SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarter ended September 30, 1994.
Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ___________ to
_____________.
Commission File Number 1-8822
BEDFORD PROPERTY INVESTORS, INC.
(Exact name of Registrant as specified in its charter)
MARYLAND 68-0306514
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
3658 Mt. Diablo Blvd., Suite 210, Lafayette, CA 94549
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (510) 238-8910
Indicate by check mark whether 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 Registrant was
required to file such reports( and (2) has been subject to such filing
requirements for the past 90 days. Yes x No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Class Outstanding as of November 15, 1994
Common Stock, $0.01 par value 5,976,900<PAGE>
BEDFORD PROPERTY INVESTORS, INC.
INDEX
PART I. FINANCIAL INFORMATION Page
ITEM 1. FINANCIAL STATEMENTS
Statement 2
Consolidated Balance Sheets as of September 30, 1994
and December 31, 1993 3
Consolidated Statements of Operations for the three
and nine months ended September 30, 1994 and 1993 4
Consolidated Statements of Stockholders' Equity
for the nine months ended September 30, 1994
and the year ended December 31, 1993 5
Consolidated Statements of Cash Flows
for the nine months ended September 30, 1994 and 1993 6
Notes to Consolidated Financial Statements 7-9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Management's Discussion and Analysis of Results of Operations
and Financial Condition 10-11
PART II. OTHER INFORMATION
Items 1-6 11-14
SIGNATURES 14<PAGE>
BEDFORD PROPERTY INVESTORS, INC.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
STATEMENT
The financial statements included herein have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. The information furnished reflects all adjustments which
are, in the opinion of management, necessary for a fair presentation of
results of operations for the interim periods. Such adjustments are of a
normal recurring nature. These financial statements should be read in
conjunction with the notes to financial statements appearing in the annual
report to stockholders for the year ended December 31, 1993.<PAGE>
<TABLE>
<CAPTION>
BEDFORD PROPERTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
September 30, December 31,
1994 1994
(unaudited)
<S>
ASSETS
Real estate investments <C> <C>
Office buildings - held for sale $ 8,855 $19,019
Office buildings - held for investment 22,582 12,074
Industrial buildings 26,383 10,132
57,820 41,225
Less accumulated depreciation 2,853 5,263
54,967 35,962
Cash 583 4,930
Other assets 2,260 2,115
Total assets $57,810 $43,007
LIABILITIES AND STOCKHOLDERS' EQUITY
Bank loan payable 16,519 3,621
Accounts payable and accrued expenses 1,101 1,465
Dividend payable 538 418
Acquisition payable 2,100 1,500
Other liabilities 958 562
Total liabilities 21,216 7,566
Stockholders equity
Preferred stock, par value $0.01 per
share; authorized 10,000,000 shares,
issued none - -
Common stock, par value $0.01 per
share; authorized 30,000,000 shares;
issued and outstanding,
5,976,900 shares in 1994; 5,975,900
shares in 1993 60 60
Additional paid-in capital 107,151 107,147
Accumulated losses and depreciation in
excess of net income (70,617) (71,766)
Total stockholders' equity 36,594 35,441
Total liabilities and $57,810 $43,007
stockholders' equity
See accompanying notes to consolidated financial statements.<PAGE>
</TABLE>
<TABLE>
<CAPTION>
BEDFORD PROPERTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993 (unaudited)
(in thousands, except share and per share amounts)
Three Months Nine Months
<S> 1994 1993 1994 1993
Income:
Property operations: <C> <C> <C> <C>
Rental income $2,473 $1,721 $6,305 $5,899
Rental expenses:
Operating expenses 686 730 1,753 2,117
Real estate taxes 287 224 710 733
Depreciation and
amortization 263 732 868 1,737
Income from property operations 1,237 35 2,974 1,312
Interest income 9 42 45 61
Equity in joint venture
partnership operations - - - (153)
Total income 1,246 77 3,019 1,220
Expenses:
Interest 266 172 360 577
General and administrative 431 356 1,149 1,086
Total expenses 697 528 1,509 1,663
Income (loss) before gains on
sales 549 (451) 1,510 (443)
Gains on sales:
Real estate investments - 407 1,193 407
Joint venture partnerships - - - 2,686
Total gains on sales - 407 1,193 3,093
Net income (loss) $549 ($44) $2,703 $2,650
Per share:
Income (loss) before gains
on sales 0.09 (0.08) 0.25 (0.08)
Gains on sales - 0.07 0.19 0.52
Net income (loss) per common and
common
equivalent share: $0.09 ($0.01) $0.44 $0.44
Weighted average number of common
and common equivalent shares 6,141,9 5,975,900 6,141,19 5,975,90
28 7 0
See accompanying notes to consolidated financial statements.<PAGE>
</TABLE>
<TABLE>
<CAPTION>
BEDFORD PROPERTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 (unaudited)
AND THE YEAR ENDED DECEMBER 31 1993
(in thousands, except per share data)
Accumulated
losses and
distributio Total
Additional ns in stockholder
Common paid-in excess of s' equity
stock capital net income
<C>
Balance, December <C> <C> <C> <C>
31, 1992 $60 $107,147 ($73,837) $33,370
Net income - - 3,147 3,147
Dividends ($0.18 per
share) - - (1,076) (1,076)
Balance, December
31, 1993 60 107,147 (71,766) 35,441
Issuance of common
stock - 4 - 4
Net income - - (2,703 2,703
Dividends ($0.26 per
share) - - (1,554) (1,554)
Balance, September
30, 1994 $60 $107,151 ($70,617) $36,594
See accompanying notes to consolidated financial statements.<PAGE>
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993 (unaudited)
(in thousands)
<S> 1994 1993
Operating Activities: <C> <C>
Net income $2,703 $2,650
Adjustments to reconcile net income to net
cash
provided by operating activities:
Depreciation and amortization 1,058 1,834
Gain on sale of real estate investment (1,193) (407)
Gain on sale of joint venture partnerships - (2,686)
Equity in joint venture partnership
operations
(including depreciation of $191) - 153
Change in operating assets and liabilities,
net (542) (280)
Net cash provided by operating activities 2,026 1,264
Investing Activities:
Investments in real estate (26,126) (7,587)
Proceeds from sale of real estate investment 8,289 14,833
Net cash provided (used) by investing (17,837) 7,246
activities
Financing Activities:
Proceeds from bank loan 30,257 1,600
Repayments of bank loan (17,359) (6,000)
Payment of dividends (1,434) (299)
Net cash provided (used) by financing 11,464 (4,699)
activities
Net increase (decrease) in cash (4,347) 3,811
Cash at beginning of period 4,930 175
Cash at end of period $583 $3,986
Supplement disclosure of cash flow information:
Cash paid during the period for interest $254 $488
See accompanying notes to consolidated financial statements.<PAGE>
</TABLE>
BEDFORD PROPERTY INVESTORS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. The Company and Basis of Presentation
The Company
On July 1,1993, the Company (formerly known as ICM Property Investors
Incorporated) reincorporated from the State of Delaware to the State of
Maryland under a new name, Bedford Property Investors, Inc. Since July 1,
1993, the Company's Common Stock has traded under the symbol "BED" on both the
New York and Pacific Stock Exchanges. Concurrent with the reincorporation,
the number of authorized shares of Preferred Stock was increased from
1,000,000 shares to 10,000,000 shares and the number of authorized shares of
Common Stock was increased from 10,000,000 to 30,000,000 shares. Also, the
par value of both the Preferred and Common Stock was reduced from $1.00 to
$0.01 per share and the Treasury Stock was eliminated.
Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-Q and, therefore, do not include
all information and footnotes necessary for a fair presentation of financial
condition, results of operations, and cash flows in conformity with generally
accepted accounting principles. When necessary, reclassifications have been
made to prior period balances to conform to current period presentation.
Per Share Data
Per share data are based on the weighted average number of common and common
equivalent shares outstanding during the period. Stock options issued under
the Company's stock option plans are considered common stock equivalents and
are included in the calculation of per share data if, upon exercise, they
would have a dilutive effect.
Note 2. Real Estate Investments
<TABLE>
<CAPTION>
The following table sets forth the Company's real estate investments as of
September 30, 1994 (in thousands):
Less
Land Building Accum. Total
< Dep.
Office Buildings: <C> <C> <C> <C>
1/ IBM Building , Jackson, MS $2,590 $6,265 $1,811 $7,044
Mariner Court, Torrance, CA 3,221 4,418 75 7,564
Woodlands II, Salt Lake
City, UT 945 5,985 148 6,782
1000 Town Center Drive,
Oxnard, CA 1,785 4,342 66 6,061
Village Green, Lafayette, CA 557 1,329 8 1,878<PAGE>
Industrial Buildings:
Building #3
Contra Costa Diablo
Industrial Park
Concord, CA 495 1,167 99 1,563
Building #8
Contra Costa Diablo
Industrial Park
Concord, CA 877 1,551 132 2,296
Building #18
Mason Industrial Park,
Concord, CA 610 1,274 111 1,773
Building #6
Cody Street Park, Overland
Park, KS 380 1,251 148 1,483
Building #3
Ninety-Ninth Street Park,
Lenexa, KS 360 2,172 184 2,348
Dupont Industrial center,
Ontario, CA 3,588 6,218 54 9,752
Milpitas Town Center,
Milpitas, CA 1,935 4,505 17 6,423
$17,343 $40,477 $2,853 $54,967
1/Offered for sale.
</TABLE>
IBM Building
The Company continues to offer the IBM Building for sale.
Texas Bank North
In December 1993, the Company entered into a contract to sell the Texas Bank
North Building, San Antonio, Texas, for a cash sale price of $8,500,000, or
$56 per square foot. The sale was completed on January 14, 1994, and resulted
in a gain of $1,193,000.
Contra Costa Diablo Industrial Park (Buildings 3 and 8), Mason Industrial Park
(Building 18), 99th Street Park (Building 3) and Cody Street Park (Building 6)
On December 5, 1990, the Company purchased these industrial properties from
Peter B. Bedford, Chairman of the Board and Chief Executive Officer of the
Company (Mr. Bedford) for the aggregate purchase price of $9,050,000, plus
closing and acquisition costs.
Acquisitions
As fully discussed below, fees paid to Mr. Bedford relating to property
acquisitions are capitalized. (Note 3.)
Woodlands II
The property, a suburban six-story office building located in Salt Lake City,
Utah, was purchased for $6,750,000, or $59 per square foot, on August 25,
1993. The Company recorded acquisition costs of $101,000 paid to Mr. Bedford.
1000 Town Center Drive
The property, a suburban six-story office building located in Oxnard,
California, was purchased for $5,100,000, or $47 per square foot, on December
30, 1993. The purchase price consisted of $3,600,000 in cash and a deferred
payment of $1,500,000 due in December 1994, for which the Company has issued a<PAGE>
letter of credit under its credit facility. The Company recorded acquisition
costs of $77,000 paid to Mr. Bedford.
Mariner Court
The property, a suburban three-story office building located in Torrance,
California, was purchased for $7,500,000, or $71 per square foot, on January
5, 1994. The Company recorded acquisition costs of $113,000 paid to Mr.
Bedford.
Dupont Industrial Center
The property, a three-building industrial complex located in Ontario,
California, was purchased for $9,750,000, or $22 per square foot, on May 24,
1994. The Company recorded acquisition costs of $146,000 paid to Mr. Bedford.
Because the property was only 68% leased at the time of purchase, the purchase
contract established a rental income guarantee fund of $400,000 which
disburses to the Company a monthly sum equal to 27.3 cents for each square
foot of vacant space in excess of 22,560 square feet. The rental income
guarantee fund will terminate either when all funds are disbursed or at lease
t 90% of the space is leased. As of September 30, 1994, the Company had
received $125,000 of the rental income guarantee fund. This amount has been
accounted for as a reduction of the cost of the property.
Village Green
The property, a suburban three-building office complex located in Lafayette,
California, was purchased for $1,792,000 or $106 per square foot, on July 7,
1994. The Company recorded acquisition costs of $27,000 paid to Mr. Bedford.
Milpitas Town Center
The property consists of two suburban research and development buildings and
3.1 acres of undeveloped land. The property, located in Milpitas, California,
was purchased for 6,320,000, or $62 per square foot (excluding the undeveloped
land), on August 11, 1994. The purchase price consisted of $5,720,000 in cash
and a deferred payment of $600,000 due in August, 1995, for which the Company
has issued a letter of credit under its credit facility. The Company recorded
acquisition costs of $95,000 paid to Mr. Bedford. The property has had a
Phase I environmental site assessment (which involves inspection without soil
sampling or groundwater analysis) by an independent environmental consultant
and has been inspected for hazardous materials as part of the Company's
acquisition inspections. The Phase I assessment indicates that the
groundwater under the property either has been or may in the future be
impacted by the migration of contaminants originating from an off-site source.
According to information available to the Company, the responsible party for
this off-site source has been identified and has begun remediation pursuant to
a clean-up program mandated by a California environmental authority. The
indentified party's clean-up program is backed by an insurance policy from
CIGNA up to $10 million. The Company does not believe that this environmental
matter will impair the future value of the property in any significant
respect, or that the Company will be required to fund any portion of the cost
of remediation, although there can be no assurance in this regard.
There has been no significant development in environmental matters or
proceedings since the filing of the Company's 1993 Annual Report on Form 10-
K.
The Company internally manages the majority of its properties and maintains
centralized financial record keeping. For the IBM Building and Woodlands II,
the Company has subcontracted on-site maintenance to local maintenance firms.
Note 3. Related Party Transactions<PAGE>
Since February 1993, all of the Company's activities relating to debt and
equity financings and the acquisition of new properties have been handled
though a separate division within the Company referred to as BPI Acquisitions
("BPI Acquisitions"). Due to the Company's limited financial resources, BPI
Acquisitions operates under an arrangement with Mr. Bedford whereby he
provides acquisition and financing personnel, allocable overhead costs, and
the costs of all due diligence conducted prior to an acquisition. Upon the
completion of a financing or the acquisition of a property, Mr. Bedford is
paid a fee by the Company equal to the lesser of (a) 1-1/2% of the gross
amount raised or the purchase price of the property, as the case may be, or
(b) an amount equal to (1) the aggregate amount of costs funded by Mr. Bedford
through the time of such acquisition or financing minus (2) the aggregate
amount of fees previously paid to Mr. Bedford pursuant to such arrangement.
In no event does the aggregate amount of fees paid to Mr. Bedford exceed the
aggregate amount of costs funded by Mr. Bedford. Such fees are capitalized by
the Company as part of the direct costs of acquisition and financing
activities. As of September 30, 1994, the Company had paid Mr. Bedford an
aggregate of $903,000 pursuant to this arrangement, which was $411,000 less
than the amount of total acquisition and financing costs funded by Mr.
Bedford.
In July 1993, the Company, as lessor, entered into an industrial lease with
Bedford Property Holdings Limited (BPHL), of which Mr. Bedford is the sole
shareholder. Under the terms of the lease, BPHL is leasing for storage
purposes 2,400 square feet in Mason Industrial Park on a month-to-month basis
at a monthly rate of $1,288. Although the Company generally does not lease
space on a month-to-month basis, it believes BPHL's base rent is competitive
with what could be obtained from an unaffiliated third party lessee. There
were no leasing commissions paid or tenant improvement costs associated with
the transaction.
The furniture and equipment currently being used by the staff of the Company
was purchased from BPHL in June and September 1994. The purchase price of
$69,000 was based on an independent outside appraisal.
Note 4. Bank Loan Payable
In December 1993, the Company concluded an agreement with Bank of America
( B ofA) for a $20 million revolving line of credit for real estate
acquisitions. In August 1994, the maximum commitment amount of the facility
was increased from $20 million to $23 million. The facility, which matures on
January 1, 1997, carries an interest rate option of either prime plus 0.75% or
an offshore rate, similar to LIBOR, plus 3.00%. The facility is secured by
mortgages on Woodlands II, Mariner Court, Village Green, Milpitas Town Center,
IBM Building, 1000 Town Center Drive, and Dupont Industrial Center. At
September 30, 1994, the Company had outstanding borrowings of $16,519,000
under the credit facility and letters of credit outstanding under the facility
in the amount of $2,100,000. To minimize interest expense, the Company
utilized a portion of its available cash resources to reduce the outstanding
borrowings under the line of credit. The Company may re-borrow such amounts
at its discretion.
The daily weighted average amount owing to the bank was $6,285,000 and
$4,309,000 in the first nine months of 1994 and 1993, respectively. The
w e ighted average interest rate in these periods was 7.7% and 6.7%,
respectively.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND<PAGE>
FINANCIAL CONDITION
Nine Months Ended September 30, 1994 Compared with Nine Months Ended September
30, 1993
Income
Income from property operations increased $1,662,000 (127%) in the nine months
ended September 30, 1994, as compared to the same period in 1993. This is due
primarily to an increase in rental income of $406,000 for the first nine
months in 1994 compared to the first nine months in 1993, combined with a
decrease in rental expenses of $1,256,000. The increase in rental income is
primarily attributable to the increase in real estate investments. The
decrease in rental expenses is primarily attributable to a decrease in
operating expenses combined with a decrease in the amortization of leasing
commissions and tenant improvements. The decrease in operating expenses is
due to lower operating expenses on newly acquired industrial buildings and
more efficient cost control due to self management. The newly acquired
buildings have not yet incurred significant leasing commission and tenant
improvement costs.
Equity in joint venture partnership operations produced a loss of $153,000 for
the first nine months in 1993. The Company's ownership interests in these
joint venture partnerships were sold in May, 1993.
Expenses
Interest expense for the nine months ended September 30, 1994, decreased
$217,000 (38%) from the same period in 1993. The decrease is primarily
attributable to the Company's practice of utilizing a portion of its cash
resources to temporarily reduce the outstanding borrowings under its credit
facility and to the Company's paying off all of its mortgage loans in
November, 1993. General and administrative expenses remained relatively
unchanged as compared with the same period in 1993.
Gains on Sales
On May 1, 1993, the Company sold its interest in the Edison Square joint
venture partnerships and recorded a gain of $2,686,000. This gain was due
primarily to the book value of those partnerships having been reduced as the
result of partnership losses. In August 1993, the Company sold its investment
in University Tower for $15,200,000, which produced a gain of $407,000. On
January 14, 1994, the Company sold its investment in the Texas Bank North
Building for $8,500,000 and recorded a gain of $1,193,000. The gains on the
sales of University Tower and Texas Bank North primarily reflected prior
write-downs of those assets.
Three Months Ended September 30, 1994 Compared with Three Months Ended
September 30, 1993
Income
Income from property operations increased $1,202,000 (3,434%) in the three
months ended September 30, 1994, as compared to the same period in 1993. This
is due primarily to an increase in rental income of $752,000 for the three
months ended September 30, 1994, compared to the three months ended September
30, 1993, combined with a decrease in rental expenses of $450,000. The
increase in rental income is primarily attributable to the increase in real
estate investments. The decrease in rental expenses is primarily attributable<PAGE>
to the decrease in the amortization of leasing commissions and tenant
improvements. The newly acquired buildings have not yet incurred significant
leasing commission and tenant improvement costs.
Expenses
Interest expense for the three months ended September 30, 1994, increased
$94,000 (55%) from the same period in 1993. The increase is attributable to
the Company's higher level of borrowings on its credit facility in 1994.
General and administrative expenses increased $75,000 (21%) from the same
period in 1993. The increase is attributable to increased administrative
costs associated with a larger real estate portfolio.
Gain on Sale
In August 1993, the Company sold its investments in University Tower for
$15,200,000, which produced a gain of $407,000. The gain on the sale of
University Tower primarily reflected a write-down of that asset in 1992.
Liquidity and Capital Resources
During the nine months ended September 30, 1994, the Company's operating
activities, the sale of Texas Bank North Building, and bank borrowings
provided cash flow in the amount of $40,572,000. The Company funded
$26,126,000 of real estate investments, paid down the credit facility by
$17,359,000, and distributed dividends of $1,434,000.
In December 1993, the Company secured a $20 million revolving credit facility
with Bank of America. In August 1994, the maximum commitment amount of the
facility was increased from $20 million to $23 million. The facility was
used, in part, to finance the acquisitions of Mariner Court, Dupont Industrial
Center, Village Green, and Milpitas Town Center during the first nine months
of 1994. To minimize interest expense, the Company utilized a portion of its
available cash resources to reduce the outstanding borrowings under the line
of credit. The Company may re-borrow such amounts at its discretion. At
September 30, 1994, the Company was in compliance with the covenants and
requirements of its revolving credit facility with Bank of America.
The Company anticipates that the cash flow generated by its real estate
investments and funds available under the above credit facility will be
sufficient to meet its short-term liquidity requirements.
The capital resources for long-term liquidity requirements, including the
repayment of the revolving credit facility, may be provided by some or all of
the following: (a) the cash flow generated by the Company's real estate
investments, (b) other bank borrowings, (c) the financing of real estate
investments, (d) the sale of real estate investments, and (e) sale of new
equity.
The ability to obtain mortgage loans on income producing property is dependent
upon the ability to attract and retain tenants and the economics of the
various markets in which the properties are located, as well as the
willingness of mortgage lending institutions to make loans secured by real
property. The ability to sell real estate investments is partially dependent
upon the ability of purchasers to obtain financing.
Dividends
Dividends declared for the first quarter 1994 were $.08 per share. Dividends<PAGE>
declared for each of the second and third quarters of 1994 were $0.09 per
share. Dividends were paid approximately 30 days after the close of the
respective quarters.
Funds From Operations
Funds From Operations (FFO) during the three and nine months ended September
30, 1994, amounted to $892,000 and $2,568,000 respectively. For the same
p e riods last year, Funds From Operations were $365,000 and$1,544,000
respectively. Funds From Operations, as adopted by the National Association
of Real Estate Investment Trusts, is defined as net income, excluding gains or
losses from rent restructuring and sales of property, plus depreciation and
amortization, after adjustments for unconsolidated ventures. Funds From
Operations, therefore, does not represent cash generated from operating
activities in accordance with generally accepted accounting principles and
should not be considered an alternative to net income as an indication of the
Company's performance or to cash flow as a measure of liquidity or its ability
to pay distributions.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits
Exhibit No. Exhibit
2.1 Agreement and Plan of Merger dated July 1, 1993, between ICM
Property Investors Incorporated, a Delaware Corporation, and
Bedford Property Investors, Inc., a Maryland Corporation, is
incorporated herein by reference to the Company's registration
statement on Form 8-B/A filed March 6, 1994.
3.1 Articles of Incorporation of Bedford Property Investors, Inc., are
incorporated herein by reference to the Company's registration
statement on Form 8-B/A filed March 6, 1994.
