<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): September 22, 1997 (January 6,
1997)
SPIEKER PROPERTIES, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
MARYLAND 1-12528 94-3185802
- ------------------------------- ----------- ------------------
(State or other jurisdiction of Commission (IRS Employer
incorporation or organization) File Number) Identification No.)
2180 SAND HILL ROAD, MENLO PARK, CA 94025
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip code)
(415) 854-5600
----------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE> 2
SPIEKER PROPERTIES, INC.
CURRENT REPORT
ON
FORM 8-K
Item 5. Other Events
The following operating properties were or are to be acquired by Spieker
Properties, L.P. and its affiliates from unrelated parties between June 28,
1997, and September 22, 1997, or expected date of acquisition. Spieker
Properties, Inc. owns an approximate 87.0% general partners' interest in Spieker
Properties, L.P. (the "Operating Partnership" and collectively with Spieker
Properties, Inc. referred to as the "Company"):
Audited Property Acquisition
Kennedy Portfolio, a 1,265,000, square foot portfolio with business parks
located in Portland, Oregon; Redmond, Washington; Hayward, California;
and Fremont, California, was acquired on August 20, 1997, for $110.9 million.
Unaudited Pending Acquisition
WCB Portfolio, a 6,354,450 square foot portfolio consisting primarily of office
and industrial properties located in California, Oregon, Washington, Colorado,
Arizona, New Mexico, Atlanta, Texas, Florida, Massachusetts, Michigan and
Pennsylvania is expected to be acquired during the latter half of the fourth
quarter of 1997 for $725.0 million.
Unaudited Property Acquisitions
Lafayette Terrace, a 47,392 square foot office building located in Lafayette,
California, was acquired on June 30, 1997, for $7.5 million.
Parkway Industrial, a 175,000 square foot industrial project located in
Portland, Oregon, was acquired on July 15, 1997, for $7.5 million.
Brea Place, a 490,000 square foot office complex located in Brea, California,
was acquired on July 17, 1997, for $61.7 million.
Sepulveda Center, a 170,134 square foot office building located in Los Angeles,
California, was acquired on August 19, 1997, for $25.2 million.
790 E. Colorado, a 130,000 square foot office building located in Pasadena,
California was acquired on August 28, 1997, for $19.3 million.
Washington Park, a 50,000 square foot office building located in Federal Way,
Washington, was acquired on September 3, 1997, for $6.1 million.
Nobel Corporate Plaza, a 103,192 square foot office building located in San
Diego, California, was acquired on September 4, 1997, for $16.7 million.
Tyco Buildings, a 500,000 square foot two-building industrial project located in
Portland, Oregon, were acquired on September 12, 1997 for $16.4 million.
The costs shown above for each acquisition represent the initial cost at the
time of acquisition.
2
<PAGE> 3
Acquisitions - General
The properties were or are to be acquired using funds provided by the Company's
unsecured line of credit, short-term floating rate bridge financing, the
issuance of unsecured investment grade rated debt, convertible preferred
operating partnership units issued to certain of the sellers, common stock, and
preferred stock.
The Company believes these acquisitions are consistent with the Company's
objective of becoming the preeminent real estate operating company focusing on
industrial and suburban office property in selected western United States
markets. The Company anticipates disposing of certain properties in the WCB
Portfolio aggregating 1.7 million square feet that are not consistent with such
objectives, through sales or like-kind exchanges, as conditions warrant. In
assessing the properties acquired, the Company considered current operations,
including occupancy levels, rental rates, expenses and ongoing capital
requirements. Further, the Company's management considered the rental market for
the type and location of the acquired property and, where applicable, the cost
of building improvements.
The pending acquisition of the WCB Portfolio involves a significant amount of
assets, defined by rule 3-14 of regulation S-X to be an amount in excess of 10%
of the total assets of the Company. Additional acquisitions, while not
considered individually "significant" may in the aggregate be significant.
Certain audited and unaudited historical and pro forma financial information
concerning the Kennedy Portfolio, the WCB Portfolio and other properties
referred to herein is provided in Item 7 of this Current Report on Form 8-K. The
Company intends to file audited financial statements for the WCB Portfolio not
later than 60 days after the date of this Current Report on Form 8-K
In aggregate, the Company has or will have acquired eight properties and two
portfolios totaling 9.3 million square feet of rentable space during the period
from June 28, 1997, to September 22, 1997, or expected date of acquisition, for
$996.3 million. The financial statement of the Kennedy Portfolio for the year
ended December 31, 1996, has been audited, whereas the financial statement for
the six months ended June 30, 1997, has not been audited. The financial
statements for the WCB Portfolio and the remaining eight properties listed above
have not been audited.
Dispositions
The following operating property was disposed of by Spieker Properties, L.P. to
an unrelated party subsequent to June 30, 1997:
Sunset Science Park, a 49,750 square foot industrial project located in
Portland, Oregon, was disposed of on August 8, 1997, for $2.4 million.
Other
As previously reported on Form 8-K dated June 27, 1997, the Company acquired
seventeen properties totaling 4.4 million square feet of net rentable space for
$523.1 million and disposed of seven properties totaling 0.7 million square feet
of net rentable space for $78.4 million during the period from January 1, 1997,
to June 27, 1997.
The acquired properties, pending acquisitions, disposed properties and the
properties previously reported in the June 27, 1997, Form 8-K represent the 1997
Acquisitions Pending Acquisitions and Disposed Properties included in the pro
forma financials included in Item 7 of this Current Report on Form 8-K.
As of September 22, 1997, including pending acquisitions, the Company owns or
will own 34.5 million square feet of properties, consisting of 14.5 million
square feet of office properties, 19.0 million square feet of industrial
properties and 1.0 million square feet of retail properties.
3
<PAGE> 4
Item 7. Financial Statements and Exhibits.
(a) (i) Statements of Revenues and Certain Expenses for WCB Portfolio
Unaudited Statements of Revenues and Certain Expenses for the six months
ended June 30, 1997, and for the year ended December 31, 1996
Notes to Unaudited Statements of Revenues and Certain Expenses for the
six months ended June 30, 1997, and for the year ended December 31,
1996
(ii) Statements of Revenues and Certain Expenses for the Kennedy Portfolio
Report of Independent Public Accountants
Statements of Revenues and Certain Expenses for the six months ended
June 30, 1997, (unaudited) and for the year ended December 31, 1996
Notes to Statements of Revenues and Certain Expenses for the six months
ended June 30, 1997, (unaudited) and for the year ended December 31,
1996
(iii) Combined Statements of Revenues and Certain Expenses for the 1997
Acquisitions
Unaudited Combined Statements of Revenues and Certain Expenses for the
period from January 1, 1997, to the earlier of June 30, 1997, or date
of acquisition and for the year ended December 31, 1996
Notes to Unaudited Combined Statements of Revenues and Certain Expenses
for the period from January 1, 1997, to the earlier of June 30, 1997,
or date of acquisition and for the year ended December 31, 1996
(b) Pro Forma Financial Information
Pro Forma Condensed Consolidated Balance Sheet as of June 30, 1997
Pro Forma Condensed Consolidated Statements of Operations for the six
months ended June 30, 1997, and for the year ended December 31, 1996
Notes and adjustments to Pro Forma Condensed Consolidated Financial
Statements
(c) Exhibits
10.16 Credit Agreement among Spieker Properties, L.P., as borrower,
and Wells Fargo Bank, National Association, as Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, and
the lenders named therein, dated as of August 8, 1997, and Loan
Notes pursuant to the Credit Agreement.
10.17 Agreement of Purchase and Sale relating to the WCB Portfolio
among Spieker Properties, L.P. and the sellers named therein,
dated as of September 15, 1997.
23.1 Consent of Independent Public Accountants.
4
<PAGE> 5
SPIEKER PROPERTIES, INC.
UNAUDITED STATEMENTS OF REVENUES AND CERTAIN EXPENSES
FOR THE WCB PORTFOLIO
FOR THE SIX MONTHS ENDED JUNE 30, 1997
AND FOR THE YEAR ENDED DECEMBER 31, 1996
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1997 December 31,1996
---------------- ----------------
<S> <C> <C>
RENTAL REVENUES $ 42,534 $ 83,103
CERTAIN EXPENSES:
Rental expenses 9,313 19,319
Real estate taxes 3,172 6,693
-------- --------
12,485 26,012
-------- --------
REVENUES IN EXCESS OF CERTAIN EXPENSES $ 30,049 $ 57,091
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE> 6
SPIEKER PROPERTIES, INC.
NOTES TO UNAUDITED STATEMENTS OF REVENUES AND CERTAIN EXPENSES
FOR THE WCB PORTFOLIO
FOR THE SIX MONTHS ENDED JUNE 30, 1997
AND FOR THE YEAR ENDED DECEMBER 31, 1996
(in thousands)
1. Basis of Presentation and Summary of Significant Accounting Policies:
Properties Acquired
The accompanying unaudited statements of revenues and certain expenses
include the operations (see "Basis of Presentation" below) of the WCB
Portfolio (the "Properties") to be acquired by Spieker Properties, L.P. and
its affiliates (the "Company") during the latter half of the fourth quarter
of 1997. Spieker Properties, Inc. owns an approximate 87.0% general
partners' interest in Spieker Properties, L.P. (the "Operating Partnership"
collectively with Spieker Properties, Inc. referred to as the "Company").
Basis of Presentation
The accompanying statements of revenues and certain expenses are not
representative of the actual operations of the Properties for the periods
presented. Certain expenses may not be comparable to the expenses expected
to be incurred by the Company in the proposed future operations of the
Properties; however, the Company is not aware of any material factors
relating to the property that would cause the reported financial information
not to be indicative of future operating results. Excluded expenses consist
of property management fees, interest, depreciation and amortization and
other costs not directly related to the future operations of the Properties.
In the opinion of management, the unaudited financial information contains
all adjustments, consisting of normal recurring accruals, necessary for a
fair presentation of the combined statements of revenues and certain
expenses for the Properties.
Revenue Recognition
All leases are classified as operating leases, and rental revenue is
recognized on a straight-line basis over the terms of the leases.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses.
Actual results could differ from those estimates.
6
<PAGE> 7
2. Leasing Activity:
The minimum future rental revenues from leases in effect as of July 1, 1997,
for the remainder of 1997 and annually thereafter are as follows:
<TABLE>
<CAPTION>
Year Amount
---- ------
<S> <C>
1997 (six months) $28,734
1998 49,621
1999 40,857
2000 29,215
2001 23,290
Thereafter 66,831
--------
$238,548
========
</TABLE>
In addition to minimum rental payments, tenants pay reimbursements for their
pro rata share of specified operating expenses, which amounted to $6,762 for
the six months ended June 30, 1997 and $14,310 for the year
ended December 31, 1996. Certain leases contain options to renew.
7
<PAGE> 8
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders of Spieker Properties, Inc.:
We have audited the accompanying statement of revenues and certain
expenses of the Kennedy Portfolio, as defined in Note 1, for the year ended
December 31, 1996. This financial statement is the responsibility of management
of Spieker Properties, Inc. (the "Company"). Our responsibility is to express an
opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis of our opinion.
The accompanying statement of revenues and certain expenses was prepared
for the purpose of complying with the rules and regulations of the Securities
and Exchange Commission for inclusion in the Company's Current Report on Form
8-K dated September 22, 1997, and is not intended to be a complete presentation
of the revenues and expenses of the Kennedy Portfolio.
In our opinion, the financial statement referred to above presents
fairly, in all material respects, the revenues and certain expenses of the
Kennedy Portfolio for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.
ARTHUR ANDERSEN LLP
San Francisco, California
September 9, 1997
8
<PAGE> 9
SPIEKER PROPERTIES, INC.
STATEMENTS OF REVENUES AND CERTAIN EXPENSES
FOR THE KENNEDY PORTFOLIO
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
AND FOR THE YEAR ENDED DECEMBER 31, 1996
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1997 December 31, 1996
---------------- -----------------
(unaudited)
<S> <C> <C>
RENTAL REVENUES $ 6,234 $ 12,335
CERTAIN EXPENSES:
Rental expenses 499 997
Real estate taxes 573 1,134
-------- --------
1,072 2,131
-------- --------
REVENUES IN EXCESS OF CERTAIN EXPENSES $ 5,162 $ 10,204
======== ========
</TABLE>
The accompanying notes are an integral part of these combined statements.
9
<PAGE> 10
SPIEKER PROPERTIES, INC.
NOTES TO STATEMENTS OF REVENUE AND CERTAIN EXPENSES
FOR THE KENNEDY PORTFOLIO
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
AND FOR THE YEAR ENDED DECEMBER 31, 1996
(dollars in thousands)
1. Basis of Presentation and Summary of Significant Accounting Policies:
Properties Acquired
The combined statements of revenues and certain expenses (see "Basis of
Presentation" below) include the operations of the Kennedy Portfolio (the
"Properties") acquired by Spieker Properties, L.P. (the "Company") on August
20, 1997. Spieker Properties, Inc. owns an approximate 87.0% general
partners' interest in Spieker Properties, L.P. (the "Operating Partnership"
collectively with Spieker Properties, Inc. referred to as the "Company").
<TABLE>
<CAPTION>
Property Name Location
------------- --------
<S> <C>
Nimbus Corporate Center Portland, Oregon
Redmond Heights Tech Center Redmond, Washington
Huntwood Business Center Hayward, California
Fremont Commerce Center Fremont, California
</TABLE>
Basis of Presentation
The accompanying statements of revenues and certain expenses are not
representative of the actual operations of the Properties for the periods
presented. Certain expenses may not be comparable to the expenses expected
to be incurred by the Company in the proposed future operations of the
Properties; however, the Company is not aware of any material factors
relating to the Properties that would cause the reported financial
information not to be indicative of future operating results. Excluded
expenses consist primarily of property management fees, interest expense,
depreciation and amortization and other costs not directly related to the
future operations of the Properties.
The financial information presented for the six months ended June 30, 1996,
is unaudited. In the opinion of management, the unaudited financial
information contains all adjustments, consisting of normal recurring
accruals, necessary for a fair presentation of the combined statements of
revenues and certain expenses for the Properties.
Revenue Recognition
All leases are classified as operating leases, and rental revenue is
recognized on a straight-line basis over the term of the leases.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from these estimates.
10
<PAGE> 11
2. Leasing Activity:
The minimum future rental revenues due under noncancelable operating leases
in effect as of July 1, 1997, for the remainder of 1997 and annually
thereafter are as follows:
<TABLE>
<CAPTION>
Year Amount
---- -------
<S> <C>
1997 (six months) $ 5,096
1998 9,390
1999 6,771
2000 5,414
2001 4,439
Thereafter 6,334
-------
$37,444
=======
</TABLE>
In addition to minimum rental payments, tenants pay reimbursements for their
pro rata share of specified operating expenses, which amounted to $933 for
the six months ended June 30,1996, (unaudited) and $2,432 for the year ended
December 31, 1996. Certain leases contain options to renew.
11
<PAGE> 12
SPIEKER PROPERTIES, INC.
UNAUDITED COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES
FOR THE 1997 ACQUISITIONS
FOR THE PERIOD FROM JANUARY 1, 1997, TO THE EARLIER OF
JUNE 30, 1997, OR DATE OF ACQUISITION
AND FOR THE YEAR ENDED DECEMBER 31, 1996
(in thousands)
<TABLE>
<CAPTION>
January 1, 1997, to the
earlier of June 30,
1997, or Year Ended
Date of Acquisition December 31, 1996
------------------- -----------------
<S> <C> <C>
RENTAL REVENUES $ 11,043 $ 19,836
CERTAIN EXPENSES
Rental expenses 2,006 4,837
Real estate taxes 683 1,386
-------- --------
2,689 6,223
-------- --------
RENTAL REVENUE IN EXCESS OF CERTAIN EXPENSES $ 8,354 $ 13,613
======== ========
</TABLE>
The accompanying notes are an integral part of these unaudited, combined
statements.
12
<PAGE> 13
SPIEKER PROPERTIES, INC.
NOTES TO UNAUDITED COMBINED STATEMENTS OF REVENUE AND CERTAIN EXPENSES
FOR THE 1997 ACQUISITIONS
FOR THE PERIOD FROM JANUARY 1, 1997, TO THE EARLIER OF
JUNE 30, 1997, OR DATE OF ACQUISITION
AND FOR THE YEAR ENDED DECEMBER 31, 1996
(dollars in thousands)
1. Basis of Presentation and Summary of Significant Accounting Policies:
Properties Acquired
The combined statements of revenues and certain expenses (see "Basis of
Presentation" below) include the combined operations of the properties (the
"Properties") acquired by Spieker Properties, L.P. during the period from
June 28, 1997, to September 16, 1997 (the "1997 Property Acquisitions").
Spieker Properties, Inc. owns an approximate 87.0% general partners'
interest in Spieker Properties, L.P. (the "Operating Partnership"
collectively with Spieker Properties, Inc. referred to as the "Company").
<TABLE>
<CAPTION>
Property Name Location
------------- --------
<S> <C>
Lafayette Terrace Lafayette, CA
Parkway Industrial Portland, OR
Brea Place Brea, CA
Sepulveda Center Los Angeles, CA
790 E. Colorado Pasadena, CA
Washington Park Federal Way, WA
Nobel Corporate Plaza San Diego, CA
Tyco Buildings Portland, OR
</TABLE>
Basis of Presentation
The accompanying combined statements of revenue and certain expenses are not
representative of the actual operations of the Properties for the periods
presented. Certain expenses may not be comparable to the expenses expected
to be incurred by the Company in the proposed future operations of the
Properties; however, the Company is not aware of any material factors
relating to the Properties that would cause the reported financial
information not to be indicative of future operating results. Excluded
expenses consist primarily of property management fees, interest expense,
depreciation and amortization and other costs not directly related to the
future operations of the Properties.
In the opinion of management, the unaudited financial information contains
all adjustments, consisting of normal recurring accruals, necessary for a
fair presentation of the combined statements of revenues and certain
expenses for the Properties.
Revenue Recognition
All leases are classified as operating leases, and rental revenue is
recognized on a straight-line basis over the terms of the leases.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from these estimates.
13
<PAGE> 14
2. Leasing Activity:
The minimum future rental revenues, due under noncancelable operating leases
in effect as of July 1, 1997, for the remainder of 1997 and annually
thereafter are as follows:
<TABLE>
<CAPTION>
Year Amount
---- --------
<S> <C>
1997 (six months) $ 8,243
1998 17,420
1999 16,183
2000 13,275
2001 12,390
Thereafter 43,247
--------
$110,758
========
</TABLE>
In addition to minimum rental payments, tenants pay reimbursements for their pro
rata share of specified operating expenses, which amounted to $528 for the
period from January 1, 1997, to the earlier of June 30, 1997, or date of
acquisition and $1,556 for the year ended December 31, 1996. Certain leases
contain options to renew.
14
<PAGE> 15
SPIEKER PROPERTIES, INC.
PRO FORMA FINANCIAL INFORMATION
The unaudited, pro forma condensed consolidated balance sheet as of June
30, 1997, reflects the incremental effect of the acquired properties, pending
acquisitions and disposed properties (collectively, the "Acquired Properties,
Pending Acquisitions and Disposed Properties") described in Item 5 of this
Current Report on Form 8-K as if such transactions occurring after June 30,
1997, had all occurred on June 30, 1997. The accompanying unaudited, pro forma
condensed consolidated statements of operations for the six months ended June
30, 1997, and the year ended December 31, 1996, reflect (i) the incremental
effect of the Acquired Properties, Pending Acquisitions and Disposed Properties
described in Item 5; (ii) the incremental effect of the acquisition of 4.7
million net rentable square feet of property and two mortgages during 1996 and
(iii) certain other adjustments as if such transactions and adjustments had all
occurred on January 1, 1996.
These statements should be read in conjunction with respective
consolidated financial statements and notes thereto included in the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1997, and its
Annual Report on Form 10-K for the year ended December 31, 1996. In the opinion
of management, the unaudited, pro forma condensed consolidated financial
information provides for all adjustments necessary to reflect the effects of the
Acquired Properties, Pending Acquisitions and Disposed Properties.
These pro forma statements may not necessarily be indicative of the
results that would have actually occurred if the acquisitions had been in effect
on the date indicated, nor does it purport to represent the financial position,
results of operations or cash flows for future periods.
These pro forma statements may also not necessarily be indicative of the
Company's final financing plans to meet it's financing requirements in
connection with the acquisitions described herein. See footnotes (c) and (d).
15
<PAGE> 16
SPIEKER PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1997
(unaudited, dollars in thousands)
<TABLE>
<CAPTION>
Pending
Acquisition
and Preferred
Operating
Partnership
Acquired Debt Common Stock Unit Property
Historical(a) Properties(b) Issuances (c) Issuances(d) Issuance(e) Dispositions(f) Pro Forma
------------- ------------ ------------- ------------ -------------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investment in real estate,
net $ 1,844,700 $ 263,916 $ -- $ -- $ 725,000 $ (1,216) $ 2,832,400
Cash and cash equivalents 9,249 -- 373,906 142,125 (517,125) 2,350 10,505
Deferred financing and
leasing costs, net 16,935 -- 4,982 -- -- -- 21,917
Other assets 21,620 -- -- -- -- -- 21,620
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total assets $ 1,892,504 $ 263,916 $ 378,888 $ 142,125 $ 207,875 $ 1,134 $ 2,886,442
=========== =========== =========== =========== =========== =========== ===========
LIABILITIES
Mortgage loans $ 94,745 $ -- $ -- $ -- $ -- $ -- $ 94,745
Unsecured line of credit 57,000 263,916 (146,112) -- 63,875 -- 238,679
Unsecured notes 635,000 -- 325,000 -- -- -- 960,000
Bridge Loan -- -- 200,000 -- -- -- 200,000
Other liabilities 86,051 -- -- -- -- -- 86,051
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total liabilities 872,796 263,916 378,888 -- 63,875 -- 1,579,475
----------- ----------- ----------- ----------- ----------- ----------- -----------
MINORITY INTEREST 72,465 -- -- -- 144,000 -- 216,465
----------- ----------- ----------- ----------- ----------- ----------- -----------
STOCKHOLDERS' EQUITY
Series A Preferred Stock 23,949 -- -- -- -- -- 23,949
Series B Preferred Stock 102,064 -- -- -- -- -- 102,064
Common Stock 4 -- -- -- -- -- 4
Additional paid-in capital 816,274 -- -- 142,125 -- -- 958,399
Deferred compensation (753) -- -- -- -- -- (753)
Retained earnings 5,705 -- -- -- -- 1,134 6,839
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total stockholders'
equity 947,243 -- -- 142,125 -- 1,134 1,090,502
----------- ----------- ----------- ----------- ----------- ----------- -----------
$ 1,892,504 $ 263,916 $ 378,888 $ 142,125 $ 207,875 $ 1,134 $ 2,886,442
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these unaudited, pro forma
condensed consolidated financial statements.
16
<PAGE> 17
SPIEKER PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(unaudited, dollars in thousands, except per share data)
<TABLE>
<CAPTION>
1997 1997
Acquired Pending Property Other
Historical(a) Properties(h) Acquisitions(i) Dispositions(j) Adjustments Pro Forma
<S> <C> <C> <C> <C> <C> <C>
REVENUES
Rental income $ 138,921 $ 30,486 $ 42,534 $ (2,752) $ (12,240)(k) $ 196,949
Interest and other income 3,374 -- -- -- 8,647(l) 12,021
---------- --------- --------- --------- --------- ----------
Total revenue 142,295 30,486 42,534 (2,752) (3,593) 208,970
---------- --------- --------- --------- --------- ----------
OPERATING EXPENSES
Rental expenses 27,083 5,634 9,313 (398) (2,680)(k) 38,952
Real estate taxes 11,039 2,122 3,172 (289) (913)(k) 15,131
Interest expense, including
amortization of finance costs 24,700 -- -- -- 25,944(m) 50,644
Depreciation and amortization 23,015 4,445 6,689 (27) (1,925)(k) 32,197
General and administrative and
other expenses 6,535 -- -- -- -- 6,535
---------- --------- --------- --------- --------- ----------
Total operating expenses 92,372 12,201 19,174 (714) 20,426 143,459
---------- --------- --------- --------- --------- ----------
Income from operations before
disposition of property and
minority interests 49,923 18,285 23,360 (2,038) (24,019) 65,511
---------- --------- --------- --------- --------- ----------
Minority interests share in net
income (5,957) -- -- -- (5,347)(n) (11,304)
---------- --------- --------- --------- --------- ----------
Net income before disposition of
property 43,966 18,285 23,360 (2,038) (29,366) 54,207
---------- --------- --------- --------- --------- ----------
Series A Preferred Stock dividends (1,146) -- -- -- -- (1,146)
Series B Preferred Stock dividends (5,020) -- -- -- -- (5,020)
---------- --------- --------- --------- --------- ----------
Net income available to common
stockholders before disposition of
property $ 37,800 $ 18,285 $ 23,360 $ (2,038) $ (29,366) $ 48,041
========== ========= ========= ========= ========= ==========
Net income per common share (n) $ .82 $ .93
========== ==========
Weighted average common shares
outstanding 46,120,388 51,623,152
========== ==========
</TABLE>
17
<PAGE> 18
SPIEKER PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(unaudited, dollars in thousands, except share data)
<TABLE>
<CAPTION>
1996 Acquired 1997 1997
Properties and Acquired Pending Property Other
Historical(a) Mortgages(g) Properties(h) Acquisitions(i) Dispositions(j) Adjustments Pro Forma
------------- ----------- ------------ --------------- --------------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES
Rental income $ 196,471 $ 27,526 $ 106,134 $ 83,103 $ (15,565) $(23,915)(k) $ 373,754
Interest and other income 4,228 90 -- -- -- 16,430 (l) 20,748
---------- --------- --------- --------- --------- -------- ----------
Total Revenues 200,699 27,616 106,134 83,103 (15,565) (7,485) 394,502
---------- --------- --------- --------- --------- -------- ----------
OPERATING EXPENSES
Rental expenses 34,690 7,216 24,428 19,319 (1,491) (5,559)(k) 78,603
Real estate taxes 15,510 2,188 6,829 6,693 (1,286) (1,926)(k) 28,008
Interest expense 37,235 -- -- -- -- 66,219 (m) 103,454
Depreciation and
amortization 37,385 3,723 15,700 13,379 (2,360) (3,850)(k) 63,977
General and
administrative and
other expenses 10,115 -- -- -- -- -- 10,115
---------- --------- --------- --------- --------- ------- ----------
Total operating expenses 134,935 13,127 46,957 39,391 (5,137) 54,884 284,157
---------- --------- --------- --------- --------- -------- ----------
Income from operations
before disposition of
property and minority
interests 65,764 14,489 59,177 43,712 (10,428) (62,369) 110,345
---------- --------- --------- --------- --------- ------- ----------
Minority interests share
of net income (8,645) -- -- -- -- (10,389)(n) (19,033)
---------- --------- --------- --------- --------- ------- ----------
Net income before disposition
of property 57,119 14,489 59,177 43,712 (10,428) (72,758) 91,312
---------- --------- --------- --------- --------- ------- ----------
Series A Preferred Stock
dividends (2,098) -- -- -- -- -- (2,098)
Series B Preferred Stock
dividends (10,041) -- -- -- -- -- (10,041)
---------- --------- --------- --------- --------- ------- ----------
Net income allocable to
common stockholders
before disposition of
property $ 44,980 $ 14,489 $ 59,177 $ 43,712 $ (10,428) $(72,758) $ 79,173
========== ========= ========= ========= ========= ======== ==========
Net income per common
share (n) $ 1.30 $ 1.53
========== ==========
Weighted average common
shares outstanding 34,691,140 51,623,152
========== ==========
</TABLE>
18
<PAGE> 19
SPIEKER PROPERTIES, INC.
NOTES AND ADJUSTMENTS TO PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited, dollars in thousands)
(a) Reflects historical consolidated balance sheet of the Company as of June 30,
1997, and the historical consolidated statements of operations for the six
months ended June 30, 1997, and for the year ended December 31, 1996,
excluding gains on disposition of property of $14.2 million and $8.4
million, respectively.
(b) Reflects the acquisition of 1.6 million square feet of net rentable property
subsequent to June 30, 1997, at an aggregate acquisition cost of $263.9
million, including acquisition costs. The acquisitions were funded with cash
on hand, proceeds from property dispositions, borrowings on the unsecured
line of credit and the issuance of investment grade rated unsecured notes.
<TABLE>
<CAPTION>
Property Acquisition Date Cost
-------- ---------------- --------
<S> <C> <C>
Parkway Industrial July 15, 1997 $ 7,497
Brea Place July 17, 1997 61,703
Sepulveda Center August 19, 1997 25,205
Kennedy Portfolio August 20, 1997 110,947
790 E. Colorado August 28, 1997 19,311
Washington Park September 3, 1997 6,137
Nobel Corporate Plaza September 4, 1997 16,704
Tyco Buildings September 12, 1997 16,412
--------
$263,916
========
</TABLE>
(c) Reflects the issuance net of related costs on July 14, 1997, of $150.0
million of unsecured fixed rate investment grade notes at 7.125% due in July
2009. Also reflects the assumed issuance of $175.0 million of notes net of
assumed related costs at an assumed interest rate of 7.0% and an assumed
maturity in 2007. Also reflects assumed borrowings on a new unsecured bridge
loan of $200.0 million at an assumed interest rate of $6.49% (LIBOR plus
.80%) and an assumed maturity of one year. The Company has not made a final
determination of the proportion of cash on hand, proceeds from property
dispositions, borrowings on the unsecured line of credit, or the proposed
new unsecured bridge facility, or issuances of notes, common stock,
preferred stock, convertible preferred operating partnership units or other
securities that it intends to issue to meet its financing requirements in
connection with the acquisitions described herein.
(d) Reflects the assumed issuance of 3,703,704 shares of common stock at an
assumed price of $40.50 per share (the closing price per share on the New
York Stock Exchange on September 18, 1997) and assumed offering costs of
$7.9 million. As described in note (c), the Company has not made a final
determination of the proportion of cash on hand, proceeds from property
dispositions, borrowings on the unsecured line of credit, or the proposed
new unsecured bridge facility, or issuances of notes, common stock,
preferred stock, convertible preferred operating partnership units or other
securities to meet its financing requirements in connection with the
acquisition described herein.
(e) Reflects the pending acquisition of 6.3 million square feet of net rentable
property subsequent to June 30, 1997, at an aggregate pending acquisition
cost of $725.0 million, including estimated acquisition costs. Also reflects
the assumed issuance of $150.0 million of convertible preferred operating
partnership units convertible into 3,649,635 shares of common stock at an
assumed conversion price of $41.10 per convertible share and assumed
offering costs of $6.0 million. The convertible preferred operating
partnership unit assumed dividend rate is 6.75%. The acquisition will be
funded with a combination of cash on hand, proceeds from property
dispositions, borrowings on the unsecured line of credit, or the proposed
new unsecured bridge facility and issuances of notes, common stock,
preferred stock, convertible preferred operating partnership units or other
securities. See notes (c) and (d).
(f) Reflects the disposition of the Sunset Science park for $2.4 million and a
cost basis of $1.2 million subsequent to June 30, 1997.
19
<PAGE> 20
(g) Reflects the incremental effect on the Company's revenues, rental expenses
and real estate taxes from the acquisition of 4.7 million square feet of net
rentable property and two investments in mortgages during 1996. Such amounts
represent the operations of the acquired properties and interest earned on
mortgages prior to acquisition by the Company. Also reflects depreciation
and amortization for periods prior to acquisition. Estimated depreciation
and amortization has been based upon asset lives of 3 to 40 years.
(h) Reflects the incremental effect of the Company's revenues, rental expenses
and real estate taxes from the acquisition of 6.0 million square feet of net
rentable property during 1997. Such amounts represent the operations of the
properties prior to acquisition by the Company. Also reflects depreciation
and amortization for periods prior to acquisition. Estimated depreciation
and amortization has been based upon asset lives of 3 to 40 years.
(i) Reflects the incremental effect on the Company's revenues, rental expense
and real estate taxes from the pending acquisition of 6.3 million square
feet of net rentable property during 1997. Such amounts represent the
operations of the properties prior to acquisition by the Company. Also
reflects depreciation and amortization for periods prior to acquisition.
Estimated depreciation and amortization has been based on lives of 3 to 40
years.
(j) Reflects the elimination of the operations of (i) 4 properties sold in 1996
and (ii) 8 properties sold in 1997 included in the historical statements of
operations.
(k) Reflects the reduction in revenue and expenses for the portion of the WCB
Portfolio, aggregating 1.7 million square feet of property, purchased by an
affiliate of Spieker Properties, L.P.
(l) Reflects the increase in management fee and interest income from an
affiliate of Spieker Properties, L.P. relating to the 1.7 million square
feet of property in the WCB Portfolio to be purchased by the affiliate.
(m) Reflects an adjustment to interest expense based upon pro forma debt
outstanding as of June 30, 1997, using the actual or assumed interest rate
for fixed rate debt and an interest rate of 6.49% on the line of credit
which bears interest at LIBOR plus .80%.
