Management Company as further discussed in Note 6 of Notes
to Consolidated Financial Statements.
(4) MORTGAGE NOTES PAYABLE
On May 29, 1996, the Company executed a construction loan
commitment with a lender in the amount of $65,000 to finance
the remaining construction costs at Wolfchase Galleria. The loan which
was initially funded in May 1996 bears interest at the Company's
election at (i) the prime rate plus .25% or (ii) LIBOR plus 1.375%
(6.8125% as of June 30, 1996). The loan matures on May 29, 1998;
however, it may be extended for three one year periods. As of
June 30, 1996, $11,756 had been funded.
(5) SALE OF INVESTMENT PROPERTY
On June 25, 1996, the Company completed an outparcel land
sale at Wolfchase Galleria for total proceeds, net of selling expenses,
of $1,044 and recognized a gain of $720 for financial reporting purposes.
Subsequent to the end of the second quarter of 1996, the Company
completed a second outparcel land sale at Wolfchase Galleria for total
proceeds, net of selling expenses, of $841.
(6) TRANSACTIONS WITH AFFILIATES
Costs and expenses for services provided by the Management
Company, the Operating Partnership and other affiliates to the
Company's investment properties, including the Company's share of
unconsolidated investment properties, were as follows:
SIX MONTHS ENDED
JUNE 30,
---------------------------
1996 1995
--------- ---------
Property management and leasing
services (a) $ 1,418 $ 1,274
Development services 554 278
Insurance commissions 137 118
--------- ---------
$ 2,109 $ 1,670
========= =========
URBAN SHOPPING CENTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
(UNAUDITED)
($000's omitted, except share amounts)
(6) TRANSACTIONS WITH AFFILIATES (CONTINUED)
(a) In 1995, the management agreements for the following
properties were terminated by their owners: New York Square (July
1995), Brandon TownCenter, The Plaza at Brandon TownCenter, MainPlace
and Penn Square Mall (all October 1995), and The Plaza at Sawmill Place
(November 1995). New management agreements were put in place with
the Operating Partnership on substantially the same terms. Management
services of $706 for the six months ended June 30, 1996, provided
by the Operating Partnership to these consolidated investment
properties and included above, have been eliminated in consolidation.
The Company has purchase options, until October 2000, with
respect to interests in certain improved retail properties in which
JMB Realty and certain of its affiliates ("JMB Partners") have an
interest. In addition, these interests may not be sold by JMB
Partners without first offering such interests to the Company at the
lower of the option price or the then fair market value of such
property. The Company also has options to purchase certain retail
development land parcels from JMB Partners at the lower of fair
market value or 110% of allocable cost (all terms as defined) until
October 2000. In addition, the sale or development of any
development parcels by JMB Partners is subject to a right of first
offer in favor of the Company on the same conditions as described above.
On May 25, 1995, the Company exercised its options to acquire
interests in 167 acres of land in Memphis for the development
of Wolfchase Galleria. The aggregate acquisition value of such
parcels was $11,443. A 137 acre parcel from JMB Partners and
a 50% interest in a 30 acre parcel from the Management Company
were acquired. The Company acquired the remaining 50% interest
in the 30 acre parcel from an unaffiliated third party. The
aggregate consideration was paid in cash of $8,604 and through the issuance of
134,400 Units.
On June 23, 1995, the Company sold, to an unaffiliated third
party, its option to purchase from JMB Partners a 25% interest in
Northpoint Mall in Atlanta in exchange for $664 and a 50% interest in
Citrus Park Venture (a 163 acre development parcel). For financial
reporting purposes, the $664 was recognized as a gain in the
accompanying consolidated statements of operations for the three and
six months ended June 30, 1995.
On August 17, 1995, the Company sold, to an unaffiliated
third party, its option to purchase Woodbury (a development parcel)
in Minneapolis from the Management Company for $3,874. For financial
reporting purposes, the $3,874, net of selling expenses of $42 was
recognized as a gain in the third quarter of 1995. The unaffiliated
third party exercised its option and purchased Woodbury from the
Management Company for $1,853 net of selling expenses.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
FINANCIAL CONDITION. Net cash flows from operating activities increased
$.6 million in the six months ended June 30, 1996 from the six
months ended June 30, 1995. This increase was primarily attributable
to an increase in rental operations as discussed below.
Net cash flows used in investing activities increased $6.2
million in the six months ended June 30, 1996 from the six months ended
June 30, 1995. This increase was primarily attributable to (i) the
continuing construction costs incurred at Wolfchase Galleria in 1996,
(ii) the purchase of an additional 18% interest in Miami International
Mall in 1996 and (iii) a decrease in the net sales and maturities
of short-term investments; partially offset by (i) a decrease in additions
to investment properties as a result of the completion and opening of
Brandon TownCenter in 1995, (ii) an increase in cash distributions
from Water Tower Place and (iii) the acquisition of development
parcels at Wolfchase Galleria in 1995.
Net cash flows from financing activities increased $16.9
million in the six months ended June 30, 1996 from the six months
ended June 30, 1995. This increase was primarily attributable to
additional net fundings from the Company's Line and from the construction
loan at Wolfchase Galleria in 1996; partially offset by net fundings
from the construction loan at Brandon TownCenter in 1995.
At June 30, 1996, the Company had cash, cash equivalents and
short-term investments of approximately $7.3 million. Such funds are
available for working capital requirements, recurring capital expenditures,
dividends and distributions to shareholders and limited partners of the
Operating Partnership, respectively, and future acquisitions, expansions,
renovations and developments.
On June 6, 1996, Urban paid $6.8 million to shareholders as a dividend of
$.495 per share representing its first quarter 1996 dividend. On
June 6, 1996, the Operating Partnership paid $3.6 million to its limited
partners as a distribution of $.495 per Unit representing its first
quarter 1996 distribution.
CAPITALIZATION. At June 30, 1996, the Company's debt (including the
Company's share of debt of unconsolidated partnerships and the Management
Company) totaled $468.3 million of which $436.1 million is fixed
rate debt and $32.2 million is floating rate debt. On May 29, 1996,
the Company executed a construction loan commitment with a lender in the
amount of $65.0 million to finance the remaining construction costs
at Wolfchase Galleria. The loan which was initially funded in May 1996
bears interest at the Company's election at (i) the prime rate plus
.25% or (ii) LIBOR plus 1.375% (6.8125% as of June 30, 1996). The
loan matures on May 29, 1998; however, it may be extended for three
one year periods. As of June 30, 1996, $11.8 million had been funded.
On July 26, 1995, the Company signed an agreement with a group of
lenders for the establishment of a $90.0 million secured, revolving
line of credit ("Line"). The Line is secured by Brandon TownCenter,
The Plaza at Brandon TownCenter, Bed Bath and Beyond outparcel at
Brandon TownCenter, New York Square and The Plaza at Sawmill Place.
The Line has an initial three year term and, subject to lender's
approval, may be extended for an additional one or two year period.
As of June 30, 1996, $40.4 million was outstanding. In connection
with the initial funding on the Line, the Company repaid the $12.0
million then outstanding balance on the construction loan at
Brandon TownCenter. The Company completed several transactions in 1995 to
reduce its exposure to changing interest rates. In November
1995, the Company sold its interest rate protection agreements related
to the $82.0 million floating rate indebtedness secured by Oakbrook
Center and simultaneously entered into an interest rate swap agreement
which fixed the rate at 6.23% through maturity. In December 1995,
the interest rate on the $80.0 million indebtedness secured by
MainPlace was reduced by .34% from an interest rate of 5.7466% to
5.4066%. In December 1995, the Company entered into an unsecured
five year interest rate swap agreement for $20.0 million of the
outstanding balance on the Line at an all-in interest rate (including loan
spread) of 7.10%.
Although there can be no assurances, the Company believes
that operating cash flows will be sufficient to service all Company
debt and anticipates repayment or refinancing when such amounts
are due in the ordinary course of its business. At June 30, 1996,
the Company's ratio of Company debt to total market capitalization
(which includes the market value of issued and outstanding shares
of capital stock of Urban and of partnership interests in the
Operating Partnership not held by Urban, plus Company debt) was
approximately 48%. The debt to total market capitalization ratio is
based upon the market value of the Common Stock and indebtedness of
the Company and, accordingly, will fluctuate with changes in the
value of the Common Stock (and the issuance of additional shares of
Common Stock, or other forms of capital, if any, and the amount
of outstanding indebtedness).
The Company believes that its cash generated from property
operations will provide the necessary funds on a short-term and
long-term basis for its operating expenses, interest expenses on outstanding
indebtedness and recurring capital expenditures and all dividends to
the shareholders necessary to satisfy the REIT requirements. Sources of
capital for future acquisitions, development and non-recurring capital
expenditures, such as major building renovations and expansions, as well
as for scheduled principal payments, including balloon payments, on the
outstanding indebtedness are expected to be obtained from the following:
(i) excess funds available for distribution, (ii) working capital
reserves, (iii) additional Company or property financing, (iv) proceeds
from the sale of assets, including outparcels and (v) additional
equity raised in the public or private markets (including the
issuance of additional Units and/or Unit Voting Stock). Accordingly,
the Company expects that it may incur additional indebtedness. In
light of current economic conditions, relative costs of debt and equity
capital, market values of properties, growth and acquisition
opportunities and other factors, the Company may consider an
increase or decrease in its ratio of Company debt to total
market capitalization accordingly.
CAPITAL INVESTMENTS. Brandon TownCenter, the approximately one million
square foot super-regional mall anchored by Burdines, Dillard's,
JCPenney and Sears, and including approximately 360,000 square feet
of mall GLA, opened on February 15, 1995. The Plaza at Brandon
TownCenter, the adjacent 243,000 square foot community center anchored
by Service Merchandise and Target, opened in August 1994. In addition,
there are approximately 25 acres of outparcel land at Brandon TownCenter
which may be used for future sale or development. The addition
of the 125,000 square foot JCPenney store and various new mall
shops at Penn Square Mall was completed on October 30, 1995. The
Company also owns approximately 8 acres of land adjacent to The Plaza
at Sawmill Place (a consolidated venture) which may be used for
future sale or development.
Construction activity at the Company's newest super-regional mall,
Wolfchase Galleria, in Memphis is on time and on budget for a
scheduled opening in late February 1997. Steel erection of the mall
building began in January of 1996 and construction of the anchor
stores started in February. The anchor tenants will be Dillard's,
Goldsmith's (a division of Federated Department Stores, Inc.), JCPenney
and Sears. Wolfchase Galleria will also contain approximately 120
retailers, restaurants, a food court, a major entertainment complex
and approximately 5,450 parking spaces. Leases with a variety of the
high-quality nationally-recognized retailers have already been
signed for the scheduled opening. The Company has also reached several
recent agreements on outparcels at Wolfchase Galleria that will add
to the mall's overall appeal to shoppers in the Memphis retail market.
As of the date of this report, net proceeds from the sale of two
outparcels at Wolfchase Galleria total $1.9 million. The Company has
also reached an agreement with Bed Bath and Beyond to lease a building
that the Company will construct under a build to suit lease on an
outparcel. In connection with this project, the Company acquired, on
May 25, 1995, a 137 acre parcel from JMB Partners, a 50% interest in
a 30 acre parcel from the Management Company and the remaining 50%
interest in the 30 acre parcel from an unaffiliated third party. The
aggregate acquisition value of such land parcels of $11.4 million was paid
in cash and Units, of which $10.0 million is included in land and $1.4
million is included in construction in progress in the accompanying
Consolidated Balance Sheets at June 30, 1996 and December 31, 1995.
The total construction in progress related to Wolfchase Galleria
at June 30, 1996 was $38.1 million.
The Company's next planned development project after Wolfchase Galleria
will be Citrus Mall in Tampa, Florida. Dillard's and Burdines
have agreed to be anchor stores for the project. The Company has
also reached a preliminary agreement with JCPenney to be the third of
four planned anchor department stores. Citrus Mall is scheduled to open
in the spring of 1999. Currently, the Company owns a 50% interest
in the 163 acre development parcel. The Management Company owns
the other 50% interest, on which the Company owns a purchase option.
The Company also has a purchase option on 68 acres of land across
the street from Citrus Mall which may be used for development of a
large community center.
On January 10, 1996, the Company filed a shelf registration with the
Securities and Exchange Commission which was effective on April
22, 1996, covering an aggregate public offering price of Preferred
Stock, Depository Shares, Common Stock, Warrants and Rights, of up
to $200.0 million. The Company intends to use proceeds from any such
offerings for general corporate purposes, which may include acquisition
and development of regional malls and community centers, capital improvements
to existing properties and repayment of certain then outstanding secured
or unsecured indebtedness.
<TABLE>
REVIEW OF OPERATIONS
FUNDS FROM OPERATIONS. The chart below shows the calculation of funds from
operations, based upon the new National Association of Real Estate Investment
Trusts ("NAREIT") definition:
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------- -------------------------
1996 1995 (a) 1996 1995(a)
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Income before minority
interest $ 6,911 $ 5,933 $ 11,777 $ 11,322
Plus depreciation
and amortization 4,789 4,512 9,461 8,449
Plus the Company's
share of depreciation
and amortization from
unconsolidated
partnerships and the
Management Company 1,060 1,011 2,062 1,997
---------- ---------- ---------- ----------
Total funds from
operations (b) $ 12,760 $ 11,456 $ 23,300 $ 21,768
========== ========== ========== ==========
Company's share of
funds from
operations (c) $ 8,305 $ 7,489 $ 15,164 $ 14,243
========== ========== ========== ==========
<FN>
(a) Restated to present funds from operations based upon the new NAREIT
definition, which excludes the add back of non-real estate depreciation and
amortization, and to reflect the Company's change in accounting for the
Management Company from the cost method to the equity method as more fully
discussed in Note 1 of Notes to Consolidated Financial Statements.
(b) Funds from operations should not be considered as an alternative to net
income or any other GAAP measurement of performance as an indicator of operating
performance or as an alternative to cash flows from operating, investing or
financing activities as a measure of liquidity.
(c) Based upon a weighted average of 21,025,641 and 21,003,673 shares and
Units outstanding for the three and six months ended June 30, 1995,
respectively.
</TABLE>
<TABLE>
FUNDS AVAILABLE FOR DISTRIBUTION. The chart below shows the calculation of
funds available for distribution:
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------- -------------------------
1996 1995 (a) 1996 1995(a)
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Total funds from
operations $ 12,760 $ 11,456 $ 23,300 $ 21,768
Plus Oakbrook Center
deferred minimum
ground rent and
related interest 790 800 1,572 1,593
Less adjustment to
reflect actual cash
received from the
Management Company (23) 108 (96) (569)
Plus write-off of
assets (b) 87 15 125 116
Less straight-line
rent adjustments (b) (157) (343) (335) (649)
---------- ---------- ---------- ----------
Total funds available
for distribution
including other
gains $ 13,457 $ 12,036 $ 24,566 $ 22,259
========== ========== ========== ==========
Company's share of
funds available for
distribution including
other gains (c) $ 8,758 $ 7,868 $ 15,988 $ 14,564
========== ========== ========== ==========
Total funds available
for distribution
excluding other
gains $ 12,737 $ 11,372 $ 23,846 $ 21,595
========== ========== ========== ==========
Company's share of
funds available for
distribution excluding
other gains (c) $ 8,289 $ 7,434 $ 15,519 $ 14,130
========== ========== ========== ==========
<FN>
(a) Restated to present funds available for distribution based upon the new
NAREIT funds from operations definition, which excludes the add back of
non-real estate depreciation and amortization, and to reflect the Company's
change in accounting for the Management Company from the cost method to the
equity method as more fully discussed in Note 1 of Notes to Consolidated
Financial Statements.
(b) Includes the Company's share of unconsolidated partnerships.
(c) Based upon a weighted average of 21,025,641 and 21,003,673 shares and
Units outstanding for the three and six months ended June 30, 1995,
respectively.
</TABLE>
SALES. Aggregate sales volume at the Company's regional malls
for those mall shops and anchors that report sales have increased
3.8% to $296 million in the three months ended June 30, 1996 from
$285 million in the three months ended June 30, 1995. Mall tenant
sales (excluding anchors and movie theaters) have increased 3.9% to
$214 million in the three months ended June 30, 1996 from $206 million
in the same period for 1995. Comparable reported mall tenant sales
increased 2.8% in the six months ended June 30, 1996 compared to
the same period for 1995.
OCCUPANCY. The mall GLA was 89.3% occupied at June 30, 1996 compared
to 89.8% at March 31, 1996 and 90.4% at June 30, 1995. The mall
GLA was 91.2% leased at June 30, 1996.
RESULTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO THE SIX MONTHS ENDED
JUNE 30, 1995
Shopping center revenues increased $2.0 million, or 4.6%, to $45.2 million
in the six months ended June 30, 1996 from $43.2 million in the
six months ended June 30, 1995. This increase was primarily
attributable to the increase in shopping center revenues at Brandon
TownCenter and Penn Square Mall. Minimum rents and recoveries from
tenants increased at Brandon TownCenter due to its opening on February
15, 1995. Minimum rents and recoveries from tenants increased at
Penn Square Mall primarily due to its expansion completed in
October 1995.
Interest income decreased $.8 million to $.9 million in the six
months ended June 30, 1996 from $1.7 million in the same period
for 1995. This decrease was primarily attributable to a decrease in the
average outstanding investments during the six months ended June 30, 1996
as compared to the same period in 1995.
Shopping center expenses, including depreciation and amortization,
increased $.5 million to $25.7 million in the six months ended
June 30, 1996 from $25.2 million in the same period for 1995.
This increase was primarily attributable to an increase in shopping
center expenses, including depreciation and amortization, at Brandon
TownCenter as a result of its opening on February 15, 1995 and an
increase in depreciation and amortization at Penn Square Mall as a result
of its expansion completed in October 1995. These increases were partially
offset by a decrease in management fees as a result of the termination
of management contracts with the Management Company for six of
the Company's consolidated investment properties during 1995. New
management contracts were entered into with the Operating Partnership
and those fees are eliminated in consolidation.
Mortgage and other interest decreased $.3 million to $7.0
million in the six months ended June 30, 1996 from $7.3 million
in the same period for 1995. This decrease was primarily due to
(i) the paydown on the construction loan at Brandon TownCenter during
the second quarter of 1995 and (ii) an increase in capitalized interest
relative to Wolfchase Galleria; partially offset by (i) a decrease in
capitalized interest at Brandon TownCenter and (ii) an increase in
interest expense relative to the fundings from the Line.
Income from unconsolidated partnerships increased $.3 million to $.9
million in the six months ended June 30, 1996 from $.6 million in
the same period for 1995. This increase was primarily attributable to
the purchase of an additional 18% interest in Miami International Mall on
April 1, 1996.
Income from the Management Company decreased $.8 million to
$.5 million in the six months ended June 30, 1996 from $1.3 million
in the same period for 1995. This decrease was primarily attributable to
an increase in operating expenses at the Management Company.
Other gains of $.7 million for the six months ended June 30, 1996 represent
the gain on the sale of an outparcel of land at Wolfchase
Galleria during the second quarter of 1996. Other gains of $.7 million
for the six months ended June 30, 1995 represent the gain on the sale
of the Company's option to purchase a 25% interest in Northpoint (an
improved retail property) during the second quarter of 1995.
THREE MONTHS ENDED JUNE 30, 1996 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 1995
Shopping center revenues decreased $.6 million to $22.5 million in
the three months ended June 30, 1996 from $23.1 million in the
three months ended June 30, 1995. This decrease was primarily
attributable to the decrease in shopping center revenues at Brandon
TownCenter, Oakbrook Center and MainPlace. Other recoveries decreased at
Brandon TownCenter primarily due to reimbursements from tenants in
1995 for advertising expenses incurred relative to the grand opening.
Recoveries from tenants decreased at Oakbrook Center and MainPlace
primarily due to decreases in recoverable repairs and maintenance
expense.
Interest income decreased $.5 million to $.4 million in the three months
ended June 30, 1996 from $.9 million in the same period for 1995.
This decrease was primarily attributable to a decrease in the average
outstanding investments during the second quarter of 1996 as compared
to the same period in 1995.
Shopping center expenses, including depreciation and amortization,
decreased $1.2 million to $12.3 million in the three months ended
June 30, 1996 from $13.5 million in the same period for 1995.
This decrease was primarily attributable to (i) decreases in repairs and
maintenance at Oakbrook Center and MainPlace (which are generally recoverable
from tenants), (ii) a decrease in advertising expense at Brandon
TownCenter due to its grand opening in 1995 (which is recoverable from
tenants) and (iii) a decrease in management fees as a result of the
termination of management contracts with the Management Company for
six consolidated investment properties during 1995. These decreases were
partially offset by an increase in depreciation and amortization at
Brandon TownCenter as a result of its opening on February 15, 1995
and at Penn Square Mall as a result of its expansion completed in October 1995.
Mortgage and other interest decreased $.7 million to $3.5 million in the
three months ended June 30, 1996 from $4.2 million in the same
period for 1995. This decrease was primarily due to (i) the paydown on
the construction loan at Brandon TownCenter during the second quarter of
1995 and (ii) an increase in capitalized interest relative to
Wolfchase Galleria; partially offset by an increase in interest expense
relative to the fundings from the Line.
Income from unconsolidated partnerships increased $.5 million to $.7
million in the three months ended June 30, 1996 from $.2 million
in the same period for 1995. This increase was primarily attributable
to the purchase of an additional 18% interest in Miami International Mall
on April 1, 1996.
Income from the Management Company decreased $.2 million to $.2
million in the three months ended June 30, 1996 from $.4 million in
the same period for 1995. This decrease was primarily attributable
to an increase in operating expenses at the Management Company.
Other gains of $.7 million for the three months ended June 30, 1996
represent the gain on the sale of an outparcel of land at
Wolfchase Galleria during the second quarter of 1996. Other gains
of $.7 million for the three months ended June 30, 1995 represent the
gain on the sale of the Company's option to purchase a 25% interest
in Northpoint (an improved retail property) during the second quarter of 1995.
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On May 3, 1996, at the Company's annual meeting of shareholders,
actions were taken on (i) the election of directors, (ii) the approval
of the issuance of securities to certain significant security holders or
their affiliates as payment of part or all of the purchase price
of certain developed and undeveloped properties and (iii) the
ratification of independent auditors. The results of these actions are
presented below.
Election of Directors:
For Withheld
---------- ----------
Neil G. Bluhm 19,119,531 43,139
James B. Digney 19,120,966 41,704
Matthew S. Dominski 19,120,431 42,239
Susan Getzendanner 19,119,228 43,442
Judd D. Malkin 19,120,631 42,039
John E. Neal 19,122,164 40,506
Phillip B. Rooney 19,122,285 40,385
John G. Schreiber 19,121,790 40,880
Henry T. Segerstrom 19,120,472 42,198
Messrs. Bluhm, Malkin and Dominski have been directors since inception.
Messrs. Digney, Rooney, Segerstrom and Ms. Getzendanner have held
such positions since October 18, 1993. Messrs. Neal and Schreiber
have been directors since February 13, 1995.
Each of the above directors will serve until the Company's next
annual meeting of shareholders and until their respective successors have
been elected and qualified, or until their resignation, death, termination
or removal.