3.2 Bylaws of Bedford Property Investors, Inc., are incorporated
herein by reference to the Company's registration statement on<PAGE>
Form 8-B/A filed March 6, 1994.
4.3 Registration Rights Agreement dated as of December 5, 1990,
between ICM Property Investors Incorporated and Peter B. Bedford
is incorporated herein by reference to Exhibit D filed with the
Company's Form 8-K dated December 13, 1990.
10.2 The Company's Automatic Dividend Reinvestment and Share Purchase
Plan, as adopted by the Company, is incorporated herein by
reference to Exhibit 4.1 filed with Amendment No. 2 to the
Registration Statement No. 2-94354 of ICM Property Investors
Incorporated dated January 25, 1985.
10.3 Contract of Sale dated July 31, 1992, by and among ICMPI (Irvine),
Inc., as Seller and In-N-Out Burger, Inc., and Rich Snyder,
Revocable InterVivos Trust U.D.T. 10/11/89, jointly and severally
as Purchase for University Tower, is incorporated herein by
reference to the Company's Form 10-Q for the quarter ended
September 30, 1993, and amended on Form 8-K/A(2) on March 21,
1994.
10.4 Real Estate Purchase and Sale Agreement dated June 4, 1993, by and
between Bay Street Number Two, Ltd., as Seller, and ICM Property
Investors Incorporated, as Purchaser, for Woodlands Tower II and
Woodlands Commercial Center, Plan II and Related Properties, filed
with the Company's Form 8-K filed on August 31, 1993, and amended
certain items reported on Form 8-K/A(2) on March 21, 1994.
10.5 1989 ICM Property Investors Incorporated Share Equivalent Plan (as
Amended and Restated as of January 1, 1991), as adopted by the
Company, incorporated herein by reference to Exhibit 10.6 to the
Company's quarterly report on Form 10-Q filed for the quarter
ended September 30, 1993.
10.6 Bedford Property Investors, Inc., Employee Stock Option Plan,
effective September 16, 1985, amended as of June 9, 1993, as
adopted by the Company on September 27, 1993, and amended and
restated as of February 7, 1994, incorporated herein by reference
to the Company's registration statement on Form 8-B/A filed March
6, 1994.
10.7 Bedford Property Investors, Inc., Directors' Stock Option Plan
effective May 20, 1992, as adopted by the Company on September 27,
1 9 9 3, and amended and restated as of February 7, 1994,
incorporated herein by reference to the Company's registration
statement on Form 8-B/A filed March 6, 1994.
10.9 Purchase and Sale Agreement dated December 14, 1993, by and
between NCEC Realty, Inc., as Seller, and Bedford Property
Investors, Inc., as Purchaser, for 1000 Town Center Drive is
incorporated herein by reference to the Company's Form 8-K filed
January 13, 1994, and amended on Form 8-K/A on March 17, 1994.
10.10 Purchase and Sale Agreement dated Janaury 5, 1994, by and between
Mariner Court Association, as Seller, and Bedford Property
Investors, Inc., as Purchaser, for Mariner Court is incorporated
herein by reference to the Company's Form 8-K filed January 13,
1994, and amended on Form 8-K/A filed March 17, 1994.<PAGE>
10.11 Agreement to Purchase Real Property dated June 11, 1993, by and
between Country Hollow Associates, as Seller, and A.S., Inc., as
Purchaser, for Texas Bank North Building is incorporated herein by
reference to the Company's Form 8-K filed January 27, 1994.
10.12 Purchase and Sale Agreement dated May 24, 1994, by and between
NCEC Realty, as Seller, and Bedford Property Investors, Inc., as
Purchaser, for Dupont Industrial Center is incorporated herein by
reference by the Company's Form 8-K filed on June 8, 1994.
10.13 Credit Agreement for $20 million revolving line of credit dated
December 20, 1993, by and between Bedford Property Investors,
Inc., as Borrower, and Bank of American National Trust and Savings
Association.
10.14 Modification Agreement to increase $20 million revolving line of
credit to $23 million dated August 8, 1994, by and between Bedford
Property Investors, Inc., as Borrower, and Bank of America
National Trust and Savings Association.
B. Reports on Form 8-K
For the quarter ended March 31, 1994, the Company filed a report
on Form 8-K dated December 30, 1993, announcing the acquisition of
1000 Town Center Drive and Mariner Court.
During the quarter ended March 31, 1994, the Company filed a
report on Form 8-K dated January 14, 1994, relating to the sale of
Texas Bank North.
During the quarter ended March 31, 1994, the Company filed a
report on Form 8-K/A on March 17, 1994, which amended items
reported on Form 8-K dated December 30, 1993, regarding the
acquisition of 1000 Town Center Drive and Mariner Court.
During the quarter ended March 31, 1994, the Company filed a
report on Form 8-K/A(2) on March 21, 1994, to amend items reported
on Form 8-K dated August 18,1993, and filed August 31, 1993,
regarding the sale of University Tower and the acquisition of
Woodlands II.
During the quarter ended June 30, 1994, the Company filed a report
on Form 8-K dated May 24, 1994, announcing the acquisition of
Dupont Industrial Center.
During the quarter ended September 30, 1994, the Company filed a
report on form 8-K/A on August 5, 1994, which amended items
reported on Form 8-K dated May 24, 1994, regarding the acquisition
of Dupont Industrial Center.
During the quarter ended September 30, 1994, the Company filed a
report on Form 8-K dated August 10, 1994, announcing the
acquisition of Milpitas Town Center.<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Sections 13 or 15(a), Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Dated: November 15, 1994
BEDFORD PROPERTY INVESTORS, INC.
(Registrant)
By: /S/ PETER B. BEDFORD
Peter B. Bedford
Chairman of the Board and
Chief Executive Officer
By: /S/ JAY SPANGENBERG
Jay Spangenberg
Chief Financial Officer
(Principal Financial Officer)
By: /S/ HANH KIHARA
Hanh Kihara
Controller
(Principal Accounting Officer)<PAGE>
EXHIBIT 10.13
CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of December 20, 1993,
between BEDFORD PROPERTY INVESTORS, INC., a Maryland corporation (the
"Company"), and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION (the
"Bank").
WHEREAS, the Bank has agreed to make available to the Company a
revolving credit facility upon the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained herein, the parties agree as follows:
1. Definitions.
1..1 Defined Terms. In addition to the terms defined
elsewhere in this Agreement, the following terms have the following meanings:
"Acquired Parcel" means a Parcel acquired by the Company, in
full or in part, with the proceeds of a Loan.
"Acquisition Availability" means, at any time, an amount equal
to the Availability less the Leasing Availability, but in no event less than
zero.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. A Person shall be deemed to control another Person
if the controlling Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of the other
Person, whether through the ownership of voting securities, by contract or
otherwise. In no event shall the Bank be deemed an "Affiliate" of the Company
or of any Subsidiary of the Company.
"Agreement" means this Credit Agreement, as amended,
supplemented or modified from time to time.
"Applicable Margin" means (a) with respect to Reference Rate
Loans, 0.75%; and (b) with respect to Offshore Rate Loans, 3.00%.
"Appraisal" means a real estate appraisal conducted in
accordance with the Uniform Standards of Professional Appraisal Practice (as
promulgated by the Appraisal Standards Board of the Appraisal Foundation), all
Requirements of Law applicable to the Bank and all applicable internal
policies of the Bank, undertaken by an independent appraisal firm satisfactory
to the Bank, and providing an assessment of fair market value of a parcel of
property, taking into account any and all Estimated Remediation Costs.
"Appraised Value" means, for an Approved Parcel at any time, an
amount equal to the "as is" fair market value of such Approved Parcel
established by the Bank's most recently completed Appraisal of such Approved
Parcel. The Appraised Value of an Approved Parcel shall be adjusted upon the
completion and review by the Bank of each Appraisal of such Approved Parcel.
"Approved Parcel" means a Parcel satisfying all of the
conditions set forth in Section 4.1.
"Assignee" has the meaning specified in subsection 9.8.1.
"Assignment of Leases" means any Assignment of Leases
evidencing the assignment of all present and future leases of all or any
portion of one or more Parcels to Bank as security for the Obligations.
"Attorney Costs" means and includes all fees and disbursements
of any law firm or other external counsel, the allocated cost of internal
legal services and all disbursements of internal counsel.
"Availability" means, at any time, the least of (a) the Total
Collateral Value, (b) the Total Cash Flow Value and (c) the Maximum Commitment
Amount.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act
of 1978 (11 U.S.C. Paragraph 101, et seq.).
"Borrowing Notice" means a notice substantially in the form of
Exhibit A given by the Company to the Bank pursuant to Section 2.3.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in San Francisco, California, are
authorized or required by law to close and, if the applicable Business Day
relates to any Offshore Rate Loan, means such a day on which dealings are
carried on in the applicable offshore dollar interbank market.
"Capital Adequacy Regulation" means any guideline, request or
directive of any Governmental Authority, or any other law, rule or regulation,
whether or not having the force of law, in each case, regarding capital
adequacy of the Bank or of any corporation controlling the Bank.
"Cash Flow" means, as of any calendar quarter:
(a) for all Parcels and all other real property
owned by either Borrower or any Subsidiary for at least
three (3) consecutive calendar quarters for which
quarterly operating statements have been delivered to the
Bank, the sum of (i) two (2) times the aggregate
quarterly gross income for all such properties, as
evidenced by the most recently received quarterly
operating statements for such properties, and (ii) the
aggregate quarterly gross income for all such properties
for the two (2) consecutive quarters immediately
preceding the quarter for which the most recently
received quarterly operating statements relate, as
evidenced by the quarterly operating statements for such
quarters,
plus (b) for all Parcels and all other real
Property owned by either Borrower or any Subsidiary for
at least two (2) consecutive calendar quarters for which
quarterly operating statements have been delivered to the
Bank but fewer than three (3) consecutive calendar
quarters for which quarterly operating statements have
been delivered to the Bank, the sum of (i) the aggregate
quarterly gross income for all such properties for the
two (2) most recent consecutive calendar quarters, as
evidenced by the quarterly operating statements for such
properties for such quarters, and (ii) one-half (1/2) of
the aggregate annual gross income for all such properties
for the year in which the determination is made, based on
the proforma cash flow statement set forth in the
Appraisal for each such property,
plus (c) for all Parcels and all other real
Property owned by either Borrower or any Subsidiary for
fewer than two (2) full calendar quarters for which
quarterly operating statements have been delivered to the
Bank, the aggregate annual gross income for all such
properties for the year in which the determination is
made, based on the pro forma cash flow statement set
forth in the Appraisal for each such property,
less (d) for all Parcels and all other real
Property owned by either Borrower or any Subsidiary for
at least four (4) consecutive calendar quarters for which
quarterly operating statements have been delivered to the
Bank, the aggregate amount of actual operating expenses
other than capital expenditures relating to all such
properties for the immediately preceding four (4)
consecutive calendar quarters, as evidenced by the most
recently received quarterly operating statements for such
properties and the quarterly operating statements for the
three (3) immediately preceding quarters,
less (e) for all Parcels and all other real
Property owned by either Borrower or any Subsidiary for
fewer than four (4) full calendar quarters for which
quarterly operating statements have been delivered to the
Bank, the aggregate amount of annual operating expenses
other than capital expenditures relating to all such
properties for the year in which the determination is
made, based on the pro forma cash flow statement set
forth in the Appraisal for each such property,
less (f) $2.00 per square foot of net rentable area
of office space actually under lease on the first day of
such calendar quarter in all Parcels and all other real
Property owned by any Subsidiary, representing capital
expenditures for office space,
less (g) $0.80 per square foot of net rentable area
of retail space actually under lease on the first day of
such calendar quarter in all Parcels and all other real
Property owned by any Subsidiary, representing capital
expenditures for retail space,
less (h) $0.40 per square foot of net rentable area
of industrial, warehouse or research and development
(other than office) space actually under lease on the
first day of such calendar quarter in all Parcels and all
other real Property owned by any Subsidiary, representing
capital expenditures for industrial, warehouse or
research and development (other than office) space.
"CERCLA" means the Comprehensive Environmental
Response Compensation and Liability Act of 1980.
"Closing Date" means the date on which all
conditions precedent set forth in Section 4.2 are satisfied or
waived by the Bank.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time, and any regulations promulgated
thereunder.
"Collateral" means all property and interests in
property and proceeds thereof now owned or hereafter acquired
by the Company or one of its Subsidiaries in or upon which a
Lien now or hereafter exists in favor of the Bank, whether
under this Agreement or under any other Collateral Documents
executed by any such Persons and delivered to the Bank.
"Collateral Documents" means, collectively, (i) the
Mortgages, Assignments of Leases, and all other security
agreements, mortgages, deeds of trust, lease assignments and
other similar agreements between the Company or its
Subsidiaries and the Bank now or hereafter delivered to the
Bank pursuant to or in connection with the transactions
contemplated hereby, and all financing statements (or
comparable documents) now or hereafter filed in accordance with
the UCC (or comparable law) against the Company or any
Subsidiaries as debtor in favor of the Bank as secured party
and (ii) any amendments, supplements, modifications, renewals,
replacements, consolidations, substitutions and extensions of
any of the foregoing.
"Contingent Obligation" means, as to any Person,
(a) any Guaranty Obligation of that Person, and (b) any direct
or indirect obligation or liability, contingent or otherwise,
of that Person in respect of any letter of credit or similar
instrument issued for the account of that Person or as to which
that Person is otherwise liable for reimbursement of drawings.
The amount of any Contingent Obligation shall (subject, in the
case of Guaranty Obligations, to the last sentence of the
definition of "Guaranty Obligation") be deemed equal to the
maximum reasonably anticipated liability in respect thereof.
"Contractual Obligation" means, as to any Person,
any provision of any security issued by such Person or of any
agreement, undertaking, contract, indenture, mortgage, deed of
trust or other instrument, document or agreement to which such
Person is a party or by which it or any of its property is
bound.
"Controlled Group" means the Company and all
Persons (whether or not incorporated) under common control or
treated as a single employer with the Company pursuant to
Section 414(b), (c), (m) or (o) of the Code.
"Conversion Date" means any date on which the
Company elects to convert a Reference Rate Loan to an Offshore
Rate Loan or an Offshore Rate Loan to a Reference Rate Loan.
"Conversion/Continuation Notice" means a notice
substantially in the form of Exhibit B given by the Company to
the Bank pursuant to Section 2.4.
"Covenant Debt Service" means, at any time, the
amount necessary to amortize the aggregate amount of secured
Indebtedness and commercial unsecured Indebtedness of the
Company and its Subsidiaries (as evidenced by negotiable
instruments or other written agreements; and based on the most
recently received quarterly consolidated balance sheet, and
including as Indebtedness all then-outstanding but undrawn
Letters of Credit) in twenty (20) equal annual installments of
principal and interest at a rate equal to 3.0% per annum above
the average of the Offshore Rates (each for an Interest Period
of thirty (30) days) on the determination date and on the
corresponding dates in each of the eleven (11) previous
consecutive months (or (i) if any such previous month did not
include a corresponding date, on the last Business Day of such
month, or (ii) if the corresponding date of any such previous
month was not a Business Day, on the Business Day immediately
preceding such corresponding date).
"Default" means any event or circumstance which,
with the giving of notice, the lapse of time, or both, would
(if not cured or otherwise remedied) constitute an Event of
Default.
"Disposition" means the sale, lease, conveyance or
other disposition of any Approved Parcel, other than (i) leases
of an Approved Parcel to third-party tenants in the ordinary
course of business or (ii) sales or other dispositions
expressly permitted under Section 7.2.
"Distribution Availability" means, at any time, the
lesser of (a) the difference between (i) the aggregate amount
of optional repayments on the Loans that the Company has made
to the Bank from rental income of the Company or its
Subsidiaries and (ii) the aggregate amount of Loans that the
Bank has made to the Company pursuant to Section 2.1 for any
purpose other than acquiring fee title to real property or
paying tenant improvement expenses or leasing commissions with
respect to an Acquired Parcel, and (b) the Availability at such
time.
"Environmental Claims" means all claims, however
asserted, by any Governmental Authority or other Person
alleging potential liability or responsibility for violation of
any Environmental Laws or for injury to the environment or
threat to public health, personal injury (including sickness,
disease or death), property damage, natural resources damage,
or otherwise alleging liability or responsibility for damages
(punitive or otherwise), cleanup, removal, remedial or response
costs, restitution, civil or criminal penalties, injunctive
relief, or other type of relief, resulting from or based upon
(a) the presence, placement, discharge, emission or release
(including intentional and unintentional, negligent and
non-negligent, sudden or non-sudden, accidental or
non-accidental placement, spills, leaks, discharges, emissions
or releases) of any Hazardous Material at, in or from an
Approval Parcel, or (b) any other circumstances forming the
basis of any violation, or alleged violation, of any
Environmental Laws.
"Environmental Laws" means all federal, state or
local laws, statutes, common law duties, rules, regulations,
ordinances and codes, together with all administrative orders,
directed duties, requests, licenses, authorizations and permits
of, and agreements with, any Governmental Authorities, in each
case relating to environmental, health, safety and land use
matters; including CERCLA, the Clean Air Act, the Federal Water
Pollution Control Act of 1972, the Solid Waste Disposal Act,
the Federal Resource Conservation and Recovery Act, the Toxic
Substances Control Act, the Emergency Planning and Community
Right-to-Know Act, the California Hazardous Waste Control Law,
the California Solid Waste Management, Resource, Recovery and
Recycling Act, the California Water Code and the California
Health and Safety Code.
"Environmental Permits" has the meaning specified
in subsection 5.12(b).
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time, and
regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business
(whether or not incorporated) under common control with the
Company within the meaning of Section 414(b), 414(c) or 414(m)
of the Code.
"ERISA Event" means (a) a Reportable Event with
respect to a Qualified Plan or a Multi-employer Plan;
(b) withdrawal by the Company or any ERISA Affiliate from a
Qualified Plan subject to Section 4063 of ERISA during a plan
year in which it was a substantial employer (as defined in
Section 4001(a)(2) of ERISA); (c) a complete or partial
withdrawal by the Company or any ERISA Affiliate from a Multi-
employer Plan; (d) the filing of a notice of intent to
terminate, the treatment of a plan amendment as a termination
under Section 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Qualified Plan or Multi-
employer Plan subject to Title IV of ERISA; (e) failure by the
Company or any member of the Controlled Group to make required
contributions to a Qualified Plan or Multi-employer Plan;
(f) an event or condition which might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer,
any Qualified Plan or Multi-employer Plan; (g) the imposition
of any liability under Title IV of ERISA, other than PBGC
premiums due but not delinquent under Section 4007 of ERISA,
upon the Company or any ERISA Affiliate; (h) an application for
a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code with respect to any Plan;
(i) a non-exempt prohibited transaction occurs with respect to
any Plan for which the Company or any Subsidiary of the Company
may be directly or indirectly liable; or (j) a violation of the
applicable requirements of Section 404 or 405 of ERISA or the
exclusive benefit rule under Section 401(a) of the Code by any
fiduciary or disqualified person with respect to any Plan for
which the Company or any member of the Controlled Group may be
directly or indirectly liable.
"Estimated Remediation Costs" means all costs
associated with performing work to remediate contamination of
real property or groundwater, including engineering and other
professional fees and expenses, costs to remove, transport and
dispose of contaminated soil, costs to "cap" or otherwise
contain contaminated soil, and costs to pump and treat water
and monitor water quality.
"Event of Default" means any of the events or
circumstances specified in Section 8.1.
"Event of Loss" means, with respect to any Approved
Parcel, any of the following: (a) any loss, destruction or
damage of such Approved Parcel; (b) any pending or threatened
institution of any proceedings for the condemnation or seizure
of such Approval Parcel or for the exercise of any right of
eminent domain; or (c) any actual condemnation, seizure or
taking, by exercise of the power of eminent domain or
otherwise, of such Approved Parcel, or confiscation of such
Approved Parcel or the requisition of the use of such Approved
Parcel.
"Federal Reserve Board" means the Board of
Governors of the Federal Reserve System or any successor
thereof.
"GAAP" means generally accepted accounting
principles set forth from time to time in the opinions and
pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of
comparable stature and authority within the accounting
profession), or in such other statements by such other entity
as may be in general use by significant segments of the
U.S. accounting profession, which are applicable to the
circumstances as of the date of determination.
"Governmental Authority" means any nation or
government, any state or other political subdivision thereof,
any central bank (or similar monetary or regulatory authority)
thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of, or
pertaining to, government, and any corporation or other entity
owned or controlled, through stock or capital ownership or
otherwise, by any of the foregoing.
"Guaranty Obligation" means, as applied to any
Person, any direct or indirect liability of that Person with
respect to any Indebtedness, lease, dividend, letter of credit
or other obligation (the "primary obligations") of another
Person. The amount of any Guaranty Obligation shall be deemed
equal to the stated or determinable amount of the primary
obligation in respect of which such Guaranty Obligation is made
or, if not stated or if indeterminable, the maximum reasonably
anticipated liability in respect thereof.
"Hazardous Materials" means all those substances
which are regulated by, or which may form the basis of
liability under, any Environmental Law, including all
substances identified under any Environmental Law as a
pollutant, contaminant, hazardous waste, hazardous constituent,
special waste, hazardous substance, hazardous material, or
toxic substance, or petroleum or petroleum derived substance or
waste.
"IBOR" means the per annum rate of interest,
rounded upward, if necessary, to the nearest 1/16th of one
percent (0.0625%), at which the Bank's Grand Cayman branch,
Grand Cayman, British West Indies, would offer U.S. dollar
deposits in amounts and for periods comparable to those of the
applicable Offshore Rate Loan and Interest Period to major
banks in the offshore U.S. dollar inter-bank market.
"Indebtedness" of any Person means, without
duplication, (a) all indebtedness for borrowed money; (b) all
obligations issued, undertaken or assumed as the deferred
purchase price of property or services; (c) all reimbursement
obligations with respect to surety bonds, letters of credit and
similar instruments (in each case, to the extent material or
non-contingent); (d) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so
evidenced incurred in connection with the acquisition of
property, assets or businesses; (e) all indebtedness created or
arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with
respect to property acquired by the Person (even though the
rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession
or sale of such property); (f) all indebtedness referred to in
clauses (a) through (e) above secured by (or for which the
holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien upon or in property
owned by such Person, even though such Person has not assumed
or become liable for the payment of such Indebtedness; and
(g) all Guaranty Obligations in respect of indebtedness or
obligations of others of the kinds referred to in clauses
(a) through (e) above.
"Indemnified Liabilities" has the meaning specified
in Section 9.5.
"Indemnified Person" has the meaning specified in
Section 9.5.