(n) Reflects the allocation of the pro forma adjustment to minority interests
based upon pro forma minority ownership in the Operating Partnership of
approximately 82.7%.
(o) The Company's pro forma taxable income for the 12-month period ended June
30, 1997, is approximately $137.0 million, which has been calculated as pro
forma income from operations before minority interests for the same period
of approximately $121.0 million plus GAAP depreciation and amortization of
approximately $64.0 million less tax basis depreciation and amortization and
other tax differences of approximately $48.0 million.
(p) Per share amounts include the assumed issuance of common stock described in
note(d) and reflect the dilutive effects, if any, of outstanding options on
a historical basis as of June 30, 1997, and December 31, 1996, respectively,
based upon the average price per common share for the period presented. Pro
forma per share amounts for the same periods assume an average price per
share of $40.50. There is no material difference between primary and fully
diluted per share amounts.
Had Statement of Financial Accounting Standards No. 128 - "Earnings Per
Share" been adopted as of January 1, 1996, per share amounts would have been
$.83 and $.94 on a historical and pro forma basis, respectively for the six
months ended June 30, 1997, and $1.31 and $1.55 on a historical and pro
forma basis, respectively for the year ended December 31, 1996.
20
<PAGE> 21
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SPIEKER PROPERTIES, INC.
(Registrant)
Date: September 22, 1997 By: /s/ ELKE STRUNKA
------------------------ -----------------
Elke Strunka
Vice President and
Principal Accounting Officer
21
<PAGE> 22
EXHIBIT INDEX
Exhibit
No. Description
10.16 Credit Agreement among Spieker Properties, L.P., as borrower, and
Wells Fargo Bank, National Association, as Agent, Morgan Guaranty
Trust Company of New York, as Documentation Agent, and the lenders
named therein, dated as of August 8, 1997, and Loan Notes pursuant
to the Credit Agreement.
10.17 Agreement of Purchase and Sale Notes to the WCB Portfolio among
Spieker Properties, L.P. and the sellers named therein, dated as of
September 15, 1997.
23.1 Consent of Independent Public Accountants
<PAGE> 1
===============================================================================
CREDIT AGREEMENT
AMONG
SPIEKER PROPERTIES, L.P.,
A CALIFORNIA LIMITED PARTNERSHIP,
AS BORROWER,
AND
WELLS FARGO BANK, NATIONAL ASSOCIATION,
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
DOING BUSINESS AS SEAFIRST BANK,
UNION BANK OF CALIFORNIA, N.A.,
U.S. BANK NATIONAL ASSOCIATION,
FKA FIRST BANK NATIONAL ASSOCIATION,
COMMERZBANK AKTIENGESELLSCHAFT, LOS ANGELES BRANCH,
BANKERS TRUST COMPANY,
THE FIRST NATIONAL BANK OF CHICAGO, AND
UNION BANK OF SWITZERLAND (NEW YORK BRANCH)
TOGETHER WITH THOSE ASSIGNEES
AND DESIGNATED BID LENDERS
BECOMING PARTIES HERETO PURSUANT
TO SECTION 11.12, AS LENDERS
OR DESIGNATED BID LENDERS,
AND
WELLS FARGO BANK, NATIONAL ASSOCIATION,
AS AGENT
AND
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
AS DOCUMENTATION AGENT
DATED AS OF AUGUST 8, 1997
===============================================================================
<PAGE> 2
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of August 8, 1997 (as
amended, supplemented or modified from time to time, the "Agreement") and is
among SPIEKER PROPERTIES, L.P., a California limited partnership ("Borrower"),
each of the Lenders and Designated Bid Lenders, as hereinafter defined, WELLS
FARGO BANK, NATIONAL ASSOCIATION ("Wells Fargo"), in its capacity as agent and
as a Lender, and MORGAN GUARANTY TRUST COMPANY OF NEW YORK ("Morgan Guaranty"),
in its capacity as documentation agent and as a Lender.
RECITALS
A. Pursuant to that certain Credit Agreement dated as of
November 6, 1995, among Borrower, as borrower, Wells Fargo and each of the
other lenders named therein, as lenders (the "Original Lenders"), Wells Fargo,
as Agent, and The First National Bank of Boston, as Co-Agent, as amended by
Amendment No. 1 to Credit Agreement dated as of July 24, 1996 (as amended, the
"Original Credit Agreement"), the Original Lenders agreed to provide Borrower
with an unsecured revolving loan facility on the terms and conditions set forth
therein (the "Existing Facility").
B. Borrower has requested that Lenders extend both (i)
an unsecured revolving loan facility and (ii) a bid loan facility to Borrower,
the proceeds of which will be used in accordance with the provisions of this
Agreement (including that the proceeds of the initial Loan hereunder be
applied, as necessary, to the payment of all accrued and unpaid obligations of
Borrower under the Existing Facility), and Lenders are willing to extend the
requested facilities on the terms and conditions set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 CERTAIN DEFINED TERMS. The following terms used in this
Agreement shall have the following meanings (such meanings to be applicable,
except to the extent otherwise indicated in a definition of a particular term,
both to the singular and the plural forms of the terms defined):
"Absolute Rate" means, in connection with any Absolute Rate
Auction, the rate of interest per annum (expressed in multiples of 1/1000th of
one percent) offered for any Bid Loan to be made pursuant thereto.
2
<PAGE> 3
"Absolute Rate Auction" means a solicitation of Competitive
Bids setting forth Absolute Rates pursuant to Section 2.1.3.
"Absolute Rate Bid Loan" means a Bid Loan that bears interest
at an Absolute Rate.
"Accommodation Obligations", as applied to any Person, means
(i) any Indebtedness of another Person in respect of which that Person is
liable, including, without limitation, any such Indebtedness directly or
indirectly guaranteed, endorsed (otherwise than for collection or deposit in
the ordinary course of business), co-made or discounted or sold with recourse
by that Person, or in respect of which that Person is otherwise directly or
indirectly liable, including in respect of any Partnership in which that Person
is a general partner; or (ii) Contractual Obligations (contingent or otherwise)
arising through any agreement to purchase, repurchase or otherwise acquire such
Indebtedness or any security therefor, or to provide funds for the payment or
discharge thereof (whether in the form of loans, advances, stock purchases,
capital contributions or otherwise), or to maintain solvency, assets, level of
income, or other financial condition, or to make payment other than for value
received.
"Accountants" means Arthur Andersen & Co., any other "big six"
accounting firm or another firm of certified public accountants of national
standing selected by Borrower and acceptable to Agent.
"Acquisition Price" means the aggregate purchase price for an
asset including bona fide purchase money financing provided by the seller and
all (or Borrower's Share of, as applicable) existing Indebtedness pertaining to
such asset.
"Adjusted Percentage Interest" has the meaning given to it in
the definition of "Individual UPP Value."
"Affiliates" as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control
with, that Person. For purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), as applied to any Person, means (i) the possession,
directly or indirectly, of the power to vote ten percent (10%) or more of the
Securities having voting power for the election of directors of such Person or
otherwise to direct or cause the direction of the management and policies of
that Person, whether through the ownership of voting Securities or by contract
or otherwise, or (ii) the ownership of a general partnership interest or
managing member's interest in such Person or of a limited partnership interest
(or other ownership interest) representing ten percent (10%) or more of the
outstanding limited partnership interests or other ownership interests of such
Person.
3
<PAGE> 4
"Agent" means Wells Fargo in its capacity as agent for Lenders
under this Agreement, and shall include any successor Agent appointed pursuant
hereto and shall be deemed to refer to Wells Fargo in its individual capacity
as a Lender where the context so requires.
"Aggregate Occupancy Rate" means, with respect to the
Unencumbered Pool Properties at any time, the ratio, as of such date, expressed
as a percentage, of (i) the net rentable square footage of all Unencumbered
Pool Properties occupied by tenants paying rent pursuant to binding leases as
to which no monetary default has occurred and is continuing, to (ii) the
aggregate net rentable square footage of all Unencumbered Pool Properties.
"Annual Operating Report" has the meaning given to such term
in Section 6.1.1.
"Applicable Base Rate Margin" means, as of any date of
determination: (i) 0.00%, if Borrower's senior long-term unsecured debt
obligations are rated at least BBB-/Baa3 by both Rating Agencies, or (ii)
0.25%, in any other case (including, without limitation, if Borrower's senior
long-term unsecured debt obligations are not rated by either or both of the
Rating Agencies). If one Rating Agency assigns a lower rating to Borrower's
senior long-term unsecured debt obligations than does the other Rating Agency,
the lower of the two ratings shall control for purposes of determining the
Applicable Base Rate Margin.
"Applicable Facility Fee Percentage" means, as of any date of
determination: (i) 0.15%, if Borrower's senior long-term unsecured debt
obligations were rated at least A-/A3 by both Rating Agencies as of the last
day of the immediately preceding Fiscal Quarter, (ii) 0.20%, if Borrower's
senior long-term unsecured debt obligations were rated at least BBB/Baa2 by
both Rating Agencies as of the last day of the immediately preceding Fiscal
Quarter but the condition set forth in clause (i) of this definition is not
satisfied, (iii) 0.25%, if Borrower's senior long-term unsecured debt
obligations were rated at least BBB-/Baa3 by both Rating Agencies as of the
last day of the immediately preceding Fiscal Quarter but neither the condition
set forth in clause (i) of this definition nor the condition set forth in
clause (ii) of this definition is satisfied, and (iv) 0.30%, in any other case
(including, without limitation, if Borrower's senior long-term unsecured debt
obligations were not rated by either or both of the Rating Agencies as of the
last day of the immediately preceding Fiscal Quarter. If one Rating Agency
assigns a lower rating to Borrower's senior long-term unsecured debt
obligations than does the other Rating Agency, the lower of the two ratings
shall control for purposes of determining the Applicable Facility Fee
Percentage.
"Applicable LIBOR Rate Margin" means, as of any date of
determination: (i) 0.65%, if Borrower's senior long-term unsecured debt
obligations are rated at least A-/A3
4
<PAGE> 5
by both Rating Agencies, (ii) 0.70%, if Borrower's senior long-term unsecured
debt obligations are rated at least BBB+/Baa1 by both Rating Agencies but the
condition set forth in clause (i) of this definition is not satisfied, (iii)
0.80%, if Borrower's senior long-term unsecured debt obligations are rated at
least BBB/Baa2 by both Rating Agencies but neither the condition set forth in
clause (i) of this definition nor the condition set forth in clause (ii) of
this definition is satisfied, (iv) 0.95%, if Borrower's senior long-term
unsecured debt obligations are rated at least BBB-/Baa3 by both Rating Agencies
but neither the condition set forth in clause (i) of this definition, nor the
condition set forth in clause (ii) of this definition, nor the condition set
forth in clause (iii) of this definition is satisfied, or (v) 1.50%, in any
other case (including, without limitation, if Borrower's senior long-term
unsecured debt obligations are not rated by either or both of the Rating
Agencies). If one Rating Agency assigns a lower rating to Borrower's senior
long-term unsecured debt obligations than does the other Rating Agency, the
lower of the two ratings shall control for purposes of determining the
Applicable LIBOR Rate Margin.
"Approved Market" has the meaning ascribed to such term in
Section 3.1.2(a).
"Approved Property Type" has the meaning ascribed to such term
in Section 3.1.2(a).
"Assignment and Assumption" means an Assignment and
Assumption, substantially in the form of Exhibit A (with blanks appropriately
filled in), delivered to Agent in connection with each assignment of a Lender's
interest under this Agreement pursuant to Section 11.12.
"Base Rate" means, on any day, the higher of (i) the base rate
of interest per annum established from time to time by Wells Fargo at its
principal office in San Francisco, California, and designated as its "prime
rate" as in effect on such day, and (ii) the Federal Funds Rate in effect on
such day plus one-half percent (0.5%) per annum.
"Base Rate Loans" means those Committed Loans bearing interest
at a rate determined with reference to the Base Rate.
"Benefit Plan" means, with respect to any Person, any employee
pension benefit plan as defined in Section 3(2) of ERISA (other than a
Multiemployer Plan) in respect of which such Person or an ERISA Affiliate of
such Person is, or within the immediately preceding six (6) years was, an
"employer" as defined in Section 3(5) of ERISA.
"Bid Loan" means a Loan by a Lender or its Designated Bid
Lender pursuant to the Bid Loan Facility, and may be either an Absolute Rate
Bid Loan or a LIBOR Bid Loan.
5
<PAGE> 6
"Bid Loan Facility" means the credit facility for the
requesting and making of Bid Loans described in Section 2.1.1(b).
"Bid Loan Interest Period" means, with respect to any Bid
Loan, the period, commencing on the date of such Bid Loan and ending on a date
that is thirty (30), sixty (60) or ninety (90) days later, but not extending
beyond the Termination Date, as specified by Borrower in the relevant
Competitive Bid Request; provided however, that:
(a) if such Bid Loan Interest Period would otherwise end
on a day which is not a Business Day, such Bid Loan Interest Period
shall end on the next following Business Day; and
(b) no Bid Loan Interest Period may be selected that
would extend beyond the next succeeding Committed Facility Reduction
Date if the aggregate principal amount of the Bid Loans subject
thereto, when aggregated with the aggregate principal amount of all
other then outstanding Loans subject to Interest Periods that end
after such Committed Facility Reduction Date, would exceed the amount
of the Committed Facility, as reduced thereon.
"Bid Loan Limit" means One Hundred Fifty Million Dollars
($150,000,000).
"Borrower Debt" means (without duplication) all Indebtedness
of Borrower or any Subsidiary of Borrower (without offset or reduction in
respect of prepaid interest, restructuring fees or similar items) minus, in the
case of Nonrecourse Indebtedness of an Investment Partnership that is otherwise
included in Indebtedness of Borrower, the amount of such Indebtedness in excess
of Borrower's Share thereof.
"Borrower's Percentage Interest" means, in the case of any UPP
Subpartnership, the aggregate percentage of all outstanding equity interests in
such Person held by Borrower or another Person wholly-owned (directly or
indirectly) by the REIT or by Borrower.
"Borrower's Share" means, in the case of an Investment
Partnership, Borrower's percentage ownership interest in such Investment
Partnership.
"Borrowing" means a borrowing under the Committed Facility
(including a Swing Line Borrowing) or the Bid Loan Facility of Loans of the
same type (i.e., Committed Loans, Absolute Rate Bid Loans, or LIBOR Bid Loans)
made to Borrower on the same day and (except in the case of Base Rate Loans)
having the same Interest Period.
"Business Day" means (i) with respect to any Borrowing,
payment or rate determination of LIBOR Loans or LIBOR Bid Loans, a day, other
than a Saturday or Sunday, on which Agent is open for business in San Francisco
and on which dealings in
6
<PAGE> 7
Dollars are carried on in the London interbank market, and (ii) for all other
purposes any day excluding Saturday, Sunday and any day which is a legal
holiday under the laws of the State of California, or is a day on which banking
institutions located in California are required or authorized by law or other
governmental action to close.
"Capital Expenditures" means, for any period, the product of
(i) $0.43 (prorated if the relevant period is shorter or longer than one year)
times (ii) the sum of (A) total net rentable square footage of properties then
owned or leased by Borrower or a Subsidiary of Borrower, plus (B) Borrower's
Share of net rentable square footage owned or leased by any Investment
Partnership.
"Capital Leases", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee which,
in conformity with GAAP, is or should be accounted for as a capital lease on
the balance sheet of that Person.
"Cash Equivalents" means (i) marketable direct obligations
issued or unconditionally guaranteed by the United States Government or issued
by an agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one (1) year after the date of acquisition
thereof; (ii) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof maturing within ninety (90) days after the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from any two of Standard & Poor's Ratings Services,
Moody's Investors Service, Duff & Phelps Credit Rating Co., or Fitch Investors
Service, L.P. (or, if at any time no two of the foregoing shall be rating such
obligations, then from such other nationally recognized rating services as may
be acceptable to Agent) and not listed for possible down-grade in Credit Watch
published by Standard & Poor's Ratings Services; (iii) commercial paper, other
than commercial paper issued by Borrower or any of its Affiliates, maturing no
more than ninety (90) days after the date of creation thereof and, at the time
of acquisition, having a rating of at least A-1 or P-1 from either Standard &
Poor's Ratings Services or Moody's Investors Service (or, if at any time
neither Standard & Poor's Ratings Services nor Moody's Investors Service shall
be rating such obligations, then the highest rating from such other nationally
recognized rating services as may be acceptable to Agent); and (iv) domestic
and Eurodollar certificates of deposit or time deposits or bankers' acceptances
maturing within ninety (90) days after the date of acquisition thereof,
overnight securities repurchase agreements, or reverse repurchase agreements
secured by any of the foregoing types of securities or debt instruments issued,
in each case, by (A) any commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia or Canada
having combined capital and surplus of not less than Two Hundred Fifty Million
Dollars ($250,000,000) or (B) any Lender.
7
<PAGE> 8
"Change in Control" means (i) any transaction or series of
related transactions in which any Person or two or more Persons acting in
concert acquire beneficial ownership, directly or indirectly, of securities of
the REIT (or of other securities convertible into securities of the REIT)
representing forty percent (40%) or more of the combined voting power of all
securities of the REIT entitled to vote in the election of directors; or (ii)
(a) during any period of up to twelve (12) consecutive months commencing on or
after the Closing Date individuals who were directors of the REIT at the
beginning of such period shall cease for any reason to constitute a majority of
the Board of Directors, and (b) the individuals replacing such directors shall
not have been nominated by the Board of Directors of the REIT.
"Closing Date" means the date on which this Agreement shall
become effective in accordance with Section 12.16.
"Commission" means the Securities and Exchange Commission.
"Committed Facility" means the revolving loan facility,
described in Section 2.1.1(a), in the amount of:
(a) from and including the Closing Date to but not
including the date that is thirty-nine (39) months after the Closing
Date: Two Hundred Fifty Million Dollars ($250,000,000);
(b) from and including the date that is thirty-nine (39)
months after the Closing Date to but not including the date that is
forty-two months after the Closing Date: Two Hundred Twenty-Five
Million Dollars ($225,000,000);
(c) from and including the date that is forty-two (42)
months after the Closing Date to but not including the date that is
forty-five months after the Closing Date: Two Hundred Million Dollars
($200,000,000);
(d) from and including the date that is forty-five (45)
months after the Closing Date to but not including the date that is
forty-eight months after the Closing Date: One Hundred Seventy-Five
Million Dollars ($175,000,000); and
(e) on and after the date that is forty-eight (48) months
after the Closing Date: Zero ($0.00).
"Committed Facility Reduction Date" means each date specified
in the definition of "Committed Facility" as a date on which a reduction in the
amount of the Committed Facility becomes effective.
8
<PAGE> 9
"Committed Loan" means a Loan (including Loans made under the
Swing Line) made by Lenders pursuant to the Committed Facility; provided that
(i) if any such Loan or Loans (or portions thereof) is/are combined or
subdivided pursuant to Section 2.1.2(b) or by automatic conversion of a LIBOR
Loan to a Base Rate Loan, the term "Committed Loan" means such combination or
each such subdivided portion, as the case may be, and (ii) where the context so
requires, the term "Committed Loan" means, with respect to a particular Lender,
the advance made (or required to be made) by such Lender in the amount of such
Lender's Pro Rata Share of a Borrowing under the Committed Facility.
"Committed Loan Availability" means, at any time, the Loan
Availability less the aggregate principal amount of all Bid Loans then
outstanding.
"Commitment" means, with respect to any Lender, such Lender's
Pro Rata Share of the Committed Facility, which amount shall not exceed the
principal amount set out under such Lender's name under the heading "Revolving
Loan Commitment" on the signature pages attached to this Agreement or as set
forth on an Assignment and Assumption executed by such Lender, as assignee, as
reduced, on each Committed Facility Reduction Date, by such Lender's Pro Rata
Share of the reduction in the Committed Facility taking effect thereon.
"Competitive Bid" means an offer by a Lender to make a Bid
Loan in response to a Competitive Bid Request.
"Competitive Bid Request" means a notice, in substantially the
form of Exhibit H, requesting that Lenders submit bids for a Bid Loan.
"Compliance Certificate" means a certificate, in the form of
Exhibit D, delivered to Agent by Borrower pursuant to Section 6.1.4 or any
other provision of this Agreement and covering Borrower's compliance with the
covenant contained in Section 8.5 and the financial covenants contained in
Article IX.
"Confidential Information" has the meaning ascribed to such
term in Section 6.3.
"Contaminant" means any pollutant (as that term is defined in
42 U.S.C. 9601(33)) or toxic pollutant (as that term is defined in 33 U.S.C.
1362(13)), hazardous substance (as that term is defined in 42 U.S.C. 9601(14)),
hazardous chemical (as that term is defined by 29 CFR Section 1910.1200(c)),
toxic substance, hazardous waste (as that term is defined in 42 U.S.C.
6903(5)), radioactive material, special waste, petroleum (including crude oil
or any petroleum-derived substance, waste, or breakdown or decomposition
product thereof), any constituent of any such substance or waste, including,
but not limited to, polychlorinated biphenyls and asbestos, or any other
substance or waste deleterious to
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<PAGE> 10
the environment the release, disposal or remediation of which is now or at any
time becomes subject to regulation under any Environmental Law.
"Contractual Obligation", as applied to any Person, means any
provision of any Securities issued by that Person or any indenture, mortgage,
deed of trust, lease, contract, undertaking, document or instrument to which
that Person is a party or by which it or any of its properties is bound, or to
which it or any of its properties is subject (including, without limitation,
any restrictive covenant affecting such Person or any of its properties).
"Court Order" means any judgment, writ, injunction, decree,
rule or regulation of any court or Governmental Authority binding upon or
applicable to the Person in question.
"Debt Service" means, for any period, Interest Expense for
such period plus scheduled principal amortization (i.e., excluding any balloon
payment due at maturity) for such period on all Borrower Debt.
"December 31, 1996 Financials" has the meaning given to such
term in Section 5.1.7.
"Defaulting Lender" means any Lender or Designated Bid Lender
which fails or refuses to perform its obligations under this Agreement within
the time period specified for performance of such obligation or, if no time
frame is specified, if such failure or refusal continues for a period of five
(5) Business Days after notice from Agent.
"Designated Bid Lender" means a special purpose corporation,
organized under the laws of the United States or any subdivision thereof, that
is engaged in making, purchasing or otherwise investing in commercial loans in
the ordinary course of its business and that (i) shall have become a party to
this Agreement pursuant to Section 11.12.3, and (ii) is not otherwise a Lender.
References herein to a Lender's Designated Bid Lender or a Designating Lender's
Designated Bid Lender mean the Designated Bid Lender party to a Designation
Agreement with such Lender or Designating Lender.
"Designating Lender" means a Lender that has entered into a
Designation Agreement with a Designated Bid Lender pursuant to Section 11.12.3.
"Designation Agreement" means a designation agreement, in
substantially the form of Exhibit K, entered into by a Lender and a Designated
Bid Lender and accepted by the Borrower and the Agent.
"Documentation Agent" means Morgan Guaranty in its capacity as
documentation agent for Lenders under this Agreement, and shall be deemed to
refer to Morgan Guaranty in its individual capacity as a Lender where the
context so requires.
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<PAGE> 11
"DOL" means the United States Department of Labor and any
successor department or agency.
"Dollars" and "$" means the lawful money of the United States
of America.
"EBIDA" means, at any time, for the most recent three (3)
month period, (i) (A) the sum of the amounts for such period of (1) Net Income,
(2) depreciation and amortization expense and other non-cash items deducted on
the Financial Statements in determining such Net Income, (3) Borrower's Share
of depreciation and amortization expense and other non-cash items deducted on
the financial statements of any Investment Partnership in determining the net
income thereof, and (4) Interest Expense, minus (B) the sum for such period of
(1) the net income of any Person in which Borrower has an investment interest
that is included in Net Income, except to the extent of the amount of cash
dividends or other cash distributions actually paid to Borrower or any
Subsidiary of Borrower by such Person during such period, and (2) the income of
any consolidated Subsidiary of Borrower, to the extent that the declaration or
payment of dividends or other distributions by that Subsidiary of such income
is not at the time permitted by operation of any Contractual Obligation or
Requirement of Law applicable to such Subsidiary; (ii) minus gains (and plus
losses) from extraordinary items or asset sales or write-ups or forgiveness of
Indebtedness.
"Eligible Assignee" means (i) (A) (1) a commercial bank
organized under the laws of the United States or any state thereof; (2) a
savings and loan association or savings bank organized under the laws of the
United States or any state thereof; or (3) a commercial bank organized under
the laws of any other country or a political subdivision thereof, provided that
(x) such bank is acting through a branch or agency located in the United
States, or (y) such bank is organized under the laws of a country that is a
member of the Organization for Economic Cooperation and Development or a
political subdivision of such country; that (B) in each case, is (1) reasonably
acceptable to Agent and Borrower, and (2) has (or its parent that guaranties
its obligations hereunder has) total assets in excess of $10,000,000,000 and a
rating on its (or its parent's) senior unsecured debt obligations of at least
BBB (or its equivalent) by one of the Rating Agencies, by Moody's Investor
Service, or by Duff & Phelps Credit Rating Co.; or (ii) any Lender or Affiliate
of any Lender; provided, however, that (x) no Affiliate of Borrower shall be an
Eligible Assignee; and (y) Borrower shall have no right of approval or consent
at any time that an Event of Default has occurred and is continuing.
"Environmental Laws" has the meaning set forth in Section
5.1.20.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for (i) any liability under Environmental Laws, or (ii) damages
arising from, or costs
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<PAGE> 12
incurred by such Governmental Authority in response to, a Release or threatened
Release of a Contaminant into the environment.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA Affiliate" of any Person means any (i) corporation
which is, becomes, or is deemed to be a member of the same controlled group of
corporations (within the meaning of Section 414(b) of the Internal Revenue
Code) as such Person, (ii) partnership, trade or business (whether or not
incorporated) which is, becomes or is deemed to be under common control (within
the meaning of Section 414(c) of the Internal Revenue Code) with such Person,
(iii) other Person which is, becomes or is deemed to be a member of the same
"affiliated service group" (as defined in Section 414(m) of the Internal
Revenue Code) as such Person, or (iv) any other organization or arrangement
described in Section 414(o) of the Internal Revenue Code which is, becomes or
is deemed to be required to be aggregated pursuant to regulations issued under
Section 414(o) of the Internal Revenue Code with such Person pursuant to
Section 414(o) of the Internal Revenue Code.
"Executive Officers" means Warren E. Spieker, Jr., John K.
French, Dennis E. Singleton and Craig Vought.
"Event of Default" means any of the occurrences set forth in
Article X after the expiration of any applicable grace period expressly
provided therein.
"FDIC" means the Federal Deposit Insurance Corporation or any
successor thereto.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of
the Federal Reserve System arranged by Federal Funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the quotations
for such day on such transactions received by Agent from three Federal Funds
brokers of recognized standing selected by Agent.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any governmental authority succeeding to its
functions.
"Financial Statements" has the meaning given to such term in
Section 6.1.2.
"Fiscal Quarter" means each three-month period ending on March
31, June 30, September 30 and December 31.
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<PAGE> 13
"Fiscal Year" means the fiscal year of Borrower which shall be
the twelve (12) month period ending on the last day of December in each year.
"Fixed Rate Notice" means, with respect to a LIBOR Loan
pursuant to Section 2.1.2, a notice substantially in the form of Exhibit G.
"Fixed Rate Price Adjustment" has the meaning given to such
term in Section 2.4.8(c).
"Funding Date" means, with respect to any Loan made on or
after the Closing Date, the date of the funding of such Loan.
"Funds from Operations" means, for any period, Net Income plus
the sum of depreciation, amortization and other non-cash items deducted on the
Financial Statements in determining such Net Income, minus gains (or plus
losses) on sales of real estate, Investments (excluding Cash Equivalents) or
other assets, or other extraordinary items.
"GAAP" means generally accepted accounting principles set
forth 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 in such other
statements by such other entity as may be in general use by significant
segments of the accounting profession, which are applicable to the
circumstances as of the date of determination.
"Governmental Authority" means any nation or government, any
federal, state, local, municipal or other political subdivision thereof or any
entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Gross Asset Value" means, as at any date of determination,
the sum (without duplication of any item) of (i) cash and Cash Equivalents
owned by Borrower or any Subsidiary of Borrower as of such date (but excluding
any tenant deposits), and (ii) an amount equal to (A) (1) EBIDA for the most
recently ended Fiscal Quarter (as reasonably adjusted by Borrower, with Agent's
approval, to take into account any acquisitions or dispositions of Properties
by Borrower or any of its Subsidiaries during such Fiscal Quarter), less (2)
that portion of Net Income for such Fiscal Quarter attributable to cash or Cash
Equivalents, times (B) four (4), divided by (C) 0.10; provided that, with
respect to any Property owned by a Subsidiary in which Borrower owns less than
one hundred percent (100%) of the outstanding equity interests, there shall be
included, for purposes of the foregoing calculation, only that portion of the
EBIDA attributable to such Property for such period that corresponds to
Borrower's percentage interest in the equity of such Subsidiary (determined in
a manner consistent with the manner in which Borrower's "Adjusted Percentage
Interest" is determined with respect to UPP Subpartnerships).
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<PAGE> 14
"Guarantor Subpartnership" means SP #177 or any other
Partnership between (i) Borrower and SWIP or (ii) (A) Borrower or such other
Person or Persons, in each case, wholly-owned by the REIT, by Borrower, by the
REIT and Borrower, or by Borrower and one or more other Guarantor
Subpartnerships, as the Majority Lenders may approve (such approval not to be
unreasonably withheld), and (B) one or more Third Party Partners (provided that
the Borrower's Percentage Interest of each Guarantor Subpartnership shall at
all times equal at least ninety percent (90%)), in a form (1) including
partnership interest allocations, substantially identical to one or more of the
Guarantor Subpartnerships party to Guaranties as of the date of this Agreement
and approved by Agent (such approval not to be unreasonably withheld), or (2)
otherwise approved by the Majority Lenders (such approval not to be
unreasonably withheld); in any such case, which (x) owns one or more
Unencumbered Pool Properties, and (y) has executed and delivered a Guaranty.
"Guaranty" means each guaranty of payment and performance
executed by the REIT or a Guarantor Subpartnership in favor of Agent, Lenders
and Designated Bid Lenders.
"Indebtedness", as applied to any Person (and without
duplication), means (i) all indebtedness, obligations or other liabilities of
such Person for borrowed money, (ii) all indebtedness, obligations or other
liabilities of such Person evidenced by Securities or other similar
instruments, (iii) all reimbursement obligations and other liabilities of such
Person with respect to letters of credit or banker's acceptances issued for
such Person's account, (iv) all obligations of such Person to pay the deferred
purchase price of Property or services, (v) all obligations in respect of
Capital Leases of such Person, (vi) all Accommodation Obligations of such
Person, (vii) all indebtedness, obligations or other liabilities of such Person
or others secured by a Lien on any asset of such Person, whether or not such
indebtedness, obligations or liabilities are assumed by, or are a personal
liability of, such Person (including, without limitation, the principal amount
of any assessment or similar indebtedness encumbering any property), and (viii)
all indebtedness, obligations or other liabilities (other than interest expense
liability) in respect of Interest Rate Contracts and foreign currency exchange
agreements. Indebtedness shall not include accrued ordinary operating expenses
payable on a current basis.
"Individual UPP Value" means, with respect to any Unencumbered
Pool Property or proposed Unencumbered Pool Property, an amount equal to (A)
the aggregate Net Operating Income of such property (determined, in the case of
a proposed Unencumbered Pool Property, as if it were an Unencumbered Pool
Property) for the most recently ended Fiscal Quarter, times (B) four (4),
divided by (C) 0.10 (provided that, with respect to an Unencumbered Pool
Property owned by a UPP Subpartnership in which the Borrower's Percentage
Interest is less than 100%, there shall be included, for purposes of the
foregoing calculation only the Borrower's Percentage Interest in the Net
Operating Income of such Unencumbered Pool Property; provided that, if one or
more of the Third
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<PAGE> 15
Party Partners in such UPP Subpartnership are required, under the terms of the
Partnership Agreement of such UPP Subpartnership, to pay over to Borrower all
or any portion of any distributions to which such Third Party Partners
otherwise would be entitled in respect of any sale of such Unencumbered Pool
Property, then, for so long as Borrower's right to the payment of such
distributions is not interrupted, Borrower's Percentage Interest in such UPP
Subpartnership shall, for purposes of this calculation, be deemed to include
the entire percentage of the proceeds of any such sale to which Borrower would
be entitled (as so adjusted, Borrower's "Adjusted Percentage Interest").
"Interest Expense" means, for any period, total interest
expense, whether paid, accrued or capitalized (including the interest component
of Capital Leases but excluding capitalized interest in accordance with
accounting practices permitted under Section 8.1.3(c)) in respect of Borrower
Debt, including, without limitation, all commissions, discounts and other fees
and charges owed with respect to letters of credit, net costs under Interest
Rate Contracts, and Facility Fees payable to Lenders.