Approval of the issuance of securities to certain significant security
holders or their affiliates as payment of part or all of the purchase
price of certain developed and undeveloped properties:
For Against Abstain
- - ------------ ------------ ------------
15,101,875 1,339,519 154,393
Ratification of Appointment of KPMG Peat Marwick LLP as independent
auditors for 1996:
For Against Abstain
- - ------------ ------------ ------------
19,080,866 31,268 50,536
No other matters were submitted to a vote of security holders during the
meeting or during the period covered by this report.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
4.1 Stock Certificate is hereby incorporated by reference to Exhibit
4.1 to the Registrant's Form 10-Q (File No. 1-12278) filed
on November 19, 1993
4.2 Indenture by and between USC Oakbrook, Inc. and Bankers Trust
Company is hereby incorporated by reference to Exhibit 4.2 to the
Registrant's Form 10-K (File No. 1-12278) filed on March 25, 1994
4.3 Mortgage Note by and between Oakbrook Urban Venture, L.P. and USC
Oakbrook, Inc. is hereby incorporated by reference to Exhibit 4.3
to the Registrant's Form 10-K (File No. 1-12278) filed on March
25, 1994
4.4 Swap Agreement by and between Oakbrook Urban Venture, L.P. and
G.S. Financial Products International, L.P. is hereby
incorporated by reference to Exhibit 4.4 to the Registrant's Form
10-K (File No. 1-12278) filed on March 25, 1994
4.5 Promissory Note by and between Santa Ana Venture and MainPlace
Grantor Trust is hereby incorporated by reference to Exhibit 4.5
to the Registrant's Form 10-K (File No. 1- 12278) filed on March 25,
1994
4.6 Swap Agreement by and between Santa Ana Venture and G.S.
Financial Products International, L.P. is hereby incorporated by
reference to Exhibit 4.6 to the Registrant's Form 10-K (File No.
1-12278) filed on March 25, 1994
4.7 Indenture by and between Water Tower Finance, Inc., Water Tower
Joint Venture and First National Bank of Chicago is hereby
incorporated by reference to Exhibit 4.7 to the Registrant's Form
10-K (File No. 1-12278) filed on March 25, 1994
4.8 Indenture by and between JMB Retail Properties Co. (now Urban
Retail Properties Co.), Penn Square Mall Limited Partnership and
Norwest Bank Minnesota, National Association is hereby
incorporated by reference to Exhibit 4.8 to the Registrant's Form
10-Q (File No. 1-12278) filed on August 12, 1994
4.9 Guaranty Agreement between Penn Square Mall Limited Partnership
and Norwest Bank Minnesota, National Association is hereby
incorporated by reference to Exhibit 4.9 to the Registrant's Form
10-Q (File No. 1-12278) filed on August 12, 1994
4.10 Credit Agreement among Urban Shopping Centers, L.P., Union Bank
of Switzerland (New York Branch), Morgan Guaranty Trust Company
of New York and the several Lenders is hereby incorporated by
reference to Exhibit 4.11 to the Registrant's Form 10-Q (File No.
1-12278) filed on November 9, 1995
4.11 First Amendment to Indenture by and between USC Oakbrook, Inc.
and Bankers Trust Company is hereby incorporated by reference to
Exhibit 4.11 to the Registrant's Form 10-K (File No. 1-12278)
filed on March 25, 1996
4.12 Swap Agreement by and between Oakbrook Urban Venture, L.P. and GS
Financial Products International, L.P. is hereby incorporated by
reference to Exhibit 4.12 to the Registrant's Form 10-K (File No.
1-12278) filed on March 25, 1996
4.13 First Amendment to Promissory Note by and between Santa Ana
Venture and MainPlace Grantor Trust is hereby incorporated by
reference to Exhibit 4.13 to the Registrant's Form 10-K (File No.
1-12278) filed on March 25, 1996
4.14 Construction Loan Agreement among Wolfchase Galleria Limited
Partnership, the several banks and financial institutions from
time to time parties hereto, as Lenders, and Union Bank of
Switzerland, New York Branch, is hereby filed herewith
10.1 Second Amended and Restated Agreement of Limited Partnership of
Urban Shopping Centers, L.P. is hereby incorporated by reference
to Exhibit 10.1 to the Registrant's Form 10-Q (File No. 1-12278)
filed on November 19, 1993
10.2 Administrative Services Agreement between JMB Retail Properties
Co. (now Urban Retail Properties Co.) and JMB Service Bureau Co.
is hereby incorporated by reference to Exhibit 10.2 to the
Registrant's Form 10-Q (File No. 1-12278) filed on November 19,
1993
10.3 Corporate Services Agreement among the Registrant, Urban Shopping
Centers, L.P. and JMB Retail Properties Co. (now Urban Retail
Properties Co.) is hereby incorporated by reference to Exhibit
10.3 to the Registrant's Form 10-Q (File No. 1-12278) filed on
November 19, 1993
10.4 JMB Realty Corporation Employee Savings Plan is hereby
incorporated by reference to Exhibit 10.4 to the Registrant's
Registration Statement on Form S-11 (No. 33-64488)
10.5 Retirement Plan for Employees of Amfac, Inc. and Subsidiaries is
hereby incorporated by reference to Exhibit 10.5 to the
Registrant's Registration Statement on Form S-11 (No. 33-64488)
10.6 Urban Shopping Centers 1993 Option Plan is hereby incorporated by
reference to Exhibit 10.6 to the Registrant's Form 10-Q (File No.
1-12278) filed on November 19, 1993
10.7 Non-Competition Agreement between JMB Realty Corporation and the
Registrant is hereby incorporated by reference to Exhibit 10.7 to
the Registrant's Form 10-Q (File No. 1- 12278) filed on November
19, 1993
10.8 Non-Competition Agreement between JMB Institutional Realty
Corporation and the Registrant is hereby incorporated by
reference to Exhibit 10.8 to the Registrant's Form 10-Q (File No.
1-12278) filed on November 19, 1993
10.9 Non-Competition Agreement between Neil G. Bluhm and the
Registrant is hereby incorporated by reference to Exhibit 10.9 to
the Registrant's Form 10-Q (File No. 1-12278) filed on November
19, 1993
10.10 Non-Competition Agreement between Judd D. Malkin and the
Registrant is hereby incorporated by reference to Exhibit 10.10
to the Registrant's Form 10-Q (File No. 1-12278) filed on
November 19, 1993
10.11 Omnibus Agreement among Urban Shopping Centers, L.P., JMB
Properties Company, JMB Retail Properties Co. (now Urban Retail
Properties Co.) and the Registrant is hereby incorporated by
reference to Exhibit 10.12 to the Registrant's Form 10-Q (File
No. 1-12278) filed on November 19, 1993
10.12 Indemnification Agreement between the Registrant and its
Directors and Officers is hereby incorporated by reference to
Exhibit 10.13 to the Registrant's Form 10-Q (File No. 1-12278)
filed on November 19, 1993
10.13 Registration Rights and Lock-Up Agreement between the Registrant
and certain Investors is hereby incorporated by reference to
Exhibit 10.14 to the Registrant's Form 10-Q (File No. 1-12278)
filed on November 19, 1993
10.14 Stockholders Agreement between Center Partners, Ltd., Urban
Investment & Development Co., Urban-Water Tower Associates,
JMB/Miami Investors, L.P., Island Holidays, Ltd., Celtic Funding
Corporation and the Registrant is hereby incorporated by
reference to Exhibit 10.15 to the Registrant's Form 10-Q (File
No. 1-12278) filed on November 19, 1993
10.15 Lease Agreement, dated December 31, 1990, by and between
Teachers'Retirement System of the State of Illinois and LaSalle
National Trust, N.A., as Trustee for Oakbrook Urban Venture, as
amended by the First Amendment to Lease Agreement and to Restated
and Amended Memorandum of Lease is hereby incorporated by
reference to Exhibit 10.16 to the Registrant's Registration
Statement on Form S-11 (No. 33-64488)
10.16 Second Amendment to Lease Agreement by and between Teachers'
Retirement System of the State of Illinois and LaSalle National
Trust, N.A., as Trustee for Oakbrook Urban Venture, L.P. is
hereby incorporated by reference to Exhibit 10.17 to the
Registrant's Form 10-Q (File No. 1-12278) filed on November 19,
1993
10.17 Net Ground Rental Lease Agreement with respect to Penn Square
Mall, as amended by Amendment of Net Ground Rental Lease and as
further amended by Second Amendment of Net Ground Rental Lease is
hereby incorporated by reference to Exhibit 10.18 to the
Registrant's Registration Statement on Form S-11 (No. 33-64488)
10.18 Ground Lease by and between The Newhall Land and Farming Company
and Valencia Town Center Associates is hereby incorporated by
reference to Exhibit 10.19 to the Registrant's Registration
Statement on Form S-11 (No. 33-64488)
10.19 Restated Employment Agreement between Matthew S. Dominski and the
Registrant is hereby incorporated by reference to Exhibit 10.19
to the Registrant's Form 10-K (File No. 1-12278) filed on March
25, 1994
10.20 Third Amendment to Lease Agreement by and between Teachers'
Retirement System of the State of Illinois and LaSalle National
Trust, N.A., as Trustee for Oakbrook Urban Venture, L.P. is
hereby incorporated by reference to Exhibit 10.20 to the
Registrant's Form 10-K (File No. 1-12278) filed on March 25, 1994
10.21 First Amendment to Second Amended and Restated Agreement of
Limited Partnership of Urban Shopping Centers, L.P. is hereby
incorporated by reference to Exhibit 10.21 to the Registrant's
Form 10-Q (File No. 1-12278) filed on August 9, 1995
10.22 First and Second Amendments to Urban Shopping Centers 1993 Option
Plan are hereby incorporated by reference to Exhibit 10.22 to the
Registrant's Form 10-Q (File No. 1-12278) filed on August 9, 1995
10.23 Dissolution Agreement by and among JMB Income Properties, Ltd. -
XIII, IDS/JMB Balanced Income Growth, Ltd. and Urban Shopping
Centers, L.P. is hereby incorporated by reference to Exhibit
10.23 to the Registrant's Form 10-Q (File No. 1-12278) filed on
May 2, 1996
10.24 Purchase and Sale Agreement by JMB Income Properties, Ltd. - XIII
and Urban Shopping Centers, L.P. is hereby incorporated by
reference to Exhibit 10.24 to the Registrant's Form 10-Q (File
No. 1-12278) filed on May 2, 1996
27 Financial Data Schedule, which is submitted electronically to the
Securities and Exchange Commission for information only and not
filed
---------------
Although certain additional long-term debt instruments of the
Registrant have been excluded from Exhibit 4 above, pursuant to Rule
601(b)(4)(iii), the Registrant commits to provide copies of such
agreements to the Securities and Exchange Commission upon request.
(b) No reports on Form 8-K were filed during the second quarter of 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
URBAN SHOPPING CENTERS, INC.
By: ADAM S. METZ
Executive Vice President, Chief
Financial Officer, Treasurer,
Director of Acquisitions and Chief
Accounting Officer
Date: August 13, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following person in the capacity and on the
date indicated.
ADAM S. METZ
Executive Vice President, Chief
Financial Officer, Treasurer,
Director of Acquisitions and Chief
Accounting Officer
Date: August 13, 1996
CONSTRUCTION LOAN AGREEMENT
among
WOLFCHASE GALLERIA LIMITED PARTNERSHIP, as Borrower,
THE SEVERAL BANKS AND FINANCIAL INSTITUTIONS
FROM TIME TO TIME PARTIES HERETO,
as Lenders,
and
UNION BANK OF SWITZERLAND, NEW YORK BRANCH,
as Administrative Agent
Dated as of May 22nd, 1996
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS 1
1.1 Defined Terms 1
1.2 Other Definitional Provisions 18
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS 19
2.1 Agreement to Lend and to Borrow; Notes 19
2.2 Determination of Amounts of Loan Advances 19
2.3 Project Cost Statement Evaluation 21
2.4 Project Cost Statement Adjustments 22
2.5 Use of Proceeds 22
SECTION 3. BORROWING PROCEDURES 22
3.1 Procedure for Borrowing 22
3.2 First Advance and Subsequent Advances 23
3.3 Waivers of Conditions 23
3.4 Advances to Pay Interest 24
3.5 Optional Prepayments 24
3.6 Conversion and Continuation Options 25
3.7 Minimum Amounts and Minimum Number of Tranches 25
3.8 Interest Rates and Payment Dates 26
3.9 Computation of Interest and Fees 26
3.10 Inability to Determine Interest Rate 27
3.11 Pro Rata Treatment and Payments 27
3.12 Illegality 28
3.13 Legal Requirements 28
3.14 Taxes 30
3.15 Indemnity 31
3.16 Extension of Maturity Date 32
3.17 Amortization during Extension Terms 33
3.18 Advance of Available Commitment 33
SECTION 4. REPRESENTATIONS AND WARRANTIES 34
4.1 Formation and Existence 34
4.2 Power and Authority 34
4.3 Authorization; Enforceable Obligations 34
4.4 No Litigation 35
4.5 Consents, Approvals, Authorizations, Etc. 35
4.6 No Legal Bar 35
4.7 Compliance with Building Codes, Zoning
Laws, Etc. 35
4.8 No Default 35
4.9 Taxes 35
4.10 Availability of Utilities 36
4.11 Plans 36
4.12 Brokerage 36
4.13 Permits, Etc. 36
4.14 Financial Statements 36
4.15 ERISA 37
4.16 Solvency 37
4.17 Roads 37
4.18 REA and Leases 38
4.19 Accuracy of Information; Full Disclosure 38
SECTION 5. AFFIRMATIVE COVENANTS 39
5.1 Construction 39
5.2 Performance under Other Agreements 39
5.3 Correction of Work 39
5.4 No Encroachments 39
5.5 Application of Insurance and Condemnation
Proceeds 39
5.6 Certain Notices 40
5.7 Plan Changes 41
5.8 Indemnification 41
5.9 Expenses 41
5.10 Construction Schedule 42
5.11 Inspection of Books and Records 42
5.12 Movement of Unincorporated Materials 42
5.13 Inspection Reports 43
5.14 Certificates 43
SECTION 6. NEGATIVE COVENANTS 43
6.1 Additional Debt 43
6.2 Changes in Plans 43
6.3 Change Orders 43
6.4 Changes in Agreements 44
SECTION 7. CONDITIONS PRECEDENT TO FIRST ADVANCE 44
7.1 Closing Documents 44
7.2 Fees 49
7.3 Subordinated Loans 49
7.4 Accounting 49
7.5 Representations and Warranties 49
7.6 No Default or Event of Default 49
7.7 Additional Matters 49
SECTION 8. CONDITIONS PRECEDENT TO SUBSEQUENT ADVANCES 49
8.1 All Subsequent Advances 49
8.2 Completion of Improvements 52
SECTION 9. EVENTS OF DEFAULT 52
9.1 Events of Default 52
9.2 Lenders' Right to Apply Loan Proceeds 55
9.3 Lenders' Right to Stop Advancing Funds and to
Accelerate the Loans 56
9.4 Lenders' Right to Complete 56
9.5 Power of Attorney 57
SECTION 10. THE ADMINISTRATIVE AGENT 57
10.1 Appointment 57
10.2 Delegation of Duties 58
10.3 Exculpatory Provisions 58
10.4 Reliance by Agent 58
10.5 Notice of Default 59
10.6 Non-Reliance on Agent and Other Lenders 59
10.7 Indemnification 60
10.8 Agent in Its Individual Capacity 60
10.9 Successor Administrative Agent 60
10.10 Transfer of Agency Function 61
10.11 Authority of Administrative Agent 61
SECTION 11. GENERAL CONDITIONS 61
11.1 No Waivers 61
11.2 Lenders and Administrative Agent Sole
Beneficiary 61
11.3 Notices 62
11.4 Modifications 63
11.5 Rights Cumulative 64
11.6 Schedules 64
11.7 Successors and Assigns; Participations 64
11.8 Governing Law 67
11.9 Submission to Jurisdiction; Waivers 67
11.10 Acknowledgements 68
11.11 WAIVERS OF JURY TRIAL 68
11.12 Captions 68
11.13 Adjustments 68
11.14 Counterparts 69
11.15 Severability 69
11.16 Integration 69
11.17 Possession of Documents 69
11.18 Usury 69
11.19 Sign 69
11.20 No Recourse Against Outparcels 69
11.21 Binding Effect of Request for Advance 70
SCHEDULES
Schedule 1 Land
Schedule 2 Outparcels
Schedule 3 Partners
EXHIBITS
Exhibit A Form of Borrower's Requisition
Exhibit B Project Cost Statement
Exhibit C Form of Note
Exhibit D Form of Assignment and Acceptance
Exhibit E Form of Authorization Letter
Exhibit F Form of Solvency Certificate
CONSTRUCTION LOAN AGREEMENT
---------------------------
THIS AGREEMENT is made as of the 22nd day of May, 1996 among
WOLFCHASE GALLERIA LIMITED PARTNERSHIP, a Delaware limited
partnership ("Borrower"), the several banks and financial
institutions from time to time parties to this Agreement (being
referred to collectively as "Lenders" and individually as a
"Lender"), and UNION BANK OF SWITZERLAND, NEW YORK BRANCH, the
New York branch of a Swiss banking corporation, as agent for the
Lenders (in such capacity, together with its successors in such
capacity, the "Administrative Agent").
RECITALS
--------
A. Borrower is the owner of the land located in the City
of Memphis, Tennessee, described on Schedule 1 (the "Land").
B. Borrower wishes to construct and equip a fully
enclosed, two level super-regional shopping mall to be known as
Wolfchase Galleria, containing on the Land approximately 350,375
square feet of mall tenant space, 6,918 square feet of food court
space, 30,000 square feet of theater space and 4,093 square feet
of game room space and on land adjacent to the Land approximately
696,685 square feet of anchor space, for a total of approximately
1,088,071 square feet of leasable area (the "Mall").
C. Borrower has requested Lenders to make loans to
Borrower in the aggregate principal amount of $65,000,000 to
provide the financing for certain of the costs of construction of
the Mall and certain other costs, as described in the Project
Cost Statement referred to below.
D. Subject to the terms and conditions of this Agreement,
Lenders will make the loans to Borrower.
AGREEMENT
---------
SECTION 1. DEFINITIONS
-----------
1.1 DEFINED TERMS. For the purposes of this Agreement each
of the following terms shall have the meaning given such term
below:
ADMINISTRATIVE AGENT: As defined in the Preamble.
AFFILIATE: With respect to any Person (the "first
Person"), any other Person (i) which directly or indirectly
controls, is controlled by or is under common control with the
first Person or (ii) ten percent (10%) or more of the beneficial
interest in which is directly or indirectly owned or held by the
first Person. The term "control" means the possession, directly
orindirectly, of the power, alone, to direct or cause the
direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or
otherwise. Notwithstanding anything to the contrary contained
herein, for purposes of this definition, JMB Partners shall not
be considered an Affiliate of Borrower, Guarantor or URB.
AGREEMENT: This Construction Loan Agreement, as it may
be amended, supplemented or otherwise modified from time to time.
ANCHOR STORES: The collective reference to (i) the
Dillard's department store containing approximately 210,000
square feet of space to be constructed, owned and operated by
Dillard pursuant to the REA, (ii) the Goldsmith's department
store containing approximately 180,000 square feet of space to be
constructed, owned and operated by Rich's pursuant to the REA,
(iii) the Sears store containing approximately 160,885 square
feet of space to be constructed, owned and operated by Sears
pursuant to the REA, and (iv) the JC Penney store containing
approximately 145,800 square feet of space to be constructed,
owned and operated by JC Penney pursuant to the REA.
APPLICABLE MARGIN: For each Type of Loan, the rate per
annum set forth under the relevant column heading below:
Base Eurodollar
Rate Loans Loans
---------- ----------
.25% 1.375%
; PROVIDED, HOWEVER, that the Applicable Margin for each Type of
Loan shall be reduced by .25% upon satisfaction of the following
conditions: (a) there shall exist no Default or Event of Default,
(b) the Mall Opening Date shall have occurred and (c) either (i)
the Debt Yield Ratio (Annualized) (which shall be determined
quarterly) shall equal at least 13.25% or (ii) a Permanent Loan
Commitment shall be in full force and effect. If at any time
after the Applicable Margin shall have been reduced, an Event of
Default shall occur or both (i) the Debt Yield Ratio (Annualized)
shall be less than 13.25% and (ii) the Permanent Loan Commitment
shall cease to be in full force and effect or the permanent loan
thereunder shall not be made within 180 days after such
reduction, then the Applicable Margin shall automatically and
without the need for any documentation be increased by .25% from
the date and during the period that such conditions are not
satisfied, except that if the Applicable Margin shall be
increased by reason of a Debt Yield Ratio (Annualized) being less
than 13.25% as set forth in the Debt Yield Ratio Certificate,
such increase shall be effective from the date Administrative
Agent receives such Debt Yield Ratio Certificate but in no event
later than 60 days from the last day of the calendar quarter
covered by such Certificate until the date Administrative Agent
receives a Debt Yield Ratio Certificate indicating a Debt Yield
Ratio (Annualized) at least equal to 13.25%.
ARCHITECT: RTKL Associates, Inc. or such other
architect or architects as may be engaged by Borrower from time
to time in connection with the Improvements with Administrative
Agent's prior written approval.
ARCHITECT'S AGREEMENT: That certain agreement dated as
of April 8, 1994 between Borrower and Architect providing for
architectural services in connection with the construction of the
Improvements, as it may be amended, supplemented or otherwise
modified from time to time with Administrative Agent's prior
written approval, if required, in accordance with subsection 6.4.
ARCHITECT'S CERTIFICATE: A certificate by the
Architect delivered to Administrative Agent on or before the date
of the initial advance of the Loans, satisfactory in form and
substance to Administrative Agent.
ASSIGNEE: As defined in subsection 11.7(c).
ASSIGNMENT OF LEASES: The Assignment of Leases dated
as of the date this Agreement made by Borrower to Administrative
Agent, as it may be amended, supplemented or otherwise modified
from time to time.
AUTHORIZATION LETTER: The letter executed by Borrower
in the form of Exhibit E hereto.
AUTOMATIC ACCELERATION DEFAULT: As defined in the Deed
of Trust.
AVAILABLE COMMITMENT: As to any Lender at any time, an
amount equal to the excess, if any, of (a) the amount of such
Lender's Commitment over (b) the aggregate principal amount of
all Loans theretofore made by such Lender, provided that from and
after the Termination Date, the Available Commitment shall equal
zero.
BASE RATE LOAN: Loans the rate of interest applicable
to which is based upon the Base Rate.
BASE RATE: For any day, the UBS Prime Rate for such
day.
BORROWER: As defined in the Preamble.
BORROWER'S REQUISITION: A statement by or on behalf of
Borrower, delivered to Administrative Agent, in the form of
Exhibit A setting forth the amount of the Loan advance requested
and including the information and receipts specified therein.
BORROWING DATE: Any Business Day specified in a
Borrower's Requisition pursuant to subsection 3.1 as a date on
which Borrower requests Lenders to make Loans hereunder.
BUILDING LOAN TRUST ACCOUNT: Account No. 5285070
maintained by Borrower at First National Bank of Chicago, into
which Loan advances shall be deposited pursuant to subsection
3.1.
BUSINESS DAY: A day other than a Saturday, Sunday or
other day on which commercial banks in New York City are
authorized or required by law to close.
CODE: The Internal Revenue Code of 1986, as amended
from time to time.
COLLATERAL: The collective reference to the Project
and any other property encumbered by the Security Documents.
COMMITMENT: As to any Lender, the obligations of such
Lender to make Loans to Borrower hereunder in an aggregate
principal amount not to exceed the amount set forth opposite such
Lender's name on the signature page to this Agreement.
COMMITMENT AMOUNT: At any time, the aggregate
principal amount of the Loans outstanding at such time plus the
sum of the Available Commitment of each Lender at such time.
COMMITMENT PERCENTAGE: As to any Lender at any time,
the percentage which such Lender's Commitment then constitutes of
the aggregate Commitments (or, at any time after the Commitments
shall have expired or terminated, the percentage which the
aggregate principal amount of such Lender's Loans then
outstanding constitutes of the aggregate principal amount of the
Loans then outstanding).
COMMITMENT PERIOD: The period from and including the
date hereof to but not including the Termination Date or such
earlier date as the Commitments shall terminate as provided
herein.
COMMONLY CONTROLLED ENTITY: An entity, whether or not
incorporated, which is under common control with Borrower within
the meaning of Section 4001 of ERISA or is part of a group which
includes Borrower and which is treated as a single employer under
Section 414 of the Code.
COMPLETION DATE: February 26, 1997, provided that such
date will be extended for a period of up to six months upon
receipt by Administrative Agent of written consent to such
extension by each of the parties to the REA and the tenants under
any Leases which require the tenant's consent for such extension;
subject to extensions by the period of any Force Majeure Delay,
but in no event later than August 26, 1997.