"Insolvency Proceeding" means (a) any case, action
or proceeding before any court or other Governmental Authority
relating to bankruptcy, reorganization, insolvency,
liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors or
other similar arrangement in respect of its creditors generally
or any substantial portion of its creditors; in each case
(a) and (b) undertaken under U.S. federal, state or foreign
law, including the Bankruptcy Code.
"Interest Payment Date" means the first day of each
month following disbursement of the initial Loan.
"Interest Period" means, with respect to any
Offshore Rate Loan, the period commencing on the Business Day
the Loan is disbursed or continued or on the Conversion Date on
which the Loan is converted to an Offshore Rate Loan and ending
on the date thirty (30), sixty (60), ninety (90) or one hundred
eighty (180) days, or one (1) year, thereafter, as selected by
the Company in its Borrowing Notice or Conversion/Continuation
Notice; provided that:
(a) if any Interest Period pertaining to an
Offshore Rate Loan would otherwise end on a day that is
not a Business Day, that 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; and
(b) any Interest Period pertaining to an
Offshore Rate 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 the calendar month at the end of such
Interest Period.
"Leasing Availability" means, at any time, the
lesser of (a) an amount equal to (i) the aggregate amount of
tenant improvement expenses and leasing commissions for all
Acquired Parcels set forth in the budgets delivered to the Bank
pursuant to Section 4.3.8 for each Acquired Parcel, less
(ii) the aggregate amount of Loans that the Bank has made to
the Company pursuant to Section 2.1 for the purpose of paying
tenant improvement expenses or leasing commissions with respect
to Acquired Parcels, less (iii) the aggregate amount of such
budgeted tenant improvement expenses and leasing commissions as
to which the Bank has received satisfactory evidence (in the
Bank's sole and absolute discretion) that either (A) the
Company has paid such expenses or commissions from the
Company's own funds other than Loan Proceeds or sums payable to
the Bank under this Agreement or (B) such expenses or
commissions will not be incurred (because of cost savings or
otherwise) and (b) the Availability at such time.
"Lending Office" means the office of the Bank
specified as its "Lending Office," opposite its name on the
signature pages hereto.
"Letter of Credit" means a letter of credit issued
by the Bank for the Company's account pursuant to Article 2.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, charge or deposit arrangement,
encumbrance, lien (statutory or other) or preference, priority
or other security interest or preferential arrangement of any
kind or nature whatsoever (including those created by, arising
under or evidenced by any conditional sale or other title
retention agreement, the lessor's interest under a capital
lease (determined in accordance with GAAP), any financing lease
having substantially the same economic effect as any of the
foregoing, or the filing of any financing statement under the
UCC or any comparable law naming the owner of the asset to
which such lien relates as debtor) and any contingent or other
agreement to provide any of the foregoing, but not including
the interest of a lessor under an operating lease (determined
in accordance with GAAP).
"Loan" means an extension of credit by the Bank to
the Company pursuant to Article 2, and may be a Reference Rate
Loan or an Offshore Rate Loan.
"Loan Documents" means this Agreement, the
Revolving Note, the Collateral Documents, and all documents
delivered to the Bank in connection therewith.
"Major Tenant" means, with respect to any Parcel, a
tenant occupying ten percent (10%) or more of the net rentable
area of the improvements located on such Parcel.
"Margin Stock" means "margin stock" as such term is
defined in Regulation G, T, U or X of the Federal Reserve
Board.
"Material Adverse Effect" means a material adverse
change in, or a material adverse effect upon, any of (a) the
operations, business, properties, condition (financial or
otherwise) or prospects of the Company or the Company and its
Subsidiaries taken as a whole; (b) the ability of the Company
to perform under any Loan Document and avoid any Event of
Default; (c) the legality, validity, binding effect or
enforceability of any Loan Document; or (d) the perfection or
priority of any Lien granted to the Bank under any of the
Collateral Documents.
"Maturity Date" means January 1, 1997.
"Maximum Commitment Amount" means, at any time
(a) during the period from the Closing Date through and
including October 31, 1995, an amount equal to $20,000,000.00,
and (b) during any calendar month during the period from and
after November 1, 1995, commencing on the first day of each
such month, an amount equal to (i) the Maximum Commitment
Amount during the immediately preceding calendar month less
(ii) the principal component of the payment amount that would
amortize the Maximum Commitment Amount during the immediately
preceding calendar month in equal monthly installments over the
period from the first day of such calendar month to November 1,
2015, at a per annum rate of interest equal to the greater of
(x) 2.50% per annum above the average yield on ten-year United
States treasury bonds maturing approximately ten (10) years
from the date of determination (as determined from the telerate
screen at the opening of business on the determination date) or
(y) 9.0%, computed on the basis of a year of 365 or 366 days,
as applicable, and actual day months.
"Mortgage" means any deed of trust, mortgage or
other document creating a Lien on real property or any interest
in real property.
"Multi-employer Plan" means a "multi-employer plan"
(within the meaning of Section 4001(a)(3) of ERISA) to which
any member of the Controlled Group (i) makes, is making, or is
obligated to make contributions, or (ii) during the preceding
three calendar years has made, or has been obligated to make,
contributions.
"Net Issuance Proceeds" means, in respect of any
issuance of debt (including secured debt) or equity, cash
proceeds and non-cash proceeds received or receivable in
connection therewith, net of reasonable out-of-pocket costs and
expenses paid or incurred in connection therewith (excluding
amounts payable to the Company or any Affiliate of the
Company).
"Net Operating Income" means, as of any calendar
quarter:
(a) for all Approved Parcels owned by either
Borrower or any Subsidiary for at least three (3)
consecutive calendar quarters for which quarterly
operating statements have been delivered to the Bank, the
sum of (i) two (2) times the aggregate quarterly gross
income for all such Approved Parcels, as evidenced by the
most recently received quarterly operating statements for
such Approved Parcels, and (ii) the aggregate quarterly
gross income for all such Approved Parcels for the
two (2) consecutive quarters immediately preceding the
quarter for which the most recently received quarterly
operating statements relate, as evidenced by the
quarterly operating statements for such quarters,
plus (b) for all Approved Parcels owned by either
Borrower or any Subsidiary for at least two (2)
consecutive calendar quarters for which quarterly
operating statements have been delivered to the Bank but
fewer than three (3) consecutive calendar quarters for
which quarterly operating statements have been delivered
to the Bank, the sum of (i) the aggregate quarterly gross
income for all such Approved Parcels for the two (2) most
recent consecutive calendar quarters, as evidenced by the
quarterly operating statements for such Approved Parcels
for such quarters, and (ii) on-half (1/2) of the aggregate
annual gross income for all such Approved Parcels for the
year in which the determination is made, based on the
proforma cash flow statement set forth in the Appraisal
for each such Approved Parcel,
plus (c) for all Approved Parcels owned by either
Borrower or any Subsidiary for fewer than two (2) full
calendar quarters for which quarterly operating
statements have been delivered to the Bank, the aggregate
annual gross income for all such Approved Parcels for the
year in which the determination is made, based on the
pro forma cash flow statement set forth in the Appraisal
for each such Approved Parcel,
less (d) for all Approved Parcels owned by either
Borrower or any Subsidiary for at least four (4)
consecutive calendar quarters for which quarterly
operating statements have been delivered to the Bank, the
aggregate amount of actual operating expenses other than
capital expenditures relating to all such Approved
Parcels for the immediately preceding four (4)
consecutive calendar quarters, as evidenced by the most
recently received quarterly operating statements for such
Approved Parcels and the quarterly operating statements
for the three (3) immediately preceding quarters,
less (e) for all Approved Parcels owned by either
Borrower or any Subsidiary for fewer than four (4) full
calendar quarters for which quarterly operating
statements have been delivered to the Bank, the aggregate
amount of annual operating expenses other than capital
expenditures relating to all such Approved Parcels for
the year in which the determination is made, based on the
pro forma cash flow statement set forth in the Appraisal
for each such Approved Parcel,
less (f) $2.00 per square foot of net rentable area
of office space actually under lease on the first day of
such calendar quarter in all Approved Parcels,
representing capital expenditures for office space,
less (g) $0.80 per square foot of net rentable area
of retail space actually under lease on the first day of
such calendar quarter in all Approved Parcels,
representing capital expenditures for retail space,
less (h) $0.40 per square foot of net rentable area
of industrial, warehouse or research and development
(other than office) space actually under lease on the
first day of such calendar quarter in all Approved
Parcels, representing capital expenditures for
industrial, warehouse or research and development (other
than office) space.
Net Operating Income for any quarter will be adjusted in
accordance with the foregoing formula at any time a Parcel
becomes an Approved Parcel during such quarter, or at any time
an Approved Parcel is sold during such quarter.
"Net Proceeds" means proceeds in cash, checks or
other cash equivalent financial instruments as and when
received by the Person making a Disposition, net of: (a) the
reasonable direct costs relating to such Disposition (excluding
amounts payable to the Company or any Affiliate of the
Company), (b) sale, use or other transaction taxes paid or
payable as a result thereof, and (c) amounts required to be
applied to repay principal, interest and prepayment premiums
and penalties on Indebtedness secured by a Lien on the asset
which is the subject of such Disposition. "Net Proceeds" shall
also include proceeds paid on account of any Event of Loss, net
of (i) all money actually applied to repair or reconstruct the
damaged property or property affected by the condemnation or
taking, (ii) all of the costs and expenses reasonably incurred
in connection with the collection of such proceeds, award or
other payments, and (iii) any amounts retained by or paid to
parties having superior rights to such proceeds, awards or
other payments.
"Notice of Lien" means any "notice of lien" or
similar document intended to be filed or recorded with any
court, registry, recorder's office, central filing office or
other Governmental Authority for the purpose of evidencing,
creating, perfecting or preserving the priority of a Lien
securing obligations owing to a Governmental Authority.
"Obligations" means all Loans and other
Indebtedness, advances, debts, liabilities, obligations,
covenants and duties owing from the Company to the Bank or any
other Person required to be indemnified under any Loan
Document, of any kind or nature, present or future, whether or
not evidenced by any note, guaranty or other instrument,
arising under this Agreement or under any other Loan Document,
whether or not for the payment of money, whether arising by
reason of an extension of credit, loan, guaranty,
indemnification or in any other manner, whether direct or
indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter
arising and however acquired.
"Offshore Rate" means, for each Interest Period in
respect of any Offshore Rate Loan, the per annum rate of
interest, rounded upward, if necessary, to the nearest 1/100th
of one percent, determined by the following formula:
LIBOR Offshore Rate =
(1.00 - Reserve Percentage)
"Offshore Rate Loan" means a Loan that bears
interest based on the Offshore Rate.
"Ordinary Course of Business" means, in respect of
any transaction involving the Company or any Subsidiary of the
Company, the ordinary course of such Person's business,
substantially as conducted by any such Person prior to or as of
the Closing Date, and undertaken by such Person in good faith
and not for purposes of evading any covenant or restriction in
any Loan Document.
"Organization Documents" means, (a) for any
corporation, the certificate or articles of incorporation, the
bylaws, any certificate of determination or instrument relating
to the rights of preferred shareholders of such corporation,
and all applicable resolutions of the board of directors (or
any committee thereof) of such corporation, and (b) for any
partnership, the partnership agreement, statement or
certificate of partnership and any fictitious business name or
other filing relating to such partnership.
"Parcel" means (a) a parcel of real property that
is owned in fee by the Company and (b) the parcels of real
property located in (i) San Antonio, Texas, owned in fee
by Country Hollow Associates, a Texas general partnership, and
(ii) Jackson, Mississippi, owned in fee by ICMPI (Jackson),
Inc., a Delaware corporation.
"Participant" has the meaning specified in
subsection 9.8.2.
"PBGC" means the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its
functions under ERISA.
"Permitted Encumbrances" means, with respect to any
Parcel, all matters to which the Bank consents in writing as
exceptions to the Title Policy covering such Parcel.
"Permitted Liens" has the meaning specified in
Section 7.1.
"Person" means an individual, partnership,
corporation, business trust, joint stock company, trust,
unincorporated association, joint venture or Governmental
Authority.
"Plan" means an employee benefit plan (as defined
in Section 3(3) of ERISA) which the Company or any member of
the Controlled Group sponsors or maintains or to which the
Company or any member of the Controlled Group makes, is making
or is obligated to make contributions, and includes any
Multi-employer Plan or Qualified Plan.
"Property" means any estate or interest in any kind
of property or asset, whether real, personal or mixed, and
whether tangible or intangible.
"Qualified Plan" means a pension plan (as defined
in Section 3(2) of ERISA) intended to be tax-qualified under
Section 401(a) of the Code and which any member of the
Controlled Group sponsors, maintains, or to which it makes, is
making or is obligated to make contributions, or in the case of
a multiple employer plan (as described in Section 4064(a) of
ERISA) has made contributions at any time during the
immediately preceding period covering at least five (5) plan
years, but excluding any Multi-employer Plan.
"Reference Rate" means the per annum rate of
interest publicly announced from time to time by the Bank at
San Francisco, California, as its "Reference Rate." The
Reference Rate is set by the Bank based on various factors,
including the Bank's costs and desired return, general economic
conditions and other factors, and is used as a reference point
for pricing loans. The Bank may price loans at, above or below
the Reference Rate. Any change in the Reference Rate shall
take effect on the day specified in the public announcement of
such change.
"Reference Rate Loan" means a Loan that bears
interest based on the Reference Rate.
"Release Price" means, with respect to an Approved
Parcel, the greatest of (a) the Net Proceeds (computed without
regard to any amounts required to be applied to repay any of
the Obligations) of such Approved Parcel, up to a maximum
amount of 78% of the Appraised Value of such Approved Parcel,
or (b) 65% of the Appraised Value of such Approved Parcel, or
(c) the amount, if any, necessary to reduce the aggregate
principal amount outstanding on the Loans to the Availability
(computed without regard to the Approved Parcel for which the
Company is seeking release), in each case determined on the
date of the Company's request that the Bank release its Lien on
such Approved Parcel.
"Reportable Event" means, as to any Plan, (a) any
of the events set forth in Section 4043(b) of ERISA or the
regulations thereunder, other than any such event for which the
30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC, (b) a withdrawal from a Plan
described in Section 4063 of ERISA, or (c) a cessation of
operations described in Section 4062(e) of ERISA.
"Requirement of Law" means, as to any Person, any
law (statutory or common), treaty, rule or regulation, or any
determination of an arbitrator or of a 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.
"Reserve Percentage" means the total of the maximum
reserve percentages for determining the reserves to be
maintained by member banks of the Federal Reserve System for
"eurocurrency liabilities," as defined in Federal Reserve Board
Regulation D. The Reserve Percentage shall be expressed in
decimal form and rounded upward, if necessary, to the nearest
1/100th of one percent, and shall include marginal, emergency,
supplemental, special and other reserve percentages.
"Responsible Officer" means the chief executive
officer or the president of the Company, or any other officer
having substantially the same authority and responsibility or,
with respect to financial matters, the chief financial officer
or the treasurer of the Company, or any other officer having
substantially the same authority and responsibility.
"Revolving Note" means a promissory note of the
Company payable to the order of the Bank in substantially the
form of Exhibit C, and any amendments, supplements,
modifications, renewals, replacements, consolidations and
extensions thereof, evidencing the aggregate indebtedness of
the Company to the Bank resulting from Loans made by the Bank
pursuant to this Agreement.
"SEC" means the Securities and Exchange Commission,
or any successor thereto.
"Solvent" means, as to any Person at any time, that
(a) the fair value of the Property of such Person is greater
than the amount of such Person's liabilities (including
disputed, contingent and unliquidated liabilities) as such
value is established and liabilities evaluated for purposes of
Section 101(31) of the Bankruptcy Code and, in the alternative,
for purposes of the California Uniform Fraudulent Transfer Act
and any other applicable fraudulent conveyance statute; (b) the
present fair saleable value of the Property of such Person is
not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become
absolute and matured; (c) such Person is able to realize upon
its Property and pay its debts and other liabilities (including
disputed, contingent and unliquidated liabilities) as they
mature in the normal course of business; (d) 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; and (e) 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.
"Subsidiary" of a Person means any corporation,
association, partnership, joint venture or other business
entity of which more than 50% of the voting stock or other
equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by
the Person, or one or more of the Subsidiaries of the Person,
or a combination thereof.
"Title Policy" means any policy of title insurance
required pursuant to this Agreement.
"Total Cash Flow Value" means, at any time, the
maximum amount for which 80% of the Net Operating Income would
be sufficient to amortize such amount in twenty-five (25) equal
annual installments of principal and interest at a per annum
rate equal to the greater of (i) 2.50% per annum above the
average yield on ten-year United States treasury bonds maturing
approximately ten (10) years from the date of determination (as
determined from the telerate screen at the opening of business
on the determination date) or (ii) 9.0%, computed on the basis
of a year of 365 or 366 days, as applicable, and actual day
months.
"Total Collateral Value" means, at any time, 65% of
the aggregate amount of the Appraised Values for all of the
Approved Parcels at such time.
"Transferee" has the meaning specified in
subsection 9.8.3.
"UCC" means the Uniform Commercial Code as in
effect in any jurisdiction.
"Unfunded Pension Liabilities" means the excess of
a Plan's benefit liabilities under Section 4001(a)(16) of
ERISA, over the current value of that Plan's assets, determined
in accordance with the assumptions used by the Plan's actuaries
for funding the Plan pursuant to section 412 of the Code for
the applicable plan year.
1..2 Other Interpretive Provisions.
1..2.1 Use of Defined Terms. Unless
otherwise specified herein or therein, all terms defined in
this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant to
this Agreement. The meaning of defined terms shall be equally
applicable to the singular and plural forms of the defined
terms. Terms (including uncapitalized terms) not otherwise
defined herein and that are defined in the UCC shall have the
meanings therein described.
1..2.2 Certain Common Terms.
(a) The Agreement. The words "hereof,"
"herein," "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, schedule and exhibit references
are to this Agreement unless otherwise specified.
(b) Documents. The term "documents"
includes any and all instruments, documents, agreements,
certificates, indentures, notices and other writings,
however evidenced.
(c) Including. The term "including" is not
limiting and means "including without limitation."
(d) Performance. Whenever any performance
obligation hereunder (other than a payment obligation)
shall be stated to be due or required to be satisfied on
a day other than a Business Day, such performance shall
be made or satisfied on the next succeeding Business Day.
In the computation of periods of time from a specified
date to a later specified date, the word "from" means
"from and including"; the words "to" and "until" each
mean "to but excluding," and the word "through" means "to
and including". If any provision of this Agreement
refers to any action taken or to be taken by any Person,
or which such Person is prohibited from taking, such
provision shall be interpreted to encompass any and all
means, direct or indirect, of taking or not taking such
action.
(e) Contracts. Unless otherwise expressly
provided in this Agreement, references to agreements and
other contractual instruments shall be deemed to include
all subsequent amendments and other modifications
thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan
Document.
(f) Laws. References to any statute or
regulation are to be construed as including all statutory
and regulatory provisions consolidating, amending or
replacing the statute or regulation.
(g) Captions. The captions and headings of
this Agreement are for convenience of reference only, and
shall not affect the construction of this Agreement.
(h) Independence of Provisions. The parties
acknowledge that this Agreement and the other Loan
Documents may use several different limitations, tests or
measurements to regulate the same or similar matters, and
that such limitations, tests and measurements are
cumulative and must each be performed, except as
expressly stated to the contrary in this Agreement.
(i) Exhibits. All of the exhibits attached
to this Agreement are incorporated herein by this
reference.
1..2.3 Accounting Principles.
(a) Accounting Terms. Unless the context
otherwise clearly requires, all accounting terms not
expressly defined herein shall be construed, and all
financial computations required under this Agreement
shall be made, in accordance with GAAP, consistently
applied.
(b) Fiscal Periods. References herein to
"fiscal year" and "fiscal quarter" refer to such fiscal
periods of the Company.
2. The Credit.
2..1 Amount and Terms of Commitment. The Bank
agrees, on the terms and subject to the conditions hereinafter
set forth,
(a) to make Loans to the Company from time to
time on any Business Day during the period from the
Closing Date to the Maturity Date (i) for the purpose of
acquiring fee title to improved real property, in an
aggregate amount not to exceed at any time outstanding
the Acquisition Availability, (ii) for the purpose of
paying tenant improvement expenses and leasing
commissions with respect to Acquired Parcels, in an
aggregate amount not to exceed at any time the Leasing
Availability, and (iii) not more than four times per
calendar quarter, for the purpose of paying (A) dividends
to the Company's shareholders, or (B) any expenses of the
Company or any Parcel, including any costs of capital
improvements for any Parcel (other than tenant
improvement expenses or leasing commissions with respect
to an Acquired Parcel), in an aggregate amount not to
exceed at any time the Distribution Availability, and
(b) to issue Letters of Credit for the
Company's account from time to time on any Business Day
during the period from the Closing Date to the date that
is eighteen (18) months prior to the Maturity Date, for
the purpose of acquiring fee title to real property (but
not for use as good faith deposits for any such
acquisition), in an aggregate amount not to exceed
$3,000,000.00 at any time outstanding;
provided, however, that (u) the amount of any tenant
improvement expenses and leasing commissions with respect to
any Acquired Parcel for payment of which a Loan is made shall
not exceed the lesser of (i) the then-undisbursed aggregate
amount of such costs set forth in the budget for such Acquired
Parcel delivered to the Bank pursuant to Section 4.3.8, or
(ii)(A) $30.00 per square foot of net rentable area for tenant
improvements to office or retail space in any such Acquired
Parcel, or (B) $10.00 per square foot of net rentable area for
tenant improvements to industrial, warehouse or research and
development (other than office) space in any such Acquired
Parcel, or (C) $6.00 per square foot of net rentable area for
leasing commissions, and (v) no Letter of Credit shall have an
expiry date later than the earlier of (i) twelve (12) months
after the date on which such Letter of Credit is issued or
(ii) 180 days prior to the Maturity Date. Notwithstanding any
contrary provision of this Agreement, the aggregate principal
amount of all outstanding Loans shall not at any time exceed
the Availability, and the aggregate amount of outstanding but
undrawn Letters of Credit shall be considered a portion of the
principal amount outstanding on the Loans for purposes of
determining (x) the amount of Availability remaining available
for disbursement and (y) mandatory repayments under
Section 2.5.2. Within the limits of the Availability, and
subject to the other terms and conditions hereof, the Company
may borrow under this Section 2.1, repay pursuant to
Section 2.5 and reborrow pursuant to this Section 2.1.