"Interest Period" means (i) any Bid Loan Interest Period, and
(ii) subject to Section 2.4.5(a), relative to any LIBOR Loans comprising part
of the same Borrowing, the period beginning on (and including) the date on
which such LIBOR Loans are made as, or converted into, LIBOR Loans, and ending
on (but excluding) the day which numerically corresponds to such date thirty
(30), sixty (60), ninety (90) or one hundred eighty (180) days thereafter, in
either case as Borrower may select in its relevant Notice of Borrowing pursuant
to Section 2.1.2; provided, however, that:
(a) if such Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the
next following Business Day;
(b) no Interest Period may end later than the Termination
Date; and
(c) no Interest Period may end later than the next
succeeding Committed Facility Reduction Date if the aggregate
principal amount of the Loans subject thereto, when aggregated with
the aggregate principal amount of all other then outstanding Loans
subject to Interest Periods that end after such Committed Facility
Reduction Date, would exceed the amount of the Committed Facility, as
reduced thereon.
"Interest Rate Contracts" means, collectively, interest rate
swap, collar, cap or similar agreements providing interest rate protection.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time hereafter, and any successor statute.
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<PAGE> 16
"Investment" means, as applied to any Person, any direct or
indirect purchase or other acquisition by that Person of Securities, or of a
beneficial interest in Securities, of any other Person, and any direct or
indirect loan, advance (other than deposits with financial institutions
available for withdrawal on demand, prepaid expenses, advances to employees and
similar items made or incurred in the ordinary course of business), or capital
contribution by such Person to any other Person, including all Indebtedness and
accounts owed by that other Person which are not current assets or did not
arise from sales of goods or services to that Person in the ordinary course of
business.
"Investment Mortgages" mean mortgages securing indebtedness
directly or indirectly owned by Borrower or any Subsidiary of Borrower,
including certificates of interest in real estate mortgage investment conduits.
"Investment Partnership" means any Partnership in which
Borrower or any Subsidiary of Borrower has an ownership interest, whose
financial results are not consolidated under GAAP in the Financial Statements.
"IRS" means the Internal Revenue Service and any Person
succeeding to the functions thereof.
"Land" means unimproved real estate, including future phases
of a partially completed project, owned or leased by Borrower or any Subsidiary
of Borrower for the purpose of future development of improvements. For
purposes of the foregoing definition, "unimproved" shall mean Land on which the
construction of building improvements has not commenced or has been
discontinued for a continuous period longer than sixty (60) days prior to
completion.
"Lender Taxes" has the meaning given to such term in Section
2.4.7.
"Lenders" means Wells Fargo and any other bank, finance
company, insurance or other financial institution which is or becomes a party
to this Agreement by execution of a counterpart signature page hereto or an
Assignment and Assumption, as assignee. At all times that there are no Lenders
other than Wells Fargo, the terms "Lender" and "Lenders" means Wells Fargo in
its individual capacity. With respect to matters requiring the consent or
approval of all Lenders at any given time, all then existing Defaulting Lenders
will be disregarded and excluded, and, for voting purposes only, "all Lenders"
shall be deemed to mean "all Lenders other than Defaulting Lenders".
Notwithstanding the foregoing, if a Defaulting Lender shall dispute Agent's
determination of the defaulted status of such Lender or Designated Bid Lender,
such Lender or Designated Bid Lender may give written notice to Agent and each
other Lender setting forth the basis upon which such Lender or Designated Bid
Lender disputes Agent's determination; under such circumstances, Lenders and
Designated Bid Lenders shall attempt in good faith to
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<PAGE> 17
resolve such dispute within the 90-day period following Agent's original
determination, and during such period the suspension of voting rights for such
Defaulting Lender referred to in the preceding sentence shall not apply;
however, if such dispute is not resolved within such 90-day period, then such
suspension of voting rights shall thereafter apply. The provisions of the
immediately preceding sentence shall not alter or condition any other provision
of this Agreement with respect to a failure on the part of any Lender to fund
its Pro Rata Share of any Committed Loan or of any Lender or Designated Bid
Lender to fund any Bid Loan pursuant to an offer accepted in whole or in part
as provided herein or otherwise to perform its obligations under the Loan
Documents, including, without limitations, the provisions of Section 11.4.
"Liabilities and Costs" means all claims, judgments,
liabilities, obligations, responsibilities, losses, damages (including lost
profits), punitive or treble damages, costs, disbursements and expenses
(including, without limitation, reasonable attorneys', experts' and consulting
fees and costs of investigation and feasibility studies), fines, penalties and
monetary sanctions, interest, direct or indirect, known or unknown, absolute or
contingent, past, present or future.
"LIBOR" means, relative to any Interest Period for any LIBOR
Loan or LIBOR Bid Loan included in any Borrowing, the per annum rate of
interest (reserve adjusted as hereinbelow provided and rounded upwards, if
necessary, to the nearest one-sixteenth of one percent (0.0625%)) quoted by
Agent as the rate at which Dollar deposits in immediately available funds are
available in the Eurodollar interbank market at approximately 9:00 a.m. (San
Francisco time) two (2) Business Days prior to the beginning of such Interest
Period, for delivery on the first day of such Interest Period for a period
approximately equal to such Interest Period and in an amount equal or
comparable to the LIBOR Loan or LIBOR Bid Loan to which such Interest Period
relates. The foregoing rate of interest shall be reserve adjusted by dividing
LIBOR by one (1.00) minus the LIBOR Reserve Percentage, with such quotient to
be rounded upward to the nearest whole multiple of one-hundredth of one percent
(0.01%). All references in this Agreement or other Loan Documents to LIBOR
shall mean and include the aforesaid reserve adjustment.
"LIBOR Auction" means a solicitation of Competitive Bids
setting forth LIBOR Bid Margins pursuant to Section 2.1.3.
"LIBOR Bid Loan" means a Bid Loan that bears interest, for the
relevant Bid Loan Interest Period, at a fixed rate equal to the relevant LIBOR
Bid Margin above (or below, as the case may be) LIBOR.
"LIBOR Bid Margin" means, in connection with any LIBOR
Auction, a margin (expressed in multiples of 1/1000th of one percent) above or
below LIBOR offered for any Bid Loan to be made pursuant thereto.
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<PAGE> 18
"LIBOR Loan" means a Committed Loan bearing interest, at all
times during an Interest Period applicable to such Committed Loan, at a fixed
rate of interest determined by reference to LIBOR.
"LIBOR Office" means, relative to any Lender or Designated Bid
Lender, the office of such Lender or Designated Bid Lender designated as such
on the counterpart signature pages hereto or such other office of a Lender as
designated from time to time by notice from such Lender or Designated Bid
Lender to Agent, whether or not outside the United States, which shall be
making or maintaining (i) in the case of a Lender, LIBOR Loans and LIBOR Bid
Loans of such Lender, or (ii) in the case of a Designated Bid Lender, LIBOR Bid
Loans of such Lender.
"LIBOR Reserve Percentage" means, relative to any Interest
Period for LIBOR Loans or LIBOR Bid Loans made by any Lender or Designated Bid
Lender, the reserve percentage (expressed as a decimal) equal to the actual
aggregate reserve requirements (including all basic, emergency, supplemental,
marginal and other reserves and taking into account any transactional
adjustments or other scheduled changes in reserve requirements) announced
within Agent as the reserve percentage applicable to Agent as specified under
regulations issued from time to time by the Federal Reserve Board. The LIBOR
Reserve Percentage shall be based on Regulation D of the Federal Reserve Board
or other regulations from time to time in effect concerning reserves for
"Eurocurrency Liabilities" from related institutions as though Agent were in a
net borrowing position.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, security interest, encumbrance
(including, but not limited to, easements, rights-of-way, zoning restrictions
and the like), lien (statutory or other), preference, priority or other
security agreement or preferential arrangement of any kind or nature
whatsoever, including without limitation any conditional sale or other title
retention agreement, the interest of a lessor under a Capital Lease, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement or document having similar
effect (other than a financing statement filed by a "true" lessor pursuant to
Section 9408 of the Uniform Commercial Code) naming the owner of the asset to
which such Lien relates as debtor, under the Uniform Commercial Code or other
comparable law of any jurisdiction.
"Liquidity Provider" means, for any Designated Bid Lender and
at any time, on a collective basis, the financial institutions that at such
date are providing liquidity or credit support facilities to or for the account
of such Designated Bid Lender to fund such Designated Bid Lender's obligations
hereunder or to support the securities, if any, issued by such Designated Bid
Lender to fund such obligations.
"Loan Account" has the meaning given to such term in Section
2.3.1.
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<PAGE> 19
"Loan Availability" means, at any time, the lesser of (i) an
amount equal to the positive difference, if any, of (A) fifty-five percent
(55%) of the Unencumbered Pool Value, less (B) Unsecured Liabilities other than
the outstanding principal of the Loans; and (ii) the amount of the Committed
Facility from time to time.
"Loan Documents" means this Agreement, the Loan Notes, the
Guaranties and all other agreements, instruments and documents (together with
amendments and supplements thereto and replacements thereof) now or hereafter
executed by the REIT, Borrower or any Guarantor Subpartnership, which evidence
or guaranty the Obligations.
"Loan Notes" means the promissory notes evidencing the Loans,
executed by Borrower in favor of each of the Lenders (in their own capacities
and, if applicable, in their capacities as administrative agents for their
respected Designated Bid Lenders), as they may be amended, supplemented,
replaced or modified from time to time. The initial Loan Notes and any
replacements thereof shall be substantially in the form of Exhibit E.
"Loans" means the loans made pursuant to this Agreement,
whether constituting Committed Loans or Bid Loans.
"Major Agreements" means, at any time, (i) each Major UPP
Lease and (ii) each ground lease affecting an Unencumbered Pool Property.
"Major UPP Lease" means any UPP Lease of fifty percent (50%)
or more of the net rentable square footage of any Unencumbered Pool Property.
"Majority Lenders" means, collectively, (i) until the
Termination Date, Lenders whose Pro Rata Shares, in the aggregate, are at least
fifty-one percent (51%), and (ii) on and after the Termination Date, Lenders
whose outstanding Loans represent at least fifty-one percent (51%) of the
aggregate principal amount of all outstanding Loans, determined as if each
Designating Lender held (in addition to outstanding Committed Loans and Bid
Loans made for its own account) all outstanding Bid Loans made by its
Designated Bid Lender; provided, in each case, that, in determining such
percentage at any given time, all then existing Defaulting Lenders will be
disregarded and excluded and the Pro Rata Shares (or, if applicable, percentage
ownership of outstanding Loans) of Lenders shall be redetermined, for voting
purposes only, to exclude the Pro Rata Shares of (or, if applicable,
outstanding Loans owed to) such Defaulting Lenders, provided further, that the
foregoing suspension of voting rights shall be subject to the same provisions
set forth in the definition of "Lenders" in the case of any dispute as to the
defaulted status of a Lender or Designated Bid Lender.
"Majority Partnership" means any Partnership in which Borrower
has an ownership interest, whose financial results are consolidated under GAAP
in the Financial Statements.
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<PAGE> 20
"Material Adverse Effect" means with respect to a Person, a
material adverse effect upon the condition (financial or otherwise), results of
operations, business or properties of such Person and its consolidated
Subsidiaries, considered as a whole. The phrase "has a Material Adverse
Effect" or "will result in a Material Adverse Effect" or words substantially
similar thereto shall in all cases be intended to mean "has resulted, or will
or could reasonably be anticipated to result, in a Material Adverse Effect",
and the phrase "has no (or does not have a) Material Adverse Effect" or "will
not result in a Material Adverse Effect" or words substantially similar thereto
shall in all cases be intended to mean "does not or will not or could not
reasonably be anticipated to result in a Material Adverse Effect".
"Multiemployer Plan" means, with respect to any Person, an
employee benefit plan defined in Section 4001(a)(3) of ERISA which is, or
within the immediately preceding six (6) years was, contributed to by such
Person or an ERISA Affiliate of such Person.
"Negative Pledge" means, with respect to a particular asset,
that it is not subject to any agreement (other than (i) this Agreement or any
other Loan Document, or (ii) the documentation governing any Indebtedness
issued pursuant to (A) an effective registration statement filed under the
Securities Act or (B) the exemption from registration under the Securities Act
provided by Rule 144A issued thereunder) that prohibits the creation of any
Lien thereon as security for Indebtedness of the Person owning such asset;
provided, however, that an agreement that establishes a maximum ratio of
unsecured debt to unencumbered assets, or of secured debt to total assets, or
that otherwise conditions a Person's ability to encumber its assets upon the
maintenance of one or more specified ratios that limit such Person's ability to
encumber its assets but that do not generally prohibit the encumbrance of its
assets, or the encumbrance of specific assets, shall not constitute a "Negative
Pledge" for purposes of the Loan Documents.
"Net Income" means, for any period, the net earnings (or loss)
of the REIT, after Taxes and minority interests in consolidated Subsidiaries,
but before minority interests in Borrower, calculated for such period on a
consolidated basis in conformity with GAAP.
"Net Offering Proceeds" means (i) all cash proceeds received
by the REIT as a result of the sale of common, preferred or other classes of
stock in the REIT (if and only to the extent reflected in stockholders' equity
on the consolidated balance sheet of the REIT prepared in accordance with GAAP)
less customary costs and discounts of issuance paid by the REIT, all of which
proceeds shall have been concurrently contributed by the REIT to Borrower as
additional capital, plus (ii) all cash and the fair market value of the net
equity of all properties contributed to Borrower by one or more Persons in
exchange for limited partnership interests in Borrower.
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"Net Operating Income" means, with respect to an Unencumbered
Property, the net operating income of such Property determined in accordance
with GAAP, except that Net Operating Income shall not include security or other
deposits, late fees, lease termination or other similar charges, delinquent
rent recoveries, unless previously reflected in reserves, or any other items of
a non-recurring nature. Notwithstanding the foregoing, Net Operating Income
may include collected lease termination charges (amortized monthly over the
remaining term of the lease) and delinquent rent recoveries so long as (i) any
such charge or recovery does not relate to a date earlier than twelve (12)
months prior to the end of the period for which Net Operating Income is
determined and (ii) no such recovery shall be made for any month during or
after which the space to which such charge or recovery relates has been
re-leased to another Person and such Person has an obligation to pay rent for
such month(s).
"Net Worth" means, at any time, the REIT's stockholders'
equity, as shown on its Financial Statements prepared in accordance with GAAP,
plus minority interests in Borrower, plus cumulative net additions to
depreciation and amortization reflected in statements of operation after
December 31, 1996, minus intangible assets. The parties acknowledge that the
Net Worth as of June 30, 1997, was approximately One Billion Twenty-Five
Million Seven Hundred Eighty-Eight Thousand Dollars ($1,025,788,000).
"Non Pro Rata Loan" means (i) a Committed Loan with respect to
which fewer than all Lenders have funded their respective Pro Rata Shares of
such Committed Loan, and (ii) any Borrowing comprised of Bid Loans with respect
to which any Bid Loan to be made as part of such Borrowing has not been funded
in full, and the failure of the non-funding Lender(s) or Designated Bid
Lender(s) to fund its or their respective Pro Rata Shares of such Committed
Loan or its or their Bid Loan(s), as the case may be, constitutes a breach of
this Agreement.
"Nonrecourse Indebtedness" means Indebtedness with respect to
which recourse for payment is contractually limited to specific assets
encumbered by a Lien securing such Indebtedness.
"Notice of Borrowing" means, with respect to a proposed
Borrowing pursuant to Section 2.1.2, a notice substantially in the form of
Exhibit F.
"Obligations" means, from time to time, all Indebtedness of
Borrower owing to Agent, any Lender or Designated Bid Lender or any Person
entitled to indemnification pursuant to Section 12.2, or any of their
respective successors, transferees or assigns, of every type and description,
whether or not evidenced by any note, guaranty or other instrument, arising
under or in connection with this Agreement or any other Loan Document, whether
or not for the payment of money, whether direct or indirect (including those
acquired by assignment), absolute or contingent, due or to become due, now
existing
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or hereafter arising and however acquired. The term includes, without
limitation, all interest, charges, expenses, fees, reasonable attorneys' fees
and disbursements, reasonable fees and disbursements of expert witnesses and
other consultants, and any other sum now or hereinafter chargeable to Borrower
under or in connection with this Agreement or any other Loan Document.
"Officer's Certificate" means a certificate signed by a
specified officer of a Person certifying as to the matters set forth therein.
"Partnership" means any general or limited partnership, joint
venture, limited liability company or limited liability partnership.
"Partnership Agreement" means, with respect to any
Partnership, on a collective basis, its partnership agreement, its agreement of
limited partnership agreement and certificate of limited partnership (if any),
its operating or management agreement and articles or certificate of
organization, or other organizational or governance document(s).
"PBGC" means the Pension Benefit Guaranty Corporation or any
Person succeeding to the functions thereof.
"Permit" means any permit, approval, authorization, license,
variance or permission required from a Governmental Authority under an
applicable Requirement of Law.
"Permitted UPP Secured Debt" means Indebtedness of a UPP
Subpartnership to Borrower, incurred to replace Indebtedness secured by one or
more Unencumbered Pool Properties at the time such Unencumbered Pool Property
is first acquired by a UPP Subpartnership (excluding any such replaced
Indebtedness incurred in contemplation of such acquisition), that is secured
only by the Unencumbered Pool Property(ies), owned by the debtor UPP
Subpartnership, that secured such replaced Indebtedness at the time the
Permitted UPP Secured Debt was incurred.
"Permitted Investments" means Investments in (i) Land,
Securities, Third Party Partner Debt, Partnerships, Investment Mortgages, but
only to the extent permitted in Section 9.9, and (ii) Permitted UPP Secured
Debt.
"Permitted Liens" means:
(a) Liens (other than Environmental Liens and any Lien
imposed under ERISA) for taxes, assessments or charges of any
Governmental Authority or claims that are not yet due and payable,
unless they are being contested in good faith by appropriate
proceedings and for which appropriate reserves have been established,
to the extent required by GAAP;
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(b) Liens (other than any Lien imposed under ERISA)
incurred or deposits made in the ordinary course of business
(including without limitation surety bonds and appeal bonds) in
connection with workers' compensation, unemployment insurance and
other types of social security benefits or to secure the performance
of tenders, bids, leases, contracts (other than for the repayment of
Indebtedness), or statutory obligations;
(c) any laws, ordinances, easements, rights of way,
restrictions, exemptions, reservations, conditions, limitations,
covenants, options, leases, imperfections of title or other matters
that, in the aggregate, do not (i) materially interfere with the
occupation, use and enjoyment of the Property or other assets
encumbered thereby, by the Person owning such Property or other
assets, in the normal course of its business or (ii) materially impair
the value of the Property subject thereto; and
(d) Liens imposed by laws, such as mechanics, workers'
and materialmen's liens and other similar liens arising in the
ordinary course of business which secure payment of obligations not
more than thirty (30) days past due, unless such obligations are being
contested in good faith by appropriate proceedings and appropriate
reserves have been established, to the extent required by GAAP.
"Person" means any natural person, employee, corporation,
limited partnership, general partnership, joint stock company, limited
liability company, joint venture, association, company, trust, bank, trust
company, land trust, business trust or other organization, whether or not a
legal entity, or any other non-governmental entity, or any Governmental
Authority.
"Plan" means an employee benefit plan defined in Section 3(3)
of ERISA (other than a Multiemployer Plan) in respect of which Borrower or an
ERISA Affiliate of the Borrower, as applicable, is an "employer" as defined in
Section 3(5) of ERISA.
"Price Adjustment Date" has the meaning given to such term in
Section 2.4.8(c).
"Pro Rata Share" means, with respect to any Lender, a fraction
(expressed as a percentage), the numerator of which shall be the amount of such
Lender's Commitment and the denominator of which shall be the aggregate amount
of all of Lenders' Commitments.
"Proceedings" means, collectively, all actions, suits and
proceedings before, and investigations commenced or threatened by or before,
any court or Governmental Authority with respect to a Person.
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"Property" means, as to any Person, all real or personal
property (including, without limitation, buildings, facilities, structures,
equipment and other assets, tangible or intangible) owned by such Person.
"Rating Agency" means each of (i) Standard & Poor's Ratings
Services, and (ii) Fitch Investors Service, L.P. (or, in lieu of Fitch
Investors Service, L.P., such other nationally-recognized rating agency as the
Majority Lenders may agree to).
"Regulations G, T, U and X" mean such Regulations of the
Federal Reserve Board as in effect from time to time.
"Regional Senior Vice President" means each of John G.
Davenport, James C. Eddy, John A. Foster, Donald S. Jefferson and Peter H.
Schnugg.
"REIT" means Spieker Properties, Inc., a Maryland corporation.
"Release" means the release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment or into or out of any
property, including the movement of Contaminants through or in the air, soil,
surface water, groundwater or property.
"Remedial Action" means any action required by applicable
Environmental Laws to (i) clean up, remove, treat or in any other way address
Contaminants in the indoor or outdoor environment; (ii) prevent the Release or
threat of Release or minimize the further Release of Contaminants so they do
not migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment; or (iii) perform pre-remedial studies and
investigations and post-remedial monitoring and care.
"Reportable Event" means any of the events described in
Section 4043(b) of ERISA, other than an event for which the thirty (30) day
notice requirement is waived by regulations.
"Requirements of Law" mean, as to any Person, the charter and
by-laws, Partnership Agreement or other organizational or governing documents
of such Person, and any law, rule or regulation, Permit, or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person
or any of its property is subject, including without limitation, the Securities
Act, the Securities Exchange Act, Regulations G, T, U and X, FIRREA and any
certificate of occupancy, zoning ordinance, building, environmental or land use
requirement or Permit or occupational safety or health law, rule or regulation.
"Requisite Lenders" means, collectively, (i) until the
Termination Date, Lenders whose Pro Rata Shares, in the aggregate, are at least
sixty-six and two-thirds
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percent (66-2/3%), and (ii) on and after the Termination Date, Lenders whose
outstanding Loans represent at least sixty-six and two-thirds percent (66-2/3%)
of the aggregate principal amount of all outstanding Loans, determined as if
each Designating Lender held (in addition to outstanding Committed Loans and
Bid Loans made for its own account) all outstanding Bid Loans made by its
Designated Bid Lender; provided, in each case, that, in determining such
percentage at any given time, all then existing Defaulting Lenders will be
disregarded and excluded and the Pro Rata Shares (or, if applicable, percentage
ownership of outstanding Loans) of Lenders shall be redetermined, for voting
purposes only, to exclude the Pro Rata Shares of (or, if applicable,
outstanding Loans owed to) such Defaulting Lenders, provided further, that the
foregoing suspension of voting rights shall be subject to the same provisions
set forth in the definition of "Lenders" in the case of any dispute as to the
defaulted status of a Lender or Designated Bid Lender.
"SP #177" means Spieker Properties #177, Limited Partnership,
a California limited partnership.
"SWIP" means Spieker Washington Interest Partners, a
California general partnership, of which Borrower and the REIT are 99% and 1%
general partners, respectively.
"Secretary's Certificate" has the meaning given to such term
in Section 4.1.
"Secured Borrower Debt" means all Borrower Debt that is
secured by a Lien on any Property of the REIT, Borrower or any Investment
Partnership or any of their respective Subsidiaries.
"Securities" means any stock, shares, voting trust
certificates, bonds, debentures, notes or other evidences of indebtedness,
secured or unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities", or any certificates of interest,
shares, or participations in temporary or interim certificates for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire any of the
foregoing, but shall not include any evidence of the Obligations, provided that
Securities shall not include Cash Equivalents, Investment Mortgages, Third
Party Partner Debt or interests in Partnerships.
"Securities Act" means the Securities Act of 1933, as amended
to the date hereof and from time to time hereafter, and any successor statute.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended to the date hereof and from time to time hereafter, and any
successor statute.
"Senior Loans" has the meaning given to such term in Section
11.4.2.
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"Solvent" means, as to any Person at the time of
determination, that such Person (i) owns property the value of which (both at
fair valuation and at present fair saleable value) is greater than the amount
required to pay all of such Person's liabilities (including contingent
liabilities and debts); (ii) is able to pay all of its debts as such debts
mature; and (iii) has capital sufficient to carry on its business and
transactions and all business and transactions in which it is about to engage.
"Special UPP" means an Unencumbered Pool Property that (i) has
been designated by Borrower pursuant to Section 3.1.2 and (ii) is either (A) of
a type other than an Approved Property Type or (B) located in a market other
than an Approved Market, unless the Majority Lenders have specifically
consented to the inclusion of such Unencumbered Pool Property in the
Unencumbered Pool as other than a Special UPP.
"Subsidiary" of a Person means any corporation, Partnership,
trust or other non-Partnership entity of which a majority of the stock (or
equivalent ownership or controlling interest) having voting power to elect a
majority of the Board of Directors (if a corporation) or to select the trustee
or equivalent controlling interest, shall, at the time such reference becomes
operative, be directly or indirectly owned or controlled by such Person.
Without limiting the foregoing definition, SWIP, SP #177 and all UPP
Subpartnerships and Majority Partnerships constitute Subsidiaries of Borrower.
"Swing Line" has the meaning given to such term in Section
2.1.1(a)(ii).
"Swing Line Borrowing" means a Borrowing effected under the
Swing Line.
"Taxes" means all federal, state, local and foreign income and
gross receipts taxes.
"Termination Date" has the meaning given to such term in
Section 2.1.5.
"Termination Event" means (i) any Reportable Event, (ii) the
withdrawal of Borrower or the REIT, or an ERISA Affiliate of either of them,
from a Benefit Plan during a plan year in which it was a "substantial employer"
as defined in Section 4001(a)(2) of ERISA, (iii) the occurrence of an
obligation arising under Section 4041 of ERISA by the Borrower or the REIT, or
an ERISA Affiliate of either of them, to provide affected parties with a
written notice of an intent to terminate a Benefit Plan in a distress
termination described in Section 4041(c) of ERISA, (iv) the institution by the
PBGC of proceedings to terminate any Benefit Plan of the Borrower or the REIT,
or any ERISA Affiliate of either of them, under Section 4042 of ERISA, (v) any
event or condition which constitutes grounds under Section 4042 of ERISA for
the appointment of a trustee to administer such a Benefit Plan, (vi) the
partial or complete withdrawal of Borrower or the REIT, or any ERISA Affiliate
of either of them, from a Multiemployer Plan, or (vii) the adoption of an
amendment by any Person or any ERISA Affiliate to terminate any Benefit Plan.
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"Termination of Designation" has the meaning given to such
term in Section 3.2.
"Third Party Partner" means a Person who, immediately prior to
the acquisition (whether direct or indirect) of a Property by Borrower, held an
interest in such Property or in the Person who owned it.
"Third Party Partner Debt" means Indebtedness of a Third Party
Partner owed to Borrower, Borrower's interest in which was acquired by Borrower
as part of its acquisition of a Property.
"Total Liabilities" of any Person means (i) all Indebtedness
of such Person, whether or not such Indebtedness would be included as a
liability on the balance sheet of such Person in accordance with GAAP, plus
(ii) all other liabilities of every nature and kind of such Person that would
be included as liabilities on the balance sheet of such Person in accordance
with GAAP.
"Total Liabilities to Gross Asset Value Ratio" has the meaning
given to such term in Section 9.2.
"Unencumbered NOI" means, for any period, the aggregate Net
Operating Income of all Unencumbered Properties for such period.
"Unencumbered Pool Certificate" has the meaning given to such
term in Section 6.1.6.
"Unencumbered Pool Properties" means the Unencumbered
Properties listed on Schedule 1, as such Schedule 1 may be amended from time to
time to reflect the addition and deletion of Unencumbered Pool Properties
pursuant to Article III.
"Unencumbered Pool Value" means, at any time, an amount equal
to the sum of (i) cash and Cash Equivalents owned by Borrower or a UPP
Subpartnership (or, if the Borrower's Percentage Interest in such UPP
Subpartnership is less than 100%, an amount equal to the Borrower's Adjusted
Percentage Interest thereof) as of such date (but excluding any tenant
deposits), provided that neither such cash or Cash Equivalents, nor any portion
of the Borrower's Percentage Interest, in the Person owning such property, is
subject to (A) any Lien (other than Permitted Liens), or (B) any Negative
Pledge, and (ii) an amount equal to (A) the aggregate Net Operating Income of
the Unencumbered Pool Properties for the most recently ended Fiscal Quarter,
times (B) four (4), divided by (C) 0.10 (provided that, with respect to
Unencumbered Pool Properties owned by a UPP Subpartnership in which the
Borrower's Percentage Interest is less than 100%, there shall be included, for
purposes of the foregoing calculation, only the Borrower's Adjusted Percentage
Interest in the Net Operating Income of such Unencumbered Pool Properties).
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"Unencumbered Property" means real property (including ground
leases) improved with one or more completed office, industrial or retail
buildings, that is wholly-owned by Borrower or a UPP Subpartnership, provided
that neither such real property, nor any interest in the Person owning such
Property (other than interests held by Third Party Partners), is subject to (i)
any Lien, other than Permitted Liens or (ii) unless such Property is owned by a
UPP Subpartnership that is not a Guarantor Subpartnership, any Negative Pledge.
"Unmatured Event of Default" means an event which, with the
giving of notice or the lapse of time, or both, would constitute an Event of
Default.
"Unsecured Interest Expense" means, for any period, (i) total
Interest Expense for such period, less (ii) Interest Expense attributable to
any Secured Borrower Debt for such period.
"Unsecured Liabilities" means, at any time, (i) Total
Liabilities of Borrower and its Subsidiaries, less (ii) Secured Borrower Debt.
"UPP" when used herein refers to an Unencumbered Pool
Property.
"UPP Eligibility Certification" means the certification
delivered by Borrower to Agent with respect to any proposed Unencumbered Pool
Property in accordance with Section 3.1.2.
"UPP Eligibility Criteria" has the meaning given to such term
in Section 3.1.2.
"UPP Lease" means a tenant lease of an Unencumbered Pool
Property.
"UPP Subpartnership" means (i) any Guarantor Subpartnership,
and (ii) any other Partnership between (A) Borrower and SWIP or (B) (1)
Borrower or such other Person or Persons, in each case, wholly-owned by the
REIT, by Borrower, by the REIT and Borrower, or by Borrower and one or more
Guarantor Subpartnerships, as the Majority Lenders may approve (such approval
not to be unreasonably withheld), and (2) one or more Third Party Partners
(provided that the Borrower's Percentage Interest of each UPP Subpartnership
shall at all times equal at least fifty- one percent (51%)); in any such case,
which owns one or more Unencumbered Pool Properties.
"Voluntary Termination" has the meaning given to such term in
Section 2.1.5.
1.2 COMPUTATION OF TIME PERIODS. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
unless otherwise specified, the word "from" means "from and including" and the
words "to" and "until" each mean "to and
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including". Periods of days referred to in this Agreement shall be counted in
calendar days unless Business Days are expressly prescribed.
1.3 TERMS.
1.3.1 Any accounting terms used in this Agreement which are
not specifically defined shall have the meanings customarily given them in
accordance with GAAP. All references herein to Borrower, the REIT or any other
Person, in connection with any financial or related covenant, representation or
calculation, shall be understood to mean and refer to Borrower, the REIT and
such other Person on a consolidated basis in accordance with GAAP, unless
otherwise specifically provided and subject in all events to any adjustments
herein set forth.
1.3.2 Any time the phrase "to the best of Borrower's
knowledge" or a phrase similar thereto is used herein, it means: "to the
actual knowledge of the general counsel of Borrower or the Executive Officers
or Regional Senior Vice Presidents or their respective successors in office."
1.3.3 In each case where the consent or approval of Agent,
all Lenders and Designated Bid Lenders, Majority Lenders and/or Requisite
Lenders is required, or their non-obligatory action is requested by Borrower,
such consent, approval or action shall be in the sole and absolute discretion
of Agent and, as applicable, each Lender and Designated Bid Lender, unless
otherwise specifically indicated.
1.3.4 Any time the word "or" is used herein, unless the
context otherwise clearly requires, it has the inclusive meaning represented by
the phrase "and/or". The words "hereof", "herein", "hereby", "hereunder" and
similar terms refer to this Agreement as a whole and not to any particular
provision of this Agreement. Article, section, subsection, clause, exhibit and
schedule references are to this Agreement unless otherwise specified. Any
reference in this Agreement to this Agreement or to any other Loan Document
includes any and all amendments, modifications, supplements, renewals or
restatements thereto or thereof, as applicable.
ARTICLE II
LOANS
2.1 LOAN ADVANCES AND REPAYMENT.
2.1.1 CREDIT FACILITIES.
(a) COMMITTED LOAN FACILITY.