COMPLETION GUARANTY: The Completion Guaranty dated as
of the date of this Agreement made by Guarantor to Administrative
Agent, as it may be amended, supplemented or otherwise modified
from time to time.
CONSTRUCTION AGREEMENT: The agreement dated as of
October 13, 1995, between Borrower and Vratsinas Construction
Company, providing for the construction of the Improvements, as
it may be amended, supplemented or otherwise modified from time
to time with Administrative Agent's prior written approval, if
required, in accordance with subsection 6.4.
CONSTRUCTION CONSULTANT: Inspection & Valuation
International, Inc., or such other architectural or engineering
consultant as Administrative Agent may engage from time to time
to examine the Plans, changes in the Plans and Project Cost
Statement cost breakdowns and estimates, to make periodic
inspections of the progress on construction of the Improvements
on Lenders' behalf and to advise and render reports to Lenders.
CONSTRUCTION DOCUMENTS: The collective reference to
the Architect's Agreement, the Construction Agreement, the Site
Work Agreement, the Major Subcontracts, the Plans and the
Permits.
CONTRACTOR'S CERTIFICATE: A certificate by General
Contractor delivered to Administrative Agent on or before the
date of the initial advance of the Loans, satisfactory in form
and substance to Administrative Agent.
CONTRACTUAL OBLIGATION: As to any Person, any
provision of any security issued by such Person or of any
agreement, instrument or undertaking to which such Person is a
party or by which it or any of its property is bound.
DEBT SERVICE COVERAGE RATIO (ANNUALIZED): For any
calendar quarter, the ratio of (i) Net Operating Income for such
calendar quarter, annualized, to (ii) Hypothetical Annual Debt
Service for such calendar quarter.
DEBT SERVICE COVERAGE RATIO CERTIFICATE: A certificate
prepared by Borrower and submitted to Administrative Agent for
its approval, certified to be true and correct and signed by a
Responsible Officer of Borrower, setting forth the Debt Service
Coverage Ratio (Annualized) and including operating statements
for the applicable period for which such Ratio is being
determined.
DEBT YIELD RATIO (ANNUALIZED): For any calendar
quarter, the ratio of (a) Net Operating Income for such calendar
quarter, annualized, to (b) the Commitment Amount as of the first
day of such quarter.
DEBT YIELD RATIO CERTIFICATE: A certificate prepared
by Borrower and submitted to Administrative Agent for its
approval, certified to be true and correct and signed by a
Responsible Officer of Borrower, setting forth the Debt Yield
Ratio (Annualized) and including operating statements for the
applicable period for which such Ratio is being determined.
DEED OF TRUST: The Deed of Trust dated as of the date
of this Agreement made by Borrower to Trustee for the benefit of
Administrative Agent, as it may be amended, supplemented or
otherwise modified from time to time.
DEFAULT: Any of the events specified in subsection
9.1, whether or not any requirement for the giving of notice, the
lapse of time, or both, or any other condition has been
satisfied.
DILLARD: Dillard Tennessee Operating Limited
Partnership, a Tennessee limited partnership.
DILLARD CORPORATION: Dillard Department Stores, Inc.,
a Delaware corporation.
DIRECT COSTS: The aggregate costs of all labor,
materials, equipment, fixtures and furnishings necessary for
completion of the Improvements.
DOLLARS and $: Dollars in lawful currency of the
United States of America.
ENVIRONMENTAL INDEMNITY: The Environmental Indemnity
dated as of the date of this Agreement executed and delivered by
Borrower and Guarantor to Administrative Agent, as it may be
amended, supplemented, extended, restated, replaced or otherwise
modified from time to time.
ERISA: The Employee Retirement Income Security Act of
1974, as amended from time to time.
ERISA PLAN: At a particular time, any employee benefit
plan which is covered by ERISA and in respect of which Borrower
or a Commonly Controlled Entity is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be
deemed to be) an "employer" as defined in Section 3(5) of ERISA.
EUROCURRENCY RESERVE REQUIREMENTS: For any day as
applied to a Eurodollar Loan, the aggregate (without duplication)
of the rates (expressed as a decimal fraction) of reserve
requirements in effect on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves
under any regulations of the Board of Governors of the Federal
Reserve System or other Governmental Authority having
jurisdiction with respect thereto) dealing with reserve
requirements prescribed for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of such
Board) maintained by a member bank of such System but only to the
extent of reserve requirements actually incurred by Lenders and
any Participants.
EURODOLLAR BASE RATE: With respect to each day during
each Interest Period pertaining to a Eurodollar Loan, the rate
per annum (rounded upwards if necessary to the nearest 1/16 of
1%) quoted at approximately 11:00 A.M., London time, by
Administrative Agent two Business Days prior to the beginning of
such Interest Period for the offering to leading banks in the
London interbank market of Dollar deposits in immediately
available funds for delivery on the first day of such Interest
Period for the number of days comprised therein and in an amount
comparable to the amount of its Eurodollar Loan to be outstanding
during such Interest Period.
EURODOLLAR LOANS: Loans the rate of interest
applicable to which is based upon the Eurodollar Rate.
EURODOLLAR RATE: With respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
EVENT OF DEFAULT: Any of the events specified in
subsection 9.1, provided that any requirement for the giving of
notice, the lapse of time, or both, or any other condition, has
been satisfied.
FINANCING LEASE: Any lease of property, real or
personal, the obligations of the lessee in respect of which are
required in accordance with GAAP to be capitalized on a balance
sheet of the lessee.
FORCE MAJEURE DELAY: Any cause or event which is
beyond the reasonable control and not due to the fault or
negligence of Borrower, which delays, prevents or prohibits
Borrower's construction of the Improvements, including without
limitation, acts of God or the elements, fire, strikes, labor
disputes, delays in delivery of material and disruption of
shipping; PROVIDED, HOWEVER, any such cause or event shall be
deemed not to be a Force Majeure Delay if Borrower shall fail to
give Administrative Agent written notice within 10 days of the
beginning of each such delay.
GAAP: Generally accepted accounting principles in the
United States of America in effect from time to time.
GENERAL CONTRACTOR: Vratsinas Construction Company,
Four F Corporation, and/or such other general contractor as may
be engaged by Borrower from time to time in connection with the
Improvements with Administrative Agent's prior written approval.
GOVERNMENTAL AUTHORITY: Any nation or government, any
state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
GROSS LEASABLE AREA: Gross leasable area of the
Improvements, excluding the 30,000 square feet of theatre space.
GUARANTEE OBLIGATIONS: As to any Person (the
"GUARANTEEING PERSON"), any obligation of (a) the guaranteeing
person or (b) another Person (including, without limitation, any
bank under any letter of credit) to induce the creation of which
the guaranteeing person has issued a reimbursement,
counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases,
dividends or other obligations (the "PRIMARY OBLIGATIONS") of any
other third Person (the "PRIMARY OBLIGOR") in any manner, whether
directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not contingent,
(i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any
such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain
the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of
the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect
thereof; PROVIDED, HOWEVER, that the term Guarantee Obligation
shall not include endorsements of instruments for deposit or
collection in the ordinary course of business or, in the case of
Guarantor, any obligations which represent the "Other Party's
Share" of "Duplicated Obligations" (as such quoted terms are
hereinafter defined). "Duplicated Obligations" means,
collectively, all those payment guarantees in respect of
Indebtedness of UJVs for which Guarantor and another party are
jointly and severally liable, where the other party is, in the
reasonable judgment of Administrative Agent, capable of
satisfying the Other Party's Share of such obligation. "Other
Party's Share" means such other party's fractional beneficial
interest in the UJV in question. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the
lower of (a) an amount equal to the stated or determinable amount
of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such
primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable,
in which case the amount of such Guarantee Obligation shall be
such guaranteeing person's maximum reasonably anticipated
liability in respect thereof as determined by Borrower or
Guarantor, as the case may be, in good faith.
GUARANTOR: Urban Shopping Centers, L.P., an Illinois
limited partnership.
GUARANTY: The collective reference to the Completion
Guaranty and the Payment Guaranty.
HYPOTHETICAL ANNUAL DEBT SERVICE: For any calendar
quarter (the date of the end of such calendar quarter being
herein referred to as a "Determination Date"), an amount equal to
the constant monthly payment (annualized) of principal plus
interest required to amortize fully, over a term of thirty (30)
years, a hypothetical loan in an amount equal to the Commitment
Amount as of such Determination Date, assuming such loan were to
bear interest at a rate equal to 2% per annum in excess of the
interpolated rate on a ten (10)-year United States Treasury Note
issued as of such Determination Date.
IMPROVEMENTS: A fully enclosed, two level, first class
super-regional shopping mall, containing approximately (a)
350,375 square feet of mall tenant space, (b) 6,918 square feet
of food court space, (c) 30,000 square feet of theater space, and
(d) 4,093 square feet of game room space, to be constructed on
the Land in accordance with the Plans. Improvements shall not
include tenant work performed or to be performed by tenants under
Leases.
INDEBTEDNESS: Of any Person at any date, means,
without duplication (a) all indebtedness of such Person for
borrowed money or for the deferred purchase price of property or
services (including trade obligations), (b) all obligations of
such Person as the lessee under Financing Leases, (c) current
liabilities in respect of unfunded vested benefits under any
Plan, (d) obligations under letters of credit issued for the
account of such Person, (e) obligations under bankers' or trade
acceptance facilities, (f) all guarantees of such Person of any
Indebtedness or other obligation of any other Person, (g) all
endorsements (other than for collection or deposit in the
ordinary course of business) and other contingent obligations to
purchase any of the items included in this definition, to provide
funds for payment, to supply funds to invest in any Person or
otherwise to assure a creditor against loss, (h) all obligations
secured by any Lien on any property owned by such Person even
though such Person has not assumed or otherwise become liable for
the payment thereof, (i) all obligations under any agreement
providing for contingent participation or other hedging
mechanisms with respect to interest on any other indebtedness of
such Person payable on any of the items described above in this
definition and (j) any other indebtedness of such Person which is
evidenced by a note, bond, debenture or similar instrument.
INDIRECT COSTS: All costs of acquisition and financing
of the Project and completion of the Improvements other than
Direct Costs, including but not limited to, engineers',
architects' and attorneys' fees, brokerage fees, development
impact fees, utility connection and capacity fees, inspection
fees, interest, loan fees, arranging fees, service fees, real
estate taxes, assessments and other impositions, survey costs,
title insurance costs, insurance premiums, payments due to
Dillard, Rich's, Sears and JC Penney pursuant to the REA and
tenant allowances to be paid to tenants under Leases.
INSOLVENCY: With respect to any Multiemployer Plan,
the condition that such ERISA Plan is insolvent within the
meaning of Section 4245 of ERISA.
INSOLVENT: Pertaining to a condition of Insolvency.
INTEREST PAYMENT DATE: (a) for the period commencing
on the date hereof through and including the Completion Date, as
to any Loan, the first day of each calendar month and (b)
subsequent to the Completion Date, (i) as to any Base Rate Loan,
the first day of each calendar month, (ii) as to any Eurodollar
Loan having an Interest Period of three months or less, the last
day of such Interest Period, and (iii) as to any Eurodollar Loan
having an Interest Period longer than three months, each day
which is three months or a whole multiple thereof, after the
first day of such Interest Period and the last day of such
Interest Period.
INTEREST PERIOD: With respect to any Eurodollar Loan:
(i) initially, the period commencing on the
borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two,
three or six months thereafter, as selected by Borrower
in its notice of borrowing or notice of conversion, as
the case may be, given with respect thereto; and
(ii) thereafter, each period commencing on
the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two,
three, six months thereafter, as selected by Borrower
by irrevocable notice to Administrative Agent not less
than three Business Days prior to the last day of the
then current Interest Period with respect thereto;
PROVIDED that, all of the foregoing provisions relating to
Interest Periods are subject to the following:
(1) if any Interest Period pertaining to a
Eurodollar Loan would otherwise end on a day that is
not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless the
result of such extension would be to carry such
Interest Period into another calendar month in which
event such Interest Period shall end on the immediately
preceding Business Day;
(2) any Interest Period that would otherwise
extend beyond the Maturity Date shall end on the
Maturity Date;
(3) any Interest Period pertaining to a
Eurodollar Loan that begins on the last Business Day of
a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of a calendar month; and
(4) Borrower shall select Interest Periods
so as not to require a payment or prepayment of any
Eurodollar Loan during an Interest Period for such
Loan.
JC PENNEY: J.C. Penney Properties, Inc., a Delaware
corporation.
JMB PARTNERS: The collective reference to JMB Realty
Corporation, JMB Properties Co., Center Partners, Ltd., Urban
Investment & Development Co., Urban-Water Tower Associates and
JMB/Miami Investors, L.P.
LAND: As defined in the Recitals.
LEASES: All leases, subleases, underlettings,
concession agreements and licenses of any portion of the Project,
now existing or entered into in the future to which Borrower is a
party.
LEGAL REQUIREMENT: As to any Person, the Certificate
of Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation
or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding
upon such Person or any of its property or to which such Person
or any of its property is subject.
LENDER OR LENDERS: As defined in the Preamble.
LIEN: Any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other),
charge or other security interest or any preference, priority or
other security agreement or preferential arrangement of any kind
or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any
Financing Lease having substantially the same economic effect as
any of the foregoing).
LOAN: Any loan made by any Lender pursuant to this
Agreement.
LOAN DOCUMENTS: The collective reference to this
Agreement, the Notes, the Security Documents, the Guaranties, the
Environmental Indemnity, the Subordination Agreement and all
other documents and instruments from time to time evidencing or
relating to the Loan.
MAJOR LEASE: Any Lease demising in excess of 5,000
square feet of Gross Leasable Area.
MAJOR SUBCONTRACTS: Any contract or work order entered
into by the General Contractor and any subcontractor or supplier
with respect to the Project in excess of $500,000.
MAJORITY LENDERS: At any time, Lenders the Commitment
Percentages of which aggregate more than 50%.
MALL: As defined in the Recitals.
MALL OPENING DATE: The date on or prior to which (i)
the Improvements shall have been completed in accordance with
subsection 8.2, (ii) the Anchor Stores shall have been completed
in accordance with the REA and (iii) the Mall shall be open for
business to the general public. The Mall Opening Date is
estimated to occur on or prior to February 27, 1997.
MANAGEMENT AGREEMENT: That certain Property Management
Agreement dated November 27, 1995 between Borrower and Manager,
as the same may be amended, supplemented or otherwise modified
from time to time with Administrative Agent's prior written
approval, if required, in accordance with subsection 6.4.
MANAGER: Urban Shopping Centers, L.P., an Illinois
limited partnership and any successor manager reasonably approved
by Administrative Agent.
MATERIAL ADVERSE EFFECT: A material adverse effect on
(a) the business, operations, property, condition (financial or
otherwise) or prospects of Borrower taken as a whole which would
materially impair Borrower's ability to repay the Loans or
otherwise perform its obligations under this Agreement or any of
the other Loan Documents or (b) the validity or enforceability of
this Agreement or any of the other Loan Documents or the rights
or remedies of Administrative Agent or the Lenders hereunder or
thereunder.
MATURITY DATE: May 29, 1998, as such date may be
extended as provided in subsection 3.16.
MORTGAGED PROPERTY: As defined in the Deed of Trust.
MULTIEMPLOYER PLAN: An ERISA Plan which is a
multiemployer plan as defined in Section 4001(a)(3) of ERISA.
NET OPERATING INCOME: For any period, the excess of
(a) the gross cash receipts actually received by Borrower on
account of the ownership and operation of the Project properly
attributable to such period, including, but not limited to: (i)
gross fixed, minimum and guaranteed rentals received from tenants
under Leases; (ii) additional rent payments made by tenants under
Leases for escalation charges including, but not limited to, real
estate taxes, operating expenses, fuel and utilities, common area
maintenance, and percentage rental income; (iii) tenants'
security deposits under Leases to the extent they have been
applied to payment of tenants' obligations; (iv) amounts received
under the REA or any other easement and/or maintenance agreement
and (v) rents and receipts from concessions, parking charges or
other operating income from any activities conducted by Borrower
within the Project, excluding any extraordinary or nonrecurring
items of revenue; over (b) all expenses incurred by Borrower in
connection with the ownership and operation of the Project during
such period, including, but not limited to: (i) management fees
up to 2.5% of gross receipts of Borrower (not including capital
contributions, loans, proceeds of sales of assets, insurance
proceeds, condemnation awards, tenant reimbursement of capital
improvements, or other comparable receipts); (ii) reasonable
reserves for operation and repair of capital improvements; (iii)
any payments made by Borrower under the REA or any other easement
and/or maintenance agreement; (iv) accounting, legal and other
administrative expenses of Borrower; (v) costs of all
advertising, marketing and promotional activities related to the
Improvements; and (vi) taxes and assessments paid by Borrower or
on the Project or reserves for such taxes and assessments that
are being contested; but excluding all required debt service on
debt of Borrower to Lenders. For purposes of calculating the
Debt Yield Ratio (Annualized) and the Debt Service Coverage Ratio
(Annualized), (a) the term "Leases" shall mean only those Leases
which are executed and which either have been approved in writing
by Administrative Agent or with respect to which Administrative
Agent's consent is not required pursuant to the provisions of the
Deed of Trust and for which tenants are in occupancy and paying
rent and (b) percentage rental income shall be the percentage
rental income received by Borrower for the most recent calendar
year.
NON-EXCLUDED TAXES: As defined in subsection 3.14.
NOTE OR NOTES: The collective reference to the
Construction Loan Notes dated as of the date of this Agreement
made by Borrower to the order of each Lender, as the same may be
amended, supplemented, modified, extended, restated or replaced
from time to time (including, without limitation, any new or
replacement notes issued to any Lender pursuant to subsection
11.7 of this Agreement).
OUTPARCELS: The parcels of real property adjacent to
the Mall more particularly described on Schedule 2 and any parcel
of the Land which becomes an outparcel in accordance with the
terms of the REA and the Deed of Trust.
PARTICIPANTS: As defined in subsection 11.7.
PARTNER: Each general partner and limited partner in
Borrower. A list of all the Partners as of the date of this
Agreement is attached as Schedule 3 hereto.
PARTNERSHIP AGREEMENT: The Partnership Agreement of
Borrower dated as of January 10, 1995, as it may be amended,
supplemented or otherwise modified from time to time with
Administrative Agent's prior written approval, if required, in
accordance with subsection 6.4 and the Deed of Trust.
PAYMENT GUARANTY: The Principal Repayment and Debt
Service Guaranty dated as of the date of this Agreement made by
Guarantor to Administrative Agent, as it may be amended,
supplemented or otherwise modified from time to time.
PBGC: The Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.
PERMANENT LOAN COMMITMENT: Such loan commitment as may
be accepted by Borrower after the date of this Agreement,
providing for a permanent loan in an amount equal to or greater
than the Commitment Amount to be made not later than the Maturity
Date and containing no conditions relating to the performance of
the Project, including without limitation, leasing and financial
conditions, which have not been satisfied (other than the
condition that the Improvements be completed) and otherwise in
form and substance satisfactory to Lenders.
PERMITS: All consents, licenses and building permits
required for construction, completion, occupancy and operation of
the Improvements in accordance with all Legal Requirements
affecting the Project.
PERMITTED EXCEPTIONS: As defined in the Deed of Trust.
PERSON: An individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other
entity of whatever nature.
PLANS: The plans and specifications for the
construction of the Improvements, including, without limitation,
installation of curbs, sidewalks, gutters, landscaping, utility
connections (whether located on or off the Land) and all fixtures
and equipment necessary for construction, operation and occupancy
of the Improvements, prepared or to be prepared by the Architect,
and approved in writing by Administrative Agent, as such plans
and specifications may be amended, supplemented or otherwise
modified from time to time with Administrative Agent's prior
written approval, if required, in accordance with subsections
6.2, 6.3 and 6.4.
PROJECT: The collective reference to the Land and the
Improvements.
PROJECT COST STATEMENT: The project cost statement
attached as Exhibit B, as it may be amended, supplemented or
otherwise modified from time to time with Administrative Agent's
prior written approval, if required, in accordance with
subsection 2.4.
PROJECT COST STATEMENT DEFICIT: As defined in
subsection 2.3.
REA: That certain Construction, Operation and
Reciprocal Easement Agreement dated January 31, 1996 by and among
Borrower, Dillard Corporation, Rich, Sears and JC Penney, as
assigned by Dillard Corporation to Dillard pursuant to that
certain Assignment and Assumption of Operating Agreement dated
February 2, 1996, together with the agreements supplemental or
incidental thereto described in Exhibit 1 to the Deed of Trust,
pursuant to which the Improvements and the Anchor Stores are to
be constructed and operated as an integrated regional shopping
center, as the same may be further amended, supplemented or
otherwise modified from time to time, with Administrative Agent's
prior written approval, if required, in accordance with
subsection 6.4 and the Deed of Trust.
REGISTER: As defined in subsection 11.7(d).
RENTS: All rights of Borrower in respect of cash and
securities deposited under any Lease and the right to receive and
collect the revenues, income, rents, issues and profits of any
Lease.
REORGANIZATION: With respect to any Multiemployer
Plan, the condition that such plan is in reorganization within
the meaning of Section 4241 of ERISA.
REPORTABLE EVENT: Any of the events set forth in
Section 4043(b) of ERISA, other than those events as to which the
thirty day notice period is waived under subsections .13, .14,
.16, .18, .19 or .20 of PBGC Reg. 2615.
REQUIRED LENDERS: At any time, Lenders the Commitment
Percentages of which aggregate at least 66-2/3%.
RESPONSIBLE OFFICER: Adam S. Metz, Michael Hilborn,
Matthew S. Dominski or such other individual as shall be named by
a Responsible Officer by notice to Administrative Agent.
RICH: Rich's Department Stores, Inc., an Ohio
corporation.
SEARS: Sears, Roebuck & Co., a New York corporation.
SECURITY DOCUMENTS: The collective reference to the
Deed of Trust, the Assignment of Leases and all other documents
from time to time which secure the Indebtedness evidenced by the
Note.
SINGLE EMPLOYER PLAN: Any ERISA Plan which is covered
by Title IV of ERISA, but which is not a Multiemployer Plan.
SITE WORK AGREEMENT: The Contract dated as of May 18,
1995 between Borrower and Four F Corporation, providing for
certain site work at the Project, as it may be amended,
supplemented or otherwise modified from time to time with
Administrative Agent's prior written approval, if required, in
accordance with subsection 6.4.
SOLVENCY CERTIFICATE: Each Solvency Certificate
executed by Borrower and Guarantor in the form of Exhibit F
hereto.
SOLVENT: When used with respect to any Person, means
that each of the following are true with respect thereto: (i)
the fair value of the property of such Person, on a going concern
basis, is greater than the total amount of liabilities
(including, without limitation, contingent obligations) of such
Person; (ii) the present fair saleable value of the assets of
such Person, on a going concern basis, is not less than the
amount that will be required to pay the probable liabilities of
such Person on its debts as they become absolute and matured;
(iii) such Person does not intend to, and does not believe that
it will, incur debts or liabilities beyond such Person's ability
to pay as such debts and liabilities mature; (iv) such Person is
not engaged in business or a transaction, and is not about to
engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital after giving
due consideration to the prevailing practice in the industry in
which such Person is engaged; and (v) such Person has sufficient
resources, provided that such resources are prudently utilized,
to satisfy all of such Person's obligations.
SUBORDINATED LOANS: The collective reference to the
loans being made by Guarantor to Borrower in an aggregate
principal amount of up to $40,000,000.
SUBORDINATION AGREEMENT: The Intercreditor and
Subordination Agreement among Borrower, Administrative Agent and
Guarantor dated as of the date of this Agreement providing for
the subordination of the Subordinated Loans made by Guarantor to
Borrower to the Loans, as it may be amended, supplemented or
otherwise modified from time to time.
TERMINATION DATE: May 29, 1998.
TITLE COMPANY: Ticor Title Insurance Company, or such
other title company as may be approved in writing by
Administrative Agent.