2..2 Revolving Note. The Loans made by the Bank
shall be evidenced by a Revolving Note payable to the order of
the Bank in an amount equal to the Maximum Commitment Amount on
the Closing Date. The Bank will endorse on the schedule
annexed to the Revolving Note the date, amount and maturity of
each Loan that it makes (which shall not include undrawn
amounts on outstanding Letters of Credit, but shall include the
amounts of any drawings on outstanding Letters of Credit), the
purpose of the Loan, the amount of each payment of principal
that the Company makes with respect thereto and the source of
the funds from which each principal payment is made.
The Company irrevocably authorizes the Bank to endorse the
Revolving Note, and the Bank's record shall be conclusive
absent manifest error; provided, however, that the Bank's
failure to make, or its error in making, a notation thereon
with respect to any Loan shall not limit or otherwise affect
the Company's obligations to the Bank hereunder or under the
Revolving Note.
2..3 Procedure for Obtaining Credit. Each Loan
shall be made and each Letter of Credit shall be issued upon
the irrevocable written notice (including notice via facsimile
confirmed immediately by a telephone call) of the Company in
the form of a Borrowing Notice (which notice must be received
by the Bank prior to 10:00 a.m., San Francisco time,
(i) two (2) Business Days prior to the requested borrowing
date, in the case of Offshore Rate Loans, or (ii) on the
requested borrowing date, in the case of Reference Rate Loans),
or (iii) five (5) Business Days prior to the requested issuance
date of a Letter of Credit, specifying:
(a) the amount of the Loan or the Letter of
Credit, which in the case of a Loan shall be in an
aggregate minimum principal amount of (i) One Hundred
Thousand dollars ($100,000) for Reference Rate Loans to
be used to pay the costs of tenant improvements or
leasing commissions for any Acquired Parcel,
(ii) Two Hundred Fifty Thousand dollars ($250,000) for
Reference Rate Loans to be used for any other permitted
purpose, and (iii) One Million dollars ($1,000,000) for
any Offshore Rate Loans;
(b) the requested borrowing or Letter of
Credit issuance date, which shall be a Business Day;
(c) in the case of a Loan, whether the Loan
proceeds will be used (i) to acquire fee title to
improved real property or (ii) to pay the costs of tenant
improvements or leasing commissions for any Acquired
Parcel, or (iii) to pay dividends to the Company's
shareholders or any expenses of the Company or any Parcel
(other than the costs of tenant improvements or leasing
commissions for any Acquired Parcel) (for purposes of the
minimum Loan amount, a Loan may be used for any or all of
purpose (i) or purpose (ii) or purpose (iii));
(d) in the case of a Loan, whether the Loan
is to be an Offshore Rate Loan or a Reference Rate Loan;
(e) in the case of a Loan that is to be an
Offshore Rate Loan, the duration of the Interest Period
applicable to the Loan. If the Borrowing Notice fails to
specify the duration of the Interest Period for an
Offshore Rate Loan, such Interest Period shall be thirty
(30) days.
Notwithstanding the foregoing provisions of this Section 2.3,
any amount drawn under a Letter of Credit shall, from and after
the date on which such drawing is made, constitute a Loan for
all purposes under this Agreement (including accrual and
payment of interest and repayment of principal) other than
disbursement of Loan proceeds under this Section 2.3. Unless
the Bank otherwise agrees, during the existence of a Default or
Event of Default, the Company may not elect to have a Loan made
as, or converted into or continued as, an Offshore Rate Loan.
After giving effect to any Loan, there shall not be more than
eight (8) different Interest Periods in effect.
2..4 Conversion and Continuation Elections.
2..4.1 The Company may, upon irrevocable
written notice to the Bank in accordance with subsection 2.4.2:
(a) elect to convert, on any Business Day,
any Reference Rate Loans (or any part thereof in an
amount not less than $1,000,000.00) into Offshore Rate
Loans;
(b) elect to convert on any Interest Payment
Date any Offshore Rate Loans maturing on such Interest
Payment Date (or any part thereof in an amount not less
than $1,000,000.00) into Reference Rate Loans; or
(c) elect to renew on any Interest Payment
Date any Offshore Rate Loans maturing on such Interest
Payment Date (or any part thereof in an amount not less
than $1,000,000.00);
provided, that if the aggregate amount of Offshore Rate Loans
shall have been reduced, by payment, prepayment or conversion
of part thereof, to less than $1,000,000.00, the Offshore Rate
Loans shall automatically convert into Reference Rate Loans,
and on and after such date the right of the Company to continue
such Loans as Offshore Rate Loans shall terminate.
2..4.2 The Company shall deliver by telex,
cable or facsimile, confirmed immediately in writing, a Notice
of Conversion/Continuation (which notice must be received by
the Bank not later than 10:00 a.m. San Francisco time, (i) at
least two (2) Business Days prior to the Conversion Date or
continuation date, if the Loans are to be converted into or
continued as Offshore Rate Loans, or (ii) on the Conversion
Date, if the Loans are to be converted into Reference Rate
Loans) specifying:
(a) the proposed Conversion Date or
continuation date;
(b) the aggregate amount of Loans to be
converted or continued;
(c) the nature of the proposed conversion or
continuation; and
(d) if the Company elects to convert a
Reference Rate Loan into an Offshore Rate Loan or elects
to continue an Offshore Rate Loan, the duration of the
Interest Period applicable to such Loan. If the
Conversion/Continuation Notice fails to specify the
duration of the Interest Period for an Offshore Rate
Loan, such Interest Period shall be thirty (30) days.
2..4.3 If upon the expiration of any
Interest Period applicable to Offshore Rate Loans the Company
has failed to select a new Interest Period to be applicable to
Offshore Rate Loans, or if any Default or Event of Default
shall then exist, the Company shall be deemed to have elected
to convert Offshore Rate Loans into Reference Rate Loans
effective as of the expiration date of such current Interest
Period.
2..4.4 Notwithstanding any other provision
contained in this Agreement, after giving effect to any
conversion or continuation of any Loans, there shall not be
more than eight (8) different Interest Periods in effect.
2..5 Principal Payments.
2..5.1 Optional Repayments. Subject to
Section 3.4, the Company may, at any time or from time to time,
upon at least one (1) Business Day's prior written notice to
the Bank, repay Loans in part in an amount not less than
$250,000.00; provided, however, that subject to the provisions
of Section 2.11, the Company shall not repay the Loans in full
prior to the Maturity Date, and there shall be deemed
outstanding at all times prior to the Maturity Date principal
in the amount of at least $10.00 to the extent necessary to
maintain the liens granted in the Collateral Documents. Such
notice of repayment shall specify the date and amount of such
repayment, the source of funds for such repayment and whether
such repayment is of Reference Rate Loans, Offshore Rate Loans,
or any combination thereof. If the Company gives a repayment
notice to the Bank, such notice is irrevocable and the
repayment amount specified in such notice shall be due and
payable on the date specified therein, together with accrued
interest to such date on the amount repaid and all amounts
required to be paid pursuant to Section 3.4.
2..5.2 Mandatory Repayments.
(a) Availability Limit. Should (i) the
aggregate principal amount of the outstanding Loans at any time
exceed the Availability, or (ii) the aggregate amount of the
outstanding Loans made for the purpose of acquiring fee title
to improved real property at any time exceed the Acquisition
Availability, the Company shall immediately repay such excess
to the Bank; provided, however, that in the event that the
aggregate amount of outstanding but undrawn Letters of Credit
exceeds the Availability, the Company shall deliver cash
collateral to the Bank in the amount of such excess.
(b) Approved Parcel Dispositions. If the
Company or any of its Subsidiaries shall at any time or from
time to time agree to enter into a Disposition or shall suffer
an Event of Loss, then (i) the Company shall promptly notify
the Bank of such proposed Disposition or such Event of Loss
(including the amount of the estimated Net Proceeds to be
received by the Company or its Subsidiary in respect thereof)
and (ii) promptly upon receipt by the Company or its Subsidiary
of the Net Proceeds of such Disposition or Event of Loss, the
Company shall repay the Loans in an aggregate amount equal to
the Release Price, in the case of a Disposition, or the amount
of such Net Proceeds, in the case of an Event of Loss.
(c) Debt or Equity Issuance. If the Company
shall issue new common or preferred equity, or if the Company
or any of its Subsidiaries shall issue or incur any debt not
prohibited by Section 7.4, the Company shall promptly notify
the Bank of the estimated Net Issuance Proceeds of such
issuance to be received by the Company or its Subsidiary in
respect thereof. Promptly upon receipt by the Company or its
Subsidiary of the Net Issuance Proceeds of such issuance, the
Company shall repay the Loans in an aggregate amount equal to
the amount of such Net Issuance Proceeds.
(d) Application of Repayments. Any
repayments pursuant to this subsection 2.5.2 shall be
(i) subject to Section 3.4, and (ii) applied first to any
Reference Rate Loans then outstanding and then to Offshore Rate
Loans with the shortest Interest Periods remaining.
Notwithstanding any contrary provision of this
subsection 2.5.2, there shall be deemed outstanding on the
Loans at all times prior to the Maturity Date principal in the
amount of at least $10.00 to the extent necessary to maintain
the liens granted in the Collateral Documents.
2..5.3 Repayment at Maturity. The Company
shall repay the principal amount of all outstanding Loans, on
the Maturity Date.
2..6 Interest.
2..6.1 Accrual Rate. Subject to subsection
2.6.3, each Loan shall bear interest on the outstanding
principal amount thereof from the date when made (which, in the
case of a drawing on a Letter of Credit, is the date of such
drawing) until it becomes due at a rate per annum equal to the
Offshore Rate or the Reference Rate, as the case may be, plus
the Applicable Margin.
2..6.2 Payment. Interest on each Loan shall
be payable in arrears on each Interest Payment Date. Interest
shall also be payable on the date of any repayment of Loans
pursuant to subsections 2.5.1 and 2.5.2 for the portion of the
Loans so repaid and upon payment (including prepayment) in full
thereof and, during the existence of any Event of Default,
interest shall be payable on demand.
2..6.3 Default Interest. Commencing
(i) five (5) Business Days after the occurrence of any Event of
Default under subsection 8.1.3 or (ii) upon the occurrence of
any other Event of Default, and continuing thereafter while
such Event of Default exists, or after maturity or
acceleration, the Company shall pay interest (after as well as
before entry of judgment thereon to the extent permitted by
law) on the principal amount of all Obligations due and unpaid,
at a rate per annum which is determined by adding 3% per annum
to the Applicable Margin then in effect for such Loans and, in
the case of Obligations not subject to an Applicable Margin, at
a rate per annum equal to the Reference Rate plus 3.75%;
provided, however, that, on and after the expiration of any
Interest Period applicable to any Offshore Rate Loan
outstanding on the date of occurrence of such Event of Default
or acceleration, the principal amount of such Loan shall,
during the continuation of such Event of Default or after
acceleration, bear interest at a rate per annum equal to the
Reference Rate plus 3.75%.
2..6.4 Maximum Legal Rate. Anything herein
to the contrary notwithstanding, the obligations of the Company
hereunder shall be subject to the limitation that payments of
interest shall not be required, for any period for which
interest is computed hereunder, to the extent (but only to the
extent) that contracting for or receiving such payment by the
Bank would be contrary to the provisions of any law applicable
to the Bank limiting the highest rate of interest that may be
lawfully contracted for, charged or received by the Bank, and
in such event the Company shall pay the Bank interest at the
highest rate permitted by applicable law.
2..7 Underwriting Fee. The Company shall pay to
the Bank an annual underwriting fee equal to the greater of
(i) $25,000.00 or (ii) 0.25% of the Availability on the date
such fee is due. Such underwriting fee shall be computed, due
and payable annually in advance on the Closing Date and on
November 1 of each year thereafter prior to the Maturity Date.
In addition, if the Availability is increased to an amount in
excess of $10,000,000 at any time prior to the Maturity Date,
the Company shall pay to the Bank a prorated annual
underwriting fee for the remainder of the year (running from
November 1 through the following October 31) in which such
Availability increase occurs, in the amount of 0.25% per annum
of the increase, at the time of the increase in Availability.
No portion of the underwriting fee will be refunded to the
Company in the event of a decrease in Availability; provided,
however, that no increase in Availability shall be subject to
more than one annual underwriting fee.
2..8 Computation of Fees and Interest. All
computations of interest and underwriting fees under this
Agreement shall be made on the basis of a 360-day year and
actual days elapsed, which results in more interest or fees
being paid than if computed on the basis of a 365-day year.
Interest and underwriting fees shall accrue during each period
during which interest or such fees are computed from the first
day thereof to the last day thereof. Any change in the
interest rate on a Loan resulting from a change in the
Reference Rate or the Reserve Percentage shall become effective
as of the opening of business on the day on which such change
in the Reference Rate or the Reserve Percentage becomes
effective. Each determination of an interest rate by the Bank
pursuant to any provision of this Agreement shall be conclusive
and binding on the Company in the absence of manifest error.
2..9 Payments by the Company. All payments
(including prepayments) to be made by the Company on account of
principal, interest, fees and other amounts required hereunder
shall be made without set off or counterclaim and shall, except
as otherwise expressly provided herein, be made to the Bank at
the Bank's Payment Office, in dollars and in immediately
available funds, no later than 12:00 p.m. San Francisco time on
the date specified herein. Any payment received by the Bank
later than 12:00 p.m. San Francisco time shall be deemed to
have been received on the immediately succeeding Business Day
and any applicable interest or fee shall continue to accrue.
Subject to the provisions set forth in the definition of the
term "Interest Period," whenever any payment hereunder is
stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the
computation of interest or fees, as the case may be.
2..10 Security; Appraisal of Approved Parcels.
All obligations of the Company under this Agreement, the
Revolving Note and all other Loan Documents shall be secured in
accordance with the Collateral Documents. At any time and from
time to time, at the Company's sole expense, the Bank shall
have the right to obtain a new Appraisal of any Approved
Parcel.
2..11 Release of Lien on Approved Parcel.
2..11.1 Release Conditions. The Bank shall
reconvey and release its Lien on an Approved Parcel upon the
Company's satisfaction of all of the following conditions
precedent:
(a) The Company shall have submitted to the
Bank a written request that the Bank reconvey and release
its Lien on such Approved Parcel;
(b) The Company shall have paid to the Bank
the lesser of (i) the Release Price for such Approved
Parcel, or (ii) the then-outstanding aggregate principal
amount of the Loans;
(c) There shall have occurred no Default or
Event of Default that remains uncured, and the Bank shall
have received a certificate to that effect signed by a
Responsible Officer;
(d) The Approved Parcel to be reconveyed
constitutes a legally separable and transferable lot or
parcel under all applicable laws, ordinances, rules and
regulations relating to the subdivision or parcelling of
real property and the transfer thereof; and
(e) Upon the Bank's request, the Bank has
been furnished, at the Company's sole cost, with a CLTA
form 111 indorsement or such other indorsements to any
Title Policy as the Bank may require, assuring the Bank
that the reconveyance will not result in the
subordination of the lien of any Mortgage as to the
remaining Approved Parcels to any other lien or claim
affecting any such Approved Parcels.
The foregoing conditions precedent are solely for the benefit
of the Bank, any may be waived in a writing signed by the Bank
and in no other manner.
2..11.2 Application of Release Price. The
Release Price of each Approved Parcel shall be applied first to
any amounts due hereunder other than interest or principal then
due and payable, then to interest then due, and then to the
prepayment of principal (first to any Reference Rate Loans then
outstanding and then to Offshore Rate Loans with the shortest
Interest Periods remaining).
2..12 Estoppel Certificates. The Company shall
deliver to the Bank (or cause any Subsidiary to deliver to the
Bank), within ninety (90) days after the recording of a
Mortgage encumbering a Parcel for the benefit of the Bank,
estoppel certificates in form and substance satisfactory to the
Bank executed by (i) each tenant of such Parcel whose lease
covers at least 5,000 square feet of net rentable area and
(ii) tenants whose leases, in the aggregate, cover at least
eighty percent (80%) of the net rentable area of the
improvements located on such Parcel. In the event that the
Company fails timely to deliver such estoppel certificates to
the Bank, such Parcel shall immediately cease to be an Approved
Parcel, the Availability shall immediately be adjusted to
reflect such change and the Company shall repay to the Bank,
with five (5) days after notice from the Bank, any amounts
payable pursuant to Section 2.5.2(a).
3. Taxes, Yield Protection and Illegality.
3..1 Taxes. If any taxes (other than taxes on the
Bank's net income) are at any time imposed on any payments
under or in respect of this Agreement or any instrument or
agreement required hereunder, including payments made pursuant
to this Section 3.1, the Company shall pay all such taxes and
shall also pay to the Bank, at the time interest is paid, all
additional amounts which the Bank specifies as necessary to
preserve the yield, after payment of such taxes, that the Bank
would have received if such taxes had not been imposed.
3..2 Illegality.
(a) If the Bank determines that (i) the
introduction of any Requirement of Law, or any change in
any Requirement of Law or in the interpretation or
administration thereof, has made it unlawful, or (ii) any
central bank or other Governmental Authority has asserted
that it is unlawful, for the Bank or its Lending Office
to make Offshore Rate Loans, then, on notice thereof by
the Bank to the Company, the obligation of the Bank to
make Offshore Rate Loans shall be suspended until the
Bank shall have notified the Company that the
circumstances giving rise to such determination no longer
exists.
(b) If the Bank determines that it is
unlawful to maintain any Offshore Rate Loan, the Company
shall prepay in full all Offshore Rate Loans then
outstanding, together with interest accrued thereon and
any amounts required to be paid in connection therewith
pursuant to Section 3.4, either on the last day of the
Interest Period thereof if the Bank may lawfully continue
to maintain such Offshore Rate Loans to such day, or
immediately, if the Bank may not lawfully continue to
maintain such Offshore Rate Loans.
(c) Notwithstanding any contrary provision
of Section 2.1, if the Company is required to prepay any
Offshore Rate Loan immediately as provided in subsection
3.2(b), then concurrently with such prepayment the
Company shall borrow a Reference Rate Loan from the Bank
in the amount of such repayment.
(d) If the obligation of the Bank to make or
maintain Offshore Rate Loans has been terminated, the
Company may elect, by giving notice to the Bank, that all
Loans which would otherwise be made by the Bank as
Offshore Rate Loans shall be instead Reference Rate
Loans.
(e) Before giving any notice to the Company
pursuant to this Section 3.2, the Bank shall designate a
different Lending Office with respect to its Offshore
Rate Loans if such designation will avoid the need for
giving such notice or making such demand and will not, in
the judgment of the Bank, be illegal or otherwise
disadvantageous to the Bank.
3..3 Increased Costs and Reduction of Return.
(a) If the Bank determines that, due to
either (i) the introduction of, or any change (other than
a change by way of imposition of, or increase in, reserve
requirements included in the Reserve Percentage) in or in
the interpretation of, any law or regulation or (ii) the
compliance by the Bank (or its Lending Office) or any
Corporation controlling the Bank with any guideline or
request from any central bank or other Governmental
Authority (whether or not having the force of law), there
shall be any increase in the cost to the Bank of agreeing
to make or making, funding or maintaining any Offshore
Rate Loans, then the Company shall be liable for, and
shall from time to time, upon demand therefor by the
Bank, pay to the Bank such additional amounts as are
sufficient to compensate the Bank for such increased
costs.
(b) If the Bank determines that (i) the
introduction of any Capital Adequacy Regulation, (ii) any
change in any Capital Adequacy Regulation, (iii) any
change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other
Governmental Authority charged with the interpretation or
administration thereof, or (iv) compliance by the Bank
(or its Lending Office), or any corporation controlling
the Bank, with any Capital Adequacy Regulation affects or
would affect the amount of capital required or expected
to be maintained by the Bank or any corporation
controlling the Bank, and the Bank (taking into
consideration the Bank's or such corporation's policies
with respect to capital adequacy and the Bank's desired
return on capital) determines that the amount of such
capital is increased as a consequence of any of its
loans, credits or obligations under this Agreement, then,
upon demand of the Bank, the Company shall immediately
pay to the Bank, from time to time as specified by the
Bank, additional amounts sufficient to compensate the
Bank for such increase.
3..4 Funding Losses. The Company agrees to
reimburse the Bank for, and to hold the Bank harmless from, any
loss or expense which the Bank may sustain or incur as a
consequence of:
(a) the failure of the Company to make any
payment or prepayment of principal of any Offshore Rate
Loan (including payments made after any acceleration
thereof);
(b) the failure of the Company to borrow,
continue or convert a Loan after the Company has given
(or is deemed to have given) a Borrowing Notice or a
Conversion/Continuation Notice;
(c) the failure of the Company to make any
prepayment after the Company has given a notice in
accordance with Section 2.5;
(d) the prepayment (including pursuant to
Section 2.5.2) of an Offshore Rate Loan on a day which is
not the last day of the Interest Period with respect
thereto;
(e) the conversion pursuant to subsection
2.4 of any Offshore Rate Loan to a Reference Rate Loan on
a day that is not the last day of the respective Interest
Period;
including any such loss or expense arising from the liquidation
or reemployment of funds obtained by it to maintain its
Offshore Rate Loans hereunder or from fees payable to terminate
the deposits from which such funds were obtained. Solely for
purposes of calculating amounts payable by the Company to the
Bank under this Section 3.4, each Offshore Rate Loan (and each
related reserve, special deposit or similar requirement) shall
be conclusively deemed to have been funded at the IBOR used in
determining the Offshore Rate for such Offshore Rate Loan by a
matching deposit or other borrowing in the applicable offshore
dollar interbank market for a comparable amount and for a
comparable period, whether or not such Offshore Rate Loan is in
fact so funded.
3..5 Inability to Determine Rates. If the Bank
determines that for any reason adequate and reasonable means do
not exist for ascertaining the Offshore Rate for any requested
Interest Period with respect to a proposed Offshore Rate Loan
or that the Offshore Rate applicable pursuant to subsection
2.6.1 for any requested Interest Period with respect to a
proposed Offshore Rate Loan does not adequately and fairly
reflect the cost to the Bank of funding such Loan, the Bank
will forthwith give notice of such determination to the
Company. Thereafter, the obligation of the Bank to make or
maintain Offshore Rate Loans hereunder shall be suspended until
the Bank revokes such notice in writing. Upon receipt of such
notice, the Company may revoke any Borrowing Notice or
Conversion/Continuation Notice then submitted by it. If the
Company does not revoke such notice, the Bank shall make,
convert or continue the Loans, as proposed by the Company, in
the amount specified in the applicable notice submitted by the
Company, but such Loans shall be made, converted or continued
as Reference Rate Loans instead of Offshore Rate Loans.