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(i) Subject to the terms and conditions
set forth in this Agreement, Lenders hereby agree to make
Committed Loans to Borrower from time to time during the
period from the Closing Date to the Business Day next
preceding the Termination Date, in an aggregate outstanding
principal amount which shall not exceed the Committed Loan
Availability at any time. All Committed Loans under this
Agreement shall be made by Lenders simultaneously and
proportionately to their respective Pro Rata Shares, it being
understood that no Lender shall be responsible for any failure
by any other Lender to perform its obligation to make a
Committed Loan hereunder and that the Commitment of any Lender
shall not be increased or decreased as a result of the failure
by any other Lender to perform its obligation to make a
Committed Loan. Committed Loans may be voluntarily prepaid
pursuant to Section 2.6.1 and, subject to the provisions of
this Agreement, any amounts so prepaid may be reborrowed under
this Section 2.1.1(a). The principal balance of the Committed
Loans shall be payable in full on the Termination Date. The
Committed Loans will be evidenced by the Loan Notes.
(ii) There is hereby established a
sub-facility (the "Swing Line"), in the amount of Twenty
Million Dollars ($20,000,000), under and as a part of the
Committed Facility. The Swing Line shall not for any purpose
be an addition to the Commitments or the Committed Facility,
but shall be a sub-feature thereunder. All Loans requested to
be made pursuant to the Swing Line shall be subject to the
same terms and conditions applicable to other Borrowings under
the Committed Facility, and all outstanding Swing Line
Borrowings shall likewise be subject to the same terms and
conditions applicable to other outstanding Borrowings under
the Committed Facility, except as expressly provided in (A)
Section 2.1.2(a)(ii) with respect to the number of Borrowings
permitted in any calendar month, the time within which the
Notice of Borrowing for Swing Line Borrowings must be given,
the minimum and incremental amounts applicable to Swing Line
Borrowings and the interest rate applicable thereto, and (B)
Section 2.6.1(a) with respect to prepayments of Swing Line
Borrowings.
(b) BID LOAN FACILITY.
(i) In addition to its agreement to make
Committed Loans under the Committed Facility, each Lender
severally agrees that, subject to the conditions that at the
time of Borrower's submission of the relevant Competitive Bid
Request (A) Borrower's senior long-term unsecured debt
obligations are rated at least BBB-/Baa3 by both Rating
Agencies, and (B) no Event of Default or Unmatured Event of
Default has occurred and is
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continuing, Borrower may, in accordance with this Section
2.1.1(b), Section 2.1.3 and the other relevant provisions of
the Loan Documents, from time to time request that Lenders,
prior to the Termination Date, submit offers to make Bid Loans
to Borrower; provided, however that (X) at no time shall the
aggregate principal amount of all Loans (whether Committed
Loans or Bid Loans) at any time outstanding exceed the Loan
Availability; (Y) at no time shall the aggregate principal
amount of all Bid Loans exceed the Bid Loan Limit; and (Z) at
no time may the number of Bid Loan Interest Periods then
outstanding plus the number of Interest Periods for Committed
Loans then outstanding exceed eight.
(ii) Lenders may, but shall not be
obligated to, submit offers in response to any Competitive Bid
Request, and Borrower may, but shall not be obligated to,
accept any such offers. The obligation of a Lender to fund
its Pro Rata Share of Committed Loans shall be unaffected by
its (or its Designated Bid Lender's) making of any Bid Loans,
notwithstanding that the sum of such Lender's Pro Rata Share
of the aggregate principal amount of the outstanding Committed
Loans, plus the aggregate amount of such Lender's (and its
Designated Bid Lender's) outstanding Bid Loans, may exceed
such Lender's Commitment.
(iii) Any Bid Loan that would otherwise be
made by a Lender that is a Designating Lender may from time to
time be made by its Designated Bid Lender, in such Designated
Bid Lender's sole discretion. Nothing herein shall constitute
a commitment to make Bid Loans by such Designated Bid Lender;
provided, however, if such Designating Lender's Designated Bid
Lender elects not to, or fails to, make any such Bid Loan, for
any reason whatsoever, such Designating Lender shall make such
Bid Loan pursuant to the terms hereof, it being the obligation
of each Designating Lender to make each Bid Loan with respect
to a Competitive Bid submitted by such Designating Lender and
accepted by Borrower, in whole or in part, pursuant hereto,
except to the extent that such Bid Loan is in fact funded by
its Designated Bid Lender.
(iv) On the last day of each Bid Loan
Interest Period, Borrower shall pay to Agent, for the
respective accounts of Lenders and Designated Bid Lenders
making Bid Loans ending thereon, the full amount of the
principal of each Bid Loan ending thereon. The Bid Loans will
be evidenced by the Loan Notes.
(c) EXCESS BORROWING CONDITION. If at any time
(x) the outstanding principal balance of the Loans exceeds the Loan
Availability, as a result
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of a reduction in the Unencumbered Pool Value, the incurrence of
additional Unsecured Liabilities or (subject to Section 2.1.1(d)) for
any other reason whatsoever, and (y) the aggregate principal amount of
all then outstanding Bid Loans having Bid Loan Interest Periods that
end within sixty (60) days following such occurrence is less than the
amount by which the outstanding principal balance of the Loans exceeds
the Loan Availability, then Borrower shall, not later than sixty (60)
days following the date on which the Loan Availability was exceeded,
(i) reduce the Unsecured Liabilities in such amounts and/or (ii)
identify to Agent such additional Unencumbered Pool Property(-ies) as
(A) Agent may approve and Majority Lenders may accept under Section
3.1.3, or (B) as may be designated as Unencumbered Pool Property(ies)
in accordance with Section 3.1.2, as are necessary so that the
outstanding principal balance of the Loans does not exceed the Loan
Availability. Failure by Borrower to have complied with the foregoing
in a timely manner shall constitute an Event of Default without
further notice or grace period hereunder. No further Borrowings, and
no Termination of Designation with respect to any Unencumbered Pool
Property, shall be permitted so long as such excess borrowing
condition shall continue to exist. Nothing in this subparagraph (c)
shall excuse Borrower's compliance with all terms, conditions,
covenants and other obligations imposed upon it under the Loan
Documents during the period of such excess borrowing, nor in any
manner condition or impair Agent's or any Lender's or Designated Bid
Lender's rights thereunder in respect of any such breach thereof by
Borrower.
(d) SCHEDULED REDUCTIONS IN COMMITTED FACILITY.
On each Committed Facility Reduction Date, Borrower shall pay, for
application to the repayment of the Committed Loans, that amount, if
any, by which the outstanding principal of all Loans exceeds the
amount of the Committed Facility, as reduced thereon.
2.1.2 COMMITTED LOAN BORROWINGS.
(a) (i) Whenever Borrower desires to borrow
under the Committed Facility, but in no event more than three (3)
times during any one (1) calendar month, Borrower shall give Agent, at
Wells Fargo Real Estate Group Disbursement Center, 2120 East Park
Place, Suite 100, El Segundo, California 90245 (fax no. (310)
615-1014), with a copy to: Wells Fargo Bank, Real Estate Group, 420
Montgomery Street, Sixth Floor, San Francisco, California 94163,
Attention: Larry Andow (fax no. (415) 956-7238), or to such other
address(es), persons or fax numbers as Agent shall designate, an
original or facsimile Notice of Borrowing no later than 9:00 a.m. (San
Francisco time), not less than three (3) nor more than five (5)
Business Days prior to the proposed Funding Date of each Committed
Loan.
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(ii) Notwithstanding the foregoing or any
other provision hereof to the contrary: (A) a Notice of
Borrowing may be given not less than two (2) Business Days
prior to the proposed Funding Date of a Committed Loan if the
following conditions are met: (1) any Lender shall have
failed to fund its Pro Rata Share of a previously requested
Committed Loan, or a Bid Loan (unless such Bid Loan is funded
by such Lender's Designated Bid Lender), on the applicable
Funding Date; (2) the subject Notice of Borrowing shall have
been given by Borrower to Agent not later than three (3)
Business Days following the Funding Date referred to in the
foregoing clause (1) (or, in the case Agent shall have elected
to fund such Lender's Pro Rata Share (or such Lender's Bid
Loan, as the case may be) pursuant to Section 11.3.1, then not
later than the next Business Day following any demand for
repayment of such funding by Agent); and (3) the additional
Borrowing shall be requested as a Base Rate Loan; further, the
monthly frequency limit and the $1,000,000 minimum Borrowing
limit elsewhere referred to this Section 2.1.2 shall not apply
to such Borrowing; and (B) in addition to the number of
Committed Loans permissible monthly under the general
Committed Facility pursuant to Section 2.1.2(a)(i) or effected
pursuant to the foregoing clause (A), Borrower shall be
permitted to borrow under the Swing Line up to two (2) times
during any calendar month, provided that (1) the Notice of
Borrowing with respect to any Swing Line Borrowing shall be
given by Borrower to Agent no later than 9:00 a.m. (San
Francisco time) not less than one (1) Business Day prior to
the proposed Funding Date of such Swing Line Borrowing and
shall designate such Borrowing as a Base Rate Loan; (2) not
later than 1:00 P.M. (San Francisco time), Agent shall send a
copy of each Notice of Borrowing under the Swing Line by
facsimile to each Lender; (3) each Lender shall make available
to Agent (or the funding bank or entity designated by Agent),
the amount of such Lender's Pro Rata Share of such Swing Line
Borrowing in immediately available funds not later than 10:00
a.m. (San Francisco time) on the Funding Date designated in
the Notice of Borrowing; and (4) each requested Borrowing
under the Swing Line shall equal Five Hundred Thousand Dollars
($500,000) or an integral multiple of Ten Thousand Dollars
($10,000) in excess thereof. Except as provided in the
preceding sentence or (with respect to Swing Line Borrowings)
Section 2.6.1(a), all other provisions of this Agreement shall
apply to any such requested Borrowing.
(iii) Each Notice of Borrowing shall
specify (1) the Funding Date (which shall be a Business Day)
in respect of the Committed Loan requested therein, (2) the
amount of the proposed Committed Loan, provided that the
aggregate amount of such proposed Committed Loan shall equal
One Million Dollars ($1,000,000) or an integral multiple of
One
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Hundred Thousand Dollars ($100,000) in excess thereof, (3)
whether the Committed Loan to be made thereunder will be a
Base Rate Loan or a LIBOR Loan and, if a LIBOR Loan, the
Interest Period, (4) to which account of Borrower the funds
are to be directed, and (5) the proposed use of such Committed
Loan. Any Notice of Borrowing pursuant to this Section 2.1.2
shall be irrevocable.
(b) Borrower may elect (i) to convert LIBOR Loans
or any portion thereof into Base Rate Loans, (ii) to convert Base Rate
Loans or any portion thereof to LIBOR Loans, or (iii) to continue any
LIBOR Loans or any portion thereof for an additional Interest Period,
provided, however, that the aggregate amount of the Committed Loans
being converted into or continued as LIBOR Loans shall, in the
aggregate, equal One Million Dollars ($1,000,000) or an integral
multiple of One Hundred Thousand Dollars ($100,000) in excess thereof.
The applicable Interest Period for the continuation of any LIBOR Loan
shall commence on the day on which the next preceding Interest Period
expires. The conversion of a LIBOR Loan to a Base Rate Loan shall
only occur on the last Business Day of the Interest Period relating to
such LIBOR Loan; such conversion shall occur automatically in the
absence of an election under clause (iii) above. Each election under
clause (ii) or clause (iii) above shall be made by Borrower giving
Agent an original or facsimile Notice of Borrowing no later than 9:00
a.m. (San Francisco time), not less than three (3) nor more than five
(5) Business Days prior to the date of a conversion to or continuation
of a LIBOR Loan, specifying, in each case (1) the amount of the
conversion or continuation, (2) the Interest Period therefor, and (3)
the date of the conversion or continuation (which date shall be a
Business Day).
(c) Upon receipt of a Notice of Borrowing in
proper form requesting LIBOR Loans under subparagraph (a) or (b)
above, Agent shall determine the LIBOR applicable to the Interest
Period for such LIBOR Loans, and shall, two (2) Business Days prior to
the beginning of such Interest Period, give (by facsimile) a Fixed
Rate Notice in respect thereof to Borrower and Lenders; provided,
however, that failure to give such notice to Borrower shall not affect
the validity of such rate, and no such notice need be given with
respect to the Loans subject to Sections 2.4.5(a)(i) and (ii). Each
determination by Agent of the LIBOR shall be conclusive and binding
upon the parties hereto in the absence of manifest error.
2.1.3 BID LOAN BORROWINGS.
(a) When Borrower desires to effect one or more
Borrowings consisting of one or more Bid Loans, but not more often
than once in any period of thirty (30) consecutive days, Borrower
shall notify Agent by telephone, followed promptly by facsimile of a
Competitive Bid Request, at Wells Fargo Real Estate
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Group Disbursement Center, 2120 East Park Place, Suite 100, El
Segundo, California 90245, with a copy to: Wells Fargo Bank, Real
Estate Group, 420 Montgomery Street, Sixth Floor, San Francisco,
California 94163, Attention: Larry Andow, or such other address as
Agent shall designate (to be received no later than 8:00 a.m. (San
Francisco time), (x) in the case of a LIBOR Auction, five Business
Days prior to the proposed Funding Date of the requested Borrowing(s),
or (y) in the case of an Absolute Rate Auction, two Business Days
prior to the proposed Funding Date of the requested Borrowing(s),
together with payment of the auction fee payable to Agent as provided
in the agency fee agreement referred to in Section 2.5.2), specifying
(together with the other information required to be provided pursuant
to Exhibit H):
(i) the Funding Date of such
Borrowing(s), which shall be a Business Day;
(ii) the aggregate amount of such
Borrowing(s), which shall be in an amount (subject to the
limitations set forth in other provisions of the Loan
Documents) equal to $15,000,000 or an integral multiple of
$1,000,000 in excess thereof;
(iii) whether the requested Borrowing(s)
is/are to be made as either (1) one or more LIBOR Bid Loans or
(2) one or more Absolute Rate Bid Loans; and
(iv) the duration of the requested Bid
Loan Interest Period (subject to the limitation that Borrower
may request no more than three Bid Loan Interest Periods in
any single Competitive Bid Request).
Borrower's right to request Competitive Bids for LIBOR Bid
Loans, and each Lender's or Designated Bid Lender's obligation
to fund any LIBOR Bid Loan pursuant to any Competitive Bid
accepted by Borrower, shall be subject in all respects to the
provisions of Section 2.4.8.
(b) Upon receipt of a Competitive Bid Request,
Agent shall promptly send a copy thereof to each of the Lenders by
facsimile, attaching thereto notice of the date and time by which
responses must be received in order to be considered by Borrower. The
Competitive Bid Request shall not constitute an offer by Borrower, but
merely an invitation to Lenders to submit Competitive Bids with
respect to the requested Borrowing(s).
(c) (i) Each Lender may, in its discretion,
submit a Competitive Bid containing an offer or offers to make Bid
Loans in response to any Competitive Bid Request. Each Competitive
Bid must comply with the provisions
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of this Section 2.1.3(c) and must be submitted to Agent (or, in the case of a
Competitive Bid being submitted by Agent in its capacity as a Lender, to
Borrower), by facsimile, no later than 7:00 a.m. (or, in the case of a
Competitive Bid by Agent, 6:30 a.m.), San Francisco time, (1) in the case of a
LIBOR Auction, three Business Days prior to the Funding Date of the proposed
Borrowing(s), or (2) in the case of an Absolute Rate Auction, on such Funding
Date. Each Competitive Bid so submitted (subject only to the provisions of
Section 2.4.8, as described above, to Borrower's eligibility to request bids as
described in Section 2.1.1(b)(i) and to the satisfaction of all conditions
precedent to the requested Bid Loan(s)) shall be irrevocable, unless Borrower
otherwise agrees in writing.
(ii) Each Competitive Bid shall be in
substantially the form of Exhibit I, shall identify (and be
signed on behalf of) the submitting Lender and the date of the
proposed Borrowing(s) specified in the Competitive Bid Request
to which the submitting Lender is responding and shall
specify:
(A) the principal amount of each Bid
Loan for which the Competitive Bid is being made (which shall
not be limited by the submitting Lender's Commitment, but
which shall be in an amount, no greater than the amount of the
requested Borrowing, equal to $5,000,000 or an integral
multiple of $1,000,000 in excess thereof); and
(B) (1) in the case of a LIBOR
Auction, the LIBOR Bid Margin offered by the submitting
Lender, or (2) in the case of an Absolute Rate Auction, the
Absolute Rate offered by the submitting Lender.
A Competitive Bid may include up to three separate offers by
the submitting Lender with respect to each Bid Loan Interest
Period specified in the Competitive Bid Request to which it
responds. Any Competitive Bid that (X) does not include all
the information required by this Section 2.1.3(c), (Y)
contains language that qualifies or conditions the submitting
Lender's offer to make the Bid Loan(s) described therein or
proposes terms other than (or in addition to) the terms
proposed in the relevant Competitive Bid Request other than to
set an aggregate limit on the principal amount of Bid Loans
for which offers being made by the submitting Lender may be
accepted, or (Z) is received by Agent (or Borrower, as
applicable) after the time set forth in Section 2.1.3(c)(i)
(unless amended to bring it into compliance prior to the time
set forth in Section 2.1.3(c)(i)), shall be disregarded.
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(d) Promptly upon receipt, but not later than
8:00 a.m. (San Francisco time) on the date by which Competitive Bids
are required to have been submitted with respect to a Competitive Bid
Request, Agent shall notify Borrower of (i) (A) the terms of each
Competitive Bid (other than one that is to be disregarded as described
above) received in response to the Competitive Bid Request, and (B)
the identity of the Lender submitting such Competitive Bid, and (ii)
(A) the aggregate principal amount of Bid Loans for which Competitive
Bids have been received for each Interest Period requested in the
Competitive Bid Request, and (B) the respective principal amounts and
LIBOR Bid Margins or Absolute Rates, as the case may be, so offered.
(e) No later than 8:30 a.m. (San Francisco time)
on the date by which Competitive Bids are required to have been
submitted with respect to a Competitive Bid Request, Borrower shall
notify Agent, by means of a notice reasonably acceptable to Agent in
form, of its acceptance or rejection of the offers notified to it as
provided in Section 2.1.3(d). Borrower shall have no obligation to
accept any such offer, and may choose to reject all of them. If
Borrower has failed to timely notify Agent of its acceptance or
rejection of any one or more offers by the time specified in the
preceding sentence, Borrower shall be deemed to have rejected such
offer(s). Borrower may accept any Competitive Bid (other than one
that is to be disregarded as provided above) in whole or in part,
provided that:
(i) the aggregate principal amount of
the Competitive Bids so accepted may not exceed the aggregate
amount of the Borrowing(s) requested in the relevant
Competitive Bid Request;
(ii) (A) subject to the provisions set
forth below with respect to multiple offers at the same LIBOR
Bid Margin or Absolute Rate, the principal amount of each
accepted Competitive Bid must be in an amount equal to
$5,000,000 or an integral multiple of $1,000,000 in excess
thereof, and (B) Competitive Bids must be accepted with
respect to an aggregate principal amount of at least
$15,000,000; and
(iii) with respect to each Bid Loan
Interest Period for which Competitive Bids were requested,
Borrower may accept offers solely on the basis of ascending
LIBOR Bid Margins or Absolute Rates, as the case may be
(provided that Borrower may, to the extent necessary to comply
with the preceding subparagraph (ii) or to accept offers in an
aggregate principal amount equal to the aggregate amount of
the Borrowing(s) requested in the relevant Competitive Bid
Request, accept only part of an offer at a particular LIBOR
Bid Margin or Absolute Rate and accept all or part of one or
more offers at a higher LIBOR Bid Margin or Absolute Rate).
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If Borrower chooses to accept one or more offers, Borrower shall
deliver a notice to Agent (in such form as Agent may from time to time
reasonably request), specifying the aggregate principal amount of
offers with respect to each requested Bid Loan Interest Period that it
chooses to accept. If two or more Lenders offer the same LIBOR Bid
Margin or Absolute Rate for an aggregate principal amount greater than
the amount for which such offers were requested with respect to any
requested Bid Loan Interest Period, Borrower shall allocate the
principal amount of the affected Bid Loan among such Lenders as nearly
as possible (in such multiples, not less than $1,000,000, as Borrower
may deem appropriate) in proportion to the aggregate principal amounts
to which their respective offers related. Borrower's allocation, in
the absence of manifest error, shall be conclusive.
(f) Agent shall promptly notify each Lender
having submitted a Competitive Bid whether its offer has been accepted
and, if its offer has been accepted, of the amount of the Bid Loan(s)
to be made by it (or its Designated Bid Lender) on the date of the
relevant Borrowing(s).
(g) Promptly (but no later than one Business Day)
following each Borrowing of one or more Bid Loans, Agent shall notify
each Lender (whether or not such Lender submitted a Competitive Bid
with respect to such Borrowing) of the ranges of bids submitted and
the highest and lowest bids accepted for each Bid Loan Interest Period
requested by Borrower and of the aggregate amount of the Bid Loans
made pursuant to such Borrowing.
(h) Upon receipt of a Competitive Bid Request in
proper form requesting bids to make LIBOR Bid Loans under subparagraph
(a) above, Agent shall determine the LIBOR applicable to each of the
Bid Loan Interest Periods specified in the Competitive Bid Request,
and shall, two (2) Business Days prior to the beginning of such Bid
Loan Interest Period, give (by facsimile) notice of such rate (or
rates, as the case may be) to Borrower and Lenders; provided, however,
that failure to give such notice to any Person shall not affect the
validity of such rate. Each determination by Agent of the LIBOR shall
be conclusive and binding upon the parties hereto in the absence of
manifest error.
2.1.4 MAKING OF LOANS.
Subject to Section 11.3, Agent shall make the proceeds of
Loans available to Borrower on the relevant Funding Date and shall disburse
such funds in Dollars in immediately available funds to Borrower's commercial
demand account at Wells Fargo, Account Number 4233-040799 or such other
account, acceptable to Agent, as may be specified in the Notice of Borrowing or
otherwise requested by Borrower in a writing that is received by Agent no later
than 9:00 a.m. (San Francisco time) on such Funding Date.
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2.1.5 TERM.
The outstanding principal of each Bid Loan shall be payable in
full on the last day of the Bid Loan Interest Period applicable thereto. In
addition: the outstanding balance of the Loans (in the case of clause (iii)
only, except for the Bid Loans) shall be payable in full on the earliest to
occur of (i) the fourth anniversary of the Closing Date, (ii) the acceleration
of the Loans pursuant to Section 10.2.1, or (iii) Borrower's written notice to
Agent (pursuant to Section 2.6.1) of Borrower's election to prepay all accrued
Obligations in respect of the Committed Loans and terminate all Commitments
(the "Termination Date"). Any Bid Loan outstanding on the date on which a
termination described in the foregoing clause (iii) (a "Voluntary
Termination") becomes effective shall be permitted to remain outstanding and
(subject to acceleration thereof pursuant to Section 10.2.1) shall be due and
payable on the last day of the Bid Loan Interest Period applicable thereto.
2.2 AUTHORIZATION TO OBTAIN LOANS.
Borrower shall provide Agent with documentation satisfactory
to Agent indicating the names of those employees of Borrower authorized by
Borrower to sign Notices of Borrowing and Competitive Bid Requests, and Agent
and Lenders shall be entitled to rely on such documentation until notified in
writing by Borrower of any change(s) of the persons so authorized. Agent shall
be entitled to act on the instructions of anyone identifying himself or herself
as one of the Persons authorized to execute a Notice of Borrowing or
Competitive Bid Request, and Borrower shall be bound thereby in the same manner
as if such Person were actually so authorized. Borrower agrees to indemnify,
defend and hold Lenders and Agent harmless from and against any and all
Liabilities and Costs which may arise or be created by the acceptance of
instructions in any Notice of Borrowing, unless caused by the gross negligence
of the Person to be indemnified.
2.3 LENDERS' ACCOUNTING.
2.3.1 Agent shall maintain a loan account (the "Loan
Account") on its books in which shall be recorded (i) the names and addresses
and the Commitments of Lenders and the names and addresses of Designated Bid
Lenders, and the principal amount of Loans owing to each Lender and Designated
Bid Lender from time to time, and (ii) all advances and repayments of principal
and payments of accrued interest under the Loans, as well as payments of the
Facility Fee, as provided in this Agreement, separately identifying Loans and
prepayments (or repayments, as the case may be) under the Swing Line and under
the Bid Loan Facility. All entries in the Loan Account shall be made in
accordance with Agent's customary accounting practices as in effect from time
to time. Monthly or at such other interval as is customary with Agent's
practice, Agent will render a statement of the Loan Account to Borrower and
will deliver a copy thereof to each Lender (for itself and for transmittal to
its Designated Bid Lender, if any). Each such statement shall be deemed
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final, binding and conclusive upon Borrower in all respects as to all matters
reflected therein (absent manifest error), unless Borrower, within thirty (30)
days after the date such statement is mailed or otherwise delivered to
Borrower, delivers to Agent written notice of any objections which Borrower may
have to any such statement, or within ten (10) days after discovery by Borrower
of an error with respect to which Borrower had no knowledge and which could not
have been determined after reasonable inquiry during said 30-day period. In
that event, only those items expressly objected to in such notice shall be
deemed to be disputed by Borrower. In the event that any such objection cannot
be settled by Agent and Borrower within thirty (30) days after Agent receives
notice thereof from Borrower, Agent shall notify all Lenders of such objection.
Notwithstanding the foregoing, Agent's entries in the Loan Account evidencing
Loans and other financial accommodations made from time to time shall be final,
binding and conclusive upon Borrower (absent manifest error) as to the
existence and amount of the Obligations recorded in the Loan Account.
2.3.2 From time to time, Borrower, Lenders and Designated
Bid Lenders shall furnish such information to Agent as Agent may reasonably
request relating to the Bid Loans, including the amounts, interest rates, dates
of Borrowing and last days of the applicable Bid Loan Interest Periods, for the
purpose of enabling Agent to allocate amounts received from Borrower to payment
of amounts due and owing under the Loan Documents.
2.4 INTEREST ON THE LOANS.
2.4.1 BASE RATE LOANS. Subject to Section 2.4.5, all Base
Rate Loans shall bear interest on the average daily unpaid principal amount
thereof from the date made until paid in full at a fluctuating rate per annum
equal to the sum of the Base Rate plus the Applicable Base Rate Margin. Base
Rate Loans shall be made in minimum amounts of One Million Dollars ($1,000,000)
or an integral multiple of One Hundred Thousand ($100,000) in excess thereof.
2.4.2 LIBOR LOANS. Subject to Sections 2.4.5 and 2.4.8,
all LIBOR Loans shall bear interest on the unpaid principal amount thereof
during the Interest Period applicable thereto at a rate per annum equal to the
sum of LIBOR for such Interest Period plus the Applicable LIBOR Rate Margin.
LIBOR Loans shall be in tranches of One Million Dollars ($1,000,000) or One
Hundred Thousand Dollar ($100,000) increments in excess thereof. Subject to
the limitation on the total number of Interest Periods that may be outstanding
at any time set forth in Section 2.1.1(b), no more than eight (8) LIBOR Loan
tranches shall be outstanding at any one time. Notwithstanding anything to the
contrary contained herein and subject to the Default Interest provisions
contained in Section 2.4.5, if an Event of Default occurs and as a result
thereof the Commitments are terminated, all LIBOR Loans will convert to Base
Rate Loans upon the expiration of the applicable Interest Periods therefor or
the date all Loans become due, whichever occurs first.
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2.4.3 BID LOANS. Subject to Section 2.4.5 (and, in the
case of LIBOR Bid Loans, Section 2.4.8), each Bid Loan shall bear interest,
from and including the date it is made to but excluding the last day of the Bid
Loan Interest Period applicable thereto, at a rate per annum equal to (A) in
the case of an Absolute Rate Bid Loan, the Absolute Rate specified by the
Lender making (or whose Designated Bid Lender makes) such Absolute Rate Bid
Loan in its accepted Competitive Bid, and (B) in the case of a LIBOR Bid Loan,
the sum of (1) the LIBOR Bid Margin specified by the Lender making (or whose
Designated Bid Lender makes) such LIBOR Bid Loan in its accepted Competitive
Bid, plus (2) LIBOR. Any portion of the principal of a Bid Loan that is not
paid when due shall thereafter bear interest, from and including the date it
was due to but not including the date it is paid, at a rate that is five
percent (5%) per annum in excess of the non-default rate applicable to Base
Rate Loans.
2.4.4 INTEREST PAYMENTS. Subject to Section 2.4.5,
interest accrued on all Loans shall be payable by Borrower, in the manner
provided in Section 2.6.2, in arrears on (a) the first Business Day of the
first calendar month following the Closing Date, (b) the first Business Day of
each succeeding calendar month thereafter, and (c) (i) if the Termination Date
occurs by reason of an event other than a Voluntary Termination, on the
Termination Date, or (ii) in the case of a Voluntary Termination: (A) with
respect to the Committed Loans, on the Termination Date, and (B) with respect
to any Bid Loans that remain outstanding after the Termination Date, on the
first Business Day of each succeeding calendar month thereafter and on the last
day of the Bid Loan Interest Period applicable thereto (or upon acceleration
thereof pursuant to Section 10.2.1).
2.4.5 INITIAL LOANS; DEFAULT INTEREST.
(a) Notwithstanding the rates of interest
specified in Sections 2.4.1 and 2.4.2 (but subject to Section
2.4.5(b)), the Loans made on the initial Funding Date shall bear
interest as follows:
(i) as to $19,000,000, for an Interest
Period ending on August 27, 1997, as a LIBOR Loan at a per
annum rate equal to 6.61%;
(ii) as to $10,000,000, for an Interest
Period ending on August 21, 1997, as a LIBOR Loan at a per
annum rate equal to 6.49%; and
(iii) as to any portion of the Loans made
on the initial Funding Date in excess of of $29,000,000, at a
rate or rates determined in accordance with the other
provisions of this Agreement.
(b) Notwithstanding the rates of interest
specified in Sections 2.4.1, 2.4.2 and 2.4.3 and the payment dates
specified in Section 2.4.4, effective immediately upon the occurrence
and during the continuance of any Event of
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Default, the principal balance of each Loan then outstanding and, to
the extent permitted by applicable law, any interest payments on the
Loans not paid when due, shall bear interest payable upon demand at a
rate which is five percent (5%) per annum in excess of the rate(s) of
interest otherwise payable from time to time under this Agreement.
All other amounts due Agent, Lenders or Designated Bid Lenders
(whether directly or for reimbursement) under this Agreement or any of
the other Loan Documents if not paid when due, or if no due date is
expressed, if not paid within ten (10) days after demand, shall bear
interest from and after such due date or demand, as the case may be,
at a rate that is five percent (5%) per annum in excess of the
non-default rate applicable to Base Rate Loans.
2.4.6 COMPUTATION OF INTEREST. Interest shall be computed
on the basis of the actual number of days elapsed in the period during which
interest or fees accrue and a year of three hundred sixty (360) days. In
computing interest on any Loan, the date of the making of the Loan shall be
included and the date of payment shall be excluded; provided, however, that if
a Loan is repaid on the same day on which it is made, one (1) day's interest
shall be paid on that Loan. Notwithstanding any provision in this Section 2.4,
interest in respect of any Loan shall not exceed the maximum rate permitted by
applicable law. Changes in the Applicable Base Rate Margin or the Applicable
LIBOR Rate Margin shall take effect as of the date on which the condition set
forth in the relevant clause of the definition of each such term is satisfied.
2.4.7 CHANGES; LEGAL RESTRICTIONS. In the event that after
the Closing Date (i) the adoption of or any change in any law, treaty, rule,
regulation, guideline or determination of a court or Governmental Authority or
any change in the interpretation or application thereof by a court or
Governmental Authority, or (ii) compliance by Agent or any Lender with any
request or directive made or issued after the Closing Date (whether or not
having the force of law and whether or not the failure to comply therewith
would be unlawful) from any central bank or other Governmental Authority or
quasi-governmental authority:
(a) subjects Agent or any Lender to any tax, duty
or other charge of any kind with respect to the Committed Facility,
the Bid Loan Facility, this Agreement or any of the other Loan
Documents or the Loans, or changes the basis of taxation of payments
to Agent or such Lender of principal, fees, interest or any other
amount payable hereunder, except for net income, gross receipts, gross
profits or franchise taxes imposed by any jurisdiction and not
specifically based upon loan transactions (all such non-excepted
taxes, duties and other charges being hereinafter referred to as
"Lender Taxes");
(b) imposes, modifies or holds applicable, in the
determination of Agent or any Lender, any reserve, special deposit,
compulsory loan, FDIC
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insurance, capital allocation or similar requirement (other than a
requirement of the type described in Section 2.7) against assets held
by, or deposits or other liabilities in or for the account of,
advances or loans by, or other credit extended by, or any other
acquisition of funds by, Agent or such Lender or any applicable
lending office (except to the extent that the reserve and FDIC
insurance requirements are reflected in the "Base Rate" or in
determining LIBOR); or
(c) imposes on Agent or any Lender any other
condition (other than one described in Section 2.7) materially more
burdensome in nature, extent or consequence than those in existence as
of the Closing Date,
and the result of any of the foregoing is to increase the cost to Agent or any
Lender of making, renewing, maintaining or participating in the Loans or to
reduce any amount receivable thereunder; then, in any such case, Borrower shall
promptly pay to Agent or such Lender, as applicable, upon demand, such amount
or amounts (based upon a reasonable allocation thereof by Agent or such Lender
to the financing transactions contemplated by this Agreement and affected by
this Section 2.4.7) as may be necessary to compensate Agent or such Lender for
any such additional cost incurred or reduced amounts received; provided,
however, that if the payment of such compensation may not be legally made
whether by modification of the applicable interest rate or otherwise, then
Lenders shall have no further obligation to make Loans that cause Agent or any
Lender to incur such increased cost, and all affected Loans shall become
immediately due and payable by Borrower. Agent or such Lender shall deliver to
Borrower and in the case of a delivery by Lender, such Lender shall also
deliver to Agent, a written statement of the claimed additional costs incurred
or reduced amounts received and the basis therefor as soon as reasonably
practicable after such Lender obtains knowledge thereof. If Agent or any
Lender subsequently recovers any amount of Lender Taxes previously paid by
Borrower pursuant to this Section 2.4.7, whether before or after termination of
this Agreement, then, upon receipt of good funds with respect to such recovery,
Agent or such Lender will refund such amount to Borrower if no Event of Default
or Unmatured Event of Default then exists or, if an Event of Default or
Unmatured Event of Default then exists, such amount will be credited to the
Obligations in the manner determined by Agent or such Lender.