TRANCHE: The collective reference to Eurodollar Loans
the then current Interest Periods with respect to all of which
begin on the same date and end on the same later date (whether or
not such Loans shall originally have been made on the same day);
Tranches may be identified as "EURODOLLAR TRANCHES".
TRANSFEREE: As defined in subsection 11.7(f).
TRUSTEE: Mary Aronov, an individual resident of
Tennessee.
TYPE: As to any Loan, its nature as a Base Rate Loan
or a Eurodollar Loan.
UBS: Union Bank of Switzerland, New York Branch.
UBS PRIME RATE: The rate of interest publicly
announced by Union Bank of Switzerland, New York Branch in New
York, New York from time to time as its prime commercial lending
rate. The prime commercial lending rate is not intended to be
the lowest rate of interest charged by Union Bank of Switzerland,
New York Branch in connection with the extension of credit to
debtors.
UJVs: The consolidated joint ventures in which
Guarantor owns a beneficial interest and which are accounted for
under the equity method in the Guarantor Consolidated Financial
Statements referred to in the Guaranty.
UNINCORPORATED MATERIALS: Materials purchased or
manufactured for incorporation in the Improvements but, at any
time an advance of the Loan is made to pay costs therefor, not
yet incorporated in the Improvements.
URB: Urban Shopping Centers, Inc., a Maryland
corporation.
USCM: USC Memphis, Inc., a Delaware corporation.
1.2 OTHER DEFINITIONAL PROVISIONS.
(a) Unless otherwise specified therein, all terms
defined in this Agreement shall have the defined meanings
when used in the Notes or
any certificate or other document made or delivered pursuant
hereto.
(b) As used herein and in the Notes, and any
certificate or other document made or delivered pursuant
hereto, accounting terms relating to Borrower not defined in
subsection 1.1 and accounting terms partly defined in
subsection 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section, subsection,
Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) The meanings given to terms defined herein shall
be equally applicable to both the singular and plural forms
of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
-------------------------------
2.1 AGREEMENT TO LEND AND TO BORROW; NOTES.
(a) Subject to the conditions and upon the terms
provided for in this Agreement, each Lender severally agrees
to make loans to Borrower in an aggregate principal amount
not to exceed the amount of the Commitment of such Lender,
but only during the Commitment Period. The Loans may from
time to time be (a) Eurodollar Loans, (b) Base Rate Loans or
(c) a combination thereof, as determined by Borrower and
notified to Administrative Agent in accordance with
subsection 3.1 and subsection 3.6.
(b) The Loans made by each Lender shall be evidenced
by a Note of Borrower, substantially in the form of Exhibit
C, with appropriate insertions therein as to payee, date and
principal amount, payable to the order of such Lender. The
date, amount and Type of each advance and payment or
prepayment of principal with respect thereto, each
continuation thereof, each conversion of all or a portion
thereof to another Type and, in the case of Eurodollar
Loans, the length of each Interest Period with respect
thereto shall be recorded by each Lender on its books and,
prior to any transfer of its Note (or, at the discretion of
each Lender, at any other time) endorsed by each Lender, on
the schedules annexed to and constituting a part of its
Note. Each such recordation shall constitute PRIMA FACIE
evidence of the accuracy of the information so recorded in
the absence of manifest error. The Note of each Lender
shall (a) be dated the date hereof, (b) be stated to mature
on the Maturity Date and (c) provide for the payment of
interest in accordance with subsection 3.8.
2.2 DETERMINATION OF AMOUNTS OF LOAN ADVANCES.
(a) Disbursements for Direct Costs included in the
Project Cost Statement shall be made as such costs are
incurred in such amounts as shall be determined by
Administrative Agent, in its reasonable discretion, based
upon certifications of Borrower and the Construction
Consultant and such other evidence as may be required by
Administrative Agent, less a retention of 10% of such costs
until the Improvements have been completed; PROVIDED,
HOWEVER, that after 50% of the work performed by any
contractor or subcontractor has been completed substantially
in accordance with the Plans, as certified to Administrative
Agent by the General Contractor and confirmed by the
Construction Consultant, such retention shall be reduced to
5% of such costs, PROVIDED that the retention shall in no
event be less than the percentage actually held back by
Borrower from the relevant contractor or subcontractor.
Upon final completion of the work performed by any
contractor or subcontractor substantially in accordance with
the Plans, as certified to Administrative Agent by the
General Contractor and confirmed by the Construction
Consultant, Administrative Agent shall release that portion
of the retention allocated to the work performed by such
contractor or subcontractor in accordance with the Project
Cost Statement, provided that Administrative Agent shall
have received a final lien waiver and sworn statement from
such contractor or subcontractor.
(b) Advances for payments due to tenants under Leases
which comply with the leasing requirements set forth in the
Deed of Trust or which have been approved by Administrative
Agent and for payments due to Dillard, Rich's, Sears and JC
Penney pursuant to the REA, to the extent such payments are
included in the Project Cost Statement, shall be disbursed
as such payments become due based upon certifications of
Borrower and confirmed by the Construction Consultant and
such other evidence as may be reasonably required by
Administrative Agent, including, without limitation, in the
case of any final payment, an estoppel certificate, in form
and substance reasonably satisfactory to Administrative
Agent, from the applicable Anchor Store owner (dated not
prior to the date such Anchor Store opens for business to
the general public) or tenant, and, to the extent required
under any Lease, appropriate lien waivers.
(c) Disbursements for any other costs related to the
Project included in the Project Cost Statement shall be made
as such costs are incurred, in such amounts as shall be
determined by Administrative Agent in its reasonable
discretion, based upon certifications of Borrower and such
other evidence as may be required by Administrative Agent.
(d) Lenders shall make advances of Loan proceeds from
time to time to pay costs of Unincorporated Materials. Any
such advances shall be made subject to satisfaction of all
other conditions of this Agreement and each of the following
conditions:
(1) the amount of advances at any time
outstanding to pay costs of any category of
Unincorporated Materials shall not exceed $1,000,000;
(2) the Unincorporated Materials, whether
stored on or off the Project, shall be secured,
segregated and identifiable in a manner satisfactory to
Administrative Agent;
(3) Administrative Agent shall be given the
complete address of the place of storage of any
Unincorporated Materials stored off the Project;
(4) Administrative Agent shall be provided
with insurance with respect to the Unincorporated
Materials of kinds, in form and amount and written by
insurers satisfactory to Administrative Agent and
covering Administrative Agent as an insured;
(5) except as provided in clause (9) below,
Administrative Agent shall have received evidence
satisfactory to it that Borrower has good title to the
Unincorporated Materials, free from any lien or
encumbrance;
(6) Administrative Agent shall have received
any documents of title and warehouse receipts that
evidence title to the Unincorporated Materials;
(7) Administrative Agent shall have received
such documents and instruments, including, without
limitation, financing statements, security agreements,
consents of manufacturers, vendors, warehousemen and
bailees, as Administrative Agent may require to
evidence or perfect Administrative Agent's lien on the
Unincorporated Materials;
(8) Administrative Agent shall have received
evidence satisfactory to it that all specially
fabricated Unincorporated Materials have been
fabricated in accordance with the Plans; and
(9) If Administrative Agent advances amounts
to pay contract deposits for Unincorporated Materials
and title has not passed to Borrower, Administrative
Agent shall have received a first, perfected,
enforceable security interest in Borrower's rights in
the contract for the purchase of such materials and any
sums payable or refundable to Borrower thereunder, and,
if requested by Administrative Agent, the contract
vendor shall have consented to such assignment and
agreed to perform its obligations under such contract
for the benefit of Administrative Agent.
2.3 PROJECT COST STATEMENT EVALUATION. If Administrative
Agent determines in its reasonable discretion at any time, after
giving effect to any reallocation made in accordance with
subsection 2.4, that the portion of the Available Commitments
allocated to any line item on the Project Cost Statement is not
sufficient to pay the cost of completing such line item, or in
the case of the line item for interest, to pay interest on the
Loans until the Mall Opening Date (any such deficiency, a
"PROJECT COST STATEMENT DEFICIT"), Lenders, in their sole
discretion, may stop making Loan advances until such time as
Borrower shall either (a) deposit with Administrative Agent
letters of credit issued by an institutional lender reasonably
acceptable to Administrative Agent or additional funds from some
other source in an amount equal to the Project Cost Statement
Deficit or (b) so long as the Guaranties remain in full force and
effect, provide evidence reasonably satisfactory to
Administrative Agent that an adequate source of funds is and
shall remain available to Borrower to fund such Project Cost
Statement Deficit. If any such sums deposited with
Administrative Agent exceed $100,000 at any one time, such sums
shall be held by Administrative Agent in an account bearing
interest at the money market rate. Sums so deposited with
Administrative Agent shall be applied to pay costs of such line
item or items as to which the Project Cost Statement Deficit
exists before Lenders advance proceeds of the Loans to pay such
costs.
2.4 PROJECT COST STATEMENT ADJUSTMENTS. If at any
time the Available Commitments allocated to any line item shown
on the Project Cost Statement exceeds the amount necessary for
such line item, then Administrative Agent, in its reasonable
discretion and after consultation with the Construction
Consultant, may allocate the amount of such excess to any other
line item shown on the Project Cost Statement that Administrative
Agent deems to be insufficient, or if no other line item is
insufficient, to the line item shown on the Project Cost
Statement for interest and/or contingency. Administrative Agent
shall consider any reasonable requests made by Borrower for
adjustments to the Project Cost Statement in accordance with the
preceding sentence. Borrower may revise the Project Cost
Statement by allocating from the line item for contingency an
amount equal to up to 3.5% of the aggregate Direct Costs and
tenant allowances shown on the initial Project Cost Statement to
any line item for Direct Costs and tenant allowances for work
remaining to be completed.
2.5 USE OF PROCEEDS. The proceeds of the Loans shall be
used by Borrower only for payment of costs specified in the
Project Cost Statement.
SECTION 3. BORROWING PROCEDURES
--------------------
3.1 PROCEDURE FOR BORROWING. Borrower shall submit
Borrower's Requisitions (appropriately completed and including
all documentation required to be attached thereto) to
Administrative Agent and the Construction Consultant no later
than noon (New York City time) ten Business Days prior to the
Borrowing Date specified therein requesting that Lenders make
Loans on the Borrowing Date and specifying (i) the amount to be
borrowed, (ii) whether the Loans are to be Eurodollar Loans, Base
Rate Loans, or a combination thereof, and (iii) if the Loans are
to be entirely or partly Eurodollar Loans, the respective amounts
of each such Type of Loan and the respective lengths of the
initial Interest Periods therefor, provided that in the event
that any portion of the borrowing is to be a Eurodollar Loan,
such portion of the borrowing may, at Borrower's election,
initially be made as either a Base Rate Loan, and subject to the
conditions herein set forth concerning Eurodollar Loans, such
portion shall be converted into a Eurodollar Loan two Business
Days after the Borrowing Date, or as a Eurodollar Loan. If
Borrower selects a Eurodollar Loan and the borrowing is not made
on the Borrowing Date for any reason, Borrower shall be liable
for any amounts payable pursuant to subsection 3.15.
Administrative Agent, no later than three Business Days prior to
the date an advance is to be made, shall (i) notify each Lender
thereof and (ii) send to each Lender by facsimile Borrower's
Requisition (without attachments except for Direct and Indirect
Cost Statements). Provided all conditions to an advance of Loan
proceeds have been satisfied, each Lender will make the amount of
its pro rata share of each borrowing available to Administrative
Agent for the account of Borrower at the office of Administrative
Agent specified in subsection 11.3 prior to 11:00 A.M., New York
City time, on the Borrowing Date requested by Borrower in funds
immediately available to Administrative Agent, provided that if
any condition to an advance shall not be satisfied by 2:00 P.M.,
New York City time, on such Borrowing Date, Administrative Agent
shall return such funds to each Lender without compensation to
such Lender. Such borrowing will be made available to Borrower
by Administrative Agent depositing the aggregate of the amounts
made available to Administrative Agent by the Lenders into the
Building Loan Trust Account, or upon the occurrence and during
the continuance of an Event of Default, at Administrative Agent's
option, Administrative Agent may advance such funds by payment
directly to any third party to whom an amount is payable. The
execution of this Agreement by Borrower constitutes an
irrevocable authorization to Administrative Agent and Lenders to
advance Loan proceeds as provided in this subsection. No further
authorization shall be necessary to warrant such direct advances.
All sums advanced by direct payment to third parties shall reduce
the Available Commitment, shall be evidenced by the Notes and
shall be secured by the Security Documents. Lenders shall have
no obligation to make advances of the Loan proceeds more often
than once in each calendar month, provided that Lenders may make
an additional advance each calendar month to pay interest as
provided in subsection 3.4. Neither Lenders nor Administrative
Agent shall have any obligation to see to the disposition of any
direct payments to any contractor or other Person.
3.2 FIRST ADVANCE AND SUBSEQUENT ADVANCES. The first
advance of Loan proceeds shall be made upon satisfaction of all
conditions specified in Section 7 of this Agreement. All
advances after the first advance shall be made upon satisfaction
of all conditions specified in Section 8 of this Agreement.
3.3 WAIVERS OF CONDITIONS.
(a) Administrative Agent, in its sole discretion may,
but shall have no obligation to, waive or vary any
requirements imposed on Borrower for giving notice of
borrowing.
(b) If any or all conditions precedent to an advance
of Loan proceeds have not been satisfied on any Borrowing
Date, Administrative Agent, in its sole discretion, may, but
shall have no obligation to, waive such conditions and
disburse all or a part of the requested advance. No person
dealing with Borrower or the General Contractor, directly or
indirectly, shall have standing to object to such waiver.
Such waivers and advances pursuant to such waivers shall be
deemed made pursuant to this Agreement and not in
modification of this Agreement
3.4 ADVANCES TO PAY INTEREST.
(a) Included in the Project Cost Statement are amounts
allocated to pay interest on the Loans. Subject to the
conditions set forth below, Borrower shall request advances
to be made on the day of the month when each interest
payment is due for the purpose of paying the interest due or
to become due at such time, in which event Lenders shall be
authorized and are hereby directed to disburse the amount of
such interest by crediting the bank account maintained by
Borrower with Administrative Agent. No separate fund or
account shall be created for such interest. In no event
shall Lenders be obligated to make any advance if the
request for such advance does not contain a direction to pay
interest on the Loans due at the time of such advance unless
Borrower has paid interest to Lenders directly from a source
other than the Loan proceeds. Any such request for an
advance of interest shall be accompanied by a direction by
Borrower to Lenders to charge such bank account for the
amount of such interest then due and advanced to Borrower by
Lenders. Notwithstanding the foregoing, Borrower hereby
requests Lenders to make advances to pay such interest on or
before the day when each interest payment is due in the
amount of interest then due, by crediting such amount to the
bank account maintained by Borrower with Administrative
Agent and charging such account for such interest. Lenders
may comply with the foregoing request at any time,
notwithstanding any failure by Borrower to make a more
specific request.
(b) Administrative Agent, in its discretion, may
refuse to advance for the payment of interest at such time
and so long as an Event of Default has occurred and is
continuing.
If Administrative Agent determines not to advance for the payment
of interest for such reason, Administrative Agent shall so notify
Borrower and Borrower shall be obligated to pay all interest
becoming due on the Loans after such notice from a source other
than Loan proceeds, in the manner and at the times provided in
the Notes. Administrative Agent shall be obligated to recommence
advancing for the payment of interest only when there shall be no
uncured Event of Default.
3.5 OPTIONAL PREPAYMENTS. Borrower may at any time
and from time to time prepay the Loans, in whole or in part,
without premium or penalty, provided that (a) Borrower shall have
given at least one (1) Business Day's prior notice to
Administrative Agent in the case of Base Rate Loans and two (2)
Business Days' prior notice to Administrative Agent in the case
of Eurodollar Loans, specifying the date and amount of prepayment
and whether the prepayment is of Eurodollar Loans, Base Rate
Loans or a combination thereof, and, if of a combination thereof,
the amount allocable to each, (b) any partial prepayment under
this subsection shall be in an amount not less than $1,000,000 or
a whole multiple of $100,000 in excess thereof; (c) a Eurodollar
Loan may be prepaid only on the last day of the applicable
Interest Period for such Eurodollar Loan; and (d) each prepayment
under this subsection shall include all interest accrued on the
amount of principal prepaid through the date of prepayment and
any amounts payable pursuant to subsection 3.15. Upon receipt of
any such notice Administrative Agent shall promptly notify each
Lender thereof. If any such notice is given, the amount
specified in such notice shall be due and payable on the date
specified therein, together with any amounts payable pursuant to
subsection 3.15. Amounts prepaid on account of the Loans may not
be reborrowed.
3.6 CONVERSION AND CONTINUATION OPTIONS.
(a) Borrower may elect from time to time to convert
Eurodollar Loans to Base Rate Loans by giving Administrative
Agent by no later than 10:00 A.M. (New York City time) at
least two Business Days' prior irrevocable notice of such
election, PROVIDED that any such conversion of Eurodollar
Loans may only be made on the last day of an Interest Period
with respect thereto. Borrower may elect from time to time
to convert Base Rate Loans to Eurodollar Loans by giving
Administrative Agent at least three Business Days' prior
irrevocable notice of such election. Any such notice of
conversion to Eurodollar Loans shall specify the length of
the initial Interest Period or Interest Periods therefor.
Upon receipt of any such notice, Administrative Agent shall
promptly notify each Lender thereof. All or any part of
outstanding Eurodollar Loans and Base Rate Loans may be
converted as provided herein, PROVIDED that (i) no Loan may
be converted into a Eurodollar Loan when any Default or
Event of Default has occurred and is continuing and
Administrative Agent has or the Required Lenders have
determined that such a conversion is not appropriate and
(ii) no Loan may be converted into a Eurodollar Loan after
the date that is one month prior to the Maturity Date.
(b) Any Eurodollar Loans may be continued as such upon
the expiration of the then current Interest Period with
respect thereto by Borrower giving notice to Administrative
Agent, in accordance with the applicable provisions of the
term "Interest Period" set forth in subsection 1.1, of the
length of the next Interest Period to be applicable to such
Loans, PROVIDED that no Eurodollar Loan may be continued as
such (i) when any Default or Event of Default has occurred
and is continuing and Administrative Agent has or the
Required Lenders have determined that such a continuation is
not appropriate or (ii) after the date that is one month
prior to the Maturity Date and PROVIDED, FURTHER, that if
Borrower shall fail to give any required notice as described
above in this paragraph or if such continuation is not
permitted pursuant to the preceding proviso such Loans shall
be automatically converted to Base Rate Loans on the last
day of such then expiring Interest Period.
3.7 MINIMUM AMOUNTS AND MINIMUM NUMBER OF TRANCHES. All
borrowings, conversions and continuations of Loans hereunder and
all selections of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so that, after
giving effect thereto, the aggregate principal amount of the
Loans comprising each Eurodollar Tranche shall be equal to at
least $100,000, provided that no minimum aggregate principal
amount of the Loans shall be required for a Eurodollar Tranche in
respect of borrowings for the payment of interest on the Loans.
No more than six Eurodollar Tranches in the aggregate may be
outstanding at any time under this Agreement and the Notes.
3.8 INTEREST RATES AND PAYMENT DATES.
(a) Each Eurodollar Loan shall bear interest for each
day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for
such day plus the Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate
per annum equal to the Base Rate plus the Applicable Margin.
(c) If all or a portion of (i) the principal amount of
any Loan, (ii) any interest payable thereon or (iii) any fee
or other amount payable hereunder shall not be paid when due
(whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall bear interest at a
rate per annum which is (x) in the case of overdue
principal, the rate that would otherwise be applicable
thereto pursuant to the foregoing provisions of this
subsection plus 3% or (y) in the case of overdue interest,
fee or other amount, the rate described in paragraph (b) of
this subsection plus 3%, in each case from the date of such
non-payment until such amount is paid in full (as well after
as before judgment) provided that the provisions of this
paragraph (c) shall not apply if such amount shall be paid
on or prior to the expiration of any grace or cure period
applicable to such amount.
(d) Interest shall be payable in arrears on each
Interest Payment Date, PROVIDED that interest accruing
pursuant to paragraph (c) of this subsection shall be
payable from time to time on demand.
(e) Borrower shall, at Administrative Agent's option,
pay to Administrative Agent for the account of the Lenders a
late payment premium in the amount of 2% of any payments of
interest under the Loans made more than fifteen (15) days
after the due date thereof, which shall be due with any such
later payment.
3.9 COMPUTATION OF INTEREST AND FEES.
(a) Fees and interest shall be calculated on the basis
of a 360-day year for the actual days elapsed. Interest on
Base Rate Loans and Eurodollar Loans shall not exceed the
maximum amount permitted under applicable law. Any change
in the interest rate on a Loan resulting from a change in
the UBS Base Rate, or the Eurocurrency Reserve Requirements,
shall become effective as of the opening of business on the
day on which such change becomes effective. Administrative
Agent shall as soon as practicable notify Borrower and
Lenders of the effective date and the amount of each such
change in interest rate and of each determination of a
Eurodollar Rate.
(b) Each determination of an interest rate by
Administrative Agent pursuant to any provision of this
Agreement shall be conclusive and binding on Borrower in the
absence of manifest error.
3.10 INABILITY TO DETERMINE INTEREST RATE. If prior to the
first day of any Interest Period:
(a) Administrative Agent shall have determined (which
determination shall be conclusive and binding upon Borrower)
that, by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period,
or
(b) Administrative Agent shall have received notice
from the Majority Lenders that the Eurodollar Rate
determined or to be determined for such Interest Period will
not adequately and fairly reflect the cost to such Lenders
(as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest
Period,
Administrative Agent shall give telecopy or telephonic notice
thereof to Borrower and Lenders as soon as practicable
thereafter. If such notice is given (x) any Eurodollar Loans
requested to be made on the first day of such Interest Period
shall be made as Base Rate Loans, (y) any Loans that were to have
been converted on the first day of such Interest Period to
Eurodollar Loans shall be converted to or continued as Base Rate
Loans and (z) any outstanding Eurodollar Loans shall be
converted, on the first day of such Interest Period, to Base Rate
Loans. Until such notice has been withdrawn by Administrative
Agent, no further Eurodollar Loans shall be made or continued
as such, nor shall Borrower have the right to convert Loans to
Eurodollar Loans.
3.11 PRO RATA TREATMENT AND PAYMENTS.
(a) Each borrowing by Borrower from the Lenders
hereunder, each payment by Borrower on account of any fees
hereunder shall be made pro rata according to the respective
Commitment Percentages of the Lenders. Each payment
(including each prepayment) by Borrower on account of
principal of and interest on the Loans shall be made pro
rata according to the respective outstanding principal
amounts of the Loans then held by Lenders. All payments
(including prepayments) to be made by Borrower hereunder and
under the Notes, whether on account of principal, interest,
fees or otherwise, shall be made without set off or
counterclaim and shall be made prior to 11:00 A.M., New York
City time, on the due date thereof to Administrative Agent,
for the account of Lenders, at Administrative Agent's office
specified in subsection 11.3, in Dollars and in immediately
available funds. Administrative Agent shall distribute such
payments to Lenders promptly upon receipt in like funds as
received. If any payment hereunder becomes due and payable
on a day other than a Business Day, such payment shall be
extended to the next succeeding Business Day, and, with
respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension.
(b) The obligations of Lenders under this Agreement
are several, and no Lender shall be responsible for the
failure of any other Lender to fund the portion of any
borrowing of the Loan required to be funded by such other
Lender. Unless Administrative Agent shall have been
notified in writing by any Lender prior to a borrowing that
such Lender will not make the amount that would constitute
its Commitment Percentage of such borrowing available to
Administrative Agent, Administrative Agent may assume that
such Lender is making such amount available to
Administrative Agent, and, upon notice to, and approval of,
Borrower, Administrative Agent in its sole discretion may,
but shall not be obligated to, in reliance upon such
assumption, make available to Borrower a corresponding
amount. If such amount is not made available to
Administrative Agent by the required time on the Borrowing
Date therefor, such Lender shall pay to Administrative
Agent, on demand, such amount with interest thereon for the
period until such Lender makes such amount immediately
available to Administrative Agent at the Base Rate. A
certificate of Administrative Agent submitted to any Lender
with respect to any amounts owing under this subsection
shall be conclusive in the absence of manifest error. If
such Lender's Commitment Percentage of such borrowing is not
made available to Administrative Agent by such Lender within
three Business Days of such Borrowing Date, Administrative
Agent shall also be entitled to recover such amount with
interest thereon at the rate per annum applicable to Base
Rate Loans hereunder, on demand, from Borrower.