3..6 Certificate of Bank. The Bank, if claiming
reimbursement or compensation pursuant to this Article 3, shall
deliver to the Company a certificate setting forth in
reasonable detail the amount payable to the Bank hereunder, and
such certificate shall be conclusive and binding on the Company
in the absence of manifest error.
3..7 Survival. The agreements and obligations of
the Company in this Article 3 shall survive the payment and
performance of all other Obligations.
4. Conditions Precedent.
4..1 Conditions to Approving Parcels. A Parcel
shall be considered an Approved Parcel for purposes of this
Agreement upon satisfaction of all of the following conditions
precedent:
4..1.1 Satisfactory Parcel; Permitted Use.
Such Parcel is satisfactory to the Bank in its sole and
absolute discretion. The improvements located on such Parcel
are and will be used solely for office, industrial, warehouse,
research and development, or neighborhood, community or
regional shopping center purposes.
4..1.2 No Hazardous Materials. Such Parcel
shall be free from all Hazardous Materials, including asbestos,
other than commercially reasonable quantities of Hazardous
Materials typically used in properties similar to such Parcel
and permitted by all applicable Environmental Laws, and the
Bank shall have received evidence in form and substance
satisfactory to the Bank of such Parcel's compliance with this
condition.
4..1.3 Appraised Value. An Appraised Value
shall have been established for such Parcel.
4..1.4 No Liens. Such Parcel and all
related personal property is (or at the time a Mortgage is
recorded against such Parcel it shall be) free and clear of all
Liens other than Liens securing nondelinquent taxes or
assessments.
4..1.5 Deliveries to the Bank. The Bank
shall have received each of the following in form and substance
satisfactory to the Bank:
(1) a current ALTA survey of such
Parcel and Surveyor's Certification, including a complete
legal description;
(2) copies of all exceptions to title
with respect to such Parcel;
(3) copies of any available plans and
specifications for any improvements located on such
Parcel;
(4) an environmental site assessment
for such Parcel, dated as of a recent date, prepared by a
qualified firm acceptable to the Bank, stating, among
other things, that such Parcel is free from Hazardous
Materials other than commercially reasonable quantities
of Hazardous Materials typically used in properties
similar to such Parcel, and that any such Hazardous
Materials located thereon and all operations conducted
thereon are in compliance with all Environmental Laws and
showing any Estimated Remediation Costs;
(5) copies of all leases and
contracts relating to all or any portion of such Parcel;
(6) financial statements for any
Major Tenant that are available to the Company;
(7) an operating report for such
Parcel for not less than the four (4) most recent
consecutive quarters, together with a projection of the
operating results for such Parcel for the following
twenty-four (24) months;
(8) a certificate concerning the
amount of space at such Parcel devoted to office, retail,
industrial and research and development (other than
office) uses signed by the Company and, if such Parcel is
owned by a Person other than the Company, such other
Person, substantially in the form of Exhibit D;
(9) a cost budget for any anticipated
renovation of such Parcel;
(10) if such Parcel is owned by a
Person other than the Company, copies of all of such
Person's Organization Documents;
(11) a duly executed Mortgage,
Assignment of Leases, financing statement(s), assignment
of contracts and unsecured environmental indemnity
covering such Parcel;
(12) such certificates relating to the
authority of the Persons signing the documents required
under Section 4.1.5(11) as the Bank may reasonably
request;
(13) a written opinion of counsel to
the Company and the Person signing the documents required
under Section 4.1.5(11) practicing in the jurisdiction in
which such Parcel is located (which counsel shall be
acceptable to the Bank) covering such matters relating to
the Company, such other Person, the Loans and such Parcel
as the Bank may require;
(14) such consents, subordination
agreements and other documents and instruments executed
by tenants and other Persons party to material contracts
relating to such Parcel as Bank may request;
(15) certificates of insurance and
loss payable endorsements for all policies required
pursuant to Section 6.6, showing the same to be in full
force and effect with respect to such Parcel; and
(16) all other documents reasonably
required by the Bank.
4..1.6 Approval of Deliveries. The Bank
shall have reviewed and approved all of the items provided
under Section 4.1.5.
4..1.7 Recording of the Mortgage. The
Mortgage and the Assignment of Leases relating to such Parcel
shall have been duly recorded in the official records of the
jurisdiction in which such Parcel is located.
4..1.8 Title insurance. The Company shall,
at its sole expense, have delivered to the Bank an ALTA form
extended coverage lender's policy of title insurance, or
evidence of a commitment therefor satisfactory to the Bank, in
form, substance and amount, and issued by one or more insurers,
reasonably satisfactory to the Bank, together with all
indorsements and binders thereto reasonably required by the
Bank, naming the Bank as the insured, insuring the Mortgage
relating to such Parcel to be a valid first priority lien upon
such Parcel, and showing such Parcel subject only to such
Mortgage and the Permitted Encumbrances.
4..1.9 Filing of Financing Statements.
Financing statement(s) shall have been filed with all of the
officials necessary, in the Bank's sole judgment, to perfect
the security interests created by the Mortgage relating to such
Parcel and all related personal property.
4..1.10 Perfection of Liens. The Bank shall
have received satisfactory evidence that all other actions
necessary, or in the Bank's sole judgment desirable, to perfect
and protect the first priority security interests for the
benefit of the Bank created by the Collateral Documents have
been taken.
4..1.11 Tax Reporting Service. The Company
shall, at its sole expense, have delivered to the Bank evidence
of a contract with a property tax reporting service for such
Parcel for a period of not less than three years.
4..1.12 Underwriting Fee. The Company shall
have paid to the Bank (i) any additional underwriting fee
payable pursuant to Section 2.7 as a result of the Parcel's
becoming an Approved Parcel and (ii) all amounts payable
pursuant to Section 9.4 in connection with such Parcel and the
Mortgage relating to such Parcel.
4..1.13 Expenses. The Bank shall have
received satisfactory evidence that the Company has paid all
title insurance premiums, tax service charges, documentary
stamp or intangible taxes, recording fees and mortgage taxes
payable in connection with such Parcel, the recording of the
Mortgage and the Assignment of Leases relating to such Parcel
or the issuance of the Title Policy (whether due on the
recording date of the Mortgage or in the future) including sums
due in connection with any future advances.
4..2 Conditions of Initial Loan. The obligation
of the Bank to make the initial Loan hereunder is subject to
the satisfaction of all of the following conditions precedent:
4..2.1 Deliveries to the Bank. The Bank
shall have received, on or before the Closing Date, all of the
following in form and substance satisfactory to the Bank and
its counsel:
(a) this Agreement and the Revolving Note
executed by the Company;
(b) copies of the resolutions of the board
of directors of the Company approving and authorizing the
execution, delivery and performance by the Company of
this Agreement and the other Loan Documents to be
delivered hereunder, and authorizing the borrowing of the
Loans, certified as of the Closing Date by the Secretary
or an Assistant Secretary of the Company;
(c) a certificate of the Secretary or
Assistant Secretary of the Company certifying the names
and true signatures of the officers of the Company
authorized to execute and deliver, as applicable, this
Agreement and all other Loan Documents to be delivered
hereunder;
(d) the articles or certificate of
incorporation of the Company as in effect on the Closing
Date, certified by the Secretary of State of the state of
incorporation of the Company as of a recent date and by
the Secretary or Assistant Secretary of the Company as of
the Closing Date; and
(e) a good standing certificate for
the Company from the Secretary of State of its state of
incorporation and each state where the Company is
qualified to do business as a foreign corporation as of a
recent date, together with bringdown certificate by telex
or telefacsimile dated the Closing Date;
(f) an opinion of Zankel & McGrane, or
other counsel to the Company acceptable to the Bank,
addressed to the Bank, substantially in the form of
Exhibit E;
(g) a certificate signed by a Responsible
Officer, dated as of the Closing Date, stating that
(i) the representations and warranties contained in
Article 5 are true and correct on and as of such date, as
though made on and as of such date; (ii) no Default or
Event of Default exists or would result from the initial
Loan; and (iii) there has occurred since June 30, 1993,
no event or circumstance that could reasonably be
expected to result in a Material Adverse Effect;
(h) a certified copy of financial
statements of the Company and its Subsidiaries referred
to in Section 5.11; and
(i) such other approvals, opinions or
documents as the Bank may request.
4..2.2 Payment of Expenses. The Company
shall have paid all costs, accrued and unpaid fees and expenses
incurred by the Bank, to the extent then due and payable, on
the Closing Date, including Attorney Costs incurred by the
Bank, to the extent invoiced prior to or on the Closing Date,
together with such additional amounts of Attorney Costs as
shall constitute a reasonable estimate of Attorney Costs
incurred or to be incurred through the closing proceedings,
provided that such estimate shall not thereafter preclude final
settling of accounts between the Company and the Bank,
including any such costs, fees and expenses arising under or
referenced in Section 9.4.
4..2.3 Payment of Underwriting Fee. The
Company shall have paid to the Bank the first year's
underwriting fee owing pursuant to Section 2.7.
4..3 Conditions to All Borrowings. The obligation
of the Bank to make any Loan (including the initial Loan) is
subject to the satisfaction of all of the following conditions
precedent on the relevant borrowing date:
4..3.1 Initial Approved Parcel. At least
one (1) Parcel shall have become an Approved Parcel by
satisfying all of the conditions of Section 4.1.
4..3.2 Notice of Borrowing. The Bank shall
have received a Borrowing Notice.
4..3.3 Continuation of Representations and
Warranties. The representations and warranties made by the
Company contained in Article 5 shall be true and correct on and
as of such borrowing date with the same effect as if made on
and as of such borrowing date (except to the extent such
representations and warranties expressly refer to an earlier
date, in which case they shall be true and correct as of such
earlier date).
4..3.4 No Existing Default. No Default or
Event of Default shall exist or shall result from such Loan.
4..3.5 No Future Advance Notice. The Bank
shall not have received from the Company any notice that any
Collateral Document will no longer secure future advances or
future Loans to be made or extended under this Agreement.
4..3.6 Further Assurances. The Company
shall have executed and acknowledged (or caused to be executed
and acknowledged) and delivered to the Bank all documents
(including all documents evidencing tenant improvement expenses
and leasing commissions owing with respect to an Acquired
Parcel), and taken all actions, reasonably required by the Bank
from time to time to confirm the rights created or now or
hereafter intended to be created by the Loan Documents, or
otherwise to carry out the purposes of the Loan Documents and
the transactions contemplated thereunder.
4..3.7 Title Insurance. The Bank shall have
received, in form and substance satisfactory to the Bank, from
any title insurer who issued a Title Policy, all indorsements,
binders and modifications to such policy or policies reasonably
required by the Bank.
4..3.8 Lease Schedule and Budget. If all or
any portion of the Loan proceeds are to be used to acquire fee
title to improved real property, the Company shall have
delivered to the Bank a schedule of anticipated lease roll-off
for such property during the period through the Maturity Date,
together with a cost budget for anticipated tenant improvement
expenses and leasing commissions associated with re-leasing
space at such property that are to be paid with Loan proceeds
from time to time during the period through the Maturity Date.
Each Borrowing Notice submitted by the Company hereunder shall
constitute a representation and warranty by the Company
hereunder, as of the date of each such Borrowing Notice and as
of the date of each Loan, that the conditions in Section 4.3
are satisfied.
4..4 Letters of Credit. In addition to the
conditions set forth in Sections 4.2 and 4.3, the Bank's
obligation to issue any Letter of Credit is subject to the
satisfaction of all of the following conditions precedent on
the relevant issuance date:
4..4.1 The Company shall have executed and
delivered to the Bank an application and agreement for standby
letter of credit on the Bank's standard form.
4..4.2 The Company shall have paid to the
Bank a letter of credit fee in the aggregate amount of 2.00%
per annum on the face amount of the requested Letter of Credit
and based on the expiry date set forth therein.
5. Representations and Warranties. The Company
represents and warrants to the Bank that:
5..1 Corporate Existence and Power. The Company
and each of its Subsidiaries (a) is a corporation duly
organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation; (b) is duly qualified
as a foreign corporation, licensed and in good standing under
the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires
such qualification; (c) has the power and authority, and has
obtained all governmental licenses, authorizations, consents
and approvals needed, to own its assets, to carry on its
business and to execute, deliver and perform its obligations
under the Loan Documents; and (d) is in compliance with all
Requirements of Law; except, in each case referred to in clause
(b) or clause (d), to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect.
5..2 Corporate Authorization; No Contravention.
The execution, delivery and performance by the Company of this
Agreement and any other Loan Document have been duly authorized
by all necessary corporate action, and do not and will not:
(a) contravene the terms of any of the
Company's Organization Documents;
(b) conflict with or result in any breach
or contravention of, or the creation of any Lien under,
any Contractual Obligation to which the Company is a
party or any order, injunction, writ or decree of any
Governmental Authority to which the Company or its
Property is subject; or
(c) violate any Requirement of Law.
5..3 Governmental Authorization. No approval,
consent, exemption, authorization or other action by, or notice
to or filing with, any Governmental Authority (except for
recordings or filings in connection with the Liens granted to
the Bank under the Collateral Documents) is necessary or
required in connection with the execution, delivery or
performance by, or enforcement against, the Company of this
Agreement or any other Loan Document.
5..4 Binding Effect. This Agreement and each
other Loan Document constitute the legal, valid and binding
obligations of the Company, enforceable in accordance with
their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally or by equitable
principles relating to enforceability.
5..5 Litigation. Except as specifically disclosed
in Schedule 5.5, there are no actions, suits, proceedings,
claims or disputes pending, or to the best knowledge of the
Company threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against the
Company or any of its Subsidiaries or any of their respective
Properties which (a) purport to affect or pertain to this
Agreement or any other Loan Document, or any of the
transactions contemplated hereby or thereby, or (b) if
determined adversely to the Company or one or more of its
Subsidiaries would reasonably be expected to have a Material
Adverse Effect. No injunction, writ, temporary restraining
order or any order of any nature has been issued by any court
or other Governmental Authority purporting to enjoin or
restrain the execution, delivery or performance of this
Agreement or any other Loan Document, or directing that the
transactions provided for herein or therein not be consummated
as herein or therein provided.
5..6 No Default. No Default or Event of Default
exists or would result from the incurring of any Obligations by
the Company. Neither the Company nor any of its Subsidiaries
is in default under or with respect to any Contractual
Obligation in any respect which, individually or together with
all such defaults, could reasonably be expected to have a
Material Adverse Effect.
5..7 ERISA Compliance. Each Plan and
Multi-employer Plan is in full compliance with applicable
Requirements of Law, including ERISA, and no ERISA Events or
accumulated funding deficiencies within the meaning of ERISA
have occurred with respect to any Qualified Plan or
Multi-employer Plan that, in the aggregate, could result in a
Material Adverse Effect.
5..8 Use of Proceeds; Margin Regulations. The
proceeds of the Loans are intended to be and shall be used
solely for the purposes set forth in and permitted by Section
6.11, and are intended to be and shall be used in compliance
with Section 7.6.
5..9 Title to Properties. The Company and each of
its Subsidiaries has good record and marketable title in fee
simple to all real Property necessary or used in the ordinary
conduct of its business, except for such defects in title as
could not, individually or in the aggregate, have a Material
Adverse Effect. As of the Closing Date, the Property of the
Company and its Subsidiaries is subject to no Liens, other than
Permitted Liens, that are not disclosed in the most recent
financial statements delivered to the Bank.
5..10 Taxes. The Company and its Subsidiaries
have filed all federal and other material tax returns and
reports required to be filed, and have paid all federal and
other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their Properties, income
or assets otherwise due and payable, except those which are
being contested in good faith by appropriate proceedings and
for which adequate reserves have been provided in accordance
with GAAP, and no Notice of Lien has been filed or recorded.
There is no proposed tax assessment against the Company or any
of its Subsidiaries that would, if the assessment were made,
have a Material Adverse Effect.
5..11 Financial Condition.
(a) The unaudited consolidated financial
statements of the Company and its Subsidiaries dated
June 30, 1993, and the related consolidated statements of
operations, shareholders' equity and cash flows for the
quarter ended on that date:
(i) were prepared in accordance with
GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly
noted therein;
(ii) are complete, accurate and fairly
present the financial condition of the Company and
its Subsidiaries as of the date thereof and results
of operations for the period covered thereby; and
(iii) except as specifically disclosed
in Schedule 5.11, show all material Indebtedness
and other liabilities, direct or contingent, of the
Company and its consolidated Subsidiaries as of the
date thereof, including liabilities for taxes,
material commitments and Contingent Obligations.
(b) Since June 30, 1993, there has been no
Material Adverse Effect.
5..12 Environmental Matters.
(a) Except as specifically disclosed in
Schedule 5.12, to the best knowledge of the Company the
on-going operations of the Company and each of its
Subsidiaries comply in all respects with all
Environmental Laws, except such non-compliance which
would not (if enforced in accordance with applicable law)
result in liability in excess of $50,000 in the
aggregate.
(b) Except as specifically disclosed in
Schedule 5.12, the Company and each of its Subsidiaries
has obtained all licenses, permits, authorizations and
registrations required under any Environmental Law
("Environmental Permits") and necessary for its ordinary
course operations, all such Environmental Permits are in
good standing, and the Company and each of its
Subsidiaries is in compliance with all material terms and
conditions of such Environmental Permits.
(c) Except as specifically disclosed in
Schedule 5.12, none of the Company, any of its
Subsidiaries or any of their respective present Property
or operations is subject to any outstanding written order
from, or agreement with, any Governmental Authority, or
subject to any judicial or docketed administrative
proceeding, respecting any Environmental Law,
Environmental Claim or Hazardous Material.
(d) Except as specifically disclosed in
Schedule 5.12, to the best knowledge of the Company there
are no Hazardous Materials or other conditions or
circumstances existing with respect to any Property, or
arising from operations of the Company or any of its
Subsidiaries prior to the Closing Date, that would
reasonably be expected to give rise to Environmental
Claims with a potential liability of the Company and its
Subsidiaries in excess of $50,000 in the aggregate for
any such condition, circumstance or Property. In
addition, (i) neither the Company nor any of its
Subsidiaries has any underground storage tanks (x) that
are not properly registered or permitted under applicable
Environmental Laws, or (y) that are leaking or disposing
of Hazardous Materials off-site, and (ii) the Company and
its Subsidiaries have notified all of their employees of
the existence, if any, of any health hazard arising from
the conditions of their employment and have met all
notification requirements under Title III of CERCLA and
all other Environmental Laws.
5..13 Regulated Entities. Neither the Company nor
any Person controlling the Company is (a) an "Investment
Company" within the meaning of the Investment Company Act of
1940; or (b) subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code, or
any other federal or state statute or regulation limiting its
ability to incur Indebtedness.
5..14 No Burdensome Restrictions. The Company is
not a party to, or bound by, any Contractual Obligation, or
subject to any charter or corporate restriction or any
Requirement of Law, which could reasonably be expected to have
a Material Adverse Effect.
5..15 Solvency. The Company is Solvent and each
of its Subsidiaries is Solvent.
5..16 Subsidiaries. As of the Closing Date, the
Company has no Subsidiaries other than those specifically
disclosed in part (a) of Schedule 5.16, and has no equity
investments in any other corporation or entity other than those
specifically disclosed in part (b) of Schedule 5.16.
5..17 Brokers; Transaction Fees. Neither the
Company nor any of its Subsidiaries has any obligation to any
Person in respect of any finder's, broker's or investment
banker's fee in connection with the transactions contemplated
hereby.
5..18 Insurance. The Properties of the Company
and its Subsidiaries are insured with financially sound and
reputable insurance companies in such amounts, with such
deductibles and covering such risks as are customarily carried
by companies engaged in similar businesses and owning similar
Properties in localities where the Company or such Subsidiary
operates.
5..19 Full Disclosure. None of the
representations or warranties made by the Company or any of its
Subsidiaries in the Loan Documents, as of the date such
representations and warranties are made or deemed made, and
none of the statements contained in any exhibit, report,
statement or certificate furnished by or on behalf of the
Company or any of its Subsidiaries in connection with the Loan
Documents, contains any untrue statement of a material fact or
omits any material fact required to be stated therein or
necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading.
6. Affirmative Covenants. The Company covenants and
agrees that, so long as the Bank shall have any obligation
hereunder, or any Loan or other Obligation shall remain unpaid
or unsatisfied, unless the Bank waives compliance in writing:
6..1 Financial Statements. The Company shall
deliver to the Bank, in form and detail satisfactory to the
Bank:
(a) as soon as publicly available, but not
later than 120 days after the end of each calendar year,
a copy of the audited consolidated balance sheet of the
Company and its consolidated subsidiaries as at the end
of such year and the related consolidated statements of
income, shareholders' equity and cash flows for such
calendar year, setting forth in each case in comparative
form the figures for the previous year, and accompanied
by the opinion of a nationally recognized independent
public accounting firm stating that such consolidated
financial statements present fairly the financial
position for the periods indicated in conformity with
GAAP applied on a basis consistent with prior years;
(b) as soon as publicly available, but not
later than 60 days after the end of each calendar quarter
of each year, a copy of the unaudited consolidated
balance sheet of the Company and its consolidated
Subsidiaries as of the end of such quarter and the
related consolidated statements of income, shareholders'
equity and cash flows for the period commencing on the
first day and ending on the last day of such quarter,
certified by an appropriate Responsible Officer as being
complete and correct and fairly presenting the financial
position and results of operations of the Company and the
Subsidiaries in accordance with GAAP;
(c) as soon as available, but not later
than 30 days after the end of each calendar quarter of
each year, operating statements and rent rolls for each
Property securing the Loans, certified by an appropriate
Responsible Officer as being complete and correct and
fairly presenting the financial position and the results
of operations of the Company and the Subsidiaries in
accordance with GAAP;
(d) as soon as available, but not later than
60 days after the end of each semi-annual period ending
on June 30 and December 31, rolling two-year consolidated
cash flow projections for the Company and each of its
Subsidiaries, certified by an appropriate Responsible
Officer of the Company as being complete and correct in
all material respects.
6..2 Certificates; Other Information. The Company
shall furnish to the Bank:
(a) concurrently with the delivery of the
financial statements referred to in subsections 6.1(a)
and (b) above, a certificate of a Responsible Officer (i)
stating that, to the best of such officer's knowledge,
the Company, during such period, has observed and
performed all of its covenants and other agreements, and
satisfied every condition contained in this Agreement to
be observed, performed or satisfied by it, and that such
officer has obtained no knowledge of any Default or Event
of Default except as specified (by applicable subsection
reference) in such certificate, and (ii) showing in
detail the calculations supporting such statement in
respect of Sections 2.5.2(a), 7.10 and 7.11;
(b) promptly after the same are sent,
copies of all financial statements and reports which the
Company sends to its shareholders; and promptly after the
same are filed, copies of all financial statements and
regular, periodical or special reports which the Company
may make to, or file with, the SEC or any successor or
similar Governmental Authority; and
(c) promptly, such additional business,
financial, corporate affairs and other information as the
Bank may from time to time reasonably request.