2.4.8 CERTAIN PROVISIONS REGARDING LIBOR LOANS AND BID
LOANS.
(a) LIBOR LENDING UNLAWFUL. If any Lender or
Designated Bid Lender shall determine (which determination shall, upon
notice thereof to Borrower and Agent, be conclusive and binding on the
parties hereto) that the introduction of or any change in or in the
interpretation of any law makes it unlawful, or any central bank or
other Governmental Authority asserts that it is unlawful, for such
Lender or Designated Bid Lender to make or maintain any Loan as a
LIBOR Loan or a LIBOR Bid Loan, as the case may be, (i) the
obligations of
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such Lenders or Designated Bid Lenders to make or maintain any Loans
as LIBOR Loans or LIBOR Bid Loans shall, upon such determination,
forthwith be suspended until such Lender or Designated Bid Lender
shall notify Agent that the circumstances causing such suspension no
longer exist, and (ii) if required by such law or assertion, the LIBOR
Loans and LIBOR Bid Loans of such Lender or Designated Bid Lender
shall automatically convert into Base Rate Loans (which, in the case
of a LIBOR Bid Loan so converted, shall nevertheless be due and
payable in full on the last day of the relevant Bid Loan Interest
Period).
(b) DEPOSITS UNAVAILABLE. If Agent shall have
determined in good faith that adequate means do not exist for
ascertaining the interest rate applicable hereunder to LIBOR Loans or
LIBOR Bid Loans, then, upon notice from Agent to Borrower the
obligations of all Lenders and Designated Bid Lenders to make or
maintain Loans as LIBOR Loans or LIBOR Bid Loans, as the case may be,
shall forthwith be suspended until Agent shall notify Borrower that
the circumstances causing such suspension no longer exist. Agent will
give such notice when it determines, in good faith, that such
circumstances no longer exist; provided, however, that Agent shall not
have any liability to any Person with respect to any delay in giving
such notice.
(c) FIXED RATE PRICE ADJUSTMENT. Borrower
acknowledges that prepayment or acceleration of a LIBOR Loan or a Bid
Loan during an Interest Period shall result in the affected Lenders
and Designated Bid Lenders incurring additional costs, expenses and/or
liabilities and that it is extremely difficult and impractical to
ascertain the extent of such costs, expenses and/or liabilities. (For
all purposes of this subparagraph (c), any Loan not being made as a
LIBOR Loan or a Bid Loan in accordance with the Notice of Borrowing or
acceptance of a Competitive Bid therefor, as a result of Borrower's
cancellation thereof, shall be treated as if such LIBOR Loan or Bid
Loan, as the case may be, had been made by the Lender submitting such
Competitive Bid (and not by its Designated Bid Lender) and had been
prepaid.) Therefore, on the date a LIBOR Loan or Bid Loan is prepaid
or the date all sums payable hereunder become due and payable, by
acceleration or otherwise ("Price Adjustment Date"), Borrower will pay
to Agent, for the account of each affected Lender or Designated Bid
Lender (in addition to all other sums then owing), an amount ("Fixed
Rate Price Adjustment") equal to:
(i) in the case of a LIBOR Loan or a
LIBOR Bid Loan, the then present value of (A) the amount of
interest that would have accrued on the LIBOR Loan or LIBOR
Bid Loan for the remainder of the Interest Period at the rate
applicable to such LIBOR Loan or LIBOR Bid Loan, less (B) the
amount of interest that would accrue on the same Loan for the
same period if LIBOR were set on the Price Adjustment Date,
calculating the
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present value by using as a discount rate LIBOR quoted on the
Price Adjustment Date; or
(ii) in the case of an Absolute Rate Bid
Loan, the sum of such losses and expenses as the Lender or
Designated Bid Lender who made such Absolute Rate Bid Loan may
reasonably incur by reason of such prepayment, including
without limitation any losses or expenses incurred in
obtaining, liquidating or employing deposits from third
parties, but excluding loss of margin for the period after
such prepayment.
(d) Upon the written notice to Borrower from
Agent, Borrower shall immediately pay to Agent, for the account of the
affected Lenders and Designated Bid Lenders, the Fixed Rate Price
Adjustment payable with respect to each affected Loan. Such written
notice (which shall include calculations in reasonable detail) shall,
in the absence of manifest error, be conclusive and binding on the
parties hereto.
(e) Borrower understands, agrees and acknowledges
the following: (i) no Lender or Designated Bid Lender has any
obligation to purchase, sell and/or match funds in connection with the
use of LIBOR as a basis for calculating the rate of interest on a
LIBOR Loan or LIBOR Bid Loan or a Fixed Rate Price Adjustment; (ii)
LIBOR is used merely as a reference in determining such rate and/or
Fixed Rate Price Adjustment; and (iii) Borrower has accepted LIBOR as
a reasonable and fair basis for calculating such rate and/or a Fixed
Rate Price Adjustment. Borrower further agrees to pay the Fixed Rate
Price Adjustment and Lender Taxes, if any, whether or not a Lender or
Designated Bid Lender elects to purchase, sell and/or match funds.
2.4.9 WITHHOLDING TAX EXEMPTION. At least five (5)
Business Days prior to the first day on which interest or fees are payable
hereunder for the account of any Lender, each Lender that is not incorporated
under the laws of the United States of America, or a state thereof, agrees that
it will deliver to Agent and Borrower two (2) duly completed copies of United
States Internal Revenue Service Form 1001 or Form 4224, certifying in either
case that such Lender is entitled to
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receive payments under this Agreement without deduction or withholding of any
United States federal income taxes. Each Lender which so delivers a Form 1001
or Form 4224 further undertakes to deliver to Agent and Borrower two (2)
additional copies of such form (or any applicable successor form) on or before
the date that such form expires (currently, three (3) successive calendar years
for Form 1001 and one (1) calendar year for Form 4224) or becomes obsolete or
after the occurrence of any event requiring a change in the most recent forms
so delivered by it, and such amendments thereto or extensions or renewals
thereof as may be reasonably requested by Agent or Borrower, in each case
certifying that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes, unless an event (including without limitation any change in treaty, law
or regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such form with
respect to it and such Lender advises Agent that it is not capable of receiving
payments without any deduction or withholding of United States federal income
taxes. If any Lender cannot deliver such form, then Borrower may withhold from
such payments such amounts as are required by the Internal Revenue Code.
2.5 FEES.
2.5.1 FACILITY FEE. From and after the Closing Date and
until the Obligations are paid in full and this Agreement is terminated or, if
sooner, the date the Commitments terminate, Borrower shall pay to Agent, for
the account of each Lender, a fee (the "Facility Fee") in an annualized amount
equal to the Applicable Facility Fee Percentage of the Commitment. The
Facility Fee shall be payable, in the manner provided in Section 2.6.2, in
arrears, on the first Business Day in each Fiscal Quarter in an amount equal to
one-quarter of the Applicable Facility Fee Percentage of the Commitment as of
the day immediately preceding the date on which such payment is due, beginning
with the first Fiscal Quarter after the Closing Date, and on the date of
payment in full of all Obligations with respect to Committed Loans to Lenders
under Section 2.1.5 or of all Obligations to a Lender pursuant to Section 2.9,
with the Facility Fee to be prorated to the date of such payment in the case of
any partial quarter.
2.5.2 AGENCY FEES. Borrower shall pay Agent such fees as
are provided for in the agency fee agreement between Agent and Borrower, as in
existence from time to time.
2.5.3 PAYMENT OF FEES. The fees described in Section
4.1.13 and in this Section 2.5 represent compensation for services rendered and
to be rendered separate and apart from the lending of money or the provision of
credit and do not constitute compensation for the use, detention or forbearance
of money, and the obligation of Borrower to pay the fees described herein shall
be in addition to, and not in lieu of, the obligation of Borrower to pay
interest, other fees and expenses otherwise described in this Agreement. All
fees shall be payable when due in immediately available funds and shall be
non-refundable when paid. If Borrower fails to make any payment of fees or
expenses specified or referred to in this Agreement due to Agent, Lenders or
Designated Bid Lenders, including without limitation (in each case, to the
extent applicable) those referred to in this Section 2.5, in Section 12.1, or
otherwise under this Agreement or any separate fee agreement between Borrower
and Agent or any Lender relating to this Agreement, when due, the amount due
shall bear interest until paid at the Base Rate and, after ten (10) days at
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the rate specified in Section 2.4.5 (but not to exceed the maximum rate
permitted by applicable law), and shall constitute part of the Obligations.
The Facility Fee (for partial quarters) and the fees referred to in Section
2.5.2 which are expressed as a per annum charge shall be calculated on the
basis of the actual number of days elapsed in a three hundred sixty (360) day
year.
2.6 PAYMENTS.
2.6.1 VOLUNTARY PREPAYMENTS; REDUCTION IN FACILITY.
(a) Borrower may, upon not less than three (3)
Business Days prior written notice to Agent not later than 11:00 a.m.
(San Francisco time) on the date given, at any time and from time to
time, prepay any Committed Loans in whole or in part; provided that,
notwithstanding the foregoing, Borrower may, upon not less than one
(1) Business Day's prior written notice to Agent not later than 11:00
a.m. (San Francisco time) on the date given, at any time and from time
to time, prepay Swing Line Borrowings in whole or in part. Any notice
of prepayment given to Agent under this Section 2.6.1 shall specify
the date of prepayment and the aggregate principal amount of the
prepayment, and, in the event Borrower wishes to have all or a portion
of such prepayment applied in reduction of the then outstanding
principal balance under the Swing Line, the amount of such prepayment
which should be so applied. In the event of a prepayment of LIBOR
Loans, other than in connection with the prepayment of all accrued
Obligations in respect of the Committed Loans and termination of all
Commitments pursuant to a notice delivered under this Section 2.6.1(a)
within thirty (30) days after a demand by Agent or any Lender for
payment or reimbursement pursuant to Section 2.7, Borrower shall
concurrently pay any Fixed Rate Price Adjustment payable in respect
thereof. Agent shall provide to each Lender a confirming copy of such
notice on the same Business Day such notice is received.
(b) BID LOANS. Borrower shall have no right to
pay all or any portion of any Bid Loan prior to the last day of the
Bid Loan Interest Period applicable thereto.
2.6.2 MANNER AND TIME OF PAYMENT. All payments of
principal, interest and fees hereunder payable to Agent, Lenders or Designated
Bid Lenders shall be made without condition or reservation of right and free of
set-off or counterclaim, in Dollars and by wire transfer (pursuant to Agent's
written wire transfer instructions) of immediately available funds, to Agent,
for the account of each Lender and Designated Bid Lender, not later than 11:00
a.m. (San Francisco time) on the date due; and funds received by Agent after
that time and date shall be deemed to have been paid on the next succeeding
Business Day. In order to assure timely payment of interest on the Loans and
fees pursuant to
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Section 2.5, Borrower hereby irrevocably authorizes Agent to directly debit
Borrower's demand deposit account with Agent (Account No. 4233-040799) for
payment when due of all such interest and fees payable to Lenders and
Designated Bid Lenders. Written notice of the amount and purpose of any such
direct debit shall be given to Borrower by Agent not less than two (2) Business
Days prior to its effective date; provided, however, that Agent's failure to
give such notice shall not affect the validity of, or Borrower's authorization
of, such debit. In the event any direct debit hereunder is returned for
insufficient funds, Borrower shall, upon notice from Agent, immediately deposit
sufficient funds into said account to pay all interest, fees and other related
charges due and owing to Lenders and Designated Bid Lenders; provided, however,
that any such insufficiency of funds in said account shall not excuse or delay
the timely payment by Borrower of the full amount of such interest, fees and
related charges or relieve Borrower of its obligations under Section 2.4.5 in
respect of any such insufficiency. The statement of the Loan Account provided
by Agent to Borrower shall show the amounts and dates of such direct debits.
2.6.3 PAYMENTS ON NON-BUSINESS DAYS. Whenever any payment
to be made by Borrower hereunder shall be stated to be due on a day which is
not a Business Day, payments shall be made on the next succeeding Business Day
and such extension of time shall be included in the computation of the payment
of interest hereunder and of any of the fees specified in Section 2.5, as the
case may be.
2.7 INCREASED CAPITAL. If either (i) the introduction of or any
change in or in the interpretation of any law or regulation or (ii) compliance
by Agent or any Lender with any guideline or request from any central bank or
other Governmental Authority (whether or not having the force of law and
whether or not the failure to comply therewith would be unlawful) made or
issued after the Closing Date affects or would affect the amount of capital
required or expected to be maintained by Agent or such Lender or any
corporation controlling Agent or such Lender, and Agent or such Lender
determines that the amount of such capital is increased by or based upon the
existence of Agent's obligations hereunder or such Lender's Commitment, then,
upon demand by Agent or such Lender, Borrower shall immediately pay to Agent or
such Lender, from time to time as specified by Agent or such Lender, additional
amounts sufficient to compensate Agent or such Lender in the light of such
circumstances, to the extent that Agent or such Lender determines such increase
in capital to be allocable to the existence of Agent's obligations hereunder or
such Lender's Commitment; provided, however, that (i) neither Agent nor any
Lender may claim under this Section 2.7 any such additional amount attributable
to any period preceding the date that is ninety (90) days prior to the date of
its demand, and (ii) before making any such demand, Agent, and each Lender,
agrees to use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions) to designate a different lending office as its
lending office for purposes of the Loans and its Commitment, if the making of
such a designation (1) would avoid the need for, or reduce the amount of, such
demand and (2) would not, in the reasonable judgment of Agent or such Lender,
as the case may be, be
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otherwise disadvantageous to it; and provided further that neither Agent nor
any Lender may claim under this Section 2.7 any such amount to the extent that
it is not, at the time such claim is asserted, such Person's general practice
to make claims for such amounts in similar circumstances, under comparable
provisions of credit agreements, if any, with similarly situated borrowers. A
certificate as to such amounts submitted to Borrower by Agent or such Lender
shall, in the absence of manifest error, be conclusive and binding for all
purposes.
2.8 NOTICE OF INCREASED COSTS. Each Lender and Designated Bid
Lender agrees that, as promptly as reasonably practicable after it becomes
aware of the occurrence of an event or the existence of a condition which would
cause it to be affected by any of the events or conditions described in Section
2.4.7 or 2.4.8 or Section 2.7 (in each case, to the extent applicable), it will
notify Borrower, and provide a copy of such notice to Agent, of such event and
the possible effects thereof, provided that the failure to provide such notice
shall not affect such Lender's or Designated Bid Lender's rights to
reimbursement provided for herein.
2.9 OPTION TO REPLACE LENDERS. If any Lender shall:
2.9.1 fail or refuse to fund its portion of any Loan
(including, in the case of any Designating Lender, any Bid Loan not funded by
its Designated Bid Lender) for any reason other than the failure of Borrower to
satisfy the conditions precedent to such Loan hereunder and such failure
continues for two (2) Business Days after notice from Borrower to such Lender
that Borrower intends to exercise its rights hereunder;
2.9.2 make any demand for payment or reimbursement pursuant
to Section 2.4.7; or
2.9.3 make any demand for payment or reimbursement pursuant
to Section 2.7,
then, in any of the foregoing cases, provided that (i) there does not then
exist any Unmatured Event of Default or Event of Default and (ii) the
circumstances resulting in such demand for payment or reimbursement are not
applicable to all Lenders, Borrower may cause the Commitment of such Lender to
be assumed by a replacement lender, in whole but not in part, by (1) giving
such Lender and Agent not less than three (3) Business Days' prior written
notice thereof, which notice shall be irrevocable and effective only upon
receipt thereof by such Lender and Agent and shall specify the effective date
of such assumption, (2) pursuant to the provisions of Section 11.12, bringing
in a new Lender, or obtaining the agreement of one or more existing Lenders, to
assume the entire amount of the Commitment of the Lender whose Commitment is
being assumed and to purchase all outstanding Loans, including Bid Loans, owed
to such Lender (and, for purposes of such
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transaction, such Lender's Bid Loans may be assigned to such new Lender, or to
such existing Lender(s), notwithstanding any provision to the contrary
contained in any Loan Document), on the effective date of such assumption, (3)
paying to such Lender (and there shall become due and payable) on such date all
Obligations, other than in respect of principal or interest, owed to such
Lender, including, without limitation, amounts owing under (A) Sections 2.4.7,
2.4.8(d), Section 2.4.8(e), 2.5 and 2.7, and (B) except in the case of a demand
for payment or reimbursement pursuant to Section 2.7, Section 2.4.8(c), and (4)
if the Lender whose Commitment is being so assumed is also Agent, causing such
Agent to be replaced by a new agent pursuant to the provisions of Section 11.9.
Upon the satisfaction of all of the foregoing conditions, such Lender shall
cease to be a "Lender" for purposes of this Agreement, provided that Borrower
shall continue to be obligated to such Lender under Sections 12.1 and 12.2 with
respect to or on account of unpaid, unliquidated, unknown or similar claims or
liabilities accruing prior to such Lender ceasing to be a "Lender" for purposes
of this Agreement.
ARTICLE III
UNENCUMBERED POOL PROPERTIES
3.1 DESIGNATION/ACCEPTANCE OF UNENCUMBERED POOL PROPERTIES.
3.1.1 INITIAL UNENCUMBERED POOL PROPERTIES. Subject to
compliance with the terms and conditions of Section 4.1, Lenders have accepted
the properties listed on Schedule 1 as of the Closing Date as Unencumbered Pool
Properties.
3.1.2 DESIGNATION OF CERTAIN PROPERTIES AS UNENCUMBERED
POOL PROPERTIES.
(a) Borrower may from time to time designate an
additional property as an Unencumbered Pool Property by delivering to
Agent a written notice to that effect, together with a certification,
in substantially the form of Exhibit J, identifying the property and
certifying that each of the following criteria (the "UPP Eligibility
Criteria") is true and correct with respect to such property (such
certification, a "UPP Eligibility Certification"):
(i) the property is wholly-owned by
Borrower, a UPP Subpartnership or a Partnership that has
previously been approved by the Majority Lenders to become a
"UPP Subpartnership", and that neither such property, nor any
interest in the Person owning such Property (other than
interests held by Third Party Partners), is subject to (A) any
Lien (other than Permitted Liens) or (B) if such UPP
Subpartnership is (or is to be) a Guarantor Subpartnership,
any Negative Pledge;
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(ii) either (A) the property is improved
with one or more completed (1) suburban office buildings or
(2) industrial buildings, or (3) buildings of such other type
as Lenders may from time to time unanimously approve for
purposes of the UPP Eligibility Criteria (the "Approved
Property Types"), or (B) (1) the Individual UPP Value of the
property, when added to the aggregate Individual UPP Values of
all Special UPPs of types other than the Approved Property
Types, would not exceed twenty-five percent (25%) of the
Unencumbered Pool Value, and (2) the Individual UPP Value of
the property would not exceed ten percent (10%) of the
Unencumbered Pool Value (in each case, determined as if such
property were an Unencumbered Pool Property) (and specifying
which of the preceding clauses (A) and (B) is applicable);
(iii) if such property were an
Unencumbered Pool Property: (A) the Aggregate Occupancy Rate,
as of the date of such UPP Eligibility Certification, would
not be less than ninety percent (90%); (B) the aggregate
Individual UPP Values of the Unencumbered Pool Properties
owned by UPP Subpartnerships (whether or not such UPP
Subpartnerships are Guarantor Subpartnerships), as of the date
of such UPP Eligibility Certification, would not exceed ten
percent (10%) of the Unencumbered Pool Value; and (C) the
aggregate Individual UPP Values of the Unencumbered Pool
Properties owned by UPP Subpartnerships that are not Guarantor
Subpartnerships, as of the date of such UPP Eligibility
Certification, would not exceed five percent (5%) of the
Unencumbered Pool Value.
(iv) either (A) the property is located
in California, Oregon or Washington, in Boise, Idaho or in
such other market as Lenders may from time to time unanimously
approve for purposes of the UPP Eligibility Criteria (the
"Approved Markets"), or (B) the Individual UPP Value of the
property, when added to the aggregate Individual UPP Values of
all Special UPPs located outside the Approved Markets, would
not exceed ten percent (10%) of the Unencumbered Pool Value
(determined as if such property were an Unencumbered Pool
Property) (and specifying which of the preceding clauses (A)
and (B) is applicable); and
(v) (A) (1) Borrower has obtained both a
"Phase I" environmental assessment and a structural/physical
report with respect to such property, in each case, prepared
as of a reasonably current (identified) date by a consultant
of good repute within the region in which such property is
located and believed by Borrower to be competent (and
identifying the consultant), (B) Borrower has reviewed each
such report and believes it reasonable to rely upon such
report, and (C) (1) in the case of an
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environmental assessment, such assessment does not (a)
identify any contamination or potential contamination that has
resulted in, or that could reasonably be anticipated to result
in, a material adverse effect upon the condition (financial or
otherwise), fair market value, net operating income or
prospects of such property, or (2) recommend that any further
material investigation be undertaken, or (3) in the case of a
structural/physical report, such report does not identify any
material defect in construction or physical condition of the
property, material variance from any available plans and
specifications for the property or material violation of
applicable law, or other item of material concern with respect
to the structural integrity or physical condition of the
property.
Subject to Section 3.1.2(b) and to execution and delivery of such
items or documents as may be appropriate under the circumstances
(e.g., if the property is owned by a Partnership that has not
previously executed and delivered a Guaranty, the execution and
delivery of a Guaranty by such Partnership), Borrower's designation of
a property as an Unencumbered Pool Property in accordance with the
foregoing provisions of this Section 3.1.2 shall become effective on
the twentieth (20th) day following delivery of the relevant UPP
Eligibility Certification to Agent.
(b) Promptly following receipt by Agent of a UPP
Eligibility Certification with respect to a proposed Unencumbered Pool
Property, Agent shall transmit a copy thereof to each Lender, and, at
the request of any Lender made within twenty (20) days after Agent's
receipt of the UPP Eligibility Certification, shall request of
Borrower any or all of the information relating to such property
listed in Section 3.1.3 that may be relevant to determining the
accuracy of the UPP Eligibility Certification. If no such request is
made during such twenty-day period, then Borrower's designation of
such property as an Unencumbered Pool Property shall become effective
in accordance with the last sentence of Section 3.1.2(a). If any such
request is made:
(i) Borrower shall deliver the requested
information to Agent, and Agent shall promptly distribute the
information to the Lender requesting same. If, within twenty
(20) days after Agent's receipt of the requested information,
no notice has been received by Agent from any Lender
challenging the proposed designation on the grounds that the
property does not satisfy the UPP Eligibility Criteria, then
(subject to execution and delivery of such items or documents
as may be appropriate under the circumstances) the designation
of such property as an Unencumbered Pool Property shall become
effective at the end of such twenty-day period.
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(ii) If, based on its review of such
information, any Lender concludes that the proposed property
does not satisfy each of the UPP Eligibility Criteria: (A)
such Lender shall notify Agent within twenty (20) days after
Agent's receipt of such information, identifying with
reasonable specificity the information giving rise to such
conclusion, and (B) Agent shall notify Borrower and each
Lender.
(iii) Agent shall, as expeditiously as
possible, review the information identified by such Lender as
the basis for its challenge to such property's satisfaction of
the UPP Eligibility Criteria. If, following consultation with
Agent and Borrower, such Lender is still of the opinion that
such property does not satisfy the UPP Eligibility Criteria,
Agent shall so notify Borrower and each Lender, and the
designation of such property as an Unencumbered Pool Property
shall not become effective. If the assertion of ineligibility
is based on the inaccuracy of any of clauses (ii), (iv) or (v)
of the UPP Eligibility Criteria (provided that the proposed
property must be a completed improvement of one of the types
included in the definition of "Unencumbered Pool Property",
and the acceptance of such property as an Unencumbered Pool
Property shall not cause any Unmatured Event of Default or
Event of Default to exist), Borrower may, at its option, elect
to request, pursuant to Section 3.1.3, that such property be
accepted as an Unencumbered Pool Property notwithstanding the
property's failure to satisfy the UPP Eligibility Criteria, in
which case the provisions of Section 3.1.3 shall apply to the
acceptance of such property as an Unencumbered Pool Property,
except that Borrower need only provide such additional
information regarding such property as Agent or any Lender
(through Agent) may request.
(c) Borrower may, in contemplation of its
designation for inclusion in the Unencumbered Property Pool of
property that is to be owned by a Partnership that has not previously
qualified as a UPP Subpartnership hereunder, deliver to Agent copies
of the Partnership Agreement of such Partnership and of such other
information regarding such Partnership as may be reasonably requested
by Agent for submittal to the Lenders and possible approval of the
Majority Lenders.
(d) If at any time following the designation of a
property as an Unencumbered Pool Property in accordance with this
Section 3.1.2 Agent, or Majority Lenders, shall determine that such
property is not in fact "Unencumbered Property" within the meaning of
that term set forth in Section 1.1, then, in addition to any other
consequences of such determination that may arise under the Loan
Documents, such property shall cease to constitute an "Unencumbered
Pool Property".
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(e) Without limiting in any manner the general
application of Article XI to the performance of Agent's duties in
respect of the Loan Documents, Lenders agree that (i) Agent shall have
no responsibility, as Agent, to request additional information with
respect to any property for which Borrower submits a UPP Eligibility
Certification or (except to the extent expressly set forth above)
otherwise to make any determination regarding the satisfaction of the
UPP Eligibility Criteria with respect to any property; (ii) Agent's
performance of its duties under this Section 3.1.2 shall be subject in
all respects to the provisions of Article XI; and (iii) Agent shall be
entitled to all of the rights, protections and benefits of Article XI
with respect to its performance of its duties under this Section
3.1.2.
3.1.3 ACCEPTANCE OF CERTAIN UNENCUMBERED POOL PROPERTIES.
If Borrower desires that Lenders accept as an Unencumbered Pool Property (but
not as a Special UPP) (i) an additional property that does not satisfy the UPP
Eligibility Criteria, or that, if designated as an Unencumbered Pool Property
pursuant to Section 3.1.2, would be a Special UPP, or (ii) an Unencumbered Pool
Property that is currently a Special UPP, Borrower shall so notify Agent, and
Agent shall promptly notify each other Lender. In the case of a request that
an existing Special UPP be accepted as an Unencumbered Pool Property that is no
longer a Special UPP, Borrower shall deliver to Agent such information as may
be reasonably requested by Agent or any Lender in order to evaluate Borrower's
request. In the case of property other than an existing Special UPP, such
additional property will be evaluated by Lenders as a potential Unencumbered
Pool Property upon Borrowers delivery to Agent of such of the following as the
Agent may request in writing:
(a) A current operating statement for such
property audited or certified by Borrower as being true and correct in
all material respects and prepared in accordance with GAAP and
comparative operating statements (in the general form of the Quarterly
Operating Reports) for the current period and for the previous two (2)
Fiscal Years; provided, however, that, if Borrower shall have owned
such property for less than the period to be covered by such operating
statements, then the audit and certification requirements shall extend
only to the period of ownership by Borrower, so long as Borrower
provides operating statements prepared and certified by the former
owner(s) for the remainder of the period required hereunder;
(b) A current rent roll for such property and a
three (3) year operating and occupancy history of such property in
form satisfactory to Agent, and certified by Borrower to be true and
correct;
(c) A copy of Borrower's most recent Owner's
Policy of Title Insurance and survey of such Property (if any);
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(d) The most recent "Phase I" environmental
assessment of such property, and any additional environmental studies
or assessments in Borrower's possession or control that have been
performed with respect to such property (including, in the case of a
request for information pursuant to Section 3.1.2, the environmental
assessment of such property relied upon by Borrower for purposes of
its UPP Eligibility Certification);
(e) Copies of all Major Agreements affecting such
property;
(f) Copies of engineering, mechanical, structural
or maintenance studies performed with respect to such property
(including, in the case of a request for information pursuant to
Section 3.1.2, the structural/physical report on such property relied
upon by Borrower for purposes of its UPP Eligibility Certification);
(g) If the property is to be owned by a
Partnership that has not previously qualified as a UPP Subpartnership
hereunder, copies of the Partnership Agreement of such Partnership and
of such other information regarding such Partnership as may be
reasonably requested by Agent; and
(h) Such other information as may be reasonably
requested by Agent or any Lender in order to evaluate the potential
Unencumbered Pool Property.
Following receipt of the foregoing documents and information, Agent shall
review them as expeditiously as is reasonably practicable under the
circumstances. If, following such review, Agent is prepared to proceed with
acceptance of such property as an Unencumbered Pool Property that is not a
Special UPP (including, if applicable, the acceptance of any proposed UPP
Subpartnership as a UPP Subpartnership), Agent will promptly (i) so notify
Borrower, and (ii) submit the foregoing documents and information to the
Lenders, for approval by the Majority Lenders. Upon such approval by the
Majority Lenders, and upon execution and delivery of such items or documents as
may be appropriate under the circumstances, such property shall become an
Unencumbered Pool Property that is not a Special UPP.
3.2 TERMINATION OF DESIGNATION AS UNENCUMBERED POOL PROPERTY.
From time to time Borrower may request, upon prior written notice to Agent
(which shall promptly send a copy thereof to each other Lender), that an
Unencumbered Pool Property cease to be designated as such, which termination of
designation ("Termination of Designation") shall be consented to by Agent if
all of the following conditions are satisfied as of the date of such
Termination of Designation:
3.2.1 No Unmatured Event of Default or Event of Default has
occurred and is continuing; and
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3.2.2 Borrower shall have delivered to Agent an
Unencumbered Pool Certificate demonstrating on a pro forma basis, and Agent
shall have determined, that after giving effect to such Termination of
Designation and any prepayment to be made and/or the acceptance of any property
as an additional or replacement Unencumbered Pool Property to be given
concurrently with such Termination of Designation: (i) the outstanding
principal balance of the Loans will not exceed the Loan Availability, (ii) the
aggregate Individual UPP Values of all Special UPPs of types other than the
Approved Property Types will not exceed twenty-five percent (25%) of the
Unencumbered Pool Value, (iii) no remaining Special UPP of a type other than
the Approved Property Types will have an Individual UPP Value in excess of ten
percent (10%) of the Unencumbered Pool Value, (iv) the aggregate Individual UPP
Values of all Special UPPs located outside the Approved Markets will not exceed
ten percent (10%) of the Unencumbered Pool Value, (v) the Aggregate Occupancy
Rate will not be less than ninety percent (90%), (vi) the aggregate Individual
UPP Values of the Unencumbered Pool Properties owned by UPP Subpartnerships
(whether or not such UPP Subpartnerships are Guarantor Subpartnerships) will
not exceed ten percent (10%) of the Unencumbered Pool Value, and (vii) the
aggregate Individual UPP Values of the Unencumbered Pool Properties owned by
UPP Subpartnerships that are not Guarantor Subpartnerships will not exceed five
percent (5%) of the Unencumbered Pool Value.