3.12 ILLEGALITY. Notwithstanding any other provision
herein, if the adoption of or any change in any Legal Requirement
or in the interpretation or application thereof shall make it
unlawful for any Lender to make or maintain Eurodollar Loans as
contemplated by this Agreement, (a) the commitment of such Lender
hereunder to make Eurodollar Loans, continue Eurodollar Loans as
such and convert Base Rate Loans to Eurodollar Loans shall
forthwith be cancelled and (b) such Lender's Loans then
outstanding as Eurodollar Loans, if any, shall be converted
automatically to Base Rate Loans on the respective last days of
the then current Interest Periods with respect to such Loans or
within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the
last day of the then current Interest Period with respect
thereto, Borrower shall pay to such Lender such amounts, if any,
as may be required pursuant to subsection 3.15.
3.13 LEGAL REQUIREMENTS.
(a) If the adoption of or any change in any Legal
Requirement or in the interpretation or application thereof
or compliance by any Lender with any request or directive
(whether or not having the force of law) from any central
bank or other Governmental Authority, in any such case made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of
any kind whatsoever with respect to this Agreement, any
Note or any Eurodollar Loan made by it, or change the
basis of taxation of payments to such Lender in respect
thereof (except for Non-Excluded Taxes covered by
subsection 3.14 and changes in the rate of tax on the
overall net income of such Lender);
(ii) shall impose, modify or hold applicable
any reserve, special deposit, compulsory loan or
similar requirement against assets held by, deposits or
other liabilities in or for the account of, advances,
loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender
which is not otherwise included in the determination of
the Eurodollar Rate; or
(iii) shall impose on such Lender any
other condition;
and the result of any of the foregoing is to increase the
cost to such Lender, by an amount which such Lender in good
faith deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or to reduce any
amount receivable hereunder in respect thereof, then, in any
such case, Borrower shall promptly pay such Lender, upon its
demand, any additional amounts necessary to compensate such
Lender for such increased cost or reduced amount receivable.
(b) If any Lender shall have determined that any
change in any Legal Requirement regarding capital adequacy
or in the interpretation or application thereof or
compliance by such Lender or any corporation controlling
such Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) from any
Governmental Authority, in any such case made subsequent to
the date hereof, does or shall have the effect of reducing
the rate of return on such Lender's or such corporation's
capital as a consequence of its obligations hereunder to a
level below that which such Lender or such corporation could
have achieved but for such change or compliance (taking into
consideration such Lender's or such corporation's policies
with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time, after
submission by such Lender to Borrower (with a copy to
Administrative Agent) of a written request therefor,
Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction.
(c) If any Lender becomes entitled to claim any
additional amounts pursuant to this subsection, it shall
promptly notify Borrower, with a copy to Administrative
Agent, of the event by reason of which it has become so
entitled. A certificate as to any additional amounts
payable pursuant to this subsection submitted by such Lender
to Borrower (with a copy to Administrative Agent) shall be
conclusive in the absence of manifest error. This covenant
shall survive the termination of this Agreement and the
payment of the Notes and all other amounts payable
hereunder.
(d) Notwithstanding anything to the contrary contained
in this subsection, Borrower shall not be required to pay
any additional amounts to any Lender pursuant to this
subsection to the extent such additional amounts result from
such Lender's negligence.
3.14 TAXES.
(a) All payments made by Borrower under this Agreement
and any Notes shall be made free and clear of, and without
deduction or withholding for or on account of, any present
or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, excluding net income taxes
and franchise taxes (imposed in lieu of net income taxes)
imposed on Administrative Agent or any Lender as a result of
a present or former connection between Administrative Agent
or such Lender and the jurisdiction of the Governmental
Authority imposing such tax or any political subdivision or
taxing authority thereof or therein (other than any such
connection arising solely from Administrative Agent or such
Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, this
Agreement or any Notes). If any such non-excluded taxes,
levies, imposts, duties, charges, fees, deductions or
withholdings ("NON-EXCLUDED TAXES") are required to be
withheld from any amounts payable to Administrative Agent or
any Lender hereunder or under any Notes, the amounts so
payable to Administrative Agent or such Lender shall be
increased to the extent necessary to yield to Administrative
Agent or such Lender (after payment of all Non-Excluded
Taxes) interest or any such other amounts payable hereunder
at the rates or in the amounts specified in this Agreement,
PROVIDED, HOWEVER, that Borrower shall not be required to
increase any such amounts payable to any Lender that is not
organized under the laws of the United States of America or
a state thereof if such Lender fails to comply with the
requirements of paragraph (b) of this subsection. Whenever
any Non-Excluded Taxes are payable by Borrower, as promptly
as possible thereafter Borrower shall send to Administrative
Agent for its own account or for the account of such Lender,
as the case may be, a certified copy of an original official
receipt received by Borrower showing payment thereof. If
Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to
Administrative Agent the required receipts or other required
documentary evidence, Borrower shall indemnify
Administrative Agent and Lenders for any incremental taxes,
interest or penalties that may become payable by
Administrative Agent or any Lender as a result of any such
failure. The agreements in this subsection shall survive
the termination of this Agreement and the payment of the
Notes and all other amounts payable hereunder.
Notwithstanding anything to the contrary contained in this
subsection, Borrower shall not be required to pay any
additional amounts to any Lender pursuant to this subsection
to the extent such additional amounts result from such
Lender's negligence.
(b) Each Lender that is not incorporated under the
laws of the United States of America or a state thereof
shall:
(i) deliver to Borrower and Administrative
Agent (A) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, or
successor applicable form, as the case may be, and (B)
an Internal Revenue Service Form W-8 or W-9, or
successor applicable form, as the case may be;
(ii) deliver to Borrower and Administrative
Agent two further copies of any such form or
certification on or before the date that any such form
or certification expires or becomes obsolete and after
the occurrence of any event requiring a change in the
most recent form previously delivered by it to
Borrower; and
(iii) obtain such extensions of time for
filing and complete such forms or certifications as may
reasonably be requested by Borrower or Administrative
Agent;
unless in any such case an event (including, without
limitation, any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from duly
completing and delivering any such form with respect to it
and such Lender so advises Borrower and Administrative
Agent. Such Lender shall certify (i) in the case of a Form
1001 or 4224, that it is entitled to receive payments under
this Agreement without deduction or withholding of any
United States federal income taxes and (ii) in the case of a
Form W-8 or W-9, that it is entitled to an exemption from
United States backup withholding tax. Each Person that
shall become a Transferee pursuant to subsection 11.7 shall,
upon the effectiveness of the related transfer, be required
to provide all of the forms and statements required pursuant
to this subsection, provided that in the case of a
Participant such Participant shall furnish all such required
forms and statements to Lender from which the related
participation shall have been purchased.
3.15 INDEMNITY. Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense which
such Lender may sustain or incur as a consequence of (a) default
by Borrower in making a borrowing of, conversion into or
continuation of Eurodollar Loans after Borrower has given a
notice requesting the same in accordance with the provisions of
this Agreement, (b) default by Borrower in making any prepayment
after Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment of
Eurodollar Loans on a day which is not the last day of an
Interest Period with respect thereto. Such indemnification may
include an amount equal to the excess, if any, of (i) the amount
of interest which would have accrued on the amount so prepaid, or
not so borrowed, converted or continued, for the period from the
date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case
of a failure to borrow, convert or continue, the Interest Period
that would have commenced on the date of such failure) in each
case at the applicable rate of interest for such Loans provided
for herein (excluding, however, the Applicable Margin included
therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such
Lender on such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank eurodollar
market. This covenant shall survive the termination of this
Agreement and the payment of the Notes and all other amounts
payable hereunder. Amounts payable pursuant to this subsection
shall be paid to Administrative Agent for the account of the
applicable Lender, upon the request of such Lender through
Administrative Agent and a determination of any Lender as to the
amounts payable pursuant to this subsection shall be conclusive
absent manifest error.
3.16 EXTENSION OF MATURITY DATE. Borrower shall have the
option, exercisable three times, to extend the Maturity Date for
a period of one year, from May 29, 1998 to May 29, 1999 (the
"First Extension Option"), from May 29, 1999 to May 29, 2000 (the
"Second Extension Option") and from May 29, 2000 to May 29, 2001
(the "Third Extension Option"), provided that the following
conditions are satisfied for each extension:
(a) at least 60 days prior to the Maturity Date being
extended, Administrative Agent shall have received:
(i) written notice from Borrower of its
election to extend the Maturity Date;
(ii) a notice of title continuation or
endorsement from the Title Company reasonably
satisfactory to Administrative Agent showing title to
the Project free and clear of all Liens except for
Permitted Exceptions;
(iii) a current, independent M.A.I.
appraisal of the Project, commissioned by Lenders and
complying with applicable laws and regulations,
indicating, in the case of the First Extension Option,
a "stabilized" value, and in the case of each
of the Second Extension Option and Third Extension
Option, an "as-is" value, of the Project as of the
Maturity Date being extended such that the ratio of the
Commitment Amount to said value is no greater than 65%;
all costs and expenses reasonably incurred by Lenders
in connection with such appraisal shall have been
reimbursed or paid for by Borrower;
(iv) an extension fee, for the account of
Lenders, in an amount equal to .125% of the Commitment
Amount as of the Maturity Date being extended; and
(v) an estoppel certificate from any Anchor
Store owner for which Borrower has given or received
notice that a material default has occurred under the
REA.
(b) no Default or Event of Default shall have occurred
and be continuing as of the Maturity Date being extended;
and
(c) in the case of each of the Second Extension Option
and the Third Extension Option, Administrative Agent shall
have determined that (i) the Debt Service Coverage Ratio
(Annualized) for the last quarter ending before the Maturity
Date being extended exceeds 1.20 and (ii) the Debt Yield
Ratio (Annualized) for the last quarter ending before the
Maturity Date being extended exceeds 13.25%.
3.17 AMORTIZATION DURING EXTENSION TERMS. If, as of the end
of any calendar quarter from and after May 29, 1999, either (a)
the Debt Service Coverage Ratio (Annualized) shall be less than
1.20 or (b) the Debt Yield Ratio (Annualized) shall be less than
13.25% then, in addition to the required payments of interest on
the Notes, Borrower shall, and hereby covenants to, make a
payment in reduction of the outstanding principal amount of the
Notes as hereinafter provided. Such payment shall be (a) due on
the sixty-fifth (65th) day after the end of the calendar quarter
for which the requisite Debt Service Coverage Ratio (Annualized)
or Debt Yield Ratio (Annualized) is not attained and (b) in an
amount, reasonably determined by Administrative Agent, equal to
the lesser of (i) the excess, if any (the "Quarterly Cash Flow"),
of (1) Net Operating Income for the applicable calendar quarter
over (2) the actual interest expense on the Loan for the
applicable calendar quarter or (ii) the amount by which the
outstanding principal amount of the Notes would be required to be
paid down so as to cause the Debt Service Coverage Ratio
(Annualized) for such calendar quarter to be increased to 1.20 or
the Debt Yield Ratio (Annualized) for such calendar quarter to be
increased to 13.25%.
3.18 ADVANCE OF AVAILABLE COMMITMENT. If (i) Administrative
Agent shall have received copies of executed Leases for at least
92.5% of the Gross Leasable Area in compliance with the
requirements of the Deed of Trust or otherwise approved by
Administrative Agent and (ii) the Mall Opening Date shall have
occurred, each Lender shall, if requested by written notice from
Borrower to Administrative Agent given at least ten (10) days
prior to the Borrowing Date, advance on the Borrowing Date its
then Available Commitment in accordance with subsection 3.1.
SECTION 4. REPRESENTATIONS AND WARRANTIES
------------------------------
In order to induce Lenders to enter into this Agreement and
to make the Loan, Borrower covenants, represents and warrants to
Lenders as follows:
4.1 FORMATION AND EXISTENCE.
(a) Attached hereto as Schedule 3 is a true, correct
and complete list of all Persons who are Partners in
Borrower. Borrower (i) is a duly organized and validly
existing limited partnership, formed under the laws of the
State of Delaware, (ii) has all requisite power
and authority to consummate the transactions contemplated in the
Loan Documents and the Construction Documents to which
Borrower is a party and (iii) is in compliance with all
applicable Legal Requirements, except to the extent that the
failure to comply would not have a Material Adverse Effect.
(b) USCM (i) is a duly organized and validly existing
corporation, formed and in good standing under the laws of
the State of Delaware, (ii) has all requisite power and
authority to be a Partner, (iii) has all requisite power and
authority to authorize and has authorized Borrower to
consummate the transactions contemplated in the Loan
Documents and (iv) is in compliance with all applicable
Legal Requirements, except to the extent that the failure to
comply would not have a Material Adverse Effect.
4.2 POWER AND AUTHORITY. The consummation of the
transactions contemplated in the Loan Documents and the
Construction Documents to which Borrower is a party and the
performance or observance of Borrower's obligations under the
Loan Documents and the Construction Documents to which Borrower
is a party have been duly authorized by all necessary action on
the part of Borrower.
4.3 AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
(a) The Loan Documents to which Borrower is a party
have been duly executed and delivered on behalf of Borrower
and each constitutes, the legal, valid and binding
obligation of Borrower, enforceable against Borrower in
accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally.
(b) The Construction Documents to which Borrower is a
party have been duly executed and delivered, constitute the
legal, valid and binding obligations of Borrower, and to the
best of Borrower's knowledge, the other parties to such
agreements, have not been amended, modified or terminated
and are in full force and effect. The rights of Borrower
under the Architect's Agreement and the Construction
Agreement may be assigned to Lenders. There exists no
default of Borrower, or to the best of Borrower's knowledge,
of any other party under the Architect's Agreement or the
Construction Agreement and to the best of Borrower's
knowledge, no event has occurred and is continuing which
with notice or the passage of time or both would constitute
a default under the Architect's Agreement or the
Construction Agreement.
4.4 NO LITIGATION. There is no action, suit or proceeding
pending, or to the best of Borrower's knowledge threatened,
against or affecting Borrower or the Collateral or that might
have a Material Adverse Effect or might materially adversely
affect the Collateral in any court, or before or by any
Governmental Authority, whether federal, state, county or
municipal, which has not been disclosed in writing to
Administrative Agent.
4.5 CONSENTS, APPROVALS, AUTHORIZATIONS, ETC. No consent,
approval, order or authorization of or registration, declaration
or filing with any Governmental Authority is required in
connection with the valid execution and delivery of the Loan
Documents or the Construction Documents to which Borrower is a
party or the carrying out or performance of any of the
transactions required or contemplated by the Loan Documents or
the Construction Documents to which Borrower is a party other
than the Permits or, if required, such consent, approval, order
or authorization has been obtained or such registration,
declaration or filing has been accomplished (other than the
recording of the Deed of Trust and filing of UCC-1 Financing
Statements).
4.6 NO LEGAL BAR. The execution, delivery and performance
of the Loan Documents and the Construction Documents to which
Borrower is a party, borrowings under this Agreement and the use
of the proceeds of the Loan will
not violate any Legal Requirement affecting or any Contractual
Obligation of Borrower or any Partner and will not result in, or
require, the creation or imposition of any Lien on any of
Borrower's properties or revenues pursuant to any Legal
Requirement or Contractual Obligation, except for the Lien of the
Security Documents.
4.7 COMPLIANCE WITH BUILDING CODES, ZONING LAWS, ETC.
Borrower has no knowledge of any existing, probable or potential
violations of any Legal Requirement or any restrictive covenant
affecting the Land or the construction, use or occupancy of the
Improvements.
4.8 NO DEFAULT. Neither Borrower nor USCM is in default
under or with respect to any Contractual Obligation in any
respect which could have a Material Adverse Effect. No Default
or Event of Default has occurred and is continuing.
4.9 TAXES. Borrower has filed or caused to be filed all
tax returns which, to the knowledge of Borrower, are required to
be filed, and has paid all taxes shown to be due and payable on
such returns or on any assessments made against Borrower or the
Project and all other taxes, fees or other charges imposed on
Borrower or the Project by any Governmental Authority (other than
those taxes, the amount or validity of which is being contested
in good faith by appropriate proceedings diligently prosecuted
and with respect to which reserves in conformity with GAAP have
been provided on the books of Borrower); no tax Liens have been
filed, and, to the knowledge of Borrower, no claim is being
asserted, with respect to any such tax, fee or other charge.
4.10 AVAILABILITY OF UTILITIES. All utility services and
facilities necessary for the construction of the Improvements
without impediment or delay (including, without limitation, gas,
electrical, water and sewage services and facilities) are, or
will be when needed, available at the boundaries of the Land and
all utility services necessary for the operation of the
Improvements for their intended purposes will be available at or
within the boundaries of the Land when needed.
4.11 PLANS. The Plans are satisfactory to Borrower, have
been reviewed by the General Contractor and, to the extent
required by the REA, have been reviewed and approved by the
parties to the REA, the tenants under any Leases which require
approval of the Plans, the Architect, and, to the extent required
by applicable law or any effective restrictive covenant, by all
Governmental Authorities and the beneficiary of any such
covenant, and by all other Persons having the right to approve
the Plans; all construction, if any, already performed on the
Improvements has been performed on the Land substantially in
accordance with the Plans approved as aforesaid and with all
Legal Requirements and restrictive covenants applicable thereto.
4.12 BROKERAGE. No brokerage or other fee, commission or
compensation is to be paid by Lenders in connection with this
Loan.
4.13 PERMITS, ETC. All Permits for the construction of the
Improvements required to the date that this representation is
being made or reaffirmed have been obtained and are in full force
and effect.
4.14 FINANCIAL STATEMENTS. Any and all financial statements
delivered to Lenders by or on behalf of Borrower are true and
correct in all material respects and fairly present the financial
conditions of their subjects as of their respective dates, no
material adverse change has occurred in the financial conditions
reflected since their respective dates and no additional
Indebtedness has been incurred by their subjects since the
respective dates of the latest statements, other than the
borrowings contemplated by this Agreement or other Indebtedness
which has been approved by Administrative Agent in writing. No
such financial statement or any certificate or statement
furnished to Lenders by or on behalf of Borrower in connection
with the transactions contemplated by this Agreement, and no
representation or warranty in this Agreement, contains any untrue
statement of a material fact or omits to state a material fact
necessary in order to make the statements contained
in such financial statements, certificates or other statements or
this Agreement not misleading.
4.15 ERISA. (a)(i) No "accumulated funding deficiency"
(within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date
on which this representation is made or deemed made with respect
to any ERISA Plan;
(ii) No termination of a Single Employer Plan has
occurred, and no Lien in favor of the PBGC has arisen,
during such five-year period;
(iii) Neither Borrower nor any Commonly
Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan, and neither
Borrower nor any Commonly Controlled Entity would
become subject to any liability under ERISA if Borrower
or any such Commonly Controlled Entity were to withdraw
completely from all Multiemployer Plans as of the
valuation date most closely preceding the date on which
this representation is made or deemed made;
(iv) To the best of Borrower's knowledge, no such
Multiemployer Plan is in Reorganization or Insolvent;
and any such event or condition described in clause (i),
(ii), (iii) or (iv) is reasonably likely to give rise to
material liability to Borrower.
(b) No Reportable Event which is reasonably likely to
give rise to a Material Adverse Effect has occurred during
the five-year period prior to the date on which this
representation is made or deemed made with respect to any
Single Employer Plan.
(c) Each ERISA Plan has complied in all material
respects with the applicable provisions of ERISA and the
Code, except as would not reasonably be likely to give rise
to a Material Adverse Effect.
4.16 SOLVENCY. Borrower is, and upon consummation of the
transactions contemplated by this Agreement, the other Loan
Documents and any other documents, instruments or agreements
relating thereto, will be, Solvent.
4.17 ROADS. All roads necessary for the use of the
Improvements for their intended purposes and required by
Governmental Authorities have either been completed or the
necessary rights of way therefor are owned by Borrower or have
been acquired by appropriate Governmental Authorities or
dedicated to public use and accepted by said Governmental
Authorities, and all necessary steps have been taken by Borrower
and said Governmental Authorities to assure the complete
construction and installation thereof no later than the
Completion Date or any earlier date required by any Legal
Requirement, any Lease or the REA.
4.18 REA AND LEASES. The REA and all existing Leases in
respect of the Project are unmodified and in full force and
effect (except to the extent permitted by the Loan Documents),
there exists no default by Borrower, or to the best of Borrower's
knowledge, by any other party under the REA or any existing
Leases, and all conditions to the effectiveness and continuing
effectiveness the REA and all existing Leases required to be
satisfied as of the date hereof have been satisfied.
4.19 ACCURACY OF INFORMATION; FULL DISCLOSURE. All
information, reports and other papers and data with respect to
Borrower (other than projections) furnished to Lenders by
Borrower were, at the time the same were so furnished or as of
the date of such report or information, complete and correct in
all material respects, or have been subsequently supplemented by
other information, reports or other papers or data, to the extent
necessary to give Lenders a true and accurate knowledge of the
subject matter of such
information, reports, or other papers and data in all material
respects. All projections with respect to Borrower furnished to
Lenders by or on behalf of Borrower, as supplemented, were
prepared and presented in good faith by Borrower, it being
recognized by Lenders that such projections as to future events
are not to be viewed as facts and that actual results during the
period or periods covered by any such projections may differ from
the projected results. No fact is known to Borrower which has or
is reasonably likely to have a Material Adverse Effect, which has
not been set forth in the financial statements referred to in
subsection 4.14 or in such information, reports, papers and data
or otherwise disclosed in writing to Lenders prior to the date
hereof. To the best of Borrower's knowledge, neither this
Agreement nor any documents, financial statements, reports,
notices, schedules, certificates, statements or other writings
furnished by or on behalf of Borrower to Administrative Agent or
any Lender in connection with the negotiation of this Agreement
or the consummation of the transactions contemplated hereby, or
required herein to be furnished by or on behalf of Borrower,
contains any untrue or misleading statement of a material fact or
omits a material fact necessary to make the statements herein or
therein not misleading. There is no fact known to Borrower which
Borrower has not disclosed to Administrative Agent and Lenders in
writing which materially affects adversely nor, so far as
Borrower can now foresee, will materially affect adversely the
business, prospects, profits or financial condition of Borrower
or the ability of Borrower to perform this Agreement.
SECTION 5. AFFIRMATIVE COVENANTS.
---------------------
Borrower agrees, unless otherwise consented to in writing by
Administrative Agent or Lenders, as applicable, that, so long as
the Commitments remain in effect or the Notes remain outstanding
and unpaid or any amount is owing to any Lender hereunder or
under any of the other Loan Documents, Borrower shall fully keep
and perform each of the covenants set forth in this Section.
5.1 CONSTRUCTION. Borrower has commenced construction of
the Improvements and shall complete the erection and equipping of
the Improvements with due diligence on or before the Completion
Date, subject to and in accordance with the Plans, this
Agreement, the REA and the Leases, to the extent that the REA or
such Leases specify construction requirements. The Improvements
shall be constructed and equipped in full compliance with the
Legal Requirements affecting the Project and all requirements of
the appropriate Board of Fire Underwriters or other similar body
acting in and for the locality in which the Project is situated.
5.2 PERFORMANCE UNDER OTHER AGREEMENTS. Borrower shall
duly perform and observe all of the covenants, agreements and
conditions on its part to be performed and observed under the
Loan Documents, and Borrower shall duly perform and observe in
all material respects all of the covenants, agreements and
conditions on its part to be performed and observed under the
Construction Documents to which Borrower is a party and the
Leases.