6..3 Notices. The Company shall promptly notify
the Bank:
(a) of the occurrence of any Default or
Event of Default, and of the occurrence or existence of
any event or circumstance that foreseeably will become a
Default or Event of Default;
(b) of (i) any breach or non-performance
of, or any default under, any Contractual Obligation of
the Company or any of its Subsidiaries which could result
in a Material Adverse Effect; and (ii) any dispute,
litigation, investigation, proceeding or suspension which
may exist at any time between the Company or any of its
Subsidiaries and any Governmental Authority;
(c) of the commencement of, or any material
development in, any litigation or proceeding affecting
the Company or any Subsidiary (i) in which the amount of
damages claimed is $500,000 or more, (ii) in which
injunctive or similar relief is sought and which, if
adversely determined, would reasonably be expected to
have a Material Adverse Effect, or (iii) in which the
relief sought is an injunction or other stay of the
performance of this Agreement or any Loan Document;
(d) upon, but in no event later than ten
(10) days after, becoming aware of (i) any and all
enforcement, cleanup, removal or other governmental or
regulatory actions instituted, completed or threatened
against the Company or any Subsidiary or any of their
Properties pursuant to any applicable Environmental Laws,
(ii) all other Environmental Claims, and (iii) any
environmental or similar condition on any real property
adjoining or in the vicinity of any Property of the
Company or any Subsidiary that could reasonably be
anticipated to cause such property or any part thereof to
be subject to any restrictions on the ownership,
occupancy, transferability or use of such property under
any Environmental Laws;
(e) of any of the following ERISA events
affecting the Company or any member of its Controlled
Group (but in no event more than ten (10) days after such
event), together with a copy of any notice with respect
to such event that may be required to be filed with a
Governmental Authority and any notice delivered by a
Governmental Authority to the Company or any member or
its Controlled Group with respect to such event:
(i) an ERISA Event;
(ii) the adoption of any new
Plan that is subject to Title IV of ERISA or
section 412 of the Code by any member of the
Controlled Group;
(iii) the adoption of any
amendment to a Plan that is subject to Title IV of
ERISA or section 412 of the Code, if such amendment
results in a material increase in benefits or
Unfunded Pension Liabilities; or
(iv) the commencement of
contributions by any member of the Controlled Group
to any Plan that is subject to Title IV of ERISA or
section 412 of the Code;
(f) any Material Adverse Effect subsequent
to the date of the most recent audited financial
statements of the Company delivered to the Bank pursuant
to subsection 6.1(a); and
(g) of any change in accounting policies or
financial reporting practices by the Company or any of
its Subsidiaries.
Each notice pursuant to this Section shall be accompanied by a
written statement by a Responsible Officer of the Company
setting forth details of the occurrence referred to therein,
and stating what action the Company proposes to take with
respect thereto and at what time. Each notice under subsection
6.3(a) shall describe with particularity any and all clauses or
provisions of this Agreement or other Loan Document that have
been breached or violated.
6..4 Preservation of Corporate Existence, Etc.
The Company shall, and shall cause each of its Subsidiaries to:
(a) preserve and maintain in full force and
effect its corporate existence and good standing under
the laws of its state or jurisdiction of incorporation;
(b) preserve and maintain in full force and
effect all rights, privileges, qualifications, permits,
licenses and franchises necessary or desirable in the
normal conduct of its business; and
(c) use its reasonable efforts, in the
Ordinary Course of Business, to preserve its business
organization.
6..5 Maintenance of Property. The Company shall
maintain, and shall cause each of its Subsidiaries to maintain,
and preserve all its Property which is used or useful in its
business in good working order and condition, ordinary wear and
tear excepted and make all necessary repairs thereto and
renewals and replacements thereof except where the failure to
do so could not reasonably be expected to have a Material
Adverse Effect.
6..6 Insurance. In addition to insurance
requirements set forth in the Collateral Documents, the Company
shall maintain, and shall cause each Subsidiary to maintain,
with financially sound and reputable independent insurers,
insurance with respect to its Properties and business against
loss or damage of the kinds customarily insured against by
Persons engaged in the same or similar business, of such types
and in such amounts as are customarily carried under similar
circumstances by such other Persons, including workers'
compensation insurance, public liability insurance, property
and casualty insurance and rental interruption insurance, the
amount of which shall not be reduced by the Company in the
absence of thirty (30) days' prior notice to the Bank. All
casualty insurance maintained by the Company and its
Subsidiaries shall name the Bank as loss payee, and all
liability, rental interruption and other insurance maintained
by the Company and its Subsidiaries shall name the Bank as
additional insured as its interest may appear. Upon request of
the Bank, the Company shall furnish the Bank at reasonable
intervals (but not more often than once per calendar year) a
certificate of a Responsible Officer of the Company (and, if
requested by the Bank any insurance broker for the Company)
setting forth the nature and extent of all insurance maintained
by the Company and its Subsidiaries in accordance with this
Section 6.6 or any Collateral Documents (and which, in the case
of a certificate of a broker, were placed through such broker).
6..7 Payment of Obligations. The Company shall,
and shall cause its Subsidiaries to, pay and discharge as the
same shall become due and payable, all their respective
obligations and liabilities, including:
(a) all tax liabilities, assessments and
governmental charges or levies upon it or its properties
or assets, unless the same are being contested in good
faith by appropriate proceedings (which proceedings have
the effect of preventing the imposition of a Lien on, or
the forfeiture or sale of, any Property of the Company or
any of its Subsidiaries) and adequate reserves in
accordance with GAAP are being maintained by the Company
or such Subsidiary;
(b) all lawful claims which, if unpaid,
would by law become a Lien upon its Property unless the
same are being contested in good faith by appropriate
proceedings (which proceedings have the effect of
preventing the imposition of a Lien on, or the forfeiture
or sale of, any Property of the Company or any of its
Subsidiaries) and adequate reserves in accordance with
GAAP are being maintained by the Company or such
Subsidiary; and
(c) all Indebtedness, as and when due and
payable, but subject to any subordination provisions
contained in any instrument or agreement evidencing such
Indebtedness.
6..8 Compliance with Laws. The Company shall
comply, and shall cause each of its Subsidiaries to comply, in
all material respects with all Requirements of Law of any
Governmental Authority having jurisdiction over it or its
business or any of its Property, except such as may be
contested in good faith or as to which a bona fide dispute may
exist.
6..9 Inspection of Property and Books and Records.
The Company shall maintain, and shall cause each of its
Subsidiaries to maintain, proper books of record and account in
which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial
transactions and matters involving the assets and business of
the Company and such Subsidiaries. The Company shall permit,
and shall cause each of its Subsidiaries to permit,
representatives of the Bank to visit and inspect any of their
respective Properties, to examine their respective corporate,
financial and operating records, and make copies thereof or
abstracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective directors, officers
and independent public accountants, all at the expense of the
Company (which shall include all internal or outside legal and
other consultant fees and other out-of-pocket expenses incurred
by the Bank in connection with any such inspection, but shall
not include the Bank's normal overhead or employee costs of
administering the Loans) and at such reasonable times during
normal business hours and as often as may be reasonably
desired, upon reasonable advance notice to the Company;
provided, however, that when an Event of Default exists the
Bank may do any of the foregoing at the expense of the Company
at any time during normal business hours and without advance
notice. No actions by the Bank pursuant to this Section 6.9
shall unreasonably interfere with (a) the performance by the
Company's employees of their duties or (b) the occupancy of any
of the Company's tenants.
6..10 Environmental Laws. The Company shall, and
shall cause each of its Subsidiaries to, conduct its operations
and keep and maintain its Property in compliance with all
Environmental Laws. Upon the written request of the Bank, the
Company shall submit, and cause each of its Subsidiaries to
submit, to the Bank, at the Company's sole cost and expense, at
reasonable intervals, a report providing an update of the
status of any environmental, health or safety compliance,
hazard or liability issue identified in any notice or report
required pursuant to subsection 6.3(d), that could,
individually or in the aggregate, result in liability in excess
of $100,000.
6..11 Use of Proceeds. Subject to the provisions
of Section 3.2(c), the Company shall use the proceeds of the
Loans solely (a) to the extent of the Acquisition Availability,
to acquire fee simple title to additional improved real
property, and (b) to the extent of the Leasing Availability, to
pay tenant improvement expenses and leasing commissions with
respect to Acquired Parcels, and (c) to the extent of the
Distribution Availability, to pay (i) dividends to the
Company's shareholders, or (ii) any expenses of the Company or
any Parcel, including any costs of capital improvements for any
Parcel (other than tenant improvement expenses and leasing
commissions with respect to Acquired Parcels (subject to the
provisions of Section 7.12).
6..12 Solvency. The Company shall at all times
be, and shall cause each of its Subsidiaries to be, Solvent.
6..13 Further Assurances. Promptly upon request
by the Bank, the Company shall (and shall cause any of its
Subsidiaries to) do such further acts, and execute,
acknowledge, deliver, record, re-record, file, re-file,
register and re-register any and all deeds, conveyances,
security agreements, deeds of trust, mortgages, assignments,
estoppel certificates, financing statements and continuations
thereof, termination statements, notices of assignment,
transfers, certificates, assurances and other instruments, as
the Bank may reasonably require from time to time in order to
(i) carry out more effectively the purposes of this Agreement
or any other Loan Document, (ii) subject to the Liens created
by any of the Collateral Documents any of the Properties,
rights or interests covered by any of the Collateral Documents,
(iii) perfect and maintain the validity, effectiveness and
priority of any of the Collateral Documents and the Liens
intended to be created thereby, and (iv) better assure, convey,
grant, assign, transfer, preserve, protect and confirm to the
Bank the rights granted or now or hereafter intended to be
granted to the Bank under any Loan Document or under any other
document executed in connection therewith.
7. Negative Covenants. The Company hereby covenants
and agrees that, so long as the Bank shall have any obligation
hereunder, or any Loan or other Obligation shall remain unpaid
or unsatisfied, unless the Bank waives compliance in writing:
7..1 Limitation on Liens. The Company shall not,
and shall not suffer or permit any of its Subsidiaries to,
directly or indirectly, make, create, incur, assume or suffer
to exist any Lien upon or with respect to any part of the
Collateral, whether now owned or hereafter acquired, other than
the following ("Permitted Liens"):
(a) any Lien created under any Loan
Document;
(b) Liens for taxes, fees, assessments or
other governmental charges which are not delinquent or
remain payable without penalty, or to the extent that
non-payment thereof is permitted by Section 6.7, provided
that no Notice of Lien has been filed or recorded; or
(c) carriers', warehousemen's, mechanics',
landlords', materialmen's, repairmen's or other similar
Liens arising in the Ordinary Course of Business which
are not delinquent or remain payable without penalty or
which are being contested in good faith and by
appropriate proceedings, which proceedings have the
effect of preventing the forfeiture or sale of the
Property subject thereto.
7..2 Consolidations and Mergers. The Company
shall not, and shall not suffer or permit any of its
Subsidiaries to, merge, consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter
acquired) to or in favor of any Person, except:
(a) any Subsidiary of the Company may merge
with (i) the Company, provided that the Company shall be
the continuing or surviving corporation, or (ii) any one
or more subsidiaries of the Company, provided that if any
transaction shall be between a Subsidiary and a
wholly-owned Subsidiary, the wholly-owned Subsidiary
shall be the continuing or surviving corporation; and
(b) any Subsidiary of the Company may sell
all or substantially all of its assets (upon voluntary
liquidation or otherwise) to the Company or another
wholly-owned Subsidiary of the Company;
provided, however, that so long as the continuing or surviving
corporation remains liable for all of the Company's obligations
to the Bank under the Loan Documents, the Bank shall not
unreasonably withhold its consent to any merger or
consolidation of the Company or any of its Subsidiaries with or
into any other Person.
7..3 Loans and Investments. The Company shall
not, and shall not suffer or permit any of its Subsidiaries to,
make any advance, loan, extension of credit or preferred
capital contribution to any Person, including any Affiliate of
the Company, except for loans to tenants for tenant
improvements in a maximum principal amount of $250,000 for any
such loan and a maximum aggregate principal amount of $500,000
for all such loans outstanding at any time.
7..4 Limitation on Indebtedness. The Company
shall not, and shall not suffer or permit any of its
Subsidiaries to, create, incur, assume, suffer to exist, or
otherwise become or remain directly or indirectly liable with
respect to any unsecured Indebtedness, except accounts payable
to trade creditors for goods and services and current operating
liabilities (not the result of the borrowing of money) incurred
in the Ordinary Course of Business of the Company or such
Subsidiary in accordance with customary terms and paid within
the specified time.
7..5 Transactions with Affiliates. The Company
shall not, and shall not suffer or permit any of its
Subsidiaries to, enter into any transaction with any Affiliate
of the Company or of any such Subsidiary, except (a) as
expressly permitted by this Agreement, or (b) in the Ordinary
Course of Business and pursuant to the reasonable requirements
of the business of the Company or such Subsidiary; in each case
(a) and (b), upon fair and reasonable terms no less favorable
to the Company or such Subsidiary than would obtain in a
comparable arm's-length transaction with a Person not an
Affiliate of the Company or such Subsidiary.
7..6 Use of Proceeds. The Company shall not, and
shall not suffer or permit any of its Subsidiaries to, use any
portion of the Loan proceeds, directly or indirectly, (i) to
purchase or carry Margin Stock, (ii) to repay or otherwise
refinance indebtedness of the Company or others incurred to
purchase or carry Margin Stock, (iii) to extend credit for the
purpose of purchasing or carrying any Margin Stock, or (iv) to
acquire any security in any transaction that is subject to
Section 13 or 14 of the Securities and Exchange Act of 1934 or
any regulations promulgated thereunder.
7..7 Contingent Obligations. The Company shall
not, and shall not suffer or permit any of its Subsidiaries to,
create, incur, assume or suffer to exist any Contingent
Obligations except endorsements for collection or deposit in
the Ordinary Course of Business.
7..8 Creation of Subsidiaries. The Company shall
not, and shall not suffer or permit any of its Subsidiaries to,
(i) form any additional Subsidiaries, or (ii) enter into any
additional partnership, joint venture or similar business
arrangement with any Person.
7..9 Compliance with ERISA. The Company shall
not, and shall not suffer or permit any of its Subsidiaries to,
(i) terminate any Plan subject to Title IV of ERISA so as to
result in any material (in the opinion of the Bank) liability
to the Company or any ERISA Affiliate, (ii) permit to exist any
ERISA Event, or any other event or condition, which presents
the risk of a material (in the opinion of the Bank) liability
to any member of the Controlled Group, (iii) make a complete or
partial withdrawal (within the meaning of ERISA Section 4201)
from any Multi-employer Plan so as to result in any material
(in the opinion of the Bank) liability to the Company or any
ERISA Affiliate, (iv) enter into any new Plan or modify any
existing Plan so as to increase its obligations thereunder
which could result in any material (in the opinion of the Bank)
liability to any member of the Controlled Group, or (v) permit
the present value of all nonforfeitable accrued benefits under
any Plan (using the actuarial assumptions utilized by the PBGC
upon termination of a Plan) materially (in the opinion of the
Bank) to exceed the fair market value of Plan assets allocable
to such benefits, all determined as of the most recent
valuation date for each such Plan.
7..10 Debt to Tangible Net Worth Ratio. The
Company shall not at any time permit the ratio of (a) its total
consolidated liabilities (including as liabilities all then-
outstanding but undrawn Letters of Credit and the amount of the
Leasing Availability, if any) to (b) its total consolidated
stockholders' equity (excluding as assets (i) any loans to
tenants for tenant improvements and (ii) goodwill and other
intangible assets, and valuing all real Property at the lower
of book or market value (where market value is based on the
most recent Appraisal for each Parcel)) to be greater than the
ratio set forth below with respect to any fiscal quarter during
the corresponding period set forth below:
Period Ratio
On or before March 31, 1995 0.75
From and after April 1, 1995 0.50
7..11 Debt Service Coverage Ratio. The Company
shall not permit the ratio of (a) its Cash Flow to (b) its
Covenant Debt Service at any time to be less than 1.15 for any
fiscal quarter.
7..12 Change in Business. The Company shall not,
and shall not suffer or permit any of its Subsidiaries to,
engage in any material line of business substantially different
from those lines of business carried on by it on the date
hereof. In particular, the Company and its Subsidiaries will
not engage in the business of real estate development, and will
not acquire undeveloped real Property or construct, or use the
proceeds of any Loan to expand, improvements on any of their
respective real Property.
7..13 Accounting Changes. The Company shall not,
and shall not suffer or permit any of its Subsidiaries to, make
any significant change in accounting treatment or reporting
practices, except as required by GAAP, or change the fiscal
year of the Company or of any of its consolidated Subsidiaries.
8. Events of Default and Remedies.
8..1 Event of Default. Any of the following shall
constitute an Event of Default:
8..1.1 Non-Payment. The Company fails to
pay, (i) when and as required to be paid herein, any amount of
principal of any Loan, or (ii) within twenty (20) days after
the same shall become due, any interest, fee or any other
amount payable hereunder or pursuant to any other Loan
Document; or
8..1.2 Representation or Warranty. Any
representation or warranty by the Company or any of its
Subsidiaries made or deemed made in this Agreement or any other
Loan Document, or which is contained in any certificate,
document or financial or other statement by the Company, any of
its Subsidiaries or their respective Responsible Officers,
furnished at any time under this Agreement or in or under any
other Loan Document, shall prove to have been incorrect in any
material respect on or as of the date made or deemed made; or
8..1.3 Specific Defaults. The Company fails
to perform or observe any term, covenant or agreement
contained in Sections 6.1, 6.2, 6.3, 6.6, 6.9, 7.10 or 7.11; or
8..1.4 Other Defaults. The Company fails to
perform or observe any other term or covenant contained in this
Agreement or any other Loan Document, and such default shall
continue unremedied for a period of twenty (20) days after the
earlier of (i) the date upon which a Responsible Officer of the
Company knew or should have known of such failure or (ii) the
date upon which written notice thereof is given to the Company
by the Bank; or
8..1.5 Insolvency; Voluntary Proceedings.
The Company or any of its Subsidiaries (i) ceases or fails to
be Solvent, or generally fails to pay, or admits in writing its
inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or
otherwise; (ii) voluntarily ceases to conduct its business in
the ordinary course; (iii) commences any Insolvency Proceeding
with respect to itself; or (iv) takes any action to effectuate
or authorize any of the foregoing; or
8..1.6 Insolvency; Involuntary Proceedings.
(i) Any involuntary Insolvency Proceeding is commenced or filed
against the Company or any Subsidiary of the Company, or any
writ, judgment, warrant of attachment, execution or similar
process, is issued or levied against a substantial part of the
Company's or any of its Subsidiaries' Properties, and any such
proceeding or petition shall not be dismissed, or such writ,
judgment, warrant of attachment, execution or similar process
shall not be released, vacated or fully bonded within sixty
(60) days after commencement, filing or levy; (ii) the Company
or any of its Subsidiaries admits the material allegations of a
petition against it in any Insolvency Proceeding, or an order
for relief (or similar order under non-U.S. law) is ordered in
any Insolvency Proceeding; or (iii) the Company or any of its
Subsidiaries acquiesces in the appointment of a receiver,
trustee, custodian, conservator, liquidator, mortgagee in
possession (or agent therefor), or other similar Person for
itself or a substantial portion of its Property or business; or
8..1.7 ERISA Plans. The occurrence of any
one or more of the following events with respect to the
Borrower, provided such event or events could reasonably be
expected, in the judgment of the Bank, to subject the Borrower
to any tax, penalty or liability (or any combination of the
foregoing) which, in the aggregate, could have a material
adverse effect on the financial condition of the Borrower with
respect to a Plan:
(a) A Reportable Event shall occur
with respect to a Plan which is, in the reasonable
judgment of the Bank likely to result in the termination
of such Plan for purposes of Title IV of ERISA; or
(b) Any Plan termination (or
commencement of proceedings to terminate a Plan) or the
Borrower's full or partial withdrawal from a Plan; or
8..1.8 Monetary Judgments. One or more
final (non-interlocutory) judgments, orders or decrees shall be
entered against the Company or any of its Subsidiaries
involving in the aggregate a liability (not fully covered by
insurance) as to any single or related series of transactions,
incidents or conditions of $200,000 or more, and the same shall
remain unvacated and unstayed pending appeal for a period of
thirty (30) days after the entry thereof; or
8..1.9 Collateral. (a) Any provision of any
Collateral Document shall for any reason cease to be valid and
binding on or enforceable against the Company or any Subsidiary
of the Company party thereto, or the Company or any Subsidiary
of the Company shall so state in writing or bring an action to
limit its obligations or liabilities thereunder; or (b) any
Collateral Document shall for any reason (other than pursuant
to the terms thereof) cease to create a valid security interest
in the Collateral purported to be covered thereby or such
security interest shall for any reason cease to be a perfected
and first priority security interest subject only to Permitted
Liens and Permitted Encumbrances; or
8..1.10 Adverse Change. There shall occur a
Material Adverse Effect that continues unremedied for a period
of thirty (30) days after the earlier of (i) the date upon
which a Responsible Officer of the Company knew or should have
known of such Material Adverse Effect or (ii) the date upon
which written notice thereof is given to the Company by the
Bank.
8..2 Remedies. If any Event of Default occurs,
the Bank may:
8..2.1 Termination of Commitment to Lend.
Declare its commitment to make Loans or issue Letters of
Credit to be terminated, whereupon such commitment shall
forthwith be terminated; provided, however, that the Bank
shall continue to honor any outstanding Letter of Credit;
and
8..2.2 Acceleration of Loans. Declare the
unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other
amounts owing or payable hereunder or under any other
Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Company;
and
8..2.3 Security for Letters of Credit.
Require that the Company deposit with the Bank, on demand
and as cash security for the Company's obligations under
the Loan Documents, an amount equal to the aggregate
undrawn amount of all then-outstanding Letters of Credit
(and the Company hereby grants to the Bank a security
interest in any such amount deposited with the Bank (and
any amount deposited with the Bank pursuant to subsection
2.5.2(a)), all earnings thereon and all proceeds thereof,
and as to such amounts the Bank shall have the rights and
remedies of a secured party under the California Uniform
Commercial Code); provided that upon the occurrence of
any event specified in subsections 8.1.5 or 8.1.6 above
(in the case of clause (i) of subsection 8.1.6 upon the
expiration of the 60-day period mentioned therein) such
amounts shall automatically become due and payable
without further act of the Bank.