ARTICLE IV
CONDITIONS TO LOANS
4.1 CONDITIONS TO INITIAL DISBURSEMENT OF LOANS. The obligation
of Lenders to make the initial disbursement of the Loans (which Loans shall be
made as Committed Loans) shall be subject to satisfaction of each of the
following conditions precedent on or before the Closing Date (including, in the
case of Borrower, each Guarantor Subpartnership and the REIT, a certificate of
each such entity's Secretary or an officer comparable thereto (a "Secretary's
Certificate") with respect to authorization, incumbency and all organizational
documents):
4.1.1 BORROWER DOCUMENTS. Borrower shall have executed
and/or delivered to Agent each of the following, in form and substance
acceptable to Agent and each other Lender (for its own use and for transmittal
to its Designated Bid Lender, if any):
(a) this Agreement;
(b) the Loan Notes;
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(c) Certified copy of Borrower's Limited
Partnership Agreement, as amended**
(d) Certified copy of Borrower's Certificate
of Limited Partnership (Form LP-1) from
the California Secretary of State*;
(e) Certificate of Status - California Limited
Partnership from the California Secretary
of State*;
(f) Evidence of qualification and good
standing of Borrower in Oregon, Washington
and Idaho:
(i) Certificate of
Existence/Authorization of
Borrower from the Secretary
of State of Washington*;
(ii) Certificate of Existence of
Borrower from the Secretary
of State of Oregon*;
(iii) Master Business Application and
License of Borrower dba Spieker
Properties Washington, L.P. in
Washington (showing tradename of
business) (as filed and
published), issued by the
Washington Department of
Licensing; and
(iv) Certificate of Corporate Status
of Borrower from the Secretary
of State of Idaho; and
(g) Funds Transfer Agreement (on the Agent's
standard form).
4.1.2 GUARANTOR SUBPARTNERSHIP DOCUMENTS. The Guarantor
Subpartnerships shall have executed and/or delivered to Agent each of the
following, in form and substance acceptable to Agent and each other Lender:
FROM EACH GUARANTOR SUBPARTNERSHIP:
(a) Guaranty;
WITH RESPECT TO EACH GUARANTOR SUBPARTNERSHIP:
- -------------
* All good standing certificates and certified documents issued by any
Governmental Authority shall be dated as of a date within 30 days of
the Closing Date.
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(b) Certified copy of such Person's agreement
of limited partnership, partnership
agreement or operating agreement, as the
case may be, in each case, as amended*;
(c) If such Guarantor Subpartnership is a
limited partnership: Certified copies of
its Certificate of Limited Partnership
(Form LP-1) and each amendment thereto
(Form LP-2), from the Secretary of State
of California*;
(d) If such Guarantor Subpartnership is a
limited liability company: Certified
copies of its Articles of Organization and
each amendment thereto, from the Secretary
of State of California*;
(e) If such Guarantor Subpartnership is a
limited partnership or a limited liability
company: Certificate of Status from the
Secretary of State of California*;
(f) If such Guarantor Subpartnership owns an
Unencumbered Pool Property located in any
state other than California: evidence of
its qualification and good standing in
such other state:
(i) Certificate of
Existence/Authorization (or its
equivalent) from the Secretary of
State of such state*; and
(ii) in the case of SP #177
Certificate of Registration
issued under prior name of SP
#177, Spieker-Hosford-Jefferson
#177 (showing tradename of
business), issued by the
Washington Department of
Licensing, and Amended
Application for Registration
of a Foreign Limited
Partnership (showing name
change to SP #177), filed
with the Washington
Department of Licensing;
(g) Partnership Certificate (re: authorization
to execute guaranty); and
(h) Solvency Certificate; and
WITH RESPECT TO SWIP:
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(i) Certified copy of SWIP's General
Partnership Agreement*.
4.1.3 REIT DOCUMENTS. The REIT shall have executed and/or
delivered to Agent each of the following, in form and substance acceptable to
Agent and each other Lender:
(a) Guaranty;
(b) Articles of Incorporation, as amended, of
the REIT, as certified by the Secretary
of State of Maryland*;
(c) By-laws of the REIT, as certified by the
Secretary of the REIT*;
(d) Good Standing Certificate for the REIT
from the Secretary of State of Maryland*;
(e) Evidence of qualification and good
standing of the REIT in California,
Oregon and Washington:
(i) Certificate of Status of Foreign
Corporation - California Secretary
of State*;
(ii) Letter from the California
Franchise Tax Board regarding
status of the REIT in California*;
(iii) Certificate of
Existence/Authorization of the
REIT from the Washington Secretary
of State*;
(iv) Certificate of Existence of the
REIT from the Oregon Secretary
of State*;
(v) Master Business License (showing
tradename of business) issued
by the Washington Department of
Licensing; and
(vi) Letter from the Oregon Department
of Revenue regarding status of
taxes paid*;
(f) Corporate resolutions of the REIT, as
certified by the Secretary of the REIT*
(re: authorization to engage in
partnership activity, including borrowing,
and authorization to execute guaranty);
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(g) Incumbency Certificate*; and
(h) Solvency Certificate.
4.1.4 UNENCUMBERED POOL PROPERTY DOCUMENTS. Agent shall
have received all required information with respect to each Unencumbered Pool
Property in form and substance acceptable to Agent and each other Lender.
4.1.5 UNENCUMBERED POOL CERTIFICATE; COMPLIANCE
CERTIFICATE. Borrower shall have delivered to Agent an Unencumbered Pool
Certificate evidencing sufficient Loan Availability to support the Loans being
requested and a Compliance Certificate.
4.1.6 NOTICE OF BORROWING. Borrower shall have delivered
to Agent a Notice of Borrowing, and, if applicable, Agent shall have delivered
to Borrower a Fixed Rate Notice, in each case in compliance with Section 2.1.2.
4.1.7 PERFORMANCE. Borrower, the REIT and each Guarantor
Subpartnership shall have performed in all material respects all agreements and
covenants required by Agent to be performed by them on or before the Closing
Date.
4.1.8 SOLVENCY. Each of the REIT, Borrower and each
Guarantor Subpartnership shall be Solvent.
4.1.9 MATERIAL ADVERSE CHANGES. No change, as determined
by Agent and Lenders, shall have occurred, during the period commencing
December 31, 1996, and ending on the Closing Date, which has a Material Adverse
Effect on Borrower or the REIT.
4.1.10 LITIGATION PROCEEDINGS. There shall not have been
instituted or threatened, during the period commencing December 31, 1996, and
ending on the Closing Date, any litigation or proceeding in any court or
Governmental Authority affecting or threatening to affect Borrower, any
Guarantor Subpartnership or the REIT which has a Material Adverse Effect on
Borrower or the REIT.
4.1.11 INDEFEASIBLE TITLE. Borrower and the UPP
Subpartnerships, as applicable, shall have good, indefeasible and merchantable
title to the Unencumbered Pool Properties, free and clear of all Liens other
than Permitted Liens.
4.1.12 NO EVENT OF DEFAULT; SATISFACTION OF FINANCIAL
COVENANTS. On the Closing Date and after giving effect to the initial
disbursements of the Loans, no Event of Default or Unmatured Event of Default
shall exist, and the covenant contained in Section 8.5, and each of the
financial covenants contained in Article IX, shall be satisfied.
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4.1.13 FEES. Agent shall have received (i) for the ratable
account of Lenders, a loan fee in the amount separately agreed to between
Lenders and Borrower, (ii) for Agent's own account, an arrangement fee in the
amount separately agreed to between Agent and Borrower and the initial
installment of the administrative fee separately agreed to between Agent and
Borrower, and (iii) for the ratable account of Lenders or for Agent's own
account, as applicable, all other fees (if any) then due, and Borrower shall
have performed all of its other obligations as set forth in the Loan Documents
to make payments to Agent on or before the Closing Date; and all expenses of
Agent incurred prior to such Closing Date in connection with this Agreement
(including without limitation all attorneys' fees and costs), if requested by
Agent, shall have been paid by Borrower.
4.1.14 OBLIGATIONS UNDER EXISTING FACILITY. Agent shall
have received an amount (which may include proceeds of the initial Loan
hereunder) equal to all unpaid obligations of Borrower under the Existing
Facility, together with instructions to apply such sum to the payment of such
obligations in full.
4.1.15 OPINION OF COUNSEL. Agent shall have received, on
behalf of Agent and Lenders, favorable opinions of counsel (which may, as to
certain matters, be rendered by in-house counsel) for Borrower, each Guarantor
Subpartnership and the REIT dated as of the Closing Date, in form and substance
satisfactory to Agent, Lenders and their respective counsel.
4.1.16 CONSENTS AND APPROVALS. All material licenses,
permits, consents, regulatory approvals and corporate or partnership action
necessary to enter into this Agreement and the other Loan Documents to which
Borrower, the REIT or any Guarantor Subpartnership is (or is to become) a party
shall have been obtained by Borrower, the REIT or such Guarantor
Subpartnership, as the case may be.
4.1.17 ACCOUNTANT'S RELIANCE LETTER. Agent shall have
received an Accountant's reliance letter in customary form and in substance
satisfactory to Agent and Agent's counsel.
4.1.18 REPRESENTATIONS AND WARRANTIES. All representations
and warranties contained in this Agreement and the other Loan Documents shall
be true and correct in all material respects.
4.2 CONDITIONS PRECEDENT TO ALL LOANS. The obligation of each
Lender (or, in the case of a Bid Loan, its Designated Bid Lender) to make any
Loan requested to be made by it, on any date, is subject to satisfaction of the
following conditions precedent as of such date:
4.2.1 DOCUMENTS.
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(a) With respect to a request for a Committed
Loan, Agent shall have received, on or before the Funding Date and in
accordance with the provisions of Section 2.1.2, an original and duly
executed Notice of Borrowing.
(b) With respect to a Borrowing comprised of one
or more Bid Loans, a Competitive Bid Request and one or more
Competitive Bids shall have been submitted, and one or more
Competitive Bids shall have been accepted in whole or in part, all in
accordance with the provisions of Section 2.1.3.
4.2.2 ADDITIONAL MATTERS. As of the Funding Date for any
Loan and after giving effect to the Loan(s) being requested:
(a) REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties contained in this Agreement and in any
other Loan Document (other than representations and warranties which
expressly speak only as of a different date and other than for changes
permitted or contemplated by this Agreement), and each certification,
representation or warranty of Borrower set forth in the Notice of
Borrowing or Competitive Bid Request relating to such Loan(s), shall
be true and correct in all material respects on and as of such Funding
Date, as though made on and as of such date;
(b) NO DEFAULT. No Event of Default or Unmatured
Event of Default shall have occurred and be continuing or would result
from the making of the requested Loan(s), and the covenant contained
in Section 8.5, and each of the financial covenants contained in
Article IX, shall be satisfied; and
(c) NO MATERIAL ADVERSE CHANGE. Since the
Closing Date, no change shall have occurred which shall have a
Material Adverse Effect on Borrower or the REIT, as reasonably
determined by Agent, other than any such change the occurrence of
which has been waived by the Requisite Lenders in connection with any
prior Borrowing.
Each submission by Borrower to Agent of a Notice of Borrowing or a Competitive
Bid Request with respect to a Loan and the acceptance by Borrower of the
proceeds of each such Loan made hereunder shall constitute a representation and
warranty by Borrower as of the Funding Date in respect of such Loan that all
the conditions contained in this Section 4.2.2 have been satisfied.
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ARTICLE
REPRESENTATIONS AND WARRANTIES
5.1 REPRESENTATIONS AND WARRANTIES AS TO BORROWER, ETC.. In order
to induce Lenders and Designated Bid Lenders to make the Loans, Borrower hereby
represents and warrants to Lenders and Designated Bid Lenders as follows:
5.1.1 ORGANIZATION; PARTNERSHIP POWERS. Borrower (i) is a
limited partnership duly organized, validly existing and in good standing under
the laws of the jurisdiction of its formation, (ii) is duly qualified to do
business as a foreign limited partnership and in good standing under the laws
of each jurisdiction in which it owns or leases real property or in which the
nature of its business requires it to be so qualified, except for those
jurisdictions where failure to so qualify and be in good standing would not
have a Material Adverse Effect on Borrower, and (iii) has all requisite
partnership power and authority to own and operate its property and assets and
to conduct its business as presently conducted and as proposed to be conducted
in connection with and following the consummation of the Loans contemplated by
the Loan Documents.
5.1.2 AUTHORITY. Borrower has the requisite partnership
power and authority to execute, deliver and perform each of the Loan Documents
to which it is or will be a party. The execution, delivery and performance
thereof, and the consummation of the transactions contemplated thereby, have
been duly approved by the general partner of Borrower, and no other partnership
proceedings or authorizations on the part of Borrower or its general or limited
partners are necessary to consummate such transactions. Each of the Loan
Documents to which Borrower is a party has been duly executed and delivered by
Borrower and constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, subject to bankruptcy, insolvency and
other laws affecting creditors' rights generally.
5.1.3 OWNERSHIP OF BORROWER, EACH UPP SUBPARTNERSHIP.
Schedule 5.1.3 sets forth the general partners and limited partners (or other
holders of ownership interests) of Borrower and each UPP Subpartnership and
their respective ownership percentages and there are no other partnership (or
other ownership) interests outstanding. Except as set forth or referred to in
the Partnership Agreement of Borrower or any UPP Subpartnership, no partnership
(or other ownership) interest (or any securities, instruments, warrants, option
or purchase rights, conversion or exchange rights, calls, commitments or claims
of any character convertible into or exercisable for such interests) in
Borrower or any UPP Subpartnership is subject to issuance under any security,
instrument, warrant, option or purchase rights, conversion or exchange rights,
call, commitment or claim of any right, title or interest therein or thereto.
All of the partnership (or other ownership) interests
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in Borrower and each UPP Subpartnership have been issued in compliance with all
applicable Requirements of Law.
5.1.4 NO CONFLICT. The execution, delivery and performance
by Borrower of the Loan Documents to which it is or will be a party, and each
of the transactions contemplated thereby, do not and will not (i) conflict with
or violate Borrower's limited partnership agreement or certificate of limited
partnership or other organizational documents, as the case may be, or (ii)
conflict with, result in a breach of or constitute (with or without notice or
lapse of time or both) a default under any Requirement of Law, Contractual
Obligation or Court Order of or binding upon Borrower, or (iii) require
termination of any Contractual Obligation, or (iv) result in or require the
creation or imposition of any Lien whatsoever upon any of the properties or
assets of Borrower, other than Permitted Liens.
5.1.5 CONSENTS AND AUTHORIZATIONS. Borrower has obtained
all consents and authorizations required pursuant to its Contractual
Obligations with any other Person, and shall have obtained all consents and
authorizations of, and effected all notices to and filings with, any
Governmental Authority, as may be necessary to allow Borrower to lawfully
execute, deliver and perform its obligations under the Loan Documents to which
Borrower is a party.
5.1.6 GOVERNMENTAL REGULATION. Neither Borrower, the REIT
nor any Guarantor Subpartnership is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act, the Investment Company Act of 1940 or any other federal or state
statute or regulation such that its ability to incur indebtedness is limited or
its ability to consummate the transactions contemplated by the Loan Documents
is materially impaired.
5.1.7 PRIOR FINANCIALS. The (a) December 31, 1996
Consolidated Balance Sheet, Statement of Operations and Statement of Cash Flows
of the REIT contained in the REIT's Form 10K (the "December 31, 1996
Financials") and (b) March 31, 1997 Consolidated Balance Sheet, Statement of
Operations and Statement of Cash Flows of the REIT contained in the REIT's Form
10Q (in each case, delivered to Agent prior to the date hereof) were prepared
in accordance with GAAP and fairly present the assets, liabilities and
financial condition of the REIT on a consolidated basis, at the date thereof
and the results of its operations and its cash flows, on a consolidated basis,
for the period then ended.
5.1.8 FINANCIAL STATEMENTS; PROJECTIONS AND FORECASTS.
Each of the Financial Statements to be delivered to Agent pursuant to Sections
6.1.2 and 6.1.3 (i) has been, or will be, as applicable, prepared in accordance
with the books and records of the REIT on a consolidated basis, and (ii) either
fairly present, or will fairly present, as
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applicable, the financial condition of the REIT on a consolidated basis, at the
dates thereof (and, if applicable, subject to normal year-end adjustments) and
the results of its operations and cash flows, on a consolidated basis, for the
period then ended. Each of the projections delivered to Agent prior to the
date hereof and the financial projections to be delivered to Agent pursuant to
Section 6.1.5 (1) has been, or will be, as applicable, prepared by Borrower in
light of the past business and performance of Borrower on a consolidated basis
and (2) represent, or will represent, as of the date thereof, the reasonable
good faith estimates of Borrower's financial personnel.
5.1.9 PRIOR OPERATING STATEMENTS. Each of the operating
statements pertaining to each of the Unencumbered Pool Properties delivered to
Agent prior to the date hereof was prepared in accordance with GAAP in effect
on the date such operating statement of each Unencumbered Pool Property was
prepared and fairly presents the results of operations of such Unencumbered
Pool Property for the period then ended.
5.1.10 ANNUAL OPERATING REPORTS AND PROJECTIONS. Each of
the Annual Operating Reports to be delivered to Agent pursuant to Section 6.1.1
(i) has been or will be, as applicable, prepared in accordance with the books
and records of the applicable Unencumbered Pool Property, and (ii) fairly
presents or will fairly present, as applicable, the results of operations of
such Unencumbered Pool Property for the period then ended. Each of the
projections, financial plans and budgets delivered to Agent prior to the date
hereof and the projections to be delivered to Agent pursuant to Section 6.1.5
(1) has been, or will be, as applicable, prepared for each Unencumbered Pool
Property in light of the past business and performance of such Unencumbered
Pool Property and (2) represents or will represent, as of the date thereof, the
reasonable good faith estimates of the REIT's financial personnel.
5.1.11 LITIGATION; ADVERSE EFFECTS.
(a) There is no action, suit, proceeding,
governmental investigation or arbitration, at law or in equity, or
before or by any Governmental Authority, pending or, to the best of
Borrower's knowledge, threatened against Borrower or any Property of
Borrower (including any Unencumbered Pool Property), which (i) result
in a Material Adverse Effect on Borrower, (ii) materially and
adversely affect the ability of any party to any of the Loan Documents
to perform its obligations thereunder, or (iii) materially and
adversely affect the ability of Borrower to perform its obligations
contemplated in the Loan Documents.
(b) Borrower is not (i) in violation of any
applicable law, which violation has a Material Adverse Effect on
Borrower, or (ii) subject to or in default with respect to any Court
Order which has a Material Adverse Effect on Borrower. There are no
material Proceedings pending or, to the best of Borrower's knowledge,
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threatened against Borrower or any Unencumbered Pool Property, which,
if adversely decided, would have a Material Adverse Effect on
Borrower.
5.1.12 NO MATERIAL ADVERSE CHANGE. Since December 31, 1996,
there has occurred no event which has a Material Adverse Effect on Borrower,
and no material adverse change in Borrower's ability to perform its obligations
under the Loan Documents to which it is a party or the transactions
contemplated thereby.
5.1.13 PAYMENT OF TAXES. All tax returns and reports to be
filed by Borrower have been timely filed, and all taxes, assessments, fees and
other governmental charges shown on such returns or otherwise payable by
Borrower have been paid when due and payable (other than real property taxes,
which may be paid prior to delinquency so long as no penalty or interest shall
attach thereto), except such taxes, if any, as are reserved against in
accordance with GAAP and are being contested in good faith by appropriate
proceedings or such taxes, the failure to make payment of which when due and
payable will not have, in the aggregate, a Material Adverse Effect on Borrower.
Borrower has no knowledge of any proposed tax assessment against Borrower that
will have a Material Adverse Effect on Borrower, which is not being actively
contested in good faith by Borrower.
5.1.14 MATERIAL ADVERSE AGREEMENTS. Borrower is not a party
to or subject to any Contractual Obligation or other restriction contained in
its limited partnership agreement, certificate of limited partnership or
similar governing documents which has a Material Adverse Effect on Borrower.
5.1.15 PERFORMANCE. Borrower is not in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any Contractual Obligation applicable to it, and no
condition exists which, with the giving of notice or the lapse of time or both,
would constitute a default under such Contractual Obligation in each case,
except where the consequences, direct or indirect, of such default or defaults,
if any, will not have a Material Adverse Effect on Borrower.
5.1.16 FEDERAL RESERVE REGULATIONS. No part of the proceeds
of any Loan hereunder will be used to purchase or carry any "margin security"
as defined in Regulation G or for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any margin
security or for any other purpose which might constitute this transaction a
"purpose credit" within the meaning of said Regulation G. Neither Borrower,
the REIT nor any Guarantor Subpartnership is engaged primarily in the business
of extending credit for the purpose of purchasing or carrying out any "margin
stock" as defined in Regulation U. No part of the proceeds of any Loan
hereunder will be used for any purpose that violates, or which is inconsistent
with, the provisions of Regulation X or any other regulation of the Federal
Reserve Board.
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5.1.17 DISCLOSURE. The representations and warranties of
Borrower contained in the Loan Documents and all certificates, financial
statements and other documents delivered to Agent in connection therewith or
delivered to Wells Fargo or any Original Lender in connection with the Existing
Facility, do not (or, in the case of items delivered in connection with the
Existing Facility, did not, as of the date so delivered) contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading. Borrower has given
to Agent true, correct and complete copies of all UPP Leases, organizational
documents, Financial Statements and all other documents and instruments
referred to in the Loan Documents as having been delivered to Agent.
5.1.18 REQUIREMENTS OF LAW. Borrower, the REIT and each UPP
Subpartnership are in compliance with all Requirements of Law (including
without limitation the Securities Act and the Securities Exchange Act, and the
applicable rules and regulations thereunder, state securities law and "Blue
Sky" laws) applicable to it and its respective businesses, in each case, where
the failure to so comply will have a Material Adverse Effect on Borrower or the
REIT. The REIT has made all filings with and obtained all consents of the
Commission required under the Securities Act and the Securities Exchange Act in
connection with the execution, delivery and performance by the REIT of the Loan
Documents.
5.1.19 PATENTS, TRADEMARKS, PERMITS, ETC. Borrower, the
REIT and each UPP Subpartnership own, are licensed or otherwise have the lawful
right to use, or have all permits and other governmental approvals, patents,
trademarks, trade names, copyrights, technology, know-how and processes used in
or necessary for the conduct of each such Person's business as currently
conducted, the absence of which would have a Material Adverse Effect upon
Borrower or the REIT. The use of such permits and other governmental
approvals, patents, trademarks, trade names, copyrights, technology, know-how
and processes by each such Person does not infringe on the rights of any
Person, subject to such claims and infringements as do not, in the aggregate,
give rise to any liability on the part of any such Person which would have a
Material Adverse Effect on Borrower or the REIT.
5.1.20 ENVIRONMENTAL MATTERS. Except as set forth on
Schedule 5.1.20, to the best of Borrower's knowledge, (i) the operations of
Borrower, the REIT and each UPP Subpartnership comply in all material respects
with all applicable local, state and federal environmental, health and safety
Requirements of Law ("Environmental Laws"); (ii) none of Borrower's or any UPP
Subpartnership's present Property or operations are subject to any Remedial
Action or other Liabilities and Costs arising from the Release or threatened
Release of a Contaminant into the environment in violation of any Environmental
Laws, which Remedial Action or other Liabilities and Costs would have a
Material Adverse Effect
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on Borrower or the REIT; (iii) neither Borrower, the REIT nor any UPP
Subpartnership has filed any notice under applicable Environmental Laws
reporting a Release of a Contaminant into the environment in violation of any
Environmental Laws, except as the same may have been heretofore remedied; (iv)
there is not now on or in the Property of Borrower or any UPP Subpartnership
(except in compliance in all material respects with all applicable
Environmental Laws): (A) any underground storage tanks, (B) any
asbestos-containing material, or (C) any polychlorinated biphenyls (PCB's) used
in hydraulic oils, electrical transformers or other equipment owned by such
Person; and (v) neither Borrower, the REIT nor any UPP Subpartnership has
received any notice or claim to the effect that it is or may be liable to any
Person as a result of the Release or threatened Release of a Contaminant into
the environment.
5.1.21 UNENCUMBERED POOL PROPERTIES. Each of the Properties
listed on Schedule 1 qualifies as an Unencumbered Property. The Aggregate
Occupancy Rate is at or above the level required to be maintained under Section
9.7. The aggregate of the Individual UPP Values of Unencumbered Pool
Properties owned by UPP Subpartnerships (whether or not such UPP
Subpartnerships are Guarantor Subpartnerships) does not exceed ten percent
(10%) of the Unencumbered Pool Value; and the aggregate of the Individual UPP
Values of Unencumbered Pool Properties owned by UPP Subpartnerships that are
not Guarantor Subpartnerships does not exceed five percent (5%) of the
Unencumbered Pool Value.
5.1.22 MAJOR AGREEMENTS; UPP LEASES. With respect to each
Unencumbered Pool Property for which Agent has requested copies of Major
Agreements, Agent has received true, complete and correct copies of each Major
Agreement relating thereto. All such Major Agreements are in full force and
effect, and no default or event of default (or event or occurrence which upon
with the passage of time or the giving of notice, or both, will constitute a
default or event of default) exists or will exist under such Major Agreements
as a result of the consummation of the transactions contemplated by the Loan
Documents. Except as reflected on the most current rent rolls delivered to
Agent, all UPP Leases are in full force and effect and no default or event of
default (or event or occurrence which upon with the passage of time or the
giving of notice, or both, will constitute a default or event of default)
exists or will exist thereunder as a result of the consummation of the
transactions contemplated by the Loan Documents.
5.1.23 SOLVENCY. Borrower is and will be Solvent after
giving effect to each disbursement of the Loans and the payment and accrual of
all fees then payable.
5.1.24 TITLE TO ASSETS; NO LIENS. Borrower has good,
indefeasible and merchantable title to all Properties owned or leased by it,
including, without limitation, any Unencumbered Pool Properties owned or leased
by Borrower, and each of the Unencumbered Pool Properties is free and clear of
all Liens, except Permitted Liens.
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5.1.25 USE OF PROCEEDS. Borrower's use of the proceeds of
the Loans are, and will continue to be, legal and proper uses (and to the
extent necessary, duly authorized by Borrower's partners) and such uses are
consistent with all applicable laws and statutes and Section 7.1.9.
5.2 REPRESENTATIONS AND WARRANTIES AS TO EACH UPP SUBPARTNERSHIP,
ETC. In order to induce Lenders and Designated Bid Lenders to make the Loans,
Borrower hereby represents and warrants to Lenders and Designated Bid Lenders
as follows:
5.2.1 ORGANIZATION; PARTNERSHIP POWERS. Each UPP
Subpartnership (i) is a Partnership duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (ii) is
duly qualified to do business as a foreign partnership and in good standing
under the laws of each jurisdiction in which it owns or leases real property or
in which the nature of its business requires it to be so qualified, except for
those jurisdictions where failure to so qualify and be in good standing would
not have a Material Adverse Effect on Borrower or the REIT, and (iii) has all
requisite power and authority, as an entity, to own and operate its Property
and assets and to conduct its business as presently conducted and as proposed
to be conducted in connection with and following the consummation of the
transactions contemplated by the Loan Documents.
5.2.2 AUTHORITY. Each Guarantor Subpartnership has the
requisite power and authority, as an entity, to execute, deliver and perform
each of the Loan Documents to which it is or will be a party. The execution,
delivery and performance thereof, and the consummation of the transactions
contemplated thereby, have been duly approved by the requisite partners of each
such Guarantor Subpartnership, and no other partnership or similar proceedings
on the part of any Guarantor Subpartnership are necessary to consummate such
transactions. The Partnership Agreement of each Guarantor Subpartnership
expressly authorizes such Guarantor Subpartnership's execution, delivery and
performance of each of the Loan Documents to which such Guarantor
Subpartnership is or is to become a party hereunder. Each of the Loan
Documents to which each Guarantor Subpartnership is a party has been duly
executed and delivered by each Guarantor Subpartnership and constitutes its
legal, valid and binding obligation, enforceable against each Guarantor
Subpartnership in accordance with its terms, subject to bankruptcy, insolvency
and other laws affecting creditors' rights generally.
5.2.3 NO CONFLICT. The execution, delivery and performance
of the Loan Documents by each Guarantor Subpartnership, and each of the
transactions contemplated thereby, do not and will not (i) conflict with or
violate such Guarantor Subpartnership's Partnership Agreement, (ii) conflict
with, result in a breach of or constitute (with or without notice or lapse of
time or both) a default under any Requirement of Law, Contractual Obligation or
Court Order of any Guarantor Subpartnership, (iii) require termination of any
Contractual Obligation, or (iv) result in or require the creation or imposition
of any Lien
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whatsoever upon any of the properties or assets of any Guarantor Subpartnership
(other than Permitted Liens), or (iii) require any approval of any holders of
any ownership interest in any Guarantor Subpartnership which has not been
obtained.
5.2.4 CONSENTS AND AUTHORIZATIONS. Each Guarantor
Subpartnership has obtained all consents and authorizations required pursuant
to its Contractual Obligations with any other Person, and shall have obtained
all consents and authorizations of, and effected all notices to and filings
with, any Governmental Authority, as may be necessary to allow such Guarantor
Subpartnership to lawfully execute, deliver and perform its obligations under
the Loan Documents to which such Guarantor Subpartnership is a party.
5.2.5 LITIGATION; ADVERSE EFFECTS.
(a) There is no action, suit, proceeding,
governmental investigation or arbitration, at law or in equity, or
before or by any Governmental Authority, pending or, to the best of
Borrower's knowledge, threatened against any UPP Subpartnership or any
Property of any UPP Subpartnership which would (i) result in a
Material Adverse Effect on Borrower or the REIT, (ii) materially and
adversely affect the ability of any party to any of the Loan Documents
to perform its obligations thereunder, or (iii) materially and
adversely affect the ability of any Guarantor Subpartnership to
perform its obligations as contemplated in the Loan Documents.
(b) No UPP Subpartnership is (i) in violation of
any applicable law, which violation has a Material Adverse Effect on
such UPP Subpartnership, or (ii) subject to or in default with respect
to any Court Order which has a Material Adverse Effect on such UPP
Subpartnership. There are no material Proceedings pending or, to the
best of Borrower's knowledge, threatened against any UPP
Subpartnership which, if adversely decided, would have a Material
Adverse Effect on any UPP Subpartnership.
5.2.6 PAYMENT OF TAXES. All tax returns and reports to be
filed by any UPP Subpartnership have been timely filed, and all taxes,
assessments, fees and other governmental charges shown on such returns or
otherwise payable by such Guarantor Partnership have been paid when due and
payable (other than real property taxes, which may be paid prior to delinquency
so long as no penalty or interest shall attach thereto), except such taxes, if
any, as are reserved against in accordance with GAAP and are being contested in
good faith by appropriate proceedings or such taxes, the failure to make
payment of which when due and payable would not have, in the aggregate, a
Material Adverse Effect on any UPP Subpartnership. Borrower has no knowledge
of any proposed tax assessment against any UPP Subpartnership that would have a
Material Adverse Effect
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on any UPP Subpartnership, which is not being actively contested in good
faith by such UPP Subpartnership.
5.2.7 PERFORMANCE. No UPP Subpartnership is in default in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any Contractual Obligation applicable to it, and no
condition exists which, with the giving of notice or the lapse of time or both,
would constitute a default under such Contractual Obligation in each case,
except where the consequences, direct or indirect, of such default or defaults,
if any, would not have a Material Adverse Effect on Borrower or the REIT.
5.2.8 DISCLOSURE. The representations and warranties of
each Guarantor Subpartnership contained in the Loan Documents, and all
certificates, financial statements and other documents delivered to Agent in
connection therewith or delivered to Wells Fargo or any Original Lender in
connection with the Existing Facility (or, in the case of items delivered in
connection with the Existing Facility, did not, as of the date so delivered),
do not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained herein or
therein, in light of the circumstances under which they were made, not
misleading.
5.2.9 SOLVENCY. Each Guarantor Subpartnership is and will
be Solvent, in each case after giving effect to each disbursement of the Loans,
and the payment and accrual of all fees then payable.
5.2.10 TITLE TO ASSETS; NO LIENS. Each UPP Subpartnership
has good, indefeasible and merchantable title to the Properties owned or leased
by it and each of the Unencumbered Pool Properties owned by any UPP
Subpartnership is free and clear of all Liens, except Permitted Liens.
5.2.11 LIMITED PURPOSE. Each UPP Subpartnership is and will
continue to be engaged only in the business of owning, operating and developing
one or more Unencumbered Pool Properties. No UPP Subpartnership owns or has
any interest in any Person. The sole partners and beneficial owners of each
Guarantor Subpartnership are and will continue to be, directly or indirectly,
Borrower and the REIT and, with respect to no more than ten percent (10%) of
the equity interests in such Guarantor Subpartnership outstanding at any time,
one or more Third Party Partners. The sole partners and beneficial owners of
each UPP Subpartnership other than a Guarantor Subpartnership are and will
continue to be, directly or indirectly, Borrower and the REIT and, with respect
to no more than forty-nine percent (49%) of the equity interests in such UPP
Subpartnership outstanding at any time, one or more Third Party Partners.
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5.3 REPRESENTATIONS AND WARRANTIES AS TO THE REIT. In order to
induce Lenders and Designated Bid Lenders to make the Loans, Borrower hereby
represents and warrants to Lenders and Designated Bid Lenders as follows:
5.3.1 ORGANIZATION; CORPORATE POWERS. The REIT (i) is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Maryland, (ii) is duly qualified to do business as a
foreign corporation and in good standing under the laws of each jurisdiction in
which it owns or leases real property or in which the nature of its business
requires it to be so qualified, except for those jurisdictions where failure to
so qualify and be in good standing will not have a Material Adverse Effect on
the REIT, and (iii) has all requisite corporate power and authority to own and
operate its property and assets and to conduct its business as presently
conducted and as proposed to be conducted in connection with and following the
consummation of the transactions contemplated by the Loan Documents.