5.3 CORRECTION OF WORK. Upon demand of Administrative
Agent, Borrower, at its sole cost and expense, shall cause to be
corrected any structural defect in the Improvements, any material
departure from the Plans not approved by Required Lenders and any
failure to comply with applicable Legal Requirements.
5.4 NO ENCROACHMENTS. The Improvements shall be
constructed entirely on the Land and shall not encroach upon or
overhang any easement or right-of-way or the land of others
(unless such encroachment or overhang is consented to in writing
by the owner of the affected property or permitted under the
terms of the REA). When erected the Improvements shall be wholly
within any building restriction lines, however established.
Borrower shall furnish to Administrative Agent promptly after the
foundations for the Improvements have
been completed, a foundation survey prepared by a registered
surveyor or engineer.
5.5 APPLICATION OF INSURANCE AND CONDEMNATION PROCEEDS.
Any proceeds of insurance or condemnation received as a result of
a casualty or taking shall be applied as provided in the Deed of
Trust. In the event that Administrative Agent shall make
available to Borrower the proceeds of any fire or other casualty
insurance or condemnation actually paid to Administrative Agent
in respect of such damage or destruction of the Improvements
(after deducting therefrom any sums retained by Administrative
Agent in reimbursement for costs of collection) to pay the cost
of restoration, as provided in the Deed of Trust, Borrower shall
proceed promptly with the work of restoration of the Improvements
in accordance with the Plans and shall prosecute the work of
restoration diligently to completion. All insurance proceeds
shall be held by Administrative Agent to secure payment of
Borrower's obligations under this Agreement, the Notes and the
Security Documents and disbursed in accordance with the
procedures and subject to the conditions specified in this
Agreement for the disbursement of Loan proceeds. If any Default
or Event of Default shall occur prior to completion of such work
of restoration, then Administrative Agent, at its option, may
apply such insurance or condemnation proceeds in payment of sums
due under this Agreement or the Notes or any of the Security
Documents, in such order as Administrative Agent may elect in its
sole discretion. Any insurance or condemnation proceeds
remaining after restoration of the Improvements is completed
shall be applied, at Lenders' election, in prepayment of the
principal amount of the Loan, in the inverse order of maturity if
payable in installments, or paid over to Borrower.
5.6 CERTAIN NOTICES. Borrower shall give notice to
Administrative Agent promptly upon the occurrence of:
(a) the receipt by Borrower of any notice given to
Borrower that a default by Borrower has occurred under the
REA, any Lease or any of the Construction Documents to which
Borrower is a party;
(b) the giving by Borrower of any notice alleging that
a material default has occurred under the REA, any Lease or
any of the Construction Documents;
(c) the receipt by Borrower of any notice given to
Borrower or with respect to the Project or the giving by
Borrower of any notice which alleges that any portion of
construction or equipping or furnishing of the Improvements
does not comply with any Legal Requirement;
(d) any condition which results or is reasonably
likely to result in a Force Majeure Delay in completion of
the Improvements;
(e) any development or event which has had or could
have a Material Adverse Effect; and
(f) the following events, as soon as possible and in
any event within 30 days after Borrower knows or has reason
to know thereof: (i) the occurrence or expected occurrence
of any Reportable Event with respect to any Single Employer
Plan, a failure to make any material required contribution
to a Single Employer Plan, the creation of any Lien in favor
of the PBGC with respect to a Single Employer Plan or any
withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action
by the PBGC or, in the case of a distress termination,
Borrower or any Commonly Controlled Entity to terminate any
Single Employer Plan, but only to the extent such
occurrence, expected occurrence, proceedings or other
action, in each case, described in clause (i) or (ii)
together with all other such occurrences, expected
occurrences, proceedings or other actions, is reasonably
likely to have a Material Adverse Effect. Each notice
pursuant to this subsection shall be accompanied
by a statement of a Responsible Officer setting forth
details of the occurrence referred to in such notice and
stating what action Borrower proposes to take with respect
to such occurrence.
5.7 PLAN CHANGES. Borrower shall provide copies of all
change orders, change bulletins and other revisions of the Plans
and the Construction Agreements which do not require Required
Lenders' prior approval to Administrative Agent and the
Construction Consultant promptly after the commencement of any
work reflecting such changes or revisions.
5.8 INDEMNIFICATION. Borrower hereby indemnifies
Administrative Agent and Lenders against any claims for brokerage
fees or commissions asserted in connection with the Loans arising
out of or in connection with any act or omission of Borrower or
any Affiliate of Borrower and agrees to pay all expenses incurred
by Lenders in connection with the defense of any such action or
proceeding brought to collect any such brokerage fees or
commissions.
5.9 EXPENSES.
(a) Borrower shall pay or reimburse Administrative
Agent for all reasonable out-of-pocket expenses incurred by
Administrative Agent before and after the date of this
Agreement with respect to any and all transactions
contemplated by this Agreement including, without
limitation, the preparation of any document reasonably
required by Administrative Agent and the enforcement of any
of Administrative Agent's and/or Lenders' rights under this
Agreement. From time to time after the closing, Borrower
may receive statements for such expenses, including, without
limitation, attorneys' fees and disbursements. Borrower
shall pay such statements promptly upon receipt.
(b) If any action or proceeding is commenced by
Administrative Agent (including, without limitation, any
action to foreclose under the Deed of Trust or to collect
the Loans or enforce any Guaranty) or to which
Administrative Agent and/or one or more Lenders are made a
party, or in which it becomes necessary to defend or uphold
the lien of the Deed of Trust, or in which Administrative
Agent and/or one or more Lenders are served with any legal
process, discovery notice or subpoena relating to Lenders'
lending to Borrower or accepting any Guaranty, Borrower will
reimburse Administrative Agent and Lenders for all expenses
which have been or may be incurred by Administrative Agent
and Lenders arising from or in connection with such action
or proceeding.
(c) Any amounts payable or reimbursable by Borrower
under this subsection which are not paid or reimbursed
within thirty days after demand by Administrative Agent
shall bear interest at the rate of interest payable under
subsection 3.8(c) from the date of such demand until
payment.
5.10 CONSTRUCTION SCHEDULE. As soon as reasonably available
after commencement of construction, Borrower shall provide
Administrative Agent, at Borrower's expense, with a critical path
method schedule for completion of the construction and equipping
of the Improvements, which schedule shall be in form and
substance satisfactory to Administrative Agent.
5.11 INSPECTION OF BOOKS AND RECORDS. Administrative Agent
and the Construction Consultant, and designated representatives
of either of them, shall, upon reasonable prior notice and at
reasonable times, have the right of entry and free access to the
Improvements and the right in the presence of a representative of
Borrower (provided Borrower makes its representative available on
a timely basis) to inspect all work done, labor performed and
materials furnished in and about the Improvements and to inspect
all books, contracts, records and plans and shop drawings of
Borrower relating to the Project or the construction of the
Improvements. Upon reasonable prior notice and at reasonable
times, Borrower shall make its representatives available for
Administrative Agent or the Construction Consultant and any
designated
representative of either, to discuss Borrower's affairs, finances
and accounts relating to the Project and the construction of the
Improvements and Borrower will cooperate, and cause the General
Contractor to cooperate, with Administrative Agent and the
Construction Consultant and any designated representative of
either of them.
5.12 MOVEMENT OF UNINCORPORATED MATERIALS. With respect to
any Unincorporated Materials for which advances of the Loan have
been made, Borrower shall give notice to Administrative Agent not
less than five days prior to any change in the location of such
Unincorporated Materials, which notice shall state the date on
which transfer shall commence, the destination and the name and
address of the carrier. If requested by Administrative Agent at
the time such notice is given, Borrower shall furnish to
Administrative Agent, promptly when available, copies of bills of
lading, certificates of bailment, warehouse receipts and other
documents and instruments evidencing Borrower's rights in the
Unincorporated Materials in transit and on arrival at
destination.
5.13 INSPECTION REPORTS. Borrower shall furnish, or cause
to be furnished, to the Construction Consultant as soon as
available: (a) a copy of meeting minutes, (b) copies of all
construction contracts and purchase orders entered into after the
date hereof, (c) copies of all testing and quality control
reports and designer field reports, (d) copies of contractor
trade payment breakdowns and monthly job cost reports prepared by
Borrower and General Contractor and (e) such other information as
may be reasonably requested by the Construction Consultant in
order to make reports to Administrative Agent as to the status of
the Project.
5.14 CERTIFICATES. Within sixty (60) days after the end of
each calendar quarter, commencing with the quarter ending June
30, 1999, Borrower shall deliver to Administrative Agent a Debt
Service Coverage Ratio Certificate and a Debt Yield Ratio
Certificate for such quarter, provided that if the Applicable
Margin shall be reduced in reliance upon the Debt Yield Ratio
(Annualized) being at least equal to 13.75% in accordance with
the definition of Applicable Margin, Borrower shall within sixty
(60) days after the end of each calendar quarter thereafter
deliver to Administrative Agent a Debt Yield Ratio Certificate
for such calendar quarter.
SECTION 6. NEGATIVE COVENANTS
------------------
Borrower agrees, unless otherwise consented to in writing by
Administrative Agent or Lenders, as applicable, that, so long as
the Commitments remain in effect, any Note remains outstanding
and unpaid, Borrower shall not take or permit the actions set
forth in this Section.
6.1 ADDITIONAL DEBT. Borrower shall not create, incur,
assume or suffer to exist any Indebtedness other than the Loans
and the Subordinated Loans.
6.2 CHANGES IN PLANS. Borrower shall not modify or
supplement the Plans in any material respect without the prior
written consent of Required Lenders, the lessees under Leases
which specify construction requirements to the extent required
under such Leases and all Governmental Authorities which
previously have approved the matters to be changed to the extent
required by such Governmental Authorities.
6.3 CHANGE ORDERS. Borrower shall not direct or permit the
performance of any work pursuant to any revision (of whatever
nature or form) of the Plans or any change orders or change
bulletins or other instruments or understandings if the cost of
such revision or change is in excess of $250,000 or, when
combined with the cost of all revisions or change orders not
specifically approved by Administrative Agent, would result in an
aggregate increase of the cost of construction of the
Improvements in an amount in excess of $500,000, provided that
the foregoing covenant shall not apply to
change orders resulting from the addition to the Construction
Agreement or the Site Work Agreement of work which is included in
the Project Cost Statement and not contracted for as of the date
of this Agreement in amounts which are not in excess of the
amounts for such work as set forth in the Project Cost Statement
and which is otherwise in accordance with the Plans.
6.4 CHANGES IN AGREEMENTS. Borrower shall not surrender,
terminate, cancel or rescind or, in any material respect,
supplement, alter, revise, modify or amend the Partnership
Agreement, the REA, the Management Agreement or any of the
Construction Documents to which Borrower is a party or permit any
such action to be taken.
SECTION 7. CONDITIONS PRECEDENT TO FIRST ADVANCE
-------------------------------------
Lenders shall not be obligated to make the first advance of
Loan proceeds until all of the conditions set forth in this
Section shall have been satisfied.
7.1 CLOSING DOCUMENTS. Administrative Agent shall have
received all the items set forth in this subsection, in each case
in form and substance satisfactory to Administrative Agent.
(a) TAXES. Evidence that all past and current (if
then due and payable) taxes and assessments applicable to
the Project or payable by Borrower have been paid.
(b) TITLE INSURANCE POLICY. A mortgagee's policy of
title insurance or satisfactory evidence of Title Company's
unconditional obligation to issue such a policy, dated as
the date of the first advance of the Loan. Such policy
shall (i) be in the amount of the Loan; (ii) be issued at
ordinary rates; (iii) insure Administrative Agent for the
benefit of Lenders that the Mortgage creates a valid Lien on
the Project, free and clear of all defects and encumbrances,
except for the Permitted Exceptions; (iv) be in the form of
policies providing Lenders with the broadest coverage that
is then offered by the Title Company to mortgagees of
properties located in the state in which the Land is located
and that is otherwise satisfactory to Administrative Agent;
(v) provide full coverage against mechanics' liens and
against survey exceptions not specified as Permitted
Exceptions; (vi) contain a pending disbursements clause or
endorsement in form and substance satisfactory to
Administrative Agent and a commitment of Title Company to
provide notices of title continuation or endorsement
sufficient to enable Administrative Agent to determine that
title to the Project is satisfactory prior to Administrative
Agent's making any subsequent advance of the Loan; and (vii)
contain such other endorsements and affirmative coverage as
Administrative Agent may reasonably request. Administrative
Agent shall be furnished with copies of all documents that
appear as exceptions in such policy or commitment.
(c) PAYMENT OF TITLE INSURANCE PREMIUM. Evidence
satisfactory to Administrative Agent that all premiums in
respect of such title insurance policy have been paid.
(d) SURVEY. A survey of the Land certified to Lenders
by an independent professional licensed land surveyor
satisfactory to Administrative Agent within 30 days of the
date of the first advance of the Loan, which survey shall be
made in accordance with the Minimum Standard Detail
Requirements for Land Title Surveys jointly established and
adopted by the American Title Association and the American
Congress on Surveying and Mapping in 1988. Without limiting
the generality of the foregoing, there shall be surveyed and
shown on such survey the following: (i) the lines and the
width of streets abutting the Land; (ii) all access and
other easements appurtenant to or necessary or desirable to
the use of the Land; (iii) all roadways, paths, driveways,
easements, encroachments and overhanging projections and similar
encumbrances affecting the Land, whether recorded, apparent
from a physical inspection of the Land or otherwise known to
the surveyor; (iv) any party walls with structures on
adjoining property any encroachments on any adjoining
property by the building structures and improvements on the
Land; and (v) if the Land is described by reference to a
filed map, a legend relating the survey to such map.
(e) AVAILABILITY OF UTILITIES. Letters from local
utility companies or Governmental Authorities stating, or
such other evidence satisfactory to Administrative Agent,
showing that gas, electric power, sanitary and storm sewers,
water and all other utilities (i) that are necessary and
required during the construction period have been completed
and will be available in such a manner as to assure
Administrative Agent that construction will not be impeded
by a lack of utilities and (ii) that are necessary for
operation and occupancy of the Improvements will be
completed in such a manner and at such a time as will assure
the opening and operation of the Improvements on or before
the Completion Date.
(f) ARCHITECT'S CERTIFICATE. The Architect's
Certificate, executed by the Architect.
(g) CONTRACTOR'S CERTIFICATE. A Contractor's
Certificate executed by each General Contractor.
(h) INSURANCE. (i) Policies or certificates of
insurance required by the Deed of Trust and any of the other
Security Documents, accompanied by evidence of the payment
of the premiums for such policies, with mortgagee loss
payable endorsements naming Lenders as loss payees and (ii)
evidence of professional liability insurance coverage for
the Architect.
(i) FLOOD INSURANCE. If required by the Deed of
Trust, a policy of flood insurance in an amount equal to the
lesser of (i) the maximum limit of coverage available under
the National Flood Insurance Act of 1968, as amended, and
(ii) the amount of the Loan.
(j) PERMITS, ETC. All Permits required at the stage
of the construction existing on the date of this Agreement.
(k) SOILS AND GEOLOGICAL REPORT. If requested by
Administrative Agent, a soils and geological report,
including a summary of soils test borings issued by a
professional engineer satisfactory to Administrative Agent.
(l) OPINION OF COUNSEL FOR BORROWER. Opinions of
Michael Hilborn, and Katten Muchin & Zavis, counsel for
Borrower.
(m) OPINION OF COUNSEL FOR USCM. An opinion of
Michael Hilborn, and Katten Muchin & Zavis, counsel for
USCM.
(n) OPINION OF COUNSEL FOR GUARANTOR. An opinion of
Michael Hilborn, and Katten Muchin & Zavis, counsel for
Guarantor.
(o) OPINION OF LOCAL COUNSEL. An opinion of Armstrong
Allen Prewitt Gentry Johnston & Holmes, local Tennessee
counsel.
(p) CONSTRUCTION DOCUMENTS. Copies of all
Construction Documents.
(q) PLANS. A copy of the Plans, satisfactory in form
and content to Administrative Agent and Construction
Consultant.
(r) COST BREAKDOWN. A cost breakdown and schedule for
construction of the Improvements setting forth all items of
costs and expenses and estimating the construction trade
schedules required to complete the construction and
equipping of the Improvements.
(s) LOAN DOCUMENTS. Duly executed copies of all Loan
Documents.
(t) ORGANIZATIONAL DOCUMENTATION. For each Partner
and each Guarantor that is a corporation, copies of the
following documents:
(1) the certificate of incorporation
including all amendments, certified by the Secretary of
State of the state of its incorporation, together with
a certificate of such Secretary of State to the effect
that such corporation is in good standing,
(2) by-laws certified by the secretary of
such corporation,
(3) certified resolutions by the
shareholders or directors of such corporation
authorizing the consummation of the transactions
contemplated by this Agreement or the Completion
Guaranty or the Debt Service Guaranty, as the case may
be; and
(4) a certificate as to the incumbency and
genuineness of the signature of each officer executing
each Loan Document executed by such corporation;
and, if Borrower, any Partner or any Guarantor is a
partnership or limited partnership, with respect to each
such entity:
(1) the partnership agreement including all
amendments and attachments, certified by a general
partner;
(2) the partnership certificate including
all amendments, certified by an official in whose
office it is filed or recorded;
(3) any certificates filed or recorded or
required to be filed or recorded by such partnership in
the state of its formation and the state where the Land
is located in order for it to do business in those
states;
(4) any consents by other partners required
for the borrowing contemplated by this Agreement and
the execution, delivery and performance of the Loan
Documents or the execution, delivery and performance of
the Completion Guaranty or the Debt Service Guaranty,
as applicable; and
(5) if requested by Administrative Agent, an
acknowledgement by each of the Partners of his or its
continued membership in Borrower or Guarantor, as
applicable.
(u) BORROWER'S REQUISITION. A Borrower's Requisition,
duly executed by Borrower.
(v) LIEN SEARCHES. The results of a recent search by
a Person satisfactory to Administrative Agent, of the
Uniform Commercial Code, judgment and tax lien filings which
may have been filed with respect to personal property of
Borrower, Guarantor, URB or any Partner.
(w) SOLVENCY CERTIFICATES. A Solvency Certificate,
duly executed, from each of Borrower and Guarantor.
(x) APPRAISAL. An independent M.A.I. appraisal which
shall indicate a value for the Project acceptable to
Administrative Agent and shall comply in all respects with
the standards for real estate appraisals established
pursuant to the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989.
(y) ENVIRONMENTAL REPORT. A Phase I Environmental
Assessment of the Land.
(z) LIST OF PRIOR OWNERS, ETC. A list, certified by
the Title Insurance Company, of the prior owners, tenants
and other users, during the period from January 1, 1940 to
the date of such certification of all or any portion of the
Land.
(aa) LEASES. Copies of all fully executed Leases of
the Improvements existing on the date of this Agreement in
compliance with the leasing requirements set forth in the
Deed of Trust or otherwise approved by Administrative Agent,
together with, to the extent in Borrower's possession and
not prohibited by the terms of the Lease, current financial
statements of the tenants (and guarantors of the tenants'
obligations, if applicable) thereunder; such Leases to
include mall leases satisfactory to Administrative Agent in
all respects, covering, in the aggregate, at least 40%
(144,554 square feet) of the Gross Leasable Area (excluding
the lease of game room space being approximately 4,093
square feet).
(bb) STANDARD FORM OF LEASE. The standard form of
lease Borrower intends to use in connection with the leasing
of space in the Improvements.
(cc) REA. A copy, certified to be true and complete,
of the REA, together with estoppel certificates with respect
thereto from each of Dillard, Rich, Sears and JC Penney.
(dd) MANAGEMENT AND LEASING CONTRACTS. Copies of all
existing contracts providing for the management,
maintenance, operation or leasing of the Project or any
improvements thereon, together with, in each case, such
collateral assignments as Administrative Agent may require.
(ee) AUTHORIZATION LETTER. The Authorization Letter
duly executed by Borrower.
(ff) BONDS. For each of the Construction Agreement and
the Site Work Agreement, copies of labor and material
payment bonds and performance bonds with dual obligee
riders, satisfactory to Administrative Agent, naming
Borrower and Administrative Agent as co-obligees.
7.2 FEES. Lenders shall have received all legal fees and
disbursements of Administrative Agent's counsel payable in
connection with the preparation, execution and delivery of the
Loan Documents and the consummation of the transactions
contemplated by the Loan Documents.
7.3 SUBORDINATED LOANS. Administrative Agent shall have
received evidence, satisfactory to Administrative Agent, of the
making of loans to Borrower by Guarantor and payment by Borrower
with the proceeds thereof of Direct or Indirect Costs in an
amount not less than $24,992,000.
7.4 ACCOUNTING. Administrative Agent shall have received
and approved an accounting of all expenditures for costs shown on
the Project Cost Statement incurred prior to the first advance of
the Loan.
7.5 REPRESENTATIONS AND WARRANTIES. The representations
and warranties which are contained in any of the Loan Documents
or any certificate, document or financial or other statement
furnished under or in connection with the Loan Documents, shall
be correct in all material respects on and as of the date of the
first advance as if made on and as of such date.
7.6 NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of
Default shall have occurred and be continuing on such date or
after giving effect to the advance to be made on such Borrowing
Date.
7.7 ADDITIONAL MATTERS. All other documents and legal
matters in connection with the transactions contemplated by this
Agreement shall be satisfactory in form and substance to
Administrative Agent and its counsel.
SECTION 8. CONDITIONS PRECEDENT TO SUBSEQUENT ADVANCES
-------------------------------------------
8.1 ALL SUBSEQUENT ADVANCES. Lenders shall not be
obligated to make any advance of Loan proceeds subsequent to the
initial advance until all of the conditions set forth in this
subsection shall have been satisfied.
(a) SATISFACTORY TITLE. The Security Documents shall
constitute a valid lien on the Collateral for the full
amount of the Loan advanced to and including such date, free
and clear of all Liens except for Permitted Exceptions.
Administrative Agent shall have been furnished with a notice
of title continuation or an endorsement to the title
insurance policy issued to Lenders in connection with the
first advance of the Loan, which continuation or endorsement
shall state that since the last disbursement of the Loan
there have been no changes in the state of title to the
Project not previously approved by Administrative Agent and
that there are no additional survey exceptions not
previously approved by Administrative Agent.
(b) NO OTHER SECURITY INTERESTS. All materials and
fixtures incorporated in the construction of the
Improvements shall have been purchased so that their
absolute ownership shall have vested in Borrower immediately
upon delivery to the Land and Borrower shall have produced
and furnished, if required by Administrative Agent, the
contracts, bills of sale or other agreements under which
title to such materials and fixtures is claimed.
(c) STATEMENT OF EXPENDITURES. If requested by
Administrative Agent, Administrative Agent shall have
received a statement of Borrower and any contractor or
subcontractor, in form and substance satisfactory to
Administrative Agent, setting forth the names, addresses and
amounts due or to become due as well as the amounts
previously paid to every contractor, subcontractor, and
supplier furnishing materials for or performing labor on the
construction of any part of the Improvements.
(d) REPRESENTATIONS AND WARRANTIES. The
representations and warranties contained in any of the Loan
Documents or any certificate, document or financial or other
statement furnished under or in connection with the Loan
Documents, shall be correct in all material respects on and
as of the Borrowing Date for such advance as if made on and
as of such date.
(e) NO DEFAULT OR EVENT OF DEFAULT. No Default or
Event of Default shall have occurred and be continuing on
such date or result from the advance to be made on such
Borrowing Date.
(f) CONSTRUCTION PROGRESS. In the case of advances to
pay Direct Costs, Administrative Agent shall have received
and approved (i) an inspection report of the Construction
Consultant covering the progress of construction, conformity
of the work with the Plans, quality of work completed and
percentage of work completed, (ii) a requisition signed by
the General Contractor, satisfactory in form and substance
to Administrative Agent, with appropriate insertions,
accompanied by true copies of unpaid invoices, receipted
bills and lien waivers, and such
other supporting information as Administrative Agent may
reasonably request.
(g) INDIRECT COSTS. In the case of advances to pay
Indirect Costs included in the Project Cost Statement,
Administrative Agent shall have received such evidence as it
may reasonably require that such costs have been properly
incurred and are due and payable.