8..2.4 Exercise of Rights and Remedies.
Exercise all rights and remedies available to it under
the Loan Documents or applicable law; provided, however,
that upon the occurrence of any event specified in
subsections 8.1.5 or 8.1.6 above (in the case of
clause (i) of subsection 8.1.6 upon the expiration of the
60-day period mentioned therein), the obligation of the
Bank to make Loans or issue Letters of Credit shall
automatically terminate, and the unpaid principal amount
of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and
payable without further act of the Bank. Notwithstanding
any contrary provision of any Loan Document, the Bank
shall not incur any trustee or other foreclosure fees or
expenses for which it will seek reimbursement from the
Company under Section 9.4(b) until at least five (5)
Business Days after the occurrence of an Event of Default
under subsection 8.1.3; provided, however, that this
restriction shall not apply to any other Event of
Default. Notwithstanding any contrary provision of
applicable law, not less than thirty (30) days shall
elapse between the occurrence of an Event of Default and
the actual sale of any Property securing the Loans, but
the Bank may give any notices, commence any actions,
obtain the appointment of receivers and other provisional
remedies, sequester any rents, issues and profits, or
exercise any of its other rights or remedies during such
thirty (30) day period.
8..3 Rights Not Exclusive. The rights provided
for in this Agreement and the other Loan Documents are
cumulative and are not exclusive of any other rights, powers,
privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or
hereafter arising.
9. Miscellaneous.
9..1 Amendments and Waivers. No amendment or
waiver of any provision of this Agreement or any other Loan
Document, and no consent with respect to any departure by the
Company or any of its Subsidiaries therefrom, shall be
effective unless the same shall be in writing and signed by the
Bank, and then such waiver shall be effective only in the
specific instance and for the specific purpose for which given.
9..2 Notices.
(a) All notices, requests and other
communications provided for hereunder shall be in writing
(including, unless the context expressly otherwise
provides, facsimile transmission) and mailed (by
certified mail, postage prepaid, return receipt
requested), delivered or telecopied to the address or
number specified for notices on the applicable signature
page hereof, or to such other address as shall be
designated by such party in a written notice to the other
parties.
(b) All such notices and communications
shall, when transmitted by overnight delivery or
telecopied by facsimile, be effective when delivered for
overnight delivery or transmitted by telecopier,
respectively, or if delivered, upon delivery, except that
notices pursuant to Article 2 shall not be effective
until actually received by the Bank. All notices and
communications telecopied by facsimile will also be
mailed by ordinary first class mail, postage prepaid.
All such notices and communications delivered by mail
shall be effective upon the earlier of (i) two (2)
Business Days after deposit in the United States mail, or
(ii) actual receipt, as evidenced by the return receipt.
(c) The Company acknowledges and agrees that
any agreement of the Bank at Article 2 herein to receive
certain notices by telephone and facsimile is solely for
the convenience and at the request of the Company. The
Bank shall be entitled to rely on the authority of any
Person purporting to be a Person authorized by the
Company to give such notice, and the Bank shall not have
any liability to the Company or other Person on account
of any action taken or not taken by the Bank in reliance
upon such telephonic or facsimile notice. The obligation
of the Company to repay the Loans shall not be affected
in any way or to any extent by any failure by the Bank to
receive written confirmation of any telephonic or
facsimile notice or the receipt by the Bank of a
confirmation which is at variance with the terms
understood by the Bank to be contained in the telephonic
or facsimile notice.
9..3 No Waiver; Cumulative Remedies. No failure
on the part of the Bank to exercise, and no delay in its
exercising, any right, remedy, power or privilege hereunder
shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.
9..4 Costs and Expenses. The Company shall,
whether or not the transactions contemplated hereby shall be
consummated:
(a) pay or reimburse the Bank within fifteen
(15) Business Days after demand (subject to subsections
4.1.12 and 4.2.2) for all costs and expenses incurred by
the Bank in connection with the development, preparation,
delivery, administration (other than normal overhead
costs of administering the Loan) and execution of, and
any amendment, supplement, waiver or modification to,
this Agreement, any other Loan Document and any other
documents prepared in connection herewith or therewith,
and the consummation of the transactions contemplated
hereby and thereby, including Attorney Costs incurred by
the Bank with respect thereto;
(b) pay or reimburse the Bank within fifteen
(15) Business Days after demand (subject to subsections
4.1.12 and 4.2.2) for all costs and expenses incurred by
them in connection with the enforcement, attempted
enforcement or preservation of any rights or remedies
(including in connection with any workout or
restructuring regarding the Loans) under this Agreement,
any other Loan Document, and any such other documents,
including Attorney Costs incurred by the Bank; and
(c) pay or reimburse the Bank within fifteen
(15) Business Days after demand (subject to subsections
4.1.12 and 4.2.2) for all appraisal (including the
allocated cost of internal appraisal services), audit,
environmental inspection and review (including the
allocated cost of such internal services), search and
filing costs, fees and expenses incurred or sustained by
the Bank in connection with the matters referred to under
paragraphs (a) and (b) of this Section.
9..5 Indemnity. Whether or not the transactions
contemplated hereby shall be consummated, the Company shall
pay, indemnify, and hold the Bank and each of its officers,
directors, employees, counsel, agents and attorneys-in-fact
(each, an "Indemnified Person") harmless from and against any
and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses or
disbursements (including Attorney Costs) of any kind or nature
whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement
and any other Loan Documents, or the transactions contemplated
hereby and thereby, and with respect to any investigation,
litigation or proceeding related to this Agreement or the Loans
or the use of the proceeds thereof, whether or not any
Indemnified Person is a party thereto (all the foregoing,
collectively, the "Indemnified Liabilities"); provided, that
the Company shall have no obligation hereunder to any
Indemnified Person with respect to Indemnified Liabilities
arising solely from the negligence or willful misconduct of
such Indemnified Person. The obligations in this Section 9.5
shall survive payment of all other Obligations. At the
election of any Indemnified Person, the Company shall defend
such Indemnified Person using legal counsel satisfactory to
such Indemnified Person in such Person's sole discretion, at
the sole cost and expense of the Company. All amounts owing
under this Section 9.5 shall be paid within thirty (30) days
after demand.
9..6 Marshaling; Payments Set Aside. The Bank
shall be under no obligation to marshal any assets in favor of
the Company or any other Person, or against or in payment of
any or all of the Obligations. To the extent that the Company
makes a payment or payments to the Bank, or the Bank enforces
its Liens, and such payment or payments or the proceeds of such
enforcement or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or
required to be repaid to a trustee, receiver or any other party
in connection with any Insolvency Proceeding, or otherwise,
then to the extent of such recovery the obligation or part
thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had
not been made or such enforcement had not occurred.
9..7 Successors and Assigns. The provisions of
this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and
assigns, except that the Company may not assign or transfer any
of its rights or obligations under this Agreement without the
prior written consent of the Bank.
9..8 Assignments, Participations, Confidentiality.
9..8.1 Assignments. The Bank may at any
time assign and delegate to one or more Persons (provided that
no written consent of the Company shall be required in
connection with any assignment and delegation to an Affiliate
of the Bank) (each, an "Assignee") all, or any ratable part of
all, of the Loans, the Commitment and the other rights and
obligations of the Bank hereunder and under the other Loan
Documents; provided, however, that the Company may continue to
deal solely and directly with the Bank in connection with the
interest so assigned to an Assignee until written notice of
such assignment, together with payment instructions, addresses
and related information with respect to the Assignee, shall
have been given to the Company by the Bank and the Assignee.
9..8.2 Participations. The Bank may at any
time sell to one or more Persons (each, a "Participant")
participating interests in any Loans, the Commitment and the
other interests of the Bank hereunder and under the other Loan
Documents; provided, however, that (i) the Bank's obligations
under this Agreement shall remain unchanged, (ii) the Bank
shall remain solely responsible for the performance of such
obligations, (iii) the Company shall continue to deal solely
and directly with the Bank in connection with the Bank's rights
and obligations under this Agreement and the other Loan
Documents, and (iv) the Participant shall, together with the
Bank, be entitled to the non-exclusive protections of
Sections 3.1 and 3.3 as though it were also the Bank hereunder.
9..8.3 Confidentiality. The Bank agrees to
take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all non-public information
provided to it by the Company or any Subsidiary of the Company
in connection with this Agreement or any other Loan Document,
and neither the Bank nor any of its Affiliates shall use any
such information for any purpose or in any manner other than
pursuant to the terms contemplated by this Agreement, except to
the extent such information (i) was or becomes generally
available to the public other than as a result of a disclosure
by the Bank, or (ii) was or becomes available on a
non-confidential basis from a source other than the Company
(provided that such source is not bound by a confidentiality
agreement with the Company known to the Bank); provided,
however, that the Bank may disclose such information (A) at the
request or pursuant to any requirement of any Governmental
Authority to which the Bank is subject or in connection with an
examination of the Bank by any such authority; (B) pursuant to
subpoena or other court process; (C) when required to do so in
accordance with the provisions of any applicable Requirement of
Law; and (D) to the Bank's independent auditors and other
professional advisors. Notwithstanding the foregoing, the
Company authorizes the Bank to disclose to any Participant or
Assignee (each, a "Transferee"), and to any prospective
Transferee, such financial and other information in the Bank's
possession concerning the Company or its Subsidiaries which has
been delivered to the Bank pursuant to this Agreement or which
has been delivered to the Bank by the Company in connection
with the Bank's credit evaluation of the Company prior to
entering into this Agreement; provided that, unless otherwise
agreed by the Company, such Transferee agrees in writing with
the Bank to keep such information confidential to the same
extent required of the Bank hereunder.
9..9 Counterparts. This Agreement may be executed
by one or more of the parties to this Agreement in any number
of separate counterparts, each of which, when so executed,
shall be deemed an original, and all of said counterparts taken
together shall be deemed to constitute but one and the same
instrument.
9..10 Severability. The illegality or
unenforceability of any provision of this Agreement or any
instrument or agreement required hereunder shall not in any way
affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or
agreement required hereunder.
9..11 No Third Parties Benefited. This Agreement
is made and entered into for the sole protection and legal
benefit of the Company and the Bank and their permitted
successors and assigns, and no other Person (other than an
Indemnified Person under Section 9.5) shall be a direct or
indirect legal beneficiary of, or have any direct or indirect
cause of action or claim in connection with, this Agreement or
any of the other Loan Documents. The Bank shall have no
obligation to any Person not a party to this Agreement or other
Loan Documents.
9..12 Time. Time is of the essence as to each
term or provision of this Agreement and each of the other Loan
Documents.
9..13 Arbitration; Reference.
(a) Mandatory Arbitration. Any controversy
or claim between or among the parties, including but not
limited to those arising out of or relating to this
Agreement or any agreements or instruments relating
hereto or delivered in connection herewith and any claim
based on or arising from an alleged tort, shall at the
request of any party be determined by arbitration. The
arbitration shall be conducted in accordance with the
United States Arbitration Act (Title 9, U.S. Code),
notwithstanding any choice of law provision in this
Agreement, and under the Commercial Rules of the American
Arbitration Association ("AAA"). The arbitrator(s) shall
give effect to statutes of limitation in determining any
claim. Any controversy concerning whether an issue is
arbitrable shall be determined by the arbitrator(s).
Judgment upon the arbitration award may be entered in any
court having jurisdiction. The institution and
maintenance of an action for judicial relief or pursuit
of a provisional or ancillary remedy shall not constitute
a waiver of the right of any party, including the
plaintiff, to submit the controversy or claim to
arbitration if any other party contests such action for
judicial relief.
(b) Real Property Collateral.
Notwithstanding the provisions of subparagraph 9.13(a),
no controversy or claim shall be submitted to arbitration
without the consent of all parties if, at the time of the
proposed submission, such controversy or claim arises
from or relates to an obligation to the Bank which is
secured by real property collateral. If all parties do
not consent to submission of such a controversy or claim
to arbitration, the controversy or claim shall be
determined as provided in subparagraph 9.13(c).
(c) Judicial Reference. At the request of
any party, a controversy or claim which is not submitted
to arbitration as provided and limited in
subparagraphs 9.13(a) and 9.13(b) shall be determined by
a reference in accordance with California Code of Civil
Procedure Section 638 et seq. If such an election is
made, the parties shall designate to the court a referee
or referees selected under the auspices of the AAA in the
same manner as arbitrators are selected in AAA-sponsored
proceedings. The presiding referee of the panel, or the
referee if there is a single referee, shall be an active
attorney or retired judge. Judgment upon the award
rendered by such referee or referees shall be entered in
the court in which such proceeding was commenced in
accordance with California Code of Civil Procedure
Sections 644 and 645.
(d) Provisional Remedies, Self-Help and
Foreclosure. No provision of this Section 9.13 shall
limit the right of any party to this Agreement to
exercise self-help remedies such as set-off, foreclosure
against or sale of any real or personal property
collateral or security, or obtaining provisional or
ancillary remedies from a court of competent jurisdiction
before, after or during the pendency of any arbitration
or other proceeding. The exercise of a remedy does not
waive the right of either party to resort to arbitration
or reference. At Bank's option, foreclosure under a deed
of trust or mortgage may be accomplished either by
exercise of a power of sale under the deed of trust or
mortgage or by judicial foreclosure.
9..14 Notice of Claims; Claims Bar. THE COMPANY
HEREBY AGREES THAT IT SHALL GIVE PROMPT WRITTEN NOTICE OF ANY
CLAIM OR CAUSE OF ACTION IT BELIEVES IT HAS, OR MAY SEEK TO
ASSERT OR ALLEGE, AGAINST THE BANK, WHETHER SUCH CLAIM IS BASED
IN LAW OR EQUITY, ARISING UNDER OR RELATED TO THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS, OR TO THE LOANS (OR THE
COLLATERAL THEREFOR), OR ANY ACT OR OMISSION TO ACT BY THE BANK
WITH RESPECT HERETO OR THERETO, AND THAT IF IT SHALL FAIL TO
GIVE SUCH PROMPT NOTICE TO THE BANK WITH REGARD TO ANY SUCH
CLAIM OR CAUSE OF ACTION, IT SHALL BE DEEMED TO HAVE WAIVED,
AND SHALL BE FOREVER BARRED FROM BRINGING OR ASSERTING, SUCH
CLAIM OR CAUSE OF ACTION IN ANY SUIT, ACTION OR PROCEEDING IN
ANY COURT OR BEFORE ANY GOVERNMENTAL AGENCY.
9..15 Entire Agreement. This Agreement, together
with the other Loan Documents, embodies the entire Agreement
and understanding between the Company and the Bank, and
supersedes all prior or contemporaneous Agreements and
understandings of such Persons, verbal or written, relating to
the subject matter hereof and thereof, except for any prior
arrangements made with respect to the payment by the Company of
(or any indemnification for) any fees, costs or expenses
payable to or incurred (or to be incurred) by or on behalf of
the Bank.
9..16 Interpretation. This Agreement is the
result of negotiations between, and has been reviewed by
counsel to, the Company and the Bank, and is the product of all
parties hereto. Accordingly, this Agreement and the other Loan
Documents shall not be construed against the Bank merely
because of the Bank's involvement in the preparation of such
documents and agreements.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and delivered by their
proper and duly authorized officers as of the day and year
first above written.
"Company"
BEDFORD PROPERTY INVESTORS, INC.,
a Maryland corporation
By /S/ PETER B. BEDFORD
PETER B. BEDFORD
CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE
OFFICER
[Printed Name and Title]
By /S/ JAY SPANGENBERG
JAY SPANGENBERG
CHIEF FINANCIAL OFFICER
[Printed Name and Title]
Notice Address:
3658 Mt. Diablo Boulevard
Suite 210
Lafayette, California 94549
Attention: Jay Spangenberg
Telephone No.: (510) 283-8910
Telecopier No.: (510) 283-5697
"Bank"
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By /S/ DONNA CHIARO
DONNA CHIARO
VICE PRESIDENT - REGIONAL
MANAGER
[Printed Name and Title]
Lending Office/Notice Address:
50 California Street, 11th Floor
San Francisco, California 94111
Attention: James Hildebrand
Telephone No.: (415) 445-4193
Telecopier No.: (415) 445-4154
EXHIBIT A
[Form of Borrowing Notice]
(Date)
Bank of America National Trust
and Savings Association (Unit 8940)
50 California Street, 11th Floor
San Francisco, California 94111
Attention: James Hildebrand
Re: $20,000,000 Revolving Loan to Bedford
Property Investors, Inc.; Loan
No. ____________________; Borrowing Notice
No. _________________________
Gentlemen:
Bedford Property Investors, Inc. ("the Company")
hereby requests a [Loan] [Letter of Credit] on the terms set
forth below pursuant to Sections 2.1 and 2.3 of that certain
Credit Agreement dated as of December 20, 1993, between the
Company and the Bank (the "Agreement"). Capitalized terms used
herein and not defined shall have the meanings given to them in
the Agreement.
1. [The amount of the Loan is
U.S.$ _______________ (minimum principal amount of $100,000 for
Reference Rate Loans to be used to pay the costs of tenant
improvements or leasing commissions for any Acquired Parcel,
$250,000 for Reference Rate Loans to be used for any other
permitted purpose, and $1,000,000 for Offshore Rate Loans).]
[The amount of the Letter of Credit is U.S.$_______________.]
2. [The borrowing date will be ____________,
19__.] [The issuance date of the Letter of Credit will be
___________, 19,__, and the expiry date of the Letter of Credit
will be ___________, 19__.]
[3. The Loan proceeds will be used to [acquire
fee title to improved real property] [pay the costs of tenant
improvements for [describe the Parcel(s)]] and/or [pay
dividends to the Company's shareholders and/or pay expenses of
the Company and/or pay expenses of [describe the Parcel(s)]] in
the following amounts:
Permitted Purpose Amount
______________________ $______________
______________________ $______________
______________________ $______________
[4. The Loan will be a [Reference Rate/Offshore
Rate] Loan.]
[5. If the Loan is an Offshore Rate Loan, the
Interest Period will be _____ [days] [year], and will begin on
_______________, 19__, and will end on _______________, 19__.]
The Company hereby represents and warrants to the
Bank that (i) the representations and warranties made by the
Company contained in Article 5 of the Agreement are true and
correct on and as of the borrowing date with the same effect as
if made on and as of such borrowing date (except to the extent
such representations and warranties expressly refer to an
earlier date, in which case they were true and correct as of
such earlier date); (ii) no Default or Event of Default has
occurred and remains uncured and no Default or Event of Default
shall result from the making of the requested Loan; and
(iii) [with respect to the requested Loan, all of the
conditions of Section 4.3] [with respect to the requested
Letter of Credit, all of the conditions of Sections 4.3 and
4.4] of the Agreement have been satisfied (and will be
satisfied on the date such [Loan is made] [Letter of Credit is
issued]).
BEDFORD PROPERTY INVESTORS, INC.,
a Maryland corporation,
By ____________________________
____________________________
[Printed Name and Title]
EXHIBIT B
[Form of Conversion/Continuation Notice]
(Date)
Bank of America National Trust
and Savings Association (Unit 8940)
50 California Street, 11th Floor
San Francisco, California 94111
Attention: James Hildebrand
Re: $20,000,000 Revolving Loan to Bedford Property
Investors, Inc.; Loan No. ____________________;
Conversion/Continuation Notice No. ___________
Gentlemen:
Pursuant to Section 2.4 of that certain Credit
Agreement dated as of December 20, 1993, between Bedford
Property Investors, Inc., a Maryland corporation ("the
Company"), and the Bank (the "Agreement"), the Company hereby
elects to [convert the [Reference Rate Loan/expiring Offshore
Rate Loan] described below into [an Offshore Rate Loan/a
Reference Rate Loan] having the terms described below]
[continue the expiring Offshore Rate Loan described below as an
Offshore Rate Loan having the terms described below].
Capitalized terms used herein and not defined shall have the
meanings given to them in the Agreement.
1. The [conversion/continuation] date is
_______________, 19__.
2. The aggregate amount of Loans to be
[converted to [Offshore Rate Loans] [Reference Rate
Loans]/continued as Offshore Rate Loans] is U.S.$
_______________.
3. The Company requests [conversion of
U.S.$ _______________ of [Reference Rate Loans] [Offshore Rate
Loans] to [an Offshore Rate Loan having an Interest Period of
_____ [days] [year], beginning on _______________, 19__, and
ending on _______________, 19__] [a Reference Rate Loan]]
[continuation of U.S.$ _______________ of Offshore Rate Loans
as an Offshore Rate Loan having an Interest Period of _____
[days] [year], beginning on _______________, 19__, and ending
on _______________, 19__.
BEDFORD PROPERTY INVESTORS, INC.,
a Maryland corporation,
By ____________________________
____________________________
[Printed Name and Title]
EXHIBIT C
[Form of Revolving Note]
REVOLVING NOTE
$20,000,000.00 San Francisco, California December 20, 1993
FOR VALUE RECEIVED, BEDFORD PROPERTY INVESTORS,
INC., a Maryland corporation (the "Company"), promises to pay
to the order of BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION (the "Bank"), at its offices at 50 California
Street, 11th Floor (Unit 8940), San Francisco, California
94111, or at such other place as the Bank may designate from
time to time, the sum of TWENTY MILLION AND NO/100 DOLLARS
($20,000,000.00), or the aggregate unpaid principal amount
outstanding hereunder, whichever may be the lesser, in
immediately available funds and lawful money of the United
States of America.
Interest shall accrue on amounts outstanding
hereunder in accordance with that certain Credit Agreement
dated as of December 20, 1993 (the "Agreement") between the
Company and the Bank. (Capitalized term used in this Revolving
Note and not defined herein shall have the meanings given to
them in the Agreement.) Pursuant thereto, interest shall
accrue on amounts outstanding hereunder from time to time:
(a) at a fluctuating rate equal to 0.75% per annum above the
Reference Rate; or (b) at the Company's option, subject to the
terms of the Agreement, at a rate equal to 3.00% per annum
above the applicable Offshore Rate. A change in the interest
rate for Reference Rate Loans shall take effect on the day
specified in the public announcement of the change in the
Reference Rate. Interest shall be computed on the basis of a
360-day year and actual days elapsed. Interest shall become
due and payable in accordance with the terms of the Agreement.
All unpaid principal and interest outstanding
hereunder shall be due and payable on January 1, 1997; provided
that prepayments of principal shall be made as provided in the
Agreement.