5.3.2 AUTHORITY. The REIT has the requisite corporate
power and authority to execute, deliver and perform each of the Loan Documents
to which it is or will be a party. The execution, delivery and performance
thereof, and the consummation of the transactions contemplated thereby, have
been duly approved by the Board of Directors of the REIT, and no other
corporate proceedings on the part of the REIT are necessary to consummate such
transactions. Each of the Loan Documents to which the REIT is a party has been
duly executed and delivered by Borrower and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms,
subject to bankruptcy, insolvency and other laws affecting creditors' rights
generally.
5.3.3 NO CONFLICT. The execution, delivery and performance
by the REIT of the Loan Documents to which it is party, and each of the
transactions contemplated thereby, do not and will not (i) conflict with or
violate its articles of incorporation, by-laws or other organizational
documents, (ii) conflict with, result in a breach of or constitute (with or
without notice or lapse of time or both) a default under any Requirement of
Law, Contractual Obligation or Court Order of the REIT, (iii) require
termination of any Contractual Obligation, (iv) result in or require the
creation or imposition of any Lien whatsoever upon any of the properties or
assets of the REIT, or (v) require any approval of the stockholders of the
REIT.
5.3.4 CONSENTS AND AUTHORIZATIONS. The REIT has obtained
all consents and authorizations required pursuant to its Contractual
Obligations with any other Person, and shall have obtained all consents and
authorizations of, and effected all notices to and filings with, any
Governmental Authority, as may be necessary to allow the REIT to lawfully
execute, deliver and perform its obligations under the Loan Documents to which
the REIT is a party.
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5.3.5 CAPITALIZATION. All of the capital stock of the REIT
has been issued in compliance, in all material respects, with all applicable
Requirements of Law.
5.3.6 LITIGATION; ADVERSE EFFECTS.
(a) There is no action, suit, proceeding,
governmental investigation or arbitration, at law or in equity, or
before or by any Governmental Authority, pending or, to best of
Borrower's knowledge, threatened against the REIT or any Property of
the REIT, which will (i) result in a Material Adverse Effect on the
REIT, (ii) materially and adversely affect the ability of any party to
any of the Loan Documents to perform its obligations thereunder, or
(iii) materially and adversely affect the ability of the REIT to
perform its obligations as contemplated in the Loan Documents.
(b) The REIT is not (i) in violation of any
applicable law, which violation has a Material Adverse Effect on the
REIT, or (ii) subject to or in default with respect to any Court Order
which has a Material Adverse Effect on the REIT. There are no
Proceedings pending or, to the best of Borrower's knowledge,
threatened against the REIT, which, if adversely decided, would have a
Material Adverse Effect on the REIT or Borrower.
5.3.7 NO MATERIAL ADVERSE CHANGE. Since December 31, 1996,
there has occurred no event which has a Material Adverse Effect on the REIT,
and no material adverse change in the REIT's ability to perform its obligations
under the Loan Documents to which it is a party or the transactions
contemplated thereby.
5.3.8 PAYMENT OF TAXES. All tax returns and reports to be
filed by the REIT have been timely filed, and all taxes, assessments, fees and
other governmental charges shown on such returns have been paid when due and
payable, except such taxes, if any, as are reserved against in accordance with
GAAP and are being contested in good faith by appropriate proceedings or such
taxes, the failure to make payment of which when due and payable would not
have, in the aggregate, a Material Adverse Effect on the REIT. The REIT has no
knowledge of any proposed tax assessment against the REIT that would have a
Material Adverse Effect on the REIT, which is not being actively contested in
good faith by the REIT.
5.3.9 MATERIAL ADVERSE AGREEMENTS. The REIT is not a party
to or subject to any Contractual Obligation or other restriction contained in
its charter, by-laws or similar governing documents which has a Material
Adverse Effect on the REIT or the ability of the REIT to perform its
obligations under the Loan Documents to which it is a party.
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5.3.10 PERFORMANCE. The REIT is not in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any Contractual Obligation applicable to it, and no
condition exists which, with the giving of notice or the lapse of time or both,
would constitute a default under such Contractual Obligation in each case,
except where the consequences, direct or indirect, of such default or defaults,
if any, would not have a Material Adverse Effect on the REIT.
5.3.11 DISCLOSURE. The representations and warranties of
the REIT contained in the Loan Documents, and all certificates, financial
statements and other documents delivered to Agent in connection therewith or
delivered to Wells Fargo or any Original Lender in connection with the Existing
Facility (or, in the case of items delivered in connection with the Existing
Facility, did not, as of the date so delivered), do not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading.
5.3.12 ERISA. Neither the REIT nor any ERISA Affiliate
thereof (including, for all purposes under this Section 5.3.12, Borrower and
each Guarantor Partnership) has incurred any liability, with respect to any
Benefit Plan of the REIT or any ERISA Affiliate of the REIT, which would have a
Material Adverse Effect on Borrower or the REIT. Neither the REIT nor any
ERISA Affiliate thereof has during the past six (6) years maintained or
contributed to, or currently maintains or contributes to, any employee welfare
benefit plan within the meaning of Section 3(1) of ERISA which provides
benefits to retirees, the obligations with respect to which would have a
Material Adverse Effect on Borrower or the REIT. Neither the REIT nor any
ERISA Affiliate thereof is now contributing to, nor has it ever contributed to
or been obligated to contribute to, any Multiemployer Plan, and neither the
REIT nor any ERISA Affiliate of the REIT has or is likely to incur any
withdrawal liability with respect to any Multiemployer Plan which would have a
Material Adverse Effect on Borrower or the REIT.
5.3.13 SOLVENCY. The REIT is and will be Solvent, in each
case after giving effect to each disbursement of the Loans, and the payment and
accrual of all fees then payable.
5.3.14 STATUS AS A REIT. The REIT (i) is a real estate
investment trust as defined in Section 856 of the Internal Revenue Code (or any
successor provision thereto), (ii) has not revoked its election to be a real
estate investment trust, (iii) has not engaged in any "prohibited transactions"
as defined in Section 856(b)(6)(iii) of the Internal Revenue Code (or any
successor provision thereto), and (iv) for its current "tax year" (as defined
in the Internal Revenue Code) is and for all prior tax years subsequent to its
election to be a real estate investment trust has been entitled to a dividends
paid deduction which meets the requirements of Section 857 of the Internal
Revenue Code.
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5.3.15 OWNERSHIP. The REIT does not own or have any
interest in any other Person, other than its general partnership interests in
Borrower and SWIP.
5.3.16 NYSE/AMEX LISTING. The common stock of the REIT is
and will continue to be listed for trading and traded on either the New York
Stock Exchange or the American Stock Exchange.
ARTICLE VI
REPORTING COVENANTS
Borrower covenants and agrees that, on and after the date
hereof, until payment in full of all of the Obligations, the expiration of the
Commitments and termination of this Agreement:
6.1 FINANCIAL STATEMENTS AND OTHER FINANCIAL AND OPERATING
INFORMATION. Borrower shall maintain or cause to be maintained a system of
accounting established and administered in accordance with sound business
practices and consistent with past practice to permit preparation of quarterly
and annual financial statements in conformity with GAAP, and each of the
financial statements described below shall be prepared on a consolidated basis
for the REIT from such system and records. Borrower shall deliver or cause to
be delivered to Agent (with copies sufficient for each Lender):
6.1.1 ANNUAL OPERATING REPORTS; OTHER UPP REPORTS.
(a) As soon as practicable, and in any event
within ninety (90) days after the end of each Fiscal Year, operating
statements, in the form of Exhibit C or other form approved by Agent,
for the Unencumbered Pool Properties (the "Annual Operating Reports"),
in form and substance satisfactory to Agent and certified by the
REIT's chief financial officer.
(b) If requested by Agent, rent rolls (on
Borrower's detailed form of rent roll) for any or all of the
Unencumbered Pool Properties, dated within sixty (60) days prior to
the date of Agent's request, in form and substance satisfactory to
Agent and certified by the REIT's chief financial officer.
6.1.2 QUARTERLY FINANCIAL STATEMENTS CERTIFIED BY CFO. As
soon as practicable, and in any event within forty-five (45) days after the end
of each Fiscal Quarter: (i) consolidated balance sheets, statements of
operations and statements of cash flow for the REIT ("Financial Statements"),
which may, in the case of the first three Fiscal Quarters, be in the form
provided to the Commission on the REIT's Form 10Q, and certified by the REIT's
chief financial officer; and (ii) a copy of the Borrower's Form 10Q, in the
form provided to the Commission, and certified by the REIT's chief financial
officer.
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6.1.3 ANNUAL FINANCIAL STATEMENTS. Within ninety (90) days
after the close of each Fiscal Year: (i) (A) annual Financial Statements of
the REIT, on a consolidated basis (in the form provided to the Commission on
the REIT's Form 10K), audited and certified without qualification by the
Accountants; and (B) a copy of the Borrower's Form 10K, in the form provided to
the Commission, audited and certified without qualification by the Accountants;
accompanied by (ii) a statement that, in the course of their audit (conducted
in accordance with generally accepted auditing standards), the Accountants
obtained no knowledge that an Event of Default or Unmatured Event of Default
occurred, and (iii) to the extent customarily provided by the Accountants, a
copy of a letter from the Accountants to Borrower acknowledging that (A)
Borrower intends to deliver such Financial Statements and auditor's report to
Lenders and Designated Bid Lenders, (B) Lenders and Designated Bid Lenders
intend to rely thereon, and (C) Borrower intends for Lenders and Designated Bid
Lenders to so rely, in substantially the form delivered prior to the Closing
Date. To the extent Agent desires additional details or supporting information
with respect to Majority Partnerships, Investment Partnerships or individual
Properties owned or leased by Borrower, any Subsidiary of Borrower or any
Investment Partnership (other than Unencumbered Pool Properties) not contained
in the REIT's or Borrower's Form 10K, Borrower shall provide Agent with such
details or supporting information as Agent requests which is reasonably
available to Borrower. Without limiting the foregoing, within ninety (90) days
after the end of each Fiscal Year, Borrower shall provide to Agent operating
statements and a schedule setting forth the percentage of leasable area leased
to tenants in occupancy, with footnotes indicating which leases are in default
in rent payments by more than forty-five (45) days (other than technical,
nonmaterial disputes concerning percentage rentals due) any other material
provisions in respect of which the landlord has issued a notice of default, for
each Property owned or leased by Borrower, any Subsidiary of Borrower or any
Investment Partnership which is not an Unencumbered Pool Property.
6.1.4 OFFICER'S CERTIFICATE OF BORROWER. (i) Together with
each delivery of any Financial Statement pursuant to Sections 6.1.2 and 6.1.3,
(A) an Officer's Certificate of the REIT, stating that the executive officer
who is the signatory thereto (which officer shall be the chief executive
officer, the chief operating officer or the chief financial officer of the
REIT) has reviewed, or caused under his supervision to be reviewed, the terms
of this Agreement and the other principal Loan Documents, and has made, or
caused to be made under his supervision, a review in reasonable detail of the
transactions and condition of Borrower, the REIT and each UPP Subpartnership,
during the accounting period covered by such Financial Statements, and that
such review has not disclosed the existence during or at the end of such
accounting period, and that the signers do not have knowledge of the existence
as of the date of the Officer's Certificate, of any condition or event which
constitutes an Event of Default or Unmatured Event of Default, or, if any such
condition or event existed or exists, specifying the nature and period of
existence thereof and what action
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has been taken, is being taken and is proposed to be taken with respect
thereto; and (B) a Compliance Certificate demonstrating in reasonable detail
(which detail shall include actual calculation and supporting information)
compliance during and at the end of such accounting periods with the covenant
contained in Section 8.5 and each of the financial covenants contained in
Article IX.
6.1.5 CASH FLOW PROJECTIONS. Within ninety (90) days after
the end of each Fiscal Year, projections of Borrower, on a consolidated basis,
detailing expected sources and uses of cash for the next Fiscal Year. Borrower
shall also provide such additional supporting details as Agent may reasonably
request.
6.1.6 UNENCUMBERED POOL CERTIFICATE. As soon as
practicable, and in any event within forty-five (45) days after the end of each
Fiscal Quarter (and more often if so requested by Agent), a certificate in
substantially the form of Exhibit B, certified as being true and correct by the
REIT's chief executive officer, chief operating officer or chief financial
officer (the "Unencumbered Pool Certificate"). Each Unencumbered Pool
Certificate shall set forth calculations of Loan Availability as of the end of
such Fiscal Quarter.
6.1.7 KNOWLEDGE OF EVENT OF DEFAULT. Promptly upon
Borrower obtaining knowledge (i) of any condition or event which constitutes an
Event of Default or Unmatured Event of Default, or becoming aware that any
Lender (on its own account or in its capacity as administrative agent for its
Designated Bid Lender) has given notice or taken any other action with respect
to a claimed Event of Default or Unmatured Event of Default or (ii) of any
condition or event which has a Material Adverse Effect on Borrower or the REIT,
an Officer's Certificate specifying the nature and period of existence of any
such condition or event, or specifying the notice given or action taken by such
Lender and the nature of such claimed Event of Default, Unmatured Event of
Default, event or condition, and what action Borrower or the REIT has taken, is
taking and proposes to take with respect thereto.
6.1.8 LITIGATION, ARBITRATION OR GOVERNMENT INVESTIGATION.
Promptly upon Borrower, any UPP Subpartnership or the REIT obtaining knowledge
of the institution of, or written threat of, any material action, suit,
proceeding, governmental investigation or arbitration against or affecting
Borrower, any UPP Subpartnership or the REIT not previously disclosed in
writing by Borrower to Agent pursuant to this Section 6.1.8, including any
eminent domain or other condemnation proceedings affecting any Unencumbered
Pool Property.
6.1.9 ERISA TERMINATION EVENT. As soon as possible, and in
any event within thirty (30) days after Borrower, any UPP Subpartnership or the
REIT knows or has reason to know that a Termination Event has occurred that is
reasonably likely to cause a
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material liability to Borrower or the REIT, a written statement of the chief
financial officer of the REIT describing such Termination Event and the action,
if any, which Borrower, any UPP Subpartnership, the REIT or any ERISA Affiliate
of any of them has taken, is taking or proposes to take, with respect thereto,
and, when known, any action taken or threatened by the IRS, the DOL or the PBGC
with respect thereto.
6.1.10 PROHIBITED ERISA TRANSACTION. As soon as possible,
and in any event within thirty (30) days, after Borrower, any UPP
Subpartnership, the REIT or any ERISA Affiliate of any of them knows or has
reason to know that a prohibited transaction (defined in Section 406 of ERISA
and Section 4975 of the Internal Revenue Code) has occurred that is reasonably
likely to cause a material liability to Borrower or the REIT, a statement of
the chief financial officer of the REIT describing such transaction.
6.1.11 BENEFIT PLAN ANNUAL REPORT. Within ten (10) days
after Agent's request thereof (or, if not then readily available to Borrower,
as soon thereafter as reasonably practicable), copies of each annual report,
including Schedule B thereto, filed with respect to each Benefit Plan of
Borrower, any UPP Subpartnership, the REIT or any ERISA Affiliate of any of
them with the DOL, the IRS or the PBGC.
6.1.12 BENEFIT PLAN FUNDING WAIVER REQUEST. Within thirty
(30) days after the filing thereof with the IRS, a copy of each funding waiver
request filed with respect to any Benefit Plan of Borrower, any UPP
Subpartnership, the REIT or any ERISA Affiliate of any of them and all
communications received by Borrower, any UPP Subpartnership, the REIT or any
ERISA Affiliate of any of them with respect to such request.
6.1.13 ESTABLISHMENT OF BENEFIT PLAN AND INCREASE IN
CONTRIBUTIONS TO THE BENEFIT PLAN. Not less than ten (10) days prior to the
effective date thereof, a notice to Agent of the establishment by Borrower or
the REIT, or any ERISA Affiliate of either of them, of a Benefit Plan (or the
incurrence of any obligation to contribute to a Multiemployer Plan) by Borrower
or the REIT or any ERISA Affiliate of either of them. Within thirty (30) days
after the first to occur of (i) an amendment of any then existing Benefit Plan
of Borrower or the REIT or any ERISA Affiliate of either of them which will
result in an increase in the benefits under such Benefit Plan, (ii) Borrower's
or the REIT's receipt of a notification of any such increase, or (iii) the
establishment of any new Benefit Plan by Borrower or the REIT or any ERISA
Affiliate of either of them or the commencement of contributions to any Benefit
Plan to which Borrower or the REIT, or any ERISA Affiliate of either of them,
was not previously contributing: a copy of said amendment, notification or
Benefit Plan.
6.1.14 QUALIFICATION OF ERISA PLAN. Promptly upon, and in
any event within thirty (30) days after, receipt by Borrower, any UPP
Subpartnership, the REIT or any
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ERISA Affiliate of any of them of an unfavorable determination letter from the
IRS regarding the qualification of a Plan under Section 401(a) of the Internal
Revenue Code, a copy of said determination letter, if such disqualification
would have a Material Adverse Effect on Borrower, any UPP Subpartnership or the
REIT.
6.1.15 MULTIEMPLOYER PLAN WITHDRAWAL LIABILITY. Promptly
upon, and in any event within thirty (30) days after receipt by Borrower, any
UPP Subpartnership, the REIT or any ERISA Affiliate of any of them of a notice
from a Multiemployer Plan regarding the imposition of withdrawal liability, a
copy of said notice.
6.1.16 FAILURE TO MAKE SECTION 412 PAYMENT. Promptly upon,
and in any event within thirty (30) days after, Borrower, any UPP
Subpartnership, the REIT or any ERISA Affiliate of any of them fails to make a
required installment under subsection (m) of Section 412 of the Internal
Revenue Code or any other payment required under Section 412 of the Internal
Revenue Code on or before the due date for such installment or payment, a
notification of such failure, if such failure could result in either the
imposition of a Lien under said Section 412 or otherwise have or could
reasonably be anticipated to have a Material Adverse Effect on Borrower, any
UPP Subpartnership or the REIT.
6.1.17 FAILURE OF THE REIT TO QUALIFY AS REAL ESTATE
INVESTMENT TRUST. Promptly upon, and in any event within forty-eight (48)
hours after Borrower first has actual knowledge of (i) the REIT failing to
continue to qualify as a real estate investment trust as defined in Section 856
of the Internal Revenue Code (or any successor provision thereof), (ii) any act
by the REIT causing its election to be taxed as a real estate investment trust
to be terminated, (iii) any act causing the REIT to be subject to the taxes
imposed by Section 857(b)(6) of the Internal Revenue Code (or any successor
provision thereto), or (iv) the REIT failing to be entitled to a dividends paid
deduction which meets the requirements of Section 857 of the Internal Revenue
Code, a notice of any such occurrence or circumstance.
6.1.18 ASSET ACQUISITIONS AND DISPOSITIONS, INDEBTEDNESS,
ETC. Without limiting Article VIII or any other restriction in the Loan
Documents, concurrent with notice to Borrower's priority mailing list and in
all events not later than public disclosure of any material Investments (other
than in Cash Equivalents), material acquisitions, dispositions, disposals,
divestitures or similar transactions involving Property, the raising of
additional equity or the incurring or repayment of material Indebtedness, by or
with Borrower, any UPP Subpartnership or the REIT, telephonic or facsimile
notice thereof to Larry Andow or such other person(s) as Agent may designate
from time to time, and, promptly upon consummation of such transaction, a
Compliance Certificate demonstrating in reasonable detail (which detail shall
include actual calculations) compliance, after giving effect to such proposed
transaction(s), with the covenants contained in Section 8.5 and Article IX.
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6.1.19 TOTAL LIABILITIES TO GROSS ASSET VALUE RATIO.
Promptly upon each occasion on which the Total Liabilities to Gross Asset Value
Ratio, having been below 0.55:1 for any period of time, first exceeds 0.55:1,
notice thereof, and, within fifteen (15) days after the end of each calendar
month (commencing with the month during, or as of the end of which, such
occasion occurs and continuing to and including the calendar month the end of
which is at least thirty (30) days after the Total Liabilities to Gross Asset
Value Ratio no longer exceeds 0.55:1), an Officer's Certificate reporting, and
certifying as to the accuracy of, the Total Liabilities to Gross Asset Value
Ratio as of the last day of such calendar month.
6.1.20 OTHER INFORMATION. Such other information, reports,
contracts, schedules, lists, documents, agreements and instruments in the
possession of the REIT, Borrower or a UPP Subpartnership with respect to (i)
the Unencumbered Pool Properties, (ii) any material change in the REIT's
investment, finance or operating policies, or (iii) Borrower's, any UPP
Subpartnership's or the REIT's business, condition (financial or otherwise),
operations, performance, properties or prospects as Agent may from time to time
reasonably request, including, without limitation, annual information with
respect to cash flow projections, budgets, operating statements (current year
and immediately preceding year), rent rolls, lease expiration reports, leasing
status reports, note payable summaries, bullet note summaries, equity funding
requirements, contingent liability summaries, line of credit summaries, line of
credit collateral summaries, wrap note or note receivable summaries, schedules
of outstanding letters of credit, summaries of cash and Cash Equivalents,
projections of management and leasing fees and overhead budgets. Provided that
Agent gives Borrower reasonable prior notice and an opportunity to participate,
Borrower hereby authorizes Agent to communicate with the Accountants and
authorizes the Accountants to disclose to Agent any and all financial
statements and other information of any kind, including copies of any
management letter or the substance of any oral information, that such
accountants may have with respect to Borrower's, any UPP Subpartnership's or
the REIT's condition (financial or otherwise), operations, properties,
performance and prospects. Concurrently therewith, Agent will notify Borrower
of any such communication. At Agent's request, Borrower shall deliver a letter
addressed to the Accountants instructing them to disclose such information in
compliance with this Section 6.1.20.
6.1.21 PRESS RELEASES; SEC FILINGS AND FINANCIAL STATEMENTS.
Telephonic or telecopy notice to Agent concurrent with or prior to issuance of
any material press release concerning the REIT or Borrower and, as soon as
practicable after filing with the Commission, all reports and notices, proxy
statements, registration statements and prospectuses of the REIT. All
materials sent or made available generally by the REIT to the holders of its
publicly-held Securities or to a trustee under any indenture or filed with the
Commission, including all periodic reports required to be filed with the
Commission, will be delivered to Agent as soon as available.
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6.1.22 ACCOUNTANT REPORTS. Copies of all reports prepared
by the Accountants and submitted to Borrower or the REIT in connection with
each annual, interim or special audit or review of the financial statements or
practices of Borrower or the REIT, including the comment letter submitted by
the Accountants in connection with their annual audit.
6.1.23 TERMINATION OR MODIFICATION OF EARTHQUAKE COVERAGE.
Promptly upon, and in any event within thirty (30) days after Borrower first
has knowledge of the termination or modification (with respect to the amount of
either the coverage provided or the applicable deductible) of the coverage
provided by the blanket property insurance rider regarding earthquake insurance
for Properties located in "Zone 1" maintained by Borrower as of the date of
this Agreement, a notice of such termination or modification.
6.2 ENVIRONMENTAL NOTICES. Borrower shall notify Agent, in
writing, as soon as practicable, and in any event within ten (10) days after
Borrower's, any UPP Subpartnership's or the REIT's learning thereof, of any:
(i) written notice or claim to the effect that Borrower, any UPP Subpartnership
or the REIT is or may be liable to any Person as a result of any material
Release or threatened Release of any Contaminant into the environment; (ii)
written notice that Borrower, any UPP Subpartnership or the REIT is subject to
investigation by any Governmental Authority evaluating whether any Remedial
Action is needed to respond to the Release or threatened Release of any
Contaminant into the environment; (iii) written notice that any Property is
subject to an Environmental Lien; (iv) written notice of violation to Borrower,
any UPP Subpartnership or the REIT (or awareness of a condition which could
reasonably be expected to result in a notice of violation) of any Environmental
Laws by Borrower, any UPP Subpartnership or the REIT, if such violation has a
Material Adverse Effect on Borrower or the REIT; (v) commencement or written
threat of any judicial or administrative proceeding alleging a violation of any
Environmental Laws; or (vi) written notice from a Governmental Authority of any
changes to any existing Environmental Laws that will have a Material Adverse
Effect on the operations of Borrower or the REIT. With regard to the matters
referred to in clauses (i) through (v) above, the same shall apply in respect
of each Unencumbered Pool Property and, in the case of other Property of
Borrower, any UPP Subpartnership or the REIT, only if the matter will have a
Material Adverse Effect on Borrower or the REIT.
6.3 CONFIDENTIALITY. Confidential Information obtained by Agent,
any Lender or any Designated Bid Lender pursuant to this Agreement or in
connection with the Committed Facility or the Bid Loan Facility shall not be
disseminated by Agent, Lenders or Designated Bid Lenders, and shall not be
disclosed to third parties except to regulators, taxing authorities and other
governmental agencies having jurisdiction over Agent or such Lender or
Designated Bid Lender or otherwise in response to Requirements of Law, to their
respective auditors and legal counsel and in connection with regulatory,
administrative and
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judicial proceedings as necessary or relevant including enforcement proceedings
relating to the Loan Documents, and to any prospective permitted pledgee or
assignee of or participant in a Lender's or Designated Bid Lender's interest
under this Agreement or any prospective purchaser of the assets or a
controlling interest in any Lender or Designated Bid Lender, provided that such
prospective assignee, participant or purchaser first agrees to be bound by the
provisions of this Section 6.3. In connection with disclosures of Confidential
Information to any non-governmental third-party, the Lender(s) or Designated
Bid Lender(s) from whom the same has been requested shall, to the extent
feasible and permitted, give prior notice of such request to Borrower; however,
neither Agent nor any such Lender or Designated Bid Lender shall incur any
liability to Borrower for failure to do so. For purposes hereof, "Confidential
Information" shall mean all nonpublic information obtained by Agent, any Lender
or any Designated Bid Lender, unless and until such information becomes
publicly known, other than as a result of unauthorized disclosure by Agent, any
Lender or any Designated Bid Lender of such information.
ARTICLE VII
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, on and after the date
hereof, until payment in full of all of the Obligations, the expiration of the
Commitments and termination of this Agreement:
7.1 WITH RESPECT TO BORROWER:
7.1.1 EXISTENCE. Borrower shall at all times maintain its
existence as a limited partnership and preserve and keep in full force and
effect its rights and franchises unless the failure to maintain such rights and
franchises does not have a Material Adverse Effect on Borrower.
7.1.2 QUALIFICATION. Borrower shall qualify and remain
qualified to do business in each jurisdiction in which the nature of its
business requires it to be so qualified except for those jurisdictions where
failure to so qualify does not have a Material Adverse Effect on Borrower.
7.1.3 COMPLIANCE WITH LAWS, ETC. Borrower shall (i) comply
with all Requirements of Law, and all restrictive covenants affecting Borrower
or the properties, performance, prospects, assets or operations of Borrower,
and (ii) obtain as needed all Permits necessary for its operations and maintain
such in good standing, except in each of the foregoing cases where the failure
to do so will not have a Material Adverse Effect on Borrower.
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7.1.4 PAYMENT OF TAXES AND CLAIMS. Borrower shall pay (i)
all taxes, assessments and other governmental charges imposed upon it or on any
of its properties or assets or in respect of any of its franchises, business,
income or property before any penalty or interest accrues thereon, the failure
to make payment of which will have a Material Adverse Effect on Borrower, and
(ii) except to the extent being contested in good faith by appropriate
proceedings and for which appropriate reserves have been established, to the
extent required by GAAP, all claims (including, without limitation, claims for
labor, services, materials and supplies) for sums, material in the aggregate to
Borrower, which have become due and payable and which by law have or may become
a Lien other than a judgment lien upon any of Borrower's properties or assets,
prior to the time when any penalty or fine shall be incurred with respect
thereto.
7.1.5 MAINTENANCE OF PROPERTIES; INSURANCE. Borrower shall
maintain in good repair, working order and condition, excepting ordinary wear
and tear, all of its Properties and will make or cause to be made all
appropriate repairs, renewals and replacements thereof. Borrower shall
maintain commercially reasonable and appropriate amounts of fire and extended
coverage and liability insurance, which insurance shall include in any event:
(a) with respect to each Property: (i) property
and casualty insurance (including coverage for flood and water damage
for any Property located within a 100-year flood plain) in an amount
not less than the replacement costs of the improvements thereon, and
(ii) loss of rental insurance income in an amount not less than one
year's gross revenues of such Property; and
(b) comprehensive general liability insurance in
an amount not less than $20,000,000 per occurrence.
At the request of Agent, Borrower shall provide, as to each Unencumbered Pool
Property evidence of insurance, including certificates of insurance and
binders.
7.1.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS;
DISCUSSIONS. Borrower shall permit, and shall cause the REIT and each UPP
Subpartnership to permit, any authorized representative(s) designated by any
Lender (for its own account or on behalf of, and as administrative agent for,
its Designated Bid Lender) to visit and inspect any of its properties, to
inspect financial and accounting records and leases, and to make copies and
take extracts therefrom, all upon reasonable notice and at such times during
normal business hours and as often as any Lender (for its own account or on
behalf of, and as administrative agent for, its Designated Bid Lender) may
reasonably request. In connection therewith, Borrower shall pay all expenses
of the types described in Section 12.1. Borrower will keep proper books of
record and account in which entries, in conformity with GAAP and as otherwise
required by this Agreement and applicable Requirements of Law, shall be made
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of all dealings and transactions in relation to its businesses and activities
and as otherwise required under Section 6.1.
7.1.7 MAINTENANCE OF PERMITS, ETC. Borrower will maintain
in full force and effect all Permits, franchises, patents, trademarks, trade
names, copyrights, authorizations or other rights necessary for the operation
of its business, except where the failure to obtain any of the foregoing would
not have a Material Adverse Effect on Borrower; and notify Agent in writing,
promptly after learning thereof, of the suspension, cancellation, revocation or
discontinuance of or of any pending or threatened action or proceeding seeking
to suspend, cancel, revoke or discontinue any material Permit, patent,
trademark, trade name, copyright, governmental approval, franchise
authorization or right.
7.1.8 CONDUCT OF BUSINESS. Except for Permitted
Investments pursuant to Section 9.9 (including, subject to the limitations of
Section 9.9, Investments in UPP Subpartnerships), Investments in cash and Cash
Equivalents, and Investments in Permitted UPP Secured Debt, Borrower shall
engage only in the business of ownership, operation and development of
industrial/warehouse, office/R&D and retail properties of the general type
owned by Borrower as of the Closing Date in California, Washington, Oregon,
Idaho and Nevada, and any other business activities of Borrower will remain
incidental thereto.
7.1.9 USE OF PROCEEDS. Borrower shall use the proceeds of
the Loans only for pre-development costs, development costs, acquisitions,
capital expenditures, working capital, equity Investments and repayment of
Indebtedness (including Indebtedness under the Existing Facility), including
required interest and/or principal payments thereon. Loan proceeds shall not
be used for the payment of dividends or other distributions to, or the
repurchase of shares or limited partnership interests from, the holder of any
equity interest in Borrower or the REIT.
7.2 WITH RESPECT TO UPP SUBPARTNERSHIPS:
7.2.1 EXISTENCE. Borrower will cause each UPP
Subpartnership at all times to maintain its existence as a Partnership and
preserve and keep in full force and effect its rights and franchises unless the
failure to maintain such rights and franchises would not have a Material
Adverse Effect on Borrower. Borrower will cause each UPP Subpartnership to be
owned and continue to be owned, directly or indirectly, only by Borrower and
the REIT and one or more transferor(s) of property to such UPP Subpartnership,
as hereinabove more specifically referred to.
7.2.2 QUALIFICATION. Borrower will cause each UPP
Subpartnership to qualify and remain qualified to do business in each
jurisdiction in which the nature of its business requires it to be so qualified
except for those jurisdictions where failure to so qualify does not have a
Material Adverse Effect on Borrower.
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7.2.3 COMPLIANCE WITH LAWS, ETC. Borrower will cause each
UPP Subpartnership to (i) comply with all Requirements of Law, and all
restrictive covenants affecting such UPP Subpartnership or the properties,
performance, prospects, assets or operations of such UPP Subpartnership, and
(ii) obtain as needed all Permits necessary for its operations and maintain
such in good standing, except in each of the foregoing cases where the failure
to do so will not have a Material Adverse Effect on Borrower.