(h) EVIDENCE OF COMPLIANCE. All instruments relating
to each advance and all actions taken on or prior to each
advance in connection with the performance of the Loan
Documents shall be satisfactory to Administrative Agent, and
Administrative Agent shall have been furnished with such
documents, reports, certificates, affidavits and other
information, in form and substance satisfactory to
Administrative Agent, as Administrative Agent may reasonably
require to evidence compliance with all of the provisions of
the Loan Documents.
(i) LIEN WAIVERS. Borrower shall have furnished to
Administrative Agent lien waivers in form and substance
satisfactory to Administrative Agent from such contractors,
subcontractors, suppliers and materialmen as Administrative
Agent may specify, evidencing that they have been paid in
full for all work performed or materials supplied to the
date which is one month prior to the date of Borrower's
request for such advance, except for retentions provided for
in this Agreement.
(j) AGREEMENTS. Each of the Construction Documents to
which Borrower is a party shall be in full force and effect
and there shall exist no material default by any party under
the Construction Documents to which Borrower is a party,
under the REA or under Major Leases aggregating in excess of
15,000 square feet of Gross Leasable Area.
(k) DAMAGE OR INJURY. The Improvements shall not have
been materially damaged by fire or other casualty unless
there shall have been received, by Administrative Agent or a
person approved by Administrative Agent, insurance proceeds
(together with letters of credit, cash or other undertaking
or security deposited with and satisfactory to
Administrative Agent) sufficient in the reasonable judgment
of Administrative Agent after consultation with the
Construction Consultant, to effect satisfactory restoration
and completion of the Improvements on or before the
Completion Date.
(l) TAXES. Administrative Agent shall have received
evidence that all past and current (if then due and payable)
taxes and assessments applicable to the Project or payable
by Borrower in connection with the Project have been paid or
will be paid from proceeds of the advance being requested by
Borrower.
(m) WAIVED CONDITIONS. If requested by Administrative
Agent, all conditions waived with respect to the initial
advance or any subsequent advance shall be met.
(n) BORROWER'S REQUISITION. Administrative Agent
shall have received a Borrower's Requisition.
8.2 COMPLETION OF IMPROVEMENTS. The Improvements shall not
be deemed completed for purposes of this Agreement until all of
the conditions set forth in this subsection shall have been
satisfied.
(a) The Improvements (excluding punch list items and
tenant work to be performed by Borrower) shall have been
completed in accordance with the Plans and accepted by
Borrower.
(b) Administrative Agent shall have received the
following, in each case in form and substance satisfactory
to Administrative Agent:
(i) evidence of the approval by all
appropriate Governmental Authorities of the
Improvements as being complete as to construction;
(ii) the certification of the Architect and
of the Construction Consultant that the Improvements
(excluding punch list items and tenant work to be
performed by Borrower) have been completed
substantially in accordance with the Plans, that direct
connection has been made to all appropriate utility
facilities and that the Improvements are ready for
occupancy;
(iii) an as-built survey showing the
completed Improvements, all easements on and
appurtenant to the Project and the location of access
to the Land and all utility and water easements
directly affecting the Land, with a certification that
the Improvements do not encroach on any property other
than the Land, that no buildings, other structures or
appurtenances on other property encroach on the Land
and that all set-back requirements have been complied
with; and
(iv) such endorsements to the title policy
insuring the Deed of Trust as Administrative Agent may
reasonably require.
SECTION 9. EVENTS OF DEFAULT
-----------------
9.1 EVENTS OF DEFAULT. The occurrence of any of the events
set forth in this subsection shall constitute an Event of
Default.
(a) PAYMENT OF NOTES. Borrower shall fail to pay any
principal of any Note (other than principal of any Note
payable pursuant to subsection 3.17 hereof) when due in
accordance with the terms thereof or hereof; or Borrower
shall fail to pay any principal of any Note when due
pursuant to subsection 3.17 hereof, or any interest, fees or
late charges payable hereunder, under any Note or any other
Loan Document, within five days after written notice to
Borrower; or Borrower shall fail to pay any other amounts
payable hereunder, under any Note or any other Loan Document
within ten days after written notice to Borrower.
(b) UNSATISFACTORY TITLE. Title to any part of the
Collateral shall not be satisfactory to Administrative Agent
by reason of any Lien or other defect (even though any such
defect may have existed at the time of any prior advance),
except the Permitted Exceptions and the Liens of the
Security Documents, and such Lien, encumbrance or other
defect shall not be removed, insured or bonded over within
30 days after notice to Borrower.
(c) UNAUTHORIZED ASSIGNMENTS, ETC. Borrower shall
assign any interest in this Agreement or any advance to be
made or any interest in any advance to be made.
(d) DAMAGE OR DESTRUCTION. The Improvements are
partially or totally damaged or destroyed by fire or any
other cause and the restoration of the Improvements cannot
reasonably be expected to be completed so that the
Improvements will be completed on or before the Completion
Date.
(e) CESSATION OF CONSTRUCTION. There is any cessation
of construction of the Improvements for any period after the
date construction commences in excess of 30 successive
calendar days, unless the conditions of each of
subparagraphs (i), (ii), (iii) and (iv) of this subparagraph
shall be satisfied at all times during such cessation:
(i) the cessation of construction shall have been
caused by reason of a Force Majeure Delay;
(ii) Borrower shall have made adequate
provision, acceptable to Administrative Agent, for the
protection of materials stored on site and for the
protection of the Improvements, to the extent then
constructed, against deterioration and against other
loss or damage and theft;
(iii) Borrower shall have furnished to
Administrative Agent satisfactory evidence that such
cessation of construction will not (x) adversely affect
or jeopardize the rights of Borrower under material
agreements relating to the construction or operation of
the Improvements (including any Leases) or (y) increase
the cost of construction of the Improvements; and
(iv) from time to time upon Administrative
Agent's request during any such cessation of
construction, Borrower shall furnish to Administrative
Agent satisfactory evidence that (notwithstanding such
cessation of construction) the completion of the
Improvements can be accomplished on or before the
Completion Date.
(f) NONCONFORMING WORK. The construction of all or
any part of the Improvements is performed in a manner other
than as provided for in this Agreement and Borrower fails to
correct such nonconforming work in a prompt and satisfactory
fashion after notice from Administrative Agent.
(g) OTHER SECURITY AGREEMENTS. Any of the following
occurs: (i) Borrower executes any chattel mortgage or other
security agreement on any materials, fixtures or articles of
personal property used in the construction or operation of
the Improvements or if any such materials, fixtures or
articles are purchased pursuant to any conditional sales
contract or other security agreement or otherwise so that
the ownership of such materials, fixtures or articles will
not vest unconditionally in Borrower upon delivery,
unconditionally and free from encumbrance or (ii) Borrower
does not furnish to Administrative Agent within 30 days of
demand the contracts, bills of sale, statements, receipted
vouchers and agreements, or any of them, under which
Borrower claims title to such materials, fixtures or
articles.
(h) INSUFFICIENT FUNDS. Borrower shall fail to remedy
any Project Cost Statement Deficit within 30 days after
demand by Administrative Agent.
(i) NAMES OF CONTRACTORS. Borrower does not disclose
to Administrative Agent within 10 days of demand the names
of all persons with whom Borrower or the General Contractor
has contracted or intends to contract for the construction
of the Improvements or the furnishing of labor or materials
for the Improvements, or fails to exhibit to Administrative
Agent, upon request, copies of all such contracts.
(j) DEFAULTS UNDER OTHER AGREEMENTS. Any material
default by Borrower shall occur under the Construction
Agreement, the Site Work Agreement or the Architect's
Agreement and any applicable required notice shall have been
given and any applicable grace period shall have expired.
(k) FAILURE TO COMPLETE. The Improvements shall not
be completed, as provided for in this Agreement, as of the
close of business on the Completion Date or Administrative
Agent determines in the exercise of its reasonable
discretion during the course of construction that the
Improvements cannot be completed by the Completion Date.
(l) PERMITS. Any Permit shall be revoked or otherwise
cease to be in full force and effect.
(m) OTHER COVENANTS. Borrower shall default in the
performance or observance of any of the provisions contained
in Section 6 of this Agreement.
(n) OTHER DEFAULTS. An Event of Default (as defined
in the Deed of Trust) shall have occurred and be continuing,
or Borrower shall default in the performance or observance
of any other term, covenant, condition or obligation
contained in this Agreement or any of the Loan Documents
(other than the Deed of Trust) and such default shall
continue for 30 days after notice shall have been given to
Borrower by Administrative Agent specifying such default and
requiring such default to be remedied (or such shorter cure
period, if any, as may be expressly prescribed in the
applicable Loan Document); provided that if any such default
cannot by its nature be cured within such thirty (30) day,
or shorter, as the case may be, grace period and so long as
Borrower shall have commenced cure within such thirty (30)
day, or shorter, as the case may be, grace period and shall,
at all times thereafter, diligently prosecute the same to
completion, Borrower shall have an additional period, not to
exceed one hundred and twenty (120) days, to cure such
default; in no event, however, is the foregoing intended to
effect an extension of the Termination Date.
(o) SECURITY DOCUMENTS. Any of the Security Documents
shall cease for any reason to be in full force and effect,
or Borrower or any other Person executing any Security
Document shall so assert in writing.
(p) ACCELERATION EVENTS. Any Automatic Acceleration
Default shall occur.
(q) ERISA. (i) Any Person shall engage in any
"prohibited transaction" (as defined in Section 406 of ERISA
or Section 4975 of the Code) involving any ERISA Plan, (ii)
any "accumulated funding deficiency" (as defined in Section
302 of ERISA), whether or not waived, shall exist with
respect to any ERISA Plan or any Lien in favor of the PBGC
or an ERISA Plan shall arise on the assets of Borrower or
any Commonly Controlled Entity, (iii) a Reportable Event
shall occur with respect to, or proceedings shall commence
to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single
Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the
reasonable opinion of Required Lenders, likely to result in
the termination of such ERISA Plan for purposes of Title IV
of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) Borrower or any Commonly
Controlled Entity shall, or in the reasonable opinion of
Required Lenders is likely to, incur any liability in
connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan or (vi) any other
event or condition shall occur or exist with respect to an
ERISA Plan; and in each case in clauses (i) through (vi)
above, such event or condition, together with all other such
events or conditions, if any, is reasonably likely to have a
Material Adverse Effect.
9.2 LENDERS' RIGHT TO APPLY LOAN PROCEEDS. During the
continuance of an Event of Default, Lenders shall have the right,
but not the obligation, to disburse and directly apply Loan
proceeds to satisfy Borrower's obligations. Borrower hereby
authorizes Lenders during the continuance of any Event of Default
to hold, use, disburse and apply advances of the Loan for costs
incurred in constructing and equipping the Improvements, payment
or performance of obligations of Borrower under the Loan
Documents (including payment of interest on the Loan) and
preservation and protection of the Collateral. Such
disbursements shall be deemed advances of the Loan for all
purposes and shall be secured by the Security Documents.
9.3 LENDERS' RIGHT TO STOP ADVANCING FUNDS AND TO
ACCELERATE THE LOANS. In addition to any other rights and
remedies Lenders may have pursuant to the Loan Documents or
otherwise, and without limitation, if any Event of Default shall
occur, (a) if such Event of Default is an Automatic Acceleration
Default with respect to Borrower, automatically the Commitments
shall terminate and the Loans (together with accrued interest)
and all other amounts owing under this Agreement, the Notes, the
Security Documents and the other Loan Documents immediately shall
become due and payable, and (b) if such event is any other Event
of Default, either or both of the following actions may be taken:
(i) with the consent of the Required Lenders, Administrative
Agent may, or upon the request of the Required Lenders,
Administrative Agent shall by notice to Borrower, declare the
Commitments to be terminated, in which case the Commitments shall
immediately terminate; and (ii) with the consent of the Required
Lenders, Administrative Agent may, or upon the request of the
Required Lenders, Administrative Agent shall by notice to
Borrower, declare the Loans (together with accrued interest
thereon) and all other amounts payable under this Agreement, the
Notes, the Security Documents and the other Loan Documents to be
due and payable, in which case such amounts immediately shall
become due and payable. Except as expressly provided above in
this subsection, Borrower hereby expressly waives presentment,
demand, protest and all other notices of any kind.
9.4 LENDERS' RIGHT TO COMPLETE. Upon the occurrence and
during the continuance of any Event of Default, in addition to
any other remedies which Lenders may have pursuant to the Loan
Documents, or as provided by statute or rule of law, Lenders may
enter upon the Land and construct, equip and complete the
Improvements in accordance with the Plans with such changes in
the Plans as Lenders may from time to time and in their sole
discretion deem appropriate, all at the risk, cost and expense of
Borrower. Lenders shall have the right at any and all times to
discontinue any work commenced by them in respect of the
Improvements or to change any course of action undertaken by them
and shall not be bound by any limitations or requirements of time
whether set forth in this Agreement or otherwise. Lenders shall
have the right and power, but shall not be obligated, to assume
Borrower's interest under any contract made by or on behalf of
Borrower in any way relating to the Improvements or the
construction of the Improvements and to take over and use all or
any part or parts of the labor, materials, supplies and equipment
contracted for by or on behalf of Borrower, whether or not
previously incorporated into the Improvements, all in the sole
and absolute discretion of Lenders. In connection with any
construction of the Improvements undertaken by Lenders pursuant
to the provisions of this subsection, Lenders may (i) engage
builders, contractors, architects, engineers and others for the
purpose of furnishing labor, materials and equipment in
connection with any construction of the Improvements, (ii) pay,
settle or compromise all bills or claims which may become Liens
against the Project, or any part of the Project, or which have
been or may be incurred in any manner in connection with the
construction, completion and equipping of the Improvements or for
the discharge of Liens or defects in the title of the Project, or
any part of the Project, and (iii) take such other action
(including the employment of watchmen to protect the Project) or
refrain from acting under this Agreement, as Lenders may in their
sole and absolute discretion from time to time determine without
any limitation whatsoever. Borrower shall be liable to reimburse
Lenders for all sums paid or incurred for the construction,
completion and equipping of the Improvements, whether such sums
shall be paid or incurred pursuant to the provisions of this
subsection or otherwise. At Lenders' option, all such sums shall
be treated as advances of the Loan for all purposes or as demand
obligations of Borrower, bearing interest at the non-default
interest rate provided in this Agreement plus 3% from the date of
payment by Lenders to the date of repayment by Borrower. All of
the foregoing amounts, including interest, shall be deemed to
constitute advances under this Agreement, be evidenced by the
Notes and secured by the Security Documents. Upon the occurrence
of any Event of Default, the rights, powers and privileges
provided in this subsection and all other remedies available to
Lenders under this Agreement or by statute or by rule of law may
be exercised by Lenders at any time and from time to time whether
or not the Loan shall be due and payable, and whether or not
Lenders shall have instituted any foreclosure or other action for
the enforcement of the Security Documents or the Notes.
9.5 POWER OF ATTORNEY. For the purpose of carrying out the
provisions and exercising the rights, powers and privileges
granted in this Section, Borrower hereby irrevocably constitutes
and appoints Administrative Agent its true and lawful attorney-in-
fact to execute, acknowledge and deliver any instruments and do
and perform any acts such as are referred to in this Section in
the name and on behalf of Borrower. This power of attorney is a
power coupled with an interest and cannot be revoked.
SECTION 10. THE ADMINISTRATIVE AGENT
------------------------
10.1 APPOINTMENT. Each Lender hereby irrevocably designates
and appoints Union Bank of Switzerland, New York Branch as
Administrative Agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes
Union Bank of Switzerland, New York Branch, as Administrative
Agent for such Lender, to take such action on its behalf under
the provisions of this Agreement and the other Loan Documents and
to exercise such powers and perform such duties as are expressly
delegated to Administrative Agent by the terms of this Agreement
and the other Loan Documents, together with such other powers as
are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement,
Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or
otherwise exist against Administrative Agent.
10.2 DELEGATION OF DUTIES. Administrative Agent may execute
any of its duties under this Agreement and the other Loan
Documents by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining
to such duties. Administrative Agent shall not be responsible
for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.
10.3 EXCULPATORY PROVISIONS. Neither Administrative Agent
nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates shall be (a) liable for any
action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or any other Loan
Document (except for its or such Person's own gross negligence or
willful misconduct), (b) responsible in any manner to any Lenders
for any recitals, statements, representations or warranties made
by Borrower or any Partner therein contained in this Agreement or
any other Loan Document or in any certificate, report, statement
or other document referred to or provided for in, or received by
Administrative Agent under or in connection with, this Agreement
or any other Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this
Agreement or the Notes or any other Loan Document or for any
failure of Borrower to perform its obligations hereunder or
thereunder or for the perfection or priority of any Lien securing
the Indebtedness or (c) liable or responsible to Borrower on
account of the failure of any Lender to perform its obligations
hereunder. Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in,
or conditions of, this Agreement or any other Loan Document, or
to inspect the properties, books or records of Borrower.
10.4 RELIANCE BY AGENT. Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon
any Note, writing, resolution, notice, consent, certificate,
affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it
to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to
Borrower), independent accountants and other experts selected by
Administrative Agent. Administrative Agent may deem and treat
the payee of any Note as the owner thereof for all purposes
unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with Administrative Agent.
Administrative Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other
Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate or it
shall first be indemnified to its satisfaction by Lenders against
any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action.
Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and
the Notes and the other Loan Documents in accordance with a
request of the Required Lenders, and such request and any action
taken or failure to act pursuant thereto shall be binding upon
all Lenders and all future holders of the Notes.
10.5 NOTICE OF DEFAULT. Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any
Default or Event of Default hereunder unless Administrative Agent
has received notice from a Lender or Borrower referring to this
Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event
that Administrative Agent receives such a notice, Administrative
Agent shall give notice thereof to Lenders. Administrative Agent
shall take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Required Lenders;
PROVIDED that unless and until Administrative Agent shall have
received such directions, Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it
shall deem advisable in the best interests of Lenders. In no
event shall Administrative Agent be required to take any such
action which it determines to be contrary to law.
10.6 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender
expressly acknowledges that neither Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact
or Affiliates has made any representations or warranties to it
and that no act by Administrative Agent hereinafter taken,
including any review of the affairs of Borrower, shall be deemed
to constitute any representation or warranty by Administrative
Agent to any Lender. Each Lender represents to Administrative
Agent that it has, independently and without reliance upon
Administrative Agent or any other Lender, and based on such
documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations,
property, financial and other condition and creditworthiness of
Borrower and made its own decision to make its Loans hereunder
and enter into this Agreement. Each Lender also represents that
it will, independently and without reliance upon Administrative
Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking
or not taking action under this Agreement and the other Loan
Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of Borrower.
Except for notices, reports and other documents expressly
required to be furnished to Lenders by Administrative Agent
hereunder, Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other
information concerning the business, operations, property,
condition (financial or otherwise), prospects or creditworthiness
of Borrower which may come into the possession of Administrative
Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates. Administrative Agent shall not
be required to keep itself informed as to the performance or
observance by Borrower of this Agreement or any other Loan
Document or any other document referred to or provided for herein
or therein or to inspect the properties or books of Borrower.
Administrative Agent shall not be required to file this
Agreement, any other Loan Document or any document or instrument
referred to herein or therein, for record or give notice of this
Agreement, any other Loan Document or any document or instrument
referred to herein or therein, to anyone.
10.7 INDEMNIFICATION. Lenders agree to indemnify
Administrative Agent in its capacity as such (to the extent not
reimbursed by Borrower and without limiting the obligation of
Borrower to do so), ratably according to their respective
Commitment Percentages in effect on the date on which
indemnification is sought under this subsection (or, if
indemnification is sought after the date upon which the
Commitments shall have terminated and the Loans shall have been
paid in full, ratably in accordance with their Commitment
Percentages immediately prior to such date), from and against any
and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of
any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Notes) be
imposed on, incurred by or asserted against Administrative Agent
in any way relating to or arising out of this Agreement, any of
the other Loan Documents or any documents contemplated by or
referred to herein or therein or the transactions contemplated
hereby or thereby or any action taken or omitted by
Administrative Agent under or in connection with any of the
foregoing; PROVIDED that no Lender shall be liable for the
payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from Administrative Agent's gross
negligence or willful misconduct. The agreements in this
subsection shall survive the payment of the Notes and all other
amounts payable hereunder.
10.8 AGENT IN ITS INDIVIDUAL CAPACITY. Administrative Agent
and its Affiliates may make loans to, accept deposits from and
generally engage in any kind of business with Borrower as though
Administrative Agent were not Administrative Agent hereunder and
under the other Loan Documents. With respect to the Loans made
by it and any Note issued to it, Administrative Agent shall have
the same rights and powers under this Agreement and the other
Loan Documents as any Lender and may exercise the same as though
it were not Administrative Agent, and the terms "Lender" and
"Lenders" shall include Administrative Agent in its individual
capacity.
10.9 SUCCESSOR ADMINISTRATIVE AGENT. Administrative Agent
may resign as Agent upon 10 days' notice to Lenders. If
Administrative Agent shall resign as Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall
appoint from among Lenders a successor agent for Lenders,
PROVIDED that the appointment of any successor agent other than
UBS shall be subject to the consent of Borrower, which consent
shall not be unreasonably withheld or delayed. Upon the
appointment of a successor agent for Lenders, such successor
administrative agent shall succeed to the rights, powers and
duties of Administrative Agent, and the term "Administrative
Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's
rights, powers and duties as Administrative Agent shall be
terminated, without any other or further act or deed on the part
of such former Administrative Agent or any of the parties to this
Agreement or any holders of the Notes. After any retiring
Administrative Agent's resignation as Administrative Agent, the
provisions of this subsection shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan
Documents.
10.10 TRANSFER OF AGENCY FUNCTION. Administrative Agent
may at any time or from time to time transfer its functions as
Administrative Agent hereunder to any of its offices wherever
located in the United States, provided that Administrative Agent
shall promptly notify Borrower and the Lenders thereof.
10.11 AUTHORITY OF ADMINISTRATIVE AGENT. As between
Administrative Agent and Borrower, Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with
full and valid authority so to act or refrain from acting, and
Borrower shall not be under any obligation to make any inquiry
respecting such authority.
SECTION 11. GENERAL CONDITIONS
------------------
The following conditions shall be applicable throughout the
term of this Agreement:
11.1 NO WAIVERS. No advance of proceeds of the Loans shall
constitute a waiver of any of the conditions of Lenders'
obligation to make further advances. No waiver of any such
condition shall constitute a waiver of any Default or Event of
Default related to or predicated upon such condition. Any
advance made by Lenders and any sums expended by Lenders pursuant
to the Loan Documents shall be deemed to have been made pursuant
to this Agreement, notwithstanding the existence of an uncured
Default or Event of Default. No advance of the Loans at a time
when an Event of Default exists, whether or not Lenders had
actual knowledge of such default, shall constitute a waiver of
any right or remedy of Lenders existing by reason of such Event
of Default, including, without limitation, the right to
accelerate the maturity of the Loan or to foreclose the Lien of
the Security Documents or to refuse to make further advances of
the Loan.
11.2 LENDERS AND ADMINISTRATIVE AGENT SOLE BENEFICIARY. All
conditions of the obligation of Lenders and Administrative Agent
to make advances of the Loan are imposed solely and exclusively
for the benefit of Lenders and Administrative Agent and their
assigns and no other Person shall have standing to require
satisfaction of such conditions in accordance with their terms or
be entitled to assume that Lenders will refuse to make advances
in the absence of strict compliance with any or all such terms
and no Person shall, under any circumstances, be deemed to be a
beneficiary of such conditions, any or all of which may be freely
waived in whole or in part by Administrative Agent and/or Lenders
at any time if in their sole discretion they deem such waiver to
be advisable. Lenders' obligation to make advances of the Loan,
subject to the terms and conditions of this Agreement, is solely
for the benefit of Borrower and no other Person shall be deemed
to be a beneficiary of such obligation nor entitled to require
any advance of Loan proceeds. Inspections and approvals of the
Plans and the Improvements and the workmanship and materials used
in the construction of the Improvements shall impose no
responsibility or liability of any nature whatsoever on
Administrative Agent and/or Lenders, and no Person shall, under
any circumstances, be entitled to rely upon such inspections and
approvals by Administrative Agent and/or Lenders for any reason.