This Revolving Note is the Revolving Note referred
to in the Agreement, and is issued in conjunction with, and is
entitled to all of the rights, benefits and privileges provided
in, the Agreement, as now existing or as the same may from time
to time be supplemented, modified or amended. The Agreement,
among other things, provides that amounts outstanding hereunder
from time to time may be repaid pursuant to the Agreement and
reborrowed from time to time pursuant to the Agreement, and
contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events.
The Bank will endorse on the schedule annexed to
this Revolving Note the date, amount and maturity of each Loan
that it makes pursuant to the Agreement, the purpose of the
Loan, the amount of each payment of principal that the Company
makes with respect thereto and the source of the funds from
which each principal payment is made. The Company irrevocably
authorizes the Bank to endorse this Revolving Note, and the
Bank's record shall be conclusive absent manifest error;
provided, however, that the Bank's failure to make, or its
error in making, a notation on the attached schedule with
respect to any Loan shall not limit or otherwise affect the
Company's obligations to the Bank hereunder or under the
Agreement.
Except as otherwise expressly provided in any
Collateral Document, this Note is secured by (1) each of the
Mortgages executed from time to time pursuant to the Agreement
and covering an Approved Parcel and (2) each of the Assignments
of Leases and other Collateral Documents executed from time to
time pursuant to the Agreement.
The Company waives presentment, demand, protest,
notice of protest, notice of nonpayment or dishonor and all
other notices in connection with the delivery, acceptance,
performance, default or enforcement of this Revolving Note.
Time is of the essence hereof.
This Revolving Note has been executed by the
undersigned in the State of California, and shall be governed
by, and construed in accordance with, the laws of the State of
California.
BEDFORD PROPERTY INVESTORS, INC.,
a Maryland corporation
By ____________________________
____________________________
[Printed Name and Title]
By ____________________________
____________________________
[Printed Name and Title]
LOANS AND PRINCIPAL PAYMENTS
Amount of Interest Purpose Amount of Source of
Loan Rate and of Principal Principal Notation
Borrowing Loan Paid Payment Made By
Period
Date
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
___________________________________________________________________________
____________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
__________________________________________________________________________
_________________________________________________________________________
________________________________________________________________________
_________________________________________________________________________
________________________________________________________________________
__________________________________________________________________________
EXHIBIT D
[Form of Property Use Certificate]
PROPERTY USE CERTIFICATE
To: Bank of America National Trust
and Savings Association (the "Bank")
Pursuant to Section 4.1.5(8) of that certain Credit
Agreement (the "Agreement") dated as of December 20, 1993, between Bedford
Property Investors, Inc., a Maryland corporation (the "Company"), and the
Bank, the Company hereby represents, warrants and certifies to the Bank that
the improvements located on the Parcel commonly known as ________________
________________________ [property address] contain the
following amounts of net rentable area devoted to, or available
for, the following uses:
Office: _________ square feet of net rentable area
Retail: _________ square feet of net rentable area
Industrial
or Warehouse: ________ square feet of net rentable area
Research and
Development: ________ square feet of net rentable area
(not including office space)
Total: ________ square feet of net rentable area
Capitalized terms used in this Certificate and not defined
herein have the meanings given to them in the Agreement.
Dated: ____________________
BEDFORD PROPERTY INVESTORS, INC.,
a Maryland corporation
By ____________________________
____________________________
[Printed Name and Title]
EXHIBIT E
[Form of Opinion of Counsel]
_______________, 1993
Bank of America National Trust and
Savings Association
50 California Street, 11th Floor
San Francisco, California 94111
Attention: James Hildebrand
Re: $20,000,000 Secured Revolving Line of Credit from Bank of
America National Trust and Savings Association (the
"Bank") to Bedford Property Investors, Inc., a Maryland
corporation (the "Company")
Gentlemen:
We have acted as counsel to the Company in connection with the
negotiation and execution of the documents evidencing the above-referenced
line of credit (the "Credit Line"), and we are delivering this opinion to
you at the Company's request. In connection with our representation of the
Company, we have examined all of the following documents (collectively, the
"Loan Documents"):
1. Credit Agreement dated as of December 20, 1993, between
the Company and the Bank (the "Agreement");
2. Revolving Note made by the Company and payable to the
order of the Bank in the maximum principal amount of $20,000,000.00 (the
"Note"); and
3. Secretary's Certificate executed by the Company's
secretary.
We have also reviewed such other documents, certificates and
instruments as we deemed relevant, appropriate or necessary in rendering
the opinions contained herein. In rendering the opinions set forth below,
we have assumed the truth of the facts stated in the foregoing documents,
the genuineness of the signatures thereon and the completeness thereof.
Based upon the foregoing, but subject to the limitations and
qualifications expressed below, we are of the opinion that:
1. The Company is a corporation duly organized, existing and
in good standing under the laws of the State of Maryland, and is duly
qualified to do business in the State of California and in each other
jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification. The Company has the
full right, power and authority to execute, deliver and perform its
obligations under the Agreement, the Note and all other documents and
agreements it may execute in connection with the Agreement.
2. The Company's execution, delivery and performance of the
Loan Documents and each of the other documents and agreements it may
execute in connection with the Loan Documents (i) have been duly authorized
by all necessary action, (ii) do not require the consent or approval of any
governmental body or regulatory authority or any other person or entity,
and (iii) do not conflict with any law or regulation, or any term or
provision of the Company's articles of incorporation or bylaws, or any
agreement to which the Company is bound or by which any of its property is
bound or affected.
3. The Loan Documents and each of the other documents and
agreements that the Company may execute in connection with the Loan
Documents constitute legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms.
4. Except as specifically disclosed in the Agreement, there
are no actions, suits, proceedings, claims or disputes pending, or to the
best of our knowledge threatened or contemplated, at law, in equity, in
arbitration or before any court or other governmental authority, against
the Company or any of its subsidiaries or any of their respective
properties which (a) purport to affect or pertain to the Agreement or any
other Loan Document, or any of the transactions contemplated thereby, or
(b) if determined adversely to the Company or one or more of its
subsidiaries would reasonably be expected to have a material adverse effect
on the financial condition of the Company or its ability to perform its
obligations under the Loan Documents. No injunction, writ, temporary
restraining order or any order of any nature has been issued by any court
or other governmental authority purporting to enjoin or restrain the
execution, delivery or performance of the Agreement or any other Loan
Document, or directing that the transactions provided for therein not be
consummated as therein provided.
The opinions expressed herein are subject to the effect of
bankruptcy, insolvency and other similar laws affecting the rights of
creditors generally, and general principles of equity.
Very truly yours,
_____________________________
Schedule 5.5
Litigation
None, outside of ordinary litigation related to the collection
of delinquent rent.
Schedule 5.11
Material Indebtedness Not Disclosed
on 6/30/93 Financial Statements
None.
Schedule 5.12
Environmental Disclosures
None.
Schedule 5.16
(a) List of Subsidiaries
ICMPI (CBC), Inc., a Maryland corporation
ICMPI (San Antonio), Inc., a Delaware corporation
ICMPI (Scottsdale), Inc., a Delaware corporation
ICMPI (Jackson), Inc., a Delaware corporation
ICMPI (Irvine), Inc., a Delaware corporation
ICMPI (Concord Diablo 3), Inc., a Delaware corporation
ICMPI (Concord Diablo 8), Inc., a Delaware corporation
ICMPI (Mason 18), Inc., a Delaware corporation
ICMPI (Overland Park), Inc., a Delaware corporation
ICMPI (Lenexa), Inc., a Delaware corporation
ICMPI (UT Lender), Inc., a Delaware corporation
ICMPI (Benicia VII), Inc., a Delaware corporation
ICMPI (Concord Diablo 2), Inc., a Delaware corporation
ICMPI (SLA Park), Inc., a Delaware corporation
(b) Equity Investments
ICMPI (CBC), Inc., a Maryland corporation
ICMPI (San Antonio), Inc., a Delaware corporation
ICMPI (Scottsdale), Inc., a Delaware corporation
ICMPI (Jackson), Inc., a Delaware corporation
ICMPI (Irvine), Inc., a Delaware corporation
ICMPI (Concord Diablo 3), Inc., a Delaware corporation
ICMPI (Concord Diablo 8), Inc., a Delaware corporation
ICMPI (Mason 18), Inc., a Delaware corporation
ICMPI (Overland Park), Inc., a Delaware corporation
ICMPI (Lenexa), Inc., a Delaware corporation
ICMPI (UT Lender), Inc., a Delaware corporation
ICMPI (Benicia VII), Inc., a Delaware corporation
ICMPI (Concord Diablo 2), Inc., a Delaware corporation
ICMPI (SLA Park), Inc., a Delaware corporation
EXHIBIT 10.14
MODIFICATION AGREEMENT
(Long Form)
This Modification Agreement (the "Agreement") is made as
of August 8, 1994, by BEDFORD PROPERTY INVESTORS, INC.,
a Maryland corporation (the "Company"), and BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking
association (the "Bank").
Factual Background
A. Under a Credit Agreement dated as of December 20,
1993 (the "Credit Agreement"), the Bank agreed to make revolving
loans (collectively, the "Loan") to the Company. Capitalized
terms used in this Agreement without definition have the meanings
given to them in the Credit Agreement.
B. The Loan is evidenced by a Revolving Note (the
"Note") dated December 20, 1993, made by the Company and payable
to the Bank in the stated principal amount of $20,000,000.00.
The Note is presently secured by the following Deeds of Trust
(collectively, the "Company Deeds of Trust") executed by the
Company, as trustor, for the benefit of the Bank: (1) that
certain Deed of Trust dated as of December 20, 1993, encumbering
certain real property located in Salt Lake County, Utah, as more
particularly described therein, and recorded on December 28,
1993, in the official records of Salt Lake County, Utah, as
Instrument No. 5696660, in Book 6837, Page 2459; (2) that certain
Deed of Trust, dated as of April 25, 1994, encumbering certain
real property located in Los Angeles County, California, as more
particularly described therein, and recorded on May 20, 1994, in
the official records of Los Angeles County, California, as
Instrument No. 94-977185; and (3) that certain Deed of Trust,
dated as of July 1, 1994, encumbering certain real property
located in Contra Costa County, California, as more particularly
described therein, and recorded on July 7, 1994, in the official
records of Contra Costa County, California, as Instrument No.
176593. The Note is also secured by that certain Deed of Trust
(the "ICMPI Deed of Trust") dated as of December 20, 1993,
executed by the Company's wholly-owned subsidiary, ICMPI
(Jackson), Inc., a Delaware corporation ("ICMPI"), as trustor,
for the benefit of the Bank, encumbering certain real property
located in Hinds County, Mississippi, as more particularly
described therein, and initially recorded on December 28, 1993,
and re-recorded on March 15, 1994, in the official records of
Hinds County, Mississippi, in Book 4276, Page 562.
C. In connection with the Loan, the Company executed an
Unsecured Indemnity Agreement (the "Unsecured Indemnity"). The
Unsecured Indemnity is not a Loan Document, as defined below.
D. As used herein, the term "Loan Documents" means the
Credit Agreement, the Note, the Company Deeds of Trust, the ICMPI
Deed of Trust, and any other documents executed in connection
with the Loan, including those which evidence, guaranty, secure
or modify the Loan, as any or all of them may have been amended
to date. The Loan Documents, however, do not include the
Unsecured Indemnity. This Agreement is a Loan Document.
E. As of August 4, 1994, the outstanding principal
balance of the Loan is $10,172,550.00, and one letter of credit
in the stated amount of $1,500,000.00 is outstanding under the
Credit Agreement.
F. The Company and the Bank now wish to modify the Loan
as set forth below.
Agreement
Therefore, the Company and the Bank agree as follows:
1. Recitals. The recitals set forth above in the
Factual Background are true, accurate and correct.
2. Reaffirmation of Loan. The Company reaffirms all of
its obligations under the Loan Documents and the Unsecured
Indemnity, and the Company acknowledges that it has no claims,
offsets or defenses with respect to the payment of sums due under
the Note or any other Loan Document or the Unsecured Indemnity.
3. Modification of Loan Documents. The Loan Documents
are hereby amended as follows:
(a) Funds From Operations. Section 1.1 of the
Credit Agreement is amended by adding the following new
definition thereto:
"'Funds From Operations' means, for any fiscal
quarter, net income, excluding gains or losses from
debt restructuring and sales of property, plus
depreciation and amortization, after adjustments for
unconsolidated ventures."
(b) Maximum Commitment Amount. The definition of the
term "Maximum Commitment Amount" set forth in Section 1.1
of the Credit Agreement is amended in its entirety to read
as follows:
"'Maximum Commitment Amount' means, at
any time (a) during the period from the
Modification Date through and including
October 31, 1995, an amount equal to
$23,000,000.00, and (b) during any
calendar month during the period from and
after November 1, 1995, commencing on the
first day of each such month, an amount
equal to (i) the Maximum Commitment
Amount during the immediately preceding
calendar month less (ii) the principal
component of the payment amount that
would amortize the Maximum Commitment
Amount during the immediately preceding
calendar month in equal monthly
installments over the period from the
first day of such calendar month to
November 1, 2015, at a per annum rate of
interest equal to the greater of (x)
2.50% per annum above the average yield
on ten-year United States treasury bonds
maturing approximately ten (10) years
from the date of determination (as
determined from the telerate screen at
the opening of business on the
determination date) or (y) 9.0%, computed
on the basis of a year of 365 or 366
days, as applicable, and actual day
months."
(c) Modification Date. Section 1.1 of the Credit
Agreement is amended by adding the following new
definition thereto:
"'Modification Date' means the date on
which all conditions precedent set forth
in Section 4 of the Modification
Agreement dated as of August 8, 1994,
between the Company and the Bank are
satisfied or waived by the Bank."
(d) Limitation on Dividends. Article 7 of the
Credit Agreement is amended to add a new Section 7.14
thereto, reading as follows:
"7.14 Limitation on Dividends. The Company
shall not, during any fiscal quarter, declare or pay
dividends in an aggregate amount exceeding ninety
percent (90%) of the Company's Funds From Operations
during the immediately preceding fiscal quarter."
(e) Event of Default. Section 8.1 of the Credit
Agreement is amended to add a new subsection 8.1.11
thereto, reading as follows:
"8.1.11 Management Changes. Peter B. Bedford
shall cease to be the Chairman of the Board or the
chief executive officer of the Company for any
reason."
(f) Revolving Note. The stated maximum principal
amount of the Revolving Note is increased from Twenty
Million Dollars ($20,000,000.00) to Twenty-Three Million
Dollars ($23,000,000.00).
(g) Each of the Company Deeds of Trust and the ICMPI
Deed of Trust (collectively, the "Deeds of Trust") are
modified to secure payment and performance of the Loan as
amended to date, in addition to all other "Secured
Obligations" as therein defined. The foregoing
notwithstanding, certain obligations continue to be
excluded from the Secured Obligations, as provided in the
Deeds of Trust.
4. Conditions Precedent. Before this Agreement becomes
effective and any party becomes obligated under it, all of the
following conditions shall have been satisfied at the Company's
sole cost and expense in a manner acceptable to the Bank in the
exercise of the Bank's sole judgment:
(a) The Bank shall have received fully executed and,
where appropriate, acknowledged originals of this
Agreement, the short forms of this Agreement and any other
documents which the Bank may require or request in
accordance with this Agreement or the other Loan
Documents, including any documents signed by ICMPI that
the Bank may require.
(b) A short form of this Agreement shall have been
recorded in the official records of the Counties of:
Hinds, Mississippi; Salt Lake, Utah; Los Angeles,
California; and Contra Costa, California, in addition to
all other documents which the Bank may require to be
recorded.
(c) The Bank shall have received such assurance as
the Bank may require that the validity and priority of the
Deeds of Trust have not been and will not be impaired by
this Agreement or the transactions contemplated by it,
including CLTA Endorsement No. 110.5 (or the equivalent)
to be attached to the following title policies issued by
First American Title Insurance Guaranty Company: Policy
No. C166892 dated December 28, 1993 (Mississippi); Policy
No. 185675-1-A dated December 28, 1993 (Utah); Policy No.
9403513-50 dated May 20, 1994 (Los Angeles County, CA);
and Policy No. 762968 dated July 7, 1994 (Contra Costa
County, CA).
(d) The Bank shall have received a documentation fee
in the amount of $500.00 in immediately available funds.
(e) The Bank shall have received reimbursement, in
immediately available funds, of all costs and expenses
incurred by the Bank in connection with this Agreement,
including charges for title insurance (including
endorsements), recording, filing and escrow charges, fees
for appraisal, architectural and engineering review,
construction services and environmental services, mortgage
taxes, and legal fees and expenses of the Bank's counsel.
Such costs and expenses may include the allocated costs
for services of the Bank's in-house staffs, such as legal,
appraisal, construction services and environmental
services. No limitation shall apply to the Company's
obligations to pay any other costs and expenses of the
Bank, whenever incurred, or to pay any other fees which
the Bank may incur after the short form(s) of this
Agreement are recorded. The Company acknowledges that the
documentation fee payable in connection with this
transaction does not include the amounts payable by the
Company under this subsection.
5. The Company's Representations and Warranties. The
Company represents and warrants to the Bank as follows:
(a) Loan Documents. All representations and
warranties made and given by the Company in the Loan
Documents and the Unsecured Indemnity are true, accurate
and correct.
(b) No Default. No Event of Default has occurred
and is continuing, and no event has occurred and is
continuing which, with notice or the passage of time or
both, would be an Event of Default.
(c) Property. The Company or its wholly-owned
Subsidiary lawfully possesses and holds fee simple title
to all of the Property which is real property, and the
Deeds of Trust are each first and prior liens on the
respective Property encumbered. The Company or its
wholly-owned Subsidiary owns all of the Property which is
personal property free and clear of any reservations of
title and conditional sales contracts, and also of any
security interests other than the Deeds of Trust, which
are each first and prior liens on the respective Property
encumbered. There is no financing statement affecting any
Property on file in any public office except for financing
statements in favor of the Bank.
(d) Borrowing Entity. The Company is a corporation
which is duly organized and validly existing under the
laws of the State of Maryland, and is further authorized
to do business in the States of California, Mississippi
and Utah. There have been no changes in the organization,
composition, ownership structure or formation documents of
the Company since the inception of the Loan. ICMPI is a
corporation which is duly organized and validly existing
under the laws of the State of Delaware, and is further
authorized to do business in the States of California and
Mississippi. There have been no changes in the
organization, composition, ownership structure or
formation documents of ICMPI since the inception of the
Loan.
6. Incorporation. This Agreement shall form a part of
each Loan Document, and all references to a given Loan Document
shall mean that document as hereby modified.
7. No Prejudice; Reservation of Rights. This Agreement
shall not prejudice any rights or remedies of the Bank under the
Loan Documents or the Unsecured Indemnity. The Bank reserves,
without limitation, all rights which it has against any
indemnitor, guarantor, or endorser of the Note.
8. No Impairment. Except as specifically hereby
amended, the Loan Documents and the Unsecured Indemnity shall
each remain unaffected by this Agreement, and all such documents
shall remain in full force and effect. Nothing in this Agreement
shall impair the liens of any of the Deeds of Trust, each of
which as hereby amended shall remain one deed of trust with one
power of sale, creating a first lien encumbering the respective
Property encumbered.
9. Purpose and Effect of the Bank's Approval. The
Bank's approval of any matter in connection with the Loan shall
be for the sole purpose of protecting the Bank's security and
rights. No such approval shall result in a waiver of any default
of the Company. In no event shall the Bank's approval be a
representation of any kind with regard to the matter being
approved.
10. Disclosure to Title Company. Without notice to or
the consent of the Company, the Bank may disclose to any title
insurance company which insures any interest of the Bank under
any of the Deeds of Trust (whether as primary insurer, coinsurer
or reinsurer) any information, data or material in the Bank's
possession relating to the Company, the Loan or any of the
Property.
11. Integration. The Loan Documents, including this
Agreement and the Unsecured Indemnity: (a) integrate all the
terms and conditions mentioned in or incidental to the Loan
Documents and the Unsecured Indemnity; (b) supersede all oral
negotiations and prior and other writings with respect to their
subject matter; and (c) are intended by the parties as the final
expression of the agreement with respect to the terms and
conditions set forth in those documents and as the complete and
exclusive statement of the terms agreed to by the parties. If
there is any conflict between the terms, conditions and
provisions of this Agreement and those of any other agreement or
instrument, including any of the other Loan Documents or the
Unsecured Indemnity, the terms, conditions and provisions of this
Agreement shall prevail.
12. Miscellaneous. This Agreement and any attached
consents or exhibits requiring signatures may be executed in
counterparts, and all counterparts shall constitute but one and
the same document. If any court of competent jurisdiction
determines any provision of this Agreement or any of the other
Loan Documents or the Unsecured Indemnity to be invalid, illegal
or unenforceable, that portion shall be deemed severed from the
rest, which shall remain in full force and effect as though the
invalid, illegal or unenforceable portion had never been a part
of the Loan Documents or the Unsecured Indemnity. This Agreement
shall be governed by the laws of the State of California, without
regard to the choice of law rules of that State. As used here,
the word "include(s)" means "includes(s), without limitation,"
and the word "including" means "including, but not limited to."
BEDFORD PROPERTY INVESTORS,
INC.,
a Maryland corporation
By /S/ JAY SPANGENBERG
JAY SPANGENBERG
CHIEF FINANCIAL OFFICER
[Printed Name and Title]
BANK OF AMERICA NATIONAL
TRUST
AND SAVINGS ASSOCIATION,
a national banking
association
By /S/ ANNIE PANG
ANNNIE PANG, VICE
PREISDENT
[Printed Name and Title]
ICMPI'S CONSENT
ICMPI (Jackson), Inc., a Delaware
corporation ("ICMPI"), hereby consents to the terms,
conditions and provisions of the foregoing
Modification Agreement and the transactions
contemplated by it. ICMPI hereby reaffirms the full
force and effectiveness of its Deed of Trust dated as
of December 20, 1993, as well as its acknowledgment
that its obligations under that deed of trust are
separate and distinct from those of the Company on
the Loan.
Dated: August 8, 1994
ICMPI (JACKSON), INC.,
a Delaware corporation
By /S/ JAY SPANGENBERG
JAY SPANGENBERG, CHIEF
FINNCIAL OFFICER
[Printed Name and Title]
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<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 583,000
<SECURITIES> 0
<RECEIVABLES> 973,000
<ALLOWANCES> 0
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<CURRENT-ASSETS> 1,287,000
<PP&E> 57,820,000
<DEPRECIATION> (2,853,000)
<TOTAL-ASSETS> 57,810,000
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<COMMON> 60,000
0
0
<OTHER-SE> 36,534,000
<TOTAL-LIABILITY-AND-EQUITY> 57,810,000
<SALES> 0
<TOTAL-REVENUES> 7,543,000
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