7.2.4 PAYMENT OF TAXES AND CLAIMS. Borrower will cause
each UPP Subpartnership shall pay (i) all taxes, assessments and other
governmental charges imposed upon it or on any of its properties or assets or
in respect of any of its franchises, business, income or property before any
penalty or interest accrues thereon, the failure to make payment of which will
have a Material Adverse Effect on Borrower, and (ii) except to the extent being
contested in good faith by appropriate proceedings and for which appropriate
reserves have been established, to the extent required by GAAP, all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums, material in the aggregate to such UPP Subpartnership, which
have become due and payable and which by law have or may become a Lien other
than a judgment lien upon any of such UPP Subpartnership's properties or
assets, prior to the time when any penalty or fine shall be incurred with
respect thereto.
7.2.5 MAINTENANCE OF PERMITS, ETC. Borrower will cause
each UPP Subpartnership to maintain in full force and effect all Permits,
franchises, patents, trademarks, trade names, copyrights, authorizations or
other rights necessary for the operation of its business, except where the
failure to obtain any of the foregoing will not have a Material Adverse Effect
on Borrower; and Borrower shall notify Agent in writing, promptly after
learning thereof, of the suspension, cancellation, revocation or discontinuance
of or of any pending or threatened action or proceeding seeking to suspend,
cancel, revoke or discontinue any material Permit, patent, trademark, trade
name, copyright, governmental approval, franchise authorization or right.
7.2.6 CONDUCT OF BUSINESS. Each UPP Subpartnership shall
continue to be a Partnership with its sole business being owning, operating and
developing the Unencumbered Pool Property(ies) owned by it.
7.3 WITH RESPECT TO THE REIT:
7.3.1 CORPORATE EXISTENCE. The REIT shall at all times
maintain its corporate existence and preserve and keep in full force and effect
its rights and franchises unless the failure to maintain such rights and
franchises will not have a Material Adverse Effect on the REIT.
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7.3.2 QUALIFICATION, NAME. The REIT shall qualify and
remain qualified to do business in each jurisdiction in which the nature of its
business requires it to be so qualified except for those jurisdictions where
failure to so qualify does not have a Material Adverse Effect on the REIT.
7.3.3 SECURITIES LAW COMPLIANCE. The REIT shall comply in
all material respects with all rules and regulations of the Commission and file
all reports required by the Commission relating to the REIT's publicly-held
Securities.
7.3.4 CONTINUED STATUS AS A REIT; PROHIBITED TRANSACTIONS.
The REIT (i) will continue to be a real estate investment trust as defined in
Section 856 of the Internal Revenue Code (or any successor provision thereto),
(ii) will not revoke its election to be a real estate investment trust, (iii)
will not engage in any "prohibited transactions" as defined in Section
856(b)(6)(iii) of the Internal Revenue Code (or any successor provision
thereto), and (iv) will continue to be entitled to a dividend paid deduction
meeting the requirements of Section 857 of the Internal Revenue Code.
7.3.5 NYSE/AMEX LISTED COMPANY. The common stock of the
REIT shall at all times be listed for trading and be traded on the New York
Stock Exchange or the American Stock Exchange.
7.3.6 COMPLIANCE WITH LAWS, ETC. The REIT shall (i) comply
with all Requirements of Law and restrictive covenants affecting the REIT and
(ii) obtain as needed all Permits necessary for its operations and maintain
such in good standing, except in each of the foregoing cases where the failure
to do so will not have a Material Adverse Effect on the REIT.
7.3.7 PAYMENT OF TAXES AND CLAIMS. The REIT shall pay (i)
all taxes, assessments and other governmental charges imposed upon it or on any
of its properties or assets or in respect of any of its franchises, business,
income or property before any penalty or interest accrues thereon, the failure
to make payment of which will have a Material Adverse Effect on the REIT, and
(ii) except to the extent being contested in good faith by appropriate
proceedings and for which appropriate reserves have been established, to the
extent required by GAAP, all claims (including, without limitation, claims for
labor, services, materials and supplies) for sums, material in the aggregate to
the REIT, which have become due and payable and which by law have or may become
a Lien other than a judgment lien upon any of the REIT's properties or assets,
prior to the time when any penalty or fine shall be incurred with respect
thereto.
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ARTICLE VIII
NEGATIVE COVENANTS
Borrower covenants and agrees that, on and after the date
hereof, until payment in full of all of the Obligations, the expiration of the
Commitments and termination of this Agreement:
8.1 WITH RESPECT TO ALL PARTIES: Neither Borrower, the REIT nor
any UPP Subpartnership shall:
8.1.1 LIENS. (i) Directly or indirectly create, incur,
assume or permit to exist any Lien, except for Permitted Liens, on or with
respect to all or any portion of (A) any Unencumbered Pool Property or (B) any
interest of Borrower (direct or indirect) in any Person that owns any
Unencumbered Pool Property; (ii) directly or indirectly create, assume or
permit to exist any Lien on Permitted UPP Secured Debt; or (iii) directly or
indirectly create, assume or permit to exist any Negative Pledge on (A) any
Unencumbered Pool Property (other than Unencumbered Pool Property owned by a
UPP Subpartnership that is not a Guarantor Subpartnership), or (B) any interest
of Borrower (direct or indirect) in any Person that owns any Unencumbered Pool
Property.
8.1.2 TRANSFERS OF UNENCUMBERED POOL PROPERTY. Transfer,
directly or indirectly, all or any interest in (i) any Unencumbered Pool
Property except (A) upon the effectiveness of a Termination of Designation in
accordance with Section 3.2, or (B) to Borrower or to a UPP Subpartnership
(provided that Borrower shall not transfer any Unencumbered Pool Property to
(1) a UPP Subpartnership unless, upon giving effect to such transfer, the
aggregate Individual UPP Values of the Unencumbered Pool Properties owned by
UPP Subpartnerships (whether or not such UPP Subpartnerships are Guarantor
Subpartnerships) will not exceed ten percent (10%) of the Unencumbered Pool
Value, or (2) a UPP Partnership that is not a Guarantor Subpartnership unless,
upon giving effect to such transfer, the aggregate Individual UPP Values of the
Unencumbered Pool Properties owned by UPP Subpartnerships that are not
Guarantor Subpartnerships will not exceed five percent (5%) of the Unencumbered
Pool Value), or (ii) Permitted UPP Secured Debt.
8.1.3 RESTRICTIONS ON FUNDAMENTAL CHANGES.
(a) (i) Enter into any merger or consolidation
unless (A) if Borrower or the REIT is involved, (1) the Borrower or
REIT, as the case may be, is the surviving entity, and (2) as of the
closing of such merger or consolidation, Borrower would be in
compliance with each of the covenants contained in Article 9, in each
case, determined as of the end of the most recently concluded fiscal
quarter and as if such merger or consolidation had occurred on the
last day of such fiscal quarter, or (B) if one or more UPP
Subpartnerships (but not Borrower or the REIT)
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is involved, a UPP Subpartnership is the surviving entity; or (b) in
the case of Borrower or the REIT, liquidate, wind-up or dissolve (or
suffer any liquidation or dissolution);
(b) Except for Permitted Investments, engage in
any line of business other than as expressly permitted under Section
7.1.8;
(c) Except with the prior written consent of
Agent, change its accounting practices with respect to the
capitalization of interest, as reflected in the December 31, 1996
Financials.
8.1.4 ERISA. Permit any ERISA Affiliates to do any of the
following to the extent that such act or failure to act would result in the
aggregate, after taking into account any other such acts or failure to act, in
a Material Adverse Effect on Borrower or the REIT:
(a) Engage, or knowingly permit an ERISA
Affiliate to engage, in any prohibited transaction described in
Section 406 of the ERISA or Section 4975 of the Internal Revenue Code
which is not exempt under Section 407 or 408 of ERISA or Section
4975(d) of the Internal Revenue Code for which a class exemption is
not available or a private exemption has not been previously obtained
from the DOL;
(b) Permit to exist any accumulated funding
deficiency (as defined in Section 302 of ERISA and Section 412 of the
Internal Revenue Code), whether or not waived;
(c) Fail, or permit an ERISA Affiliate to fail,
to pay timely required contributions or annual installments due with
respect to any waived funding deficiency to any Plan if such failure
could result in the imposition of a Lien or otherwise would have a
Material Adverse Effect on Borrower or the REIT;
(d) Terminate, or permit an ERISA Affiliate of
Borrower or the REIT to terminate, any Benefit Plan which would result
in any liability of Borrower or the REIT, or an ERISA Affiliate of
either of them, under Title IV of ERISA; or
(e) Fail, or permit any ERISA Affiliate to fail,
to pay any required installment under Section 412(m) of the Internal
Revenue Code or any other payment required under Section 412 of the
Internal Revenue Code on or before the due date for such installment
or other payment, if such failure could result in the imposition of a
Lien or otherwise would have a Material Adverse Effect on Borrower or
the REIT.
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8.2 AMENDMENT OF CONSTITUENT DOCUMENTS. Except (i) for any such
amendment that is required (A) under any Requirement of Law imposed by any
Governmental Authority or (B) in order to maintain compliance with Section
7.3.4, or (ii) with the prior written consent of Majority Lenders: (1) neither
Borrower nor any UPP Subpartnership shall amend its or SWIP's Partnership
Agreement (including, without limitation, as to the admission of any new
partner, directly or indirectly), and (2) the REIT shall not amend its articles
of incorporation or by-laws; in any such case, in any manner that would have a
material adverse effect on the ability of such Person to perform its
obligations under the Loan Documents.
8.3 DISPOSAL OF UPP SUBPARTNERSHIP INTERESTS. Neither Borrower
nor the REIT will directly or indirectly convey, sell, transfer, assign, pledge
or otherwise encumber or dispose of any of its partnership (or other ownership)
interests in SWIP or in any UPP Subpartnership at any time when any Property
owned by such UPP Subpartnership is an Unencumbered Pool Property.
8.4 MARGIN REGULATIONS. No portion of the proceeds of any Loans
shall be used in any manner which might cause the extension of credit or the
application of such proceeds to violate Regulation G, U or X or any other
regulation of the Federal Reserve Board or to violate the Securities Exchange
Act or the Securities Act, in each case as in effect on the applicable Funding
Date.
8.5 CHANGE IN CONTROL. Borrower shall not permit the occurrence
of any Change in Control.
8.6 ORGANIZATION OF BORROWER, ETC. Borrower shall remain a
California limited partnership with the REIT as its sole general partner. At
no time shall Borrower be taxed as an association under the Internal Revenue
Code.
8.7 WITH RESPECT TO EACH UPP SUBPARTNERSHIP:
8.7.1 No UPP Subpartnership shall directly or indirectly
create, incur, assume or otherwise become or remain directly or indirectly
liable with respect to, any Indebtedness, except the Obligations, Permitted UPP
Secured Debt and trade debt incurred in the ordinary course of business.
8.7.2 No UPP Subpartnership shall directly or indirectly
create, incur, assume or permit to exist any Lien on or with respect to any of
its Property or assets, except Permitted Liens and Liens, in favor of Borrower,
securing Permitted UPP Secured Debt.
8.7.3 No UPP Subpartnership shall engage in any line of
business other than owning and operating one or more Unencumbered Pool
Properties.
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8.7.4 There shall be no change in the ownership interests
of any UPP Subpartnership, other than transfers from one or more limited
partners to Borrower or the REIT or to another limited partner of such UPP
Subpartnership. There shall be no admission of partners to any UPP
Subpartnership after the date it becomes a UPP Subpartnership.
8.8 WITH RESPECT TO THE REIT:
8.8.1 The REIT shall not own any material assets or engage
in any line of business other than owning partnership interests in Borrower and
SWIP.
8.8.2 The REIT shall not directly or indirectly create,
incur, assume or otherwise become or remain directly or indirectly liable with
respect to, any Indebtedness, except the Obligations and other Borrower Debt.
8.8.3 The REIT shall not directly or indirectly create,
incur, assume or permit to exist any Lien on or with respect to any of its
Property or assets other than Permitted Liens.
8.8.4 The REIT shall at no time (i) cease to be a listed
company on either the New York Stock Exchange or the American Stock Exchange,
or (ii) cease to be a qualified real estate investment trust in the manner
referred to in Section 5.3.14.
8.8.5 The REIT will not directly or indirectly convey,
sell, transfer, assign, pledge or otherwise encumber or dispose of any of its
partnership interests in Borrower or SWIP.
ARTICLE IX
FINANCIAL COVENANTS
Borrower covenants and agrees that, on and after the date of
this Agreement and until payment in full of all the Obligations, the expiration
of all Commitments and the termination of this Agreement:
9.1 MINIMUM NET WORTH. Borrower will maintain a Net Worth of not
less than One Billion Twenty-Five Million Seven Hundred Eighty- Eight Thousand
Dollars ($1,025,788,000) plus ninety percent (90%) of Net Offering Proceeds
received by Borrower after the Closing Date.
9.2 TOTAL LIABILITIES TO GROSS ASSET VALUE RATIO. The ratio of
Total Liabilities of Borrower and its Subsidiaries (determined without
duplication) to Gross Asset Value (the "Total Liabilities to Gross Asset Value
Ratio") shall not exceed 0.55:1 other than during a
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"Permitted Excess Period", as defined herein. Under no circumstances shall the
Total Liabilities to Gross Asset Value Ratio at any time exceed 0.60:1.
For purposes of this Section 9.2, "Permitted Excess Period" means a
period, during which the Total Liabilities to Gross Asset Value Ratio is
greater than 0.55:1 but less than or equal to 0.60:1, (a) the duration of which
does not exceed one hundred eighty (180) consecutive days, and (b) the first
day of which begins (i) at least thirty-one (31) days after the last day of the
Permitted Excess Period then most recently ended and (ii) at least one (1) year
after the last day of the Permitted Excess Period next preceding the Permitted
Excess Period then most recently ended.
9.3 SECURED DEBT TO GROSS ASSET VALUE RATIO. The ratio of Secured
Borrower Debt to Gross Asset Value shall not exceed, at any time, 0.30:1.
9.4 EBIDA TO INTEREST EXPENSE RATIO. The ratio of EBIDA to
Interest Expense shall not be less than 2.25:1.
9.5 EBIDA TO DEBT SERVICE AND CAPITAL EXPENDITURES RATIO. The
ratio of EBIDA to the sum of Debt Service and Capital Expenditures shall not be
less than 2.00:1.
9.6 UNENCUMBERED NOI TO UNSECURED INTEREST EXPENSE RATIO. The
ratio of Unencumbered NOI to Unsecured Interest Expense shall not be less than
2.00:1.
9.7 AGGREGATE OCCUPANCY RATE. The Aggregate Occupancy Rate of the
Unencumbered Pool Properties shall not be less than ninety percent (90%);
provided, however, that if, on or before the date on which the Aggregate
Occupancy Rate, having been at least ninety percent (90%), falls below that
level (such date, the "Initial Occupancy Deficiency Date"), Borrower has
delivered to Agent (i) a UPP Eligibility Certification pursuant to Section
3.1.2, or (ii) a request for the acceptance as Unencumbered Pool Property(ies)
pursuant to Section 3.1.3, with respect to one or more properties that, if
included as Unencumbered Pool Properties, would cause the Aggregate Occupancy
Rate to be at least ninety percent (90%) (the "Proposed Properties"), together
with calculations establishing that such is the case: no breach of this
covenant shall exist unless (1) either (A) such designation has not become
effective with respect to each of the Proposed Properties, or such request has
not been approved with respect to each of the Proposed Properties, as the case
may be, by the fortieth (40th) day after the Initial Occupancy Deficiency Date;
or (B) (if each designation or request with respect to a Proposed Property
becomes effective or is approved within such forty-day period) at the time that
the last of the Proposed Properties becomes an Unencumbered Pool Property (and
notwithstanding the inclusion of the Proposed Properties as Unencumbered Pool
Properties), the Aggregate Occupancy Level is below ninety percent (90%); or
(2) if either of the circumstances described in subclauses (A) and (B) of the
preceding clause (1) occurs, such deficiency in the Aggregate Occupancy
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Rate is not otherwise cured by the earlier of (A) if such designation does not
become effective, or such request is not approved, with respect to any of the
Proposed Properties, the date as of which it is determined that such Proposed
Property will not become an Unencumbered Pool Property, or (B) the fortieth
(40th) day after the Initial Occupancy Deficiency Date.
9.8 DISTRIBUTIONS.
9.8.1 Subject to Section 9.8.2, aggregate distributions to
shareholders of the REIT and all limited partners of Borrower (except as
expressly excluded in the definition of Funds From Operations) shall not exceed
the sum of:
(a) the greater of (i) ninety-five percent (95%)
of Funds From Operations for any four (4) consecutive Fiscal Quarters,
or (ii) such greater amount, but not in excess of one hundred percent
(100%) of Funds From Operations for any four (4) consecutive Fiscal
Quarters, as Borrower may be required to distribute to its
shareholders in order to maintain compliance with Section 7.3.4; plus
(b) the amount of any previously undistributed
capital gains of Borrower.
For purposes of this Section 9.8, the term "distributions" shall mean and
include all dividends and other distributions to, and the repurchase of stock
or limited partnership interests from, the holder of any equity interests in
Borrower or the REIT.
9.8.2 No distributions shall be made during the continuance
of any Event of Default arising out of Borrower's failure to pay any of the
Obligations when due (a "Monetary Default"). Aggregate distributions during
the continuance of any Event of Default other than a Monetary Default shall not
exceed the lesser of (i) the aggregate amount permitted to be made during the
continuance thereof under Section 9.8.1(a), and (ii) the minimum amount that
the REIT must distribute to its shareholders in order to maintain compliance
with Section 7.3.4; and no distributions shall be made in respect of capital
gains during such continuance.
9.9 PERMITTED INVESTMENTS. Notwithstanding the limitations set
forth in Section 7.1.8, Borrower may make the following Permitted Investments,
so long as (i) the aggregate amount of all Permitted Investments (excluding
Investments in Permitted UPP Secured Debt) does not exceed, at any time, forty
percent (40%) of Gross Asset Value, and (ii) the aggregate amount of each of
the following categories of Permitted Investments does not exceed the specified
percentage of Gross Asset Value, in each case as of the date made:
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<TABLE>
<CAPTION>
Maximum
Percentage
Permitted Investment of Gross Asset Value
-------------------- --------------------
<S> <C>
Land: 10%
Securities and Third Party Partner Debt: 10%
Investment Mortgages: 15%
Partnerships: 25%
provided that (i) the aggregate Investment in
Partnerships other than Majority Partnerships whose
properties are consistent with the type and location
of properties held by Borrower at the Closing Date
shall not exceed ten percent (10%) of Gross Asset
Value; (ii) the aggregate Individual UPP Values of
the Unencumbered Pool Properties owned by UPP
Subpartnerships (whether or not such UPP
Subpartnerships are Guarantor Subpartnerships) shall
not exceed ten percent (10%) of the Unencumbered Pool
Value; and (iii) the aggregate Individual UPP Values
of the Unencumbered Pool Properties owned by UPP
Subpartnerships that are not Guarantor
Subpartnerships shall not exceed five percent (5%) of
the Unencumbered Pool Value.
</TABLE>
For purposes of calculating compliance with the foregoing: (1) the amount of
each Investment will be deemed to be the original Acquisition Price thereof;
(2) in the case of each Investment in Land, Investment Mortgages and
Partnerships, the nature of the underlying real property asset and the conduct
of business in respect thereof shall in all respects comply with the
limitations set forth in Section 7.1.8; and (3) "Partnerships" shall not
include the thirteen (13) Partnerships referred to on page 80 of Borrower's
Prospectus dated November 11, 1993 (which Partnerships own fifteen (15)
Properties in the State of Washington), so long as such Partnerships do not
acquire additional Properties and Borrower's direct or indirect interest
therein is not reduced.
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9.10 CONSTRUCTION IN PROCESS. The net rentable square footage of
any and all Construction in Process (determined, for each construction project,
on the basis of the net rentable square footage it is projected to include upon
completion, per the applicable plans and specifications) shall not exceed
twenty percent (20%) of the aggregate net rentable square footage of all
improvements on real property (including Construction in Process and "build to
suit" projects excluded from the definition of that term as provided below)
owned or leased by Borrower or any Subsidiary. For purposes of this Section
9.10, "Construction in Process" shall include each improvement on real property
owned or leased by Borrower or any Subsidiary of Borrower as to which either of
the following is true:
(a) a certificate of occupancy (or its
equivalent) has not been issued with respect to such improvement; or
(b) less than eighty-five percent (85%) of the
net rentable square footage of such improvement is occupied by tenants
under fully executed leases who have commenced paying rent under such
leases;
provided that "Construction in Process" shall not include an improvement that
is being constructed for a single tenant that has agreed to occupy the entire
improvement pursuant to a fully executed lease under which (i) occupancy
thereunder is conditioned only upon completion of construction of such
improvement, and (ii) such tenant is otherwise unconditionally committed to
take occupancy upon completion of such construction.
9.11 CALCULATION. Each of the foregoing ratios and financial
requirements, other than under Section 9.2, shall be calculated as of the last
day of each Fiscal Quarter, but shall be satisfied at all times. The Total
Liabilities to Gross Asset Value Ratio shall be satisfied at all times, but
shall be reported (i) unless the Total Liabilities to Gross Asset Value Ratio,
as of the last day of any calendar month, exceeds 0.55:1, on a quarterly basis,
and (ii) if at any time the Total Liabilities to Gross Asset Value Ratio
exceeds 0.55:1, on a monthly basis thereafter until monthly reporting is no
longer required under Section 6.1.19. For purposes of determining compliance
with Sections 9.4, 9.5 and 9.6, the period covered thereby shall be the
immediately preceding Fiscal Quarter.
ARTICLE X
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
10.1 EVENTS OF DEFAULT. Each of the following occurrences shall
constitute an Event of Default under this Agreement:
10.1.1 FAILURE TO MAKE PAYMENTS WHEN DUE. Borrower shall
fail to pay (i) any amount due on the Termination Date, (ii) any principal when
due, or (iii) any interest on any Loan, or any fee or other amount payable
under any Loan Documents,
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within five (5) days after the same becomes due (and, for purposes of this
Section 10.1.1, amounts stated to be payable "immediately" or "upon demand" are
due upon demand).
10.1.2 DISTRIBUTIONS. Borrower or the REIT shall breach any
covenant set forth in Section 7.3.4 or 9.8.
10.1.3 BREACH OF FINANCIAL COVENANTS. (i) Borrower shall
fail to satisfy any financial covenant set forth in Article IX (other than the
requirements in Section 9.2, 9.4, 9.5, 9.6 and 9.8) and such failure shall
continue for sixty (60) days; or (ii) Borrower shall fail to satisfy any
financial covenant set forth in Section 9.4, 9.5 or 9.6 as of the last day of
any Fiscal Quarter and as of the last day of each of the next two calendar
months (determined, in each of the latter cases, on the basis of the
three-month period ended as of such date); or (iii) Borrower shall fail to
satisfy the financial covenant set forth in Section 9.2 at any time.
10.1.4 OTHER DEFAULTS. Borrower, the REIT or any Guarantor
Subpartnership shall fail duly and punctually to perform or observe any
agreement, covenant or obligation binding on Borrower, the REIT or any
Guarantor Subpartnership under this Agreement or under any of the other Loan
Documents (other than as described in any other provision of this Section
10.1), and with respect to agreements, covenants or obligations for which no
time period for performance is otherwise provided, such failure shall continue
for fifteen (15) days after Borrower, the REIT or any Guarantor Subpartnership
knew of such failure (or such lesser period of time as is mandated by
applicable Requirements of Law); provided, however, if such failure is not
capable of cure within such fifteen (15) day period, then if Borrower promptly
undertakes action to cure such failure and thereafter diligently prosecutes
such cure to completion within forty-five (45) days after Borrower, the REIT or
any Guarantor Subpartnership knew of such failure (or within such longer period
of time as the Requisite Lenders may approve, in their sole discretion), then
Borrower shall not be in default hereunder; and provided further that if the
Aggregate Occupancy Rate falls below ninety percent (90%) and the proviso to
Section 9.7 applies, Borrower shall have no further opportunity to cure any
resulting breach of that Section prior to the occurrence of an Event of
Default, and such resulting breach shall constitute an Event of Default.
10.1.5 BREACH OF REPRESENTATION OR WARRANTY. Any
representation or warranty made or deemed made by Borrower, the REIT or any
Guarantor Subpartnership to Agent or any Lender or Designated Bid Lender herein
or in any of the other Loan Documents or in any statement, certificate or
financial statements at any time given by Borrower pursuant to any of the Loan
Documents (including, without limitation, any UPP Eligibility Certification)
shall be false or misleading in any material respect on the date as of which
made.
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10.1.6 DEFAULT AS TO OTHER INDEBTEDNESS. (i) Borrower, the
REIT, any Guarantor Subpartnership or any Majority Partnership shall have (A)
failed to pay when due (beyond any applicable grace period), any amount in
respect of any Indebtedness of such party other than the Obligations if the
aggregate amount of such other Indebtedness is Ten Million Dollars
($10,000,000) or more; or (B) otherwise defaulted (beyond any applicable grace
period) under any Indebtedness of such party other than the Obligations if (1)
the aggregate amount of such other Indebtedness is Ten Million Dollars
($10,000,000) or more, and (2) the holder of such Indebtedness has accelerated
such Indebtedness; or (ii) any such other Indebtedness shall have otherwise
become payable, or be required to be purchased or redeemed, prior to its
scheduled maturity; or (iii) the holder(s) of any Lien, in any amount, commence
foreclosure of such Lien upon any Property having an aggregate value in excess
of Ten Million Dollars ($10,000,000); provided, however, that the foregoing
$10,000,000 limitation shall be increased to Twenty Million Dollars
($20,000,000) in the case of Nonrecourse Indebtedness, so long as such default
under or foreclosure on such Nonrecourse Indebtedness shall not give rise to an
Event of Default under Section 10.1.14.
10.1.7 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(a) At any time, an involuntary case or cases
shall have been commenced against (i) the REIT, (ii) Borrower, or
(iii) any one or more UPP Subpartnerships or other Subsidiaries of
Borrower contributing, in the aggregate, ten percent (10%) or more of
Borrower's Gross Asset Value at the time such case is commenced
(collectively, regardless of the number of such Persons, a "Material
Subsidiary"), and shall continue undismissed for a period of sixty
(60) consecutive days after commencement of the case(s), or a court
having jurisdiction shall enter a decree or order for relief in
respect of Borrower, the REIT or any Material Subsidiary in an
involuntary case(s), under any applicable bankruptcy, insolvency or
other similar law now or hereinafter in effect; or any other similar
relief shall be granted under any applicable federal, state or foreign
law with respect to Borrower, the REIT or any Material Subsidiary; or
(b) A decree or order of a court (or courts)
having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having
similar powers over the REIT, Borrower or any Material Subsidiary, or
over all or a substantial part of the property of any such Person,
shall be entered; or an interim receiver, trustee or other custodian
of any such Person or of all or a substantial part of the property of
any such Person, shall be appointed or a warrant of attachment,
execution or similar process against any substantial part of the
property of any such Person, shall be issued and any such event shall
not be stayed, vacated, dismissed, bonded or discharged within sixty
(60) days of entry, appointment or issuance.
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10.1.8 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
The REIT, Borrower or any Material Subsidiary shall have an order for relief
entered with respect to it or commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary case, or to
the conversion of an involuntary case to a voluntary case, under any such law,
or shall consent to the appointment of or taking of possession by a receiver,
trustee or other custodian for all or a substantial part of its property; any
such Person shall make any assignment for the benefit of creditors or shall be
unable or fail, or admit in writing its inability, to pay its debts as such
debts become due; or the general partner (or Person(s) serving in a similar
capacity) or Board of Directors (or any committee thereof) of Borrower, the
REIT or any Material Subsidiary adopts any resolution or otherwise authorizes
any action to approve any of the foregoing.
10.1.9 JUDGMENTS AND ATTACHMENTS. (i) Any money judgment
(other than a money judgment covered by insurance but only if the insurer has
admitted liability with respect to such money judgment), writ or warrant of
attachment, or similar process involving in any case an amount in excess of Ten
Million Dollars ($10,000,000) shall be entered or filed against the REIT,
Borrower or any Majority Subsidiary or the assets of any such Person, and shall
remain undischarged, unvacated, unbonded or unstayed for a period of thirty
(30) days, or (ii) any judgment or order of any court or administrative agency
awarding material damages shall be entered against any such Person in any
action under the Federal securities laws seeking rescission of the purchase or
sale of, or for damages arising from the purchase or sale of, any Securities,
such judgment or order shall have become final after exhaustion of all
available appellate remedies and the payment of such judgment or order would
have a Material Adverse Effect on Borrower or the REIT.
10.1.10 DISSOLUTION. Any order, judgment or decree shall be
entered against the REIT, Borrower or any Material Subsidiary decreeing its
involuntary dissolution or split up and such order shall remain undischarged
and unstayed for a period in excess of thirty (30) days; or the REIT or
Borrower shall otherwise dissolve or cease to exist.
10.1.11 VALIDITY OF LOAN DOCUMENTS; SUBORDINATION OF
OBLIGATIONS. If for any reason (i) any Loan Document shall cease to be in full
force and effect, or (ii) any Obligation shall be subordinated in right of
payment to any other liability of Borrower, and, in either such case, such
condition or event shall continue for fifteen (15) days after Borrower, the
REIT or any Guarantor Subpartnership knew of such condition or event.
10.1.12 ERISA LIABILITIES. Any Termination Event occurs
which will or is reasonably likely to subject Borrower or the REIT, or any
ERISA Affiliate of either of them, to a liability which will have a Material
Adverse Effect on Borrower or the REIT, or the plan administrator of any
Benefit Plan applies for approval under Section 412(d) of the Internal Revenue
Code for a waiver of the minimum funding standards of Section 412(a) of
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the Internal Revenue Code and the business hardship upon which the Section
412(d) waiver was based would have a Material Adverse Effect on Borrower or the
REIT.
10.1.13 CHANGE IN CONTROL. There shall occur any Change in
Control.
10.1.14 SOLVENCY; ENVIRONMENTAL LIABILITIES; MATERIAL ADVERSE
CHANGE. (i) Borrower or the REIT shall cease to be Solvent; or (ii) Borrower,
the REIT or any UPP Subpartnership becomes subject to any Liabilities and
Costs, which would have a Material Adverse Effect on Borrower or the REIT,
arising out of or related to (A) the Release or threatened Release at any
Property of any Contaminant into the environment, or any Remedial Action in
response thereto, or (B) otherwise any violation of any Environmental Laws; or
(iii) there shall have occurred any material adverse change in the business,
operations, properties, assets or condition (financial or otherwise) of
Borrower or the REIT.
10.1.15 BREACH OF GUARANTY. The REIT shall fail to duly and
punctually perform or observe any agreement, covenant or obligation under its
Guaranty, or any Guarantor Subpartnership shall fail to duly and punctually
perform or observe any agreement, covenant or obligation under its Guaranty.
An Event of Default shall be deemed "continuing" until cured
or waived in writing in accordance with Section 12.4.
10.2 RIGHTS AND REMEDIES.
10.2.1 ACCELERATION, ETC. Upon the occurrence of any Event
of Default described in the foregoing Section 10.1.7 or 10.1.8 with respect to
the REIT, Borrower or any UPP Subpartnership, the Commitments shall
automatically and immediately terminate and the unpaid principal amount of and
any and all accrued interest on the Loans shall automatically become
immediately due and payable, with all additional interest from time to time
accrued thereon and without presentment, demand or protest or other
requirements of any kind (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
or notice of acceleration), all of which are hereby expressly waived by
Borrower, and the obligations of Lenders and (with respect to Bid Loans)
Designated Bid Lenders to make any Loans hereunder shall thereupon terminate;
and upon the occurrence and during the continuance of any other Event of
Default, Agent shall, at the request, or may, with the consent of the Requisite
Lenders, by written notice to Borrower, (i) declare that the Commitments are
terminated, whereupon the Commitments and the obligation of Lenders and (with
respect to Bid Loans) Designated Bid Lenders to make any Loan hereunder shall
immediately terminate, and/or (ii) declare the unpaid principal amount of, any
and all accrued and unpaid interest on the Loans and all of the other
Obligations to be, and the same shall thereupon be, immediately due and
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payable with all additional interest from time to time accrued thereon and
without presentment, demand, or protest or other requirements of any kind
(including without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and of acceleration), all
of which are hereby expressly waived by Borrower. Without limiting Agent's
authority hereunder, on or after the Termination Date, Agent shall, at the
request, or may, with the consent, of the Requisite Lenders exercise any or all
rights and remedies under the Loan Documents or applicable law. Upon the
occurrence of and during the continuance of an Event of Default, Agent shall be
entitled to request and receive, by or through Borrower or appropriate legal
process, any and all information concerning the REIT, Borrower, any UPP
Subpartnership or any property of any of them, which is reasonably available to
or obtainable by Borrower.
10.2.2 WAIVER OF DEMAND. Except to the extent otherwise
expressly provided herein, demand, presentment, protest and notice of
nonpayment are hereby waived by Borrower. Borrower also waives, to the extent
permitted by law, the benefit of all exemption laws.
10.2.3 WAIVERS, AMENDMENTS AND REMEDIES. No delay or
omission of Agent, Lenders or Designated Bid