Lenders' sole obligation under this Agreement is to make the
advances if and to the extent required by this Agreement.
11.3 NOTICES. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in
writing, and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) when delivered by
hand, (b) in the case of overnight courier service with
guaranteed next business day delivery, one day after delivery to
such overnight courier service, or (c) three (3) days after being
deposited in the mail, postage prepaid, addressed as follows in
the case of Borrower and Administrative Agent, or to such other
address as may be hereafter notified by the respective parties
hereto:
Borrower: c/o Urban Shopping Centers, L.P.
900 North Michigan Avenue
Suite 1500
Chicago, Illinois 60611
Attention: Chief Financial Officer
with a copy to: Urban Shopping Centers, Inc.
900 North Michigan Avenue
Suite 1500
Chicago, Illinois 60611
Attention: General Counsel
and
Katten Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, Illinois 60661
Attention: Ira J. Swidler, Esq.
The Administrative
Agent: Union Bank of Switzerland
299 Park Avenue
32nd Floor
New York, New York 10171
Attention: Xiomara Martez
with a copy to: Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: John M. Forelle, Esq.
PROVIDED that any notice, request or demand to or upon
Administrative Agent or Lenders pursuant to subsection 3.1, 3.4,
3.5, 3.6 or 3.11 shall not be effective until received. Any
party may change its address by notice to the other parties.
11.4 MODIFICATIONS. Neither this Agreement, any Note or any
other Loan Document, nor any terms hereof or thereof may be
amended, supplemented or modified except in accordance with the
provisions of this subsection. The Required Lenders may, or, with
the written consent of the Required Lenders, Administrative Agent
may, from time to time, (a) enter into with Borrower written
amendments, supplements or modifications to this Agreement and to
the Notes and the other Loan Documents for the purpose of adding
any provisions to this Agreement, the Notes or the other Loan
Documents or changing in any manner the rights of Lenders or of
Borrower hereunder or thereunder or (b) waive, on such terms and
conditions as the Required Lenders or Administrative Agent, as
the case may be, may specify in such instrument, any of the
requirements of this Agreement, the Notes or the other Loan
Documents or any Default or Event of Default and its
consequences; PROVIDED, HOWEVER, that no such waiver and no such
amendment, supplement or modification shall (i) reduce the amount
or extend the Maturity Date of any Note, or reduce the stated
rate of any interest or fees payable hereunder or extend the
scheduled date of any payment thereof or increase the amount or
extend the expiration date of any Lender's Commitment, in each
case without the consent of each Lender affected thereby, or
(ii) amend, modify or waive any provision of this subsection or
reduce the percentage specified in the definition of Required
Lenders or Majority Lenders, or consent to the assignment or
transfer by Borrower of any of its rights and obligations under
this Agreement and the other Loan Documents or release any of the
Collateral (other than releases of Collateral expressly provided
for in the Loan Documents), in each case without the written
consent of all Lenders, or (iii) amend, modify or waive any
provision of Section 10 without the written consent of the then
Administrative Agent. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of Lenders
and shall be binding upon Borrower, Lenders, Administrative Agent
and all future holders of the Notes. In the case of any waiver,
Borrower, Lenders and Administrative Agent shall be restored to
their former position and rights hereunder and under the Notes
and any other Loan Documents, and any Default or Event of Default
waived shall be deemed to be cured and not continuing; but no
such waiver shall extend to any subsequent or other Default or
Event of Default, or impair any right consequent thereon.
11.5 RIGHTS CUMULATIVE. All rights, powers and
remedies given to Administrative Agent and Lenders under this
Agreement are cumulative and not alternative, and are in addition
to all rights, powers and remedies otherwise afforded
Administrative Agent and Lenders under all statutes and rules of
law (all rights, powers and remedies collectively, "Lenders'
Rights"); any forbearance or delay by Administrative Agent or
Lenders in exercising any of Lenders' Rights shall not be deemed
to be a waiver, and the exercise or partial exercise of any of
Lenders' Rights shall not preclude the further exercise of any of
Lenders' Rights which shall continue in full force and
effect until specifically waived by an instrument in writing
executed by Administrative Agent or Lenders. All
representations, warranties and covenants contained in any of the
Loan Documents shall survive the making of the Loans.
11.6 SCHEDULES. The Schedules and Exhibits attached to this
Agreement are essential to and are made a part of this Agreement.
11.7 SUCCESSORS AND ASSIGNS; PARTICIPATIONS.
(a) This Agreement shall be binding upon and inure to
the benefit of Borrower, Lenders, Administrative Agent, all
future holders of the Notes and their respective successors
and assigns, except that Borrower may not assign or transfer
any of its rights or obligations under this Agreement
without the prior written consent of each Lender.
(b) Any Lender may, with the consent of Borrower,
which consent shall not be unreasonably withheld, in the
ordinary course of its commercial banking business and in
accordance with applicable law, at any time sell to one or
more banks or other entities ("PARTICIPANTS") participating
interests in any Loan owing to such Lender, any Note held by
such Lender, any Commitment of such Lender or any other
interest of such Lender in connection with the Loans. In
the event of any such sale by a Lender of a participating
interest to a Participant, such Lender's obligations under
this Agreement to the other parties to this Agreement shall
remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall
remain the holder of any such Note for all purposes under
this Agreement and the other Loan Documents, and Borrower
and Administrative Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and the other
Loan Documents. Borrower agrees that each Participant shall
be entitled to the benefits of subsections 3.13, 3.14 and
3.15 with respect to its participation in the Commitments
and the Loans outstanding from time to time; provided that,
in the case of subsection 3.14, such Participant shall have
complied with the requirements of said subsection and
provided, further, that no Participant shall be entitled to
receive any greater amount pursuant to such provisions than
the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by
such transferor Lender to such Participant had no such
transfer been made. Notwithstanding any provision of this
paragraph, the consent of Borrower shall not be required for
any sale of participating interests which occurs at any time
when an Event of Default shall have occurred and be
continuing.
(c) Any Lender, in the ordinary course of its
commercial banking business and in accordance with
applicable law, at any time and from time to time may sell
to any Lender or any Affiliate thereof or, with the consent
of Borrower (which shall not be unreasonably withheld) and
Administrative Agent (which shall not be unreasonably
withheld), to one or more additional banks or financial
institutions (an "ASSIGNEE") all or any part of its rights
and obligations under this Agreement, the Notes and the
other Loan Documents pursuant to an Assignment and
Acceptance, substantially in the form of Exhibit D, executed
by such Assignee, such assigning Lender (and, in the case of
an Assignee that is not then a Lender or an affiliate
thereof, by Administrative Agent and Borrower) and delivered
to Administrative Agent for its acceptance and recording in
the Register. Upon such execution, delivery, acceptance and
recording, from and after the effective date determined
pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, shall have the
rights and obligations of a Lender hereunder with a
Commitment as set forth therein, and (y) the assigning
Lender thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this
Agreement, such assigning Lender shall cease to be a
party hereto). Notwithstanding any provision of this
paragraph and paragraph (e) of this subsection, (i) the
consent of Borrower shall not be required, and, unless
requested by the Assignee and/or the assigning Lender, new
Notes shall not be required to be executed and delivered by
Borrower, for any assignment which occurs at any time when
an Event of Default shall have occurred and be continuing
and (ii) the consent of Administrative Agent shall not be
required for any assignment, and such assignment may be made
by any Lender to any Person, if a material Event of Default
shall have occurred and six months after notice of such
material Event of Default shall have been given to Borrower,
such material Event of Default shall be continuing.
(d) Administrative Agent shall maintain at its address
referred to in subsection 11.3 a copy of each Assignment and
Acceptance delivered to it and a register (the "REGISTER")
for the recordation of the names and addresses of Lenders
and the Commitment of, and principal amount of the Loans
owing to, each Lender from time to time. The entries in the
Register shall be conclusive, in the absence of manifest
error, and Borrower, Administrative Agent and Lenders may
(and, in the case of any Loan or other obligation hereunder
not evidenced by a Note, shall) treat each Person whose name
is recorded in the Register as the owner of a Loan or other
obligation hereunder as the owner thereof for all purposes
of this Agreement and the other Loan Documents,
notwithstanding any notice to the contrary. Any assignment
of any Loan or other obligation hereunder not evidenced by a
Note shall be effective only upon appropriate entries with
respect thereto being made in the Register. The Register
shall be available for inspection by Borrower or any Lender
at any reasonable time and from time to time upon reasonable
prior notice.
(e) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an Assignee (and, in the
case of an Assignee that is not then a Lender or an
affiliate thereof, by Administrative Agent and Borrower),
together with payment to Administrative Agent of a
registration and processing fee of $3,000 (payable by such
assigning Lender), Administrative Agent shall (i) promptly
accept such Assignment and Acceptance and (ii) on the
effective date determined pursuant thereto record the
information contained therein in the Register and give
notice of such acceptance and recordation to Lenders and
Borrower. On or prior to such effective date, Borrower, at
its own expense, shall execute and deliver to Administrative
Agent (in exchange for the Note of the assigning Lender
which shall be returned to Borrower) a new Note, as the case
may be, to the order of such Assignee in an amount equal to
the Commitment or Loan, as the case may be, assumed by it
pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained a Commitment or Loan
hereunder, a new Note, as the case may be, to the order of
the assigning Lender in an amount equal to the Commitment or
Loan, as the case may be, retained by it hereunder. Such
new Note shall be dated the date of this Agreement, and
shall otherwise be in the form of the Note replaced thereby.
(f) Borrower authorizes each Lender to disclose in
confidence to any Participant or Assignee (each, a
"TRANSFEREE") and any prospective Transferee any and all
financial information in such Lender's possession concerning
Borrower and its Affiliates which has been delivered to such
Lender by or on behalf of Borrower pursuant to this
Agreement or which has been delivered to such Lender by or
on behalf of Borrower in connection with such Lender's
credit evaluation of Borrower and its Affiliates prior to
becoming a party to this Agreement.
(g) For avoidance of doubt, the parties to this
Agreement acknowledge that the provisions of this subsection
concerning assignments of Loans and Notes relate only to
absolute assignments and that such provisions do not
prohibit assignments creating security
interests, including, without limitation, any pledge or
assignment by a Lender of any Loan or Note to any Federal
Reserve Bank in accordance with applicable law.
(h) If the Assignee is not incorporated under the laws
of the United States of America or a state thereof, it
shall, prior to the first date on which interest or fees are
payable hereunder for its account, deliver to Borrower and
Administrative Agent certification as to exemption from
deduction or withholding of any United States federal income
taxes in accordance with subsection 3.14.
11.8 GOVERNING LAW. THIS AGREEMENT IS MADE AND DELIVERED IN
NEW YORK, NEW YORK AND SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
11.9 SUBMISSION TO JURISDICTION; WAIVERS.
(a) Borrower hereby irrevocably and unconditionally:
(i) submits for itself and its property in
any legal action or proceeding relating to this
Agreement and the other Loan Documents to which
Borrower is a party, or for recognition and enforcement
of any judgement in respect thereof, to the
non-exclusive general jurisdiction of the Courts of the
State of New York, the courts of the United States of
America for the Southern District of New York, and
appellate courts from any thereof;
(ii) consents that any such action or
proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the
venue of any such action or proceeding in any such
court or that such action or proceeding was brought in
an inconvenient court and agrees not to plead or claim
the same;
(iii) agrees that service of process in
any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage
prepaid, to Borrower at its address set forth in
subsection 11.3 or at such other address of which
Administrative Agent shall have been notified pursuant
thereto;
(iv) agrees that nothing herein shall affect
the right to effect service of process in any other
manner permitted by law or shall limit the right to sue
in any other jurisdiction; and
(v) waives, to the maximum extent not
prohibited by law, any right it may have to claim or
recover in any legal action or proceeding referred to
in this subsection any special, exemplary, punitive or
consequential damages.
(b) To the extent that Borrower, Administrative Agent
or any Lender have or hereafter may acquire any immunity
from jurisdiction of any court or from any legal process
(whether from service or notice, attachment prior to
judgment, attachment in aid of execution, execution or
otherwise) with respect to itself or its property, Borrower,
Administrative Agent and each Lender hereby irrevocably
waives such immunity in respect of its obligations under
this Agreement, the Notes and any other Loan Document.
11.10 ACKNOWLEDGEMENTS. Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan
Documents;
(b) neither Administrative Agent nor any Lender has
any fiduciary relationship with or duty to Borrower arising
out of or in connection with this Agreement or any of the
other Loan Documents, and the relationship between
Administrative Agent and Lenders, on one hand, and Borrower,
on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other
Loan Documents or otherwise exists by virtue of the
transactions contemplated hereby among the Lenders or among
Borrower and the Lenders.
11.11 WAIVERS OF JURY TRIAL. BORROWER, ADMINISTRATIVE
AGENT AND LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR THE NOTES OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
11.12 CAPTIONS. The captions in this Agreement are for
convenience of reference only, and in no way limit or amplify the
provisions of this Agreement.
11.13 ADJUSTMENTS. If any Lender (a "BENEFITTED
LENDER") shall at any time receive any payment of all or part of
its Loans, or interest thereon, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by
set-off, pursuant to events or proceedings of the nature referred
to in Section 18(g) of the Deed of Trust, or otherwise), in a
greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of such other
Lender's Loans, or interest therein, such benefitted Lender shall
purchase for cash from the other Lenders a participating interest
in such portion of each such other Lender's Loan, or shall
provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to
cause such benefitted Lender to share the excess payment or
benefits of such collateral or proceeds ratably with each of the
Lenders; PROVIDED, HOWEVER, if all or any portion of such excess
payment or benefits is thereafter recovered from such benefitted
Lender, such purchase shall be rescinded, and the purchase price
and benefits returned, to the extent of such recovery, but
without interest.
11.14 COUNTERPARTS. This Agreement may be executed by
one or more of the parties to this Agreement on any number of
separate counterparts (including by telecopy), and all of said
counterparts taken together shall be deemed to constitute one and
the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with Borrower and
Administrative Agent.
11.15 SEVERABILITY. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
11.16 INTEGRATION. This Agreement and the other Loan
Documents represent the agreement of Borrower, Administrative
Agent and the Lenders with respect to the subject matter hereof,
and there are no promises, undertakings, representations or
warranties by Administrative Agent or any Lender relative to
subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
11.17 POSSESSION OF DOCUMENTS. Each Lender shall keep
possession of its own Note. Administrative Agent shall hold all
the other Loan Documents and related documents in its possession
and maintain separate records and accounts with respect thereto,
and shall permit the Lenders and their representatives access at
all reasonable times to inspect such Loan Documents, related
documents, records and accounts.
11.18 USURY. Anything herein to the contrary
notwithstanding, the obligations of Borrower under this Agreement
and the Notes shall be subject to the limitation that payments of
interest shall not be required to the extent that receipt thereof
would be contrary to provisions of law applicable to a Lender
limiting rates of interest which may be charged or collected by
such Lender.
11.19 SIGN. Prior to the Mall Opening Date, at Lenders'
option, Borrower will, at Lenders' sole cost and expense, erect
and maintain a sign on the Land indicating the source of the
construction financing.
11.20 NO RECOURSE AGAINST OUTPARCELS. Administrative
Agent and Lenders (a) agree that in pursuing their rights and
remedies under the Loan Documents, they shall treat the
Outparcels as if they were not assets of Borrower and will not
proceed to enforce any judgment which may be obtained against
Borrower against the Outparcels or any rents or other proceeds
attributable to the Outparcels and (b) waive any rights which
they may now or in the future have with respect to the Outparcels
and any rents or other proceeds attributable to the Outparcels.
11.21 BINDING EFFECT OF REQUEST FOR ADVANCE. Borrower
agrees that, by its acceptance of any advance of proceeds of the
Loans under this Agreement, it shall be bound in all respects by
the request for advance submitted on its behalf in connection
therewith with the same force and effect as if Borrower had
itself executed and submitted the request for advance and whether
or not the request for advance is executed and/or submitted by an
authorized person.
TO CONFIRM THEIR AGREEMENT, this Agreement has been duly
executed by Lenders, Borrower and Administrative Agent as of the
date first written above.
$ UNION BANK OF SWITZERLAND,
------------ NEW YORK BRANCH
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
WOLFCHASE GALLERIA LIMITED PARTNERSHIP
By USC MEMPHIS, INC., general partner
By:
----------------------------
Name:
Title:
UNION BANK OF SWITZERLAND, NEW YORK
BRANCH, as Administrative Agent
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
Schedule 1
----------
Land
----
Schedule 2
-----------
Outparcels
----------
Schedule 3
-----------
Partners
--------
U.S.C. Memphis, Inc.
Urban Shopping Centers, L.P.
EXHIBIT A
---------
BORROWER'S REQUISITION
----------------------
EXHIBIT B
---------
PROJECT COST STATEMENT
EXHIBIT C
---------
FORM OF NOTE
EXHIBIT D
---------
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to Construction Loan Agreement dated as of
May 22nd, 1996 (as the same may be amended, modified or
supplemented from time to time in accordance with its terms, the
"Loan Agreement") among (i) Wolfchase Galleria Limited
Partnership, a Delaware limited partnership ("Borrower"), (ii)
the several banks and financial institutions from time to time
parties to the Agreement (collectively, the "Lenders") and (iii)
Union Bank of Switzerland, New York Branch, as administrative
agent for the Lenders (in such capacity the "Administrative
Agent"). Terms defined in the Loan Agreement are used herein
with the same meaning. This Assignment and Acceptance, between
the Assignor (as identified on SCHEDULE 1 hereto) and the
Assignee (as identified on SCHEDULE 1 hereto) is dated as of the
Effective Date (as specified on SCHEDULE 1 hereto, the "Effective
Date").
The Assignor hereby irrevocably sells and assigns to the
Assignee without recourse to the Assignor, and the Assignee
hereby irrevocably purchases and assumes from the Assignor,
without recourse to the Assignor, as of the Effective Date, a __%
interest (the "Assigned Interest") in and to the Assignor's
rights and obligations under the Loan Agreement with respect to
the credit facility contained in the Loan Agreement (the
"Assigned Facility"), in a principal amount as set forth in
SCHEDULE 1.
The Assignor (a) makes no representation or warranty and
assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the
Loan Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan
Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto, other than that it has not
created any adverse claim upon the interest being assigned by it
hereunder and that such interest is free and clear of any adverse
claim; (b) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of
Borrower or the performance or observance by Borrower of any of
its obligations under the Loan Agreement or any other Loan
Document or any other instrument or document furnished pursuant
hereto or thereto; and (c) attaches the Note held by it
evidencing the Assigned Facility and requests that Administrative
Agent exchange such Note for a new Note payable to the Assignor
(if the Assignor has retained any interest in the Assigned
Facility) and a new Note payable to the Assignee in the
respective amounts which reflect the assignment being made hereby
(and after giving effect to any other assignments which have
become effective on the Effective Date).
The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b)
confirms that it has received a copy of the Loan Documents,
together with copies of the financial statements delivered
pursuant thereto and such other documents and information as it
has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (c) agrees
that it will, independently and without reliance upon the
Assignor, Administrative Agent or any other person which has
become a Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Loan
Agreement; (d) appoints and authorizes Administrative Agent to
take such action as agent on its behalf and to exercise such
powers under the Loan Agreement as are delegated to
Administrative Agent by the terms thereof, together with such
powers as are incidental thereto; and (e) agrees that it will be
bound by the provisions of the Loan Agreement and will perform in
accordance with its terms all the obligations which by the terms
of the Loan Agreement are required to be performed by it as a
Lender including, if it is organized under the laws of a
jurisdiction outside the United States, its obligation pursuant
to subsection 3.14 of the Loan Agreement to deliver the forms
prescribed by the Internal Revenue Service of the United States
certifying as to the Assignee's exemption from United States
withholding taxes with respect to all payments to be made to the
Assignee under the Loan Agreement, or such other documents as are
necessary to indicate that all such payments are subject to such
tax at a rate reduced by an applicable tax treaty.
[This Agreement is conditioned upon the consent of Borrower
and Administrative Agent pursuant to subsection 11.7(c) of the
Loan Agreement. The execution of this Agreement by Borrower and
Administrative Agent is evidence of this consent. ONLY NECESSARY
IF NO EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, AS
PROVIDED IN PARAGRAPH 11.7(c).] Following the execution of this
Assignment and Acceptance, it will be delivered to Administrative
Agent for acceptance by it and recording by Administrative Agent
pursuant to subsection 11.7 of the Loan Agreement, effective as
of the Effective Date (which shall not, unless otherwise agreed
to by Administrative Agent, be earlier than five Business Days
after the date of acceptance and recording by Administrative
Agent of the executed Assignment and Acceptance).
Upon such acceptance and recording, from and after the
Effective Date, Administrative Agent shall make all payments in
respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignee
whether such amounts have accrued prior to the Effective Date or
accrue subsequent to the Effective Date. The Assignor and the
Assignee shall make all appropriate adjustments in payments by
Administrative Agent for periods prior to the Effective Date or
with respect to the making of this assignment directly between
themselves.
From and after the Effective Date (a) the Assignee shall be
a party to the Loan Agreement and, with respect to the Assigned
Interest, have the rights and obligations of a Lender thereunder
and under the other Loan Documents and shall be bound by the
provisions thereof and (b) the Assignor shall, with respect to
the Assigned Interest, relinquish its rights and be released from
its obligations under the Loan Agreement. [Either assigning
party or acquiring party must have liability for obligations to
Assigned Interest].
This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed on SCHEDULE 1 hereto by
their respective duly authorized officers.
SCHEDULE 1
TO
ASSIGNMENT AND ACCEPTANCE
RELATING TO CONSTRUCTION LOAN AGREEMENT
DATED AS OF MAY 22ND, 1996
AMONG
WOLFCHASE GALLERIA LIMITED PARTNERSHIP,
THE LENDERS NAMED THEREIN,
UNION BANK OF SWITZERLAND, NEW YORK BRANCH,
AS ADMINISTRATIVE AGENT FOR THE LENDERS
(IN SUCH CAPACITY, THE "ADMINISTRATIVE AGENT")
- - -----------------------------------------------------------------------------
NAME OF ASSIGNOR:
NAME OF ASSIGNEE:
EFFECTIVE DATE OF ASSIGNMENT:
PRINCIPAL AMOUNT ASSIGNED COMMITMENT PERCENTAGE ASSIGNED
$ $
----------------- --.-------------------%
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By By
-------------------------- -----------------------------
Name: Name:
Title: Title:
ACCEPTED: [CONSENTED TO: NAME OF BORROWER]
[ ],
-------------------
as Administrative Agent
By By
-------------------------- -----------------------------
Name: Name:
Title: Title:
EXHIBIT E
---------
FORM OF AUTHORIZATION LETTER
EXHIBIT F
---------
FORM OF SOLVENCY CERTIFICATE
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FINANCIAL STATEMENTS INCLUDED IN ITS REPORT ON FORM 10-Q FOR THE
SIX MONTHS ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS INCLUDED IN SUCH REPORT.
</LEGEND>
<CIK> 0000907077
<NAME> URBAN SHOPPING CENTERS, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 7,326
<SECURITIES> 0
<RECEIVABLES> 9,945
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 17,271
<PP&E> 649,421
<DEPRECIATION> 88,310
<TOTAL-ASSETS> 618,509
<CURRENT-LIABILITIES> 22,543
<BONDS> 272,156
0
0
<COMMON> 134
<OTHER-SE> 128,366
<TOTAL-LIABILITY-AND-EQUITY> 618,509
<SALES> 45,219
<TOTAL-REVENUES> 46,082
<CGS> 0
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<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,956
<INCOME-PRETAX> 9,623
<INCOME-TAX> 0
<INCOME-CONTINUING> 6,875
<DISCONTINUED> 720
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<NET-INCOME> 7,595
<EPS-PRIMARY> .55
<EPS-DILUTED> .55
</TABLE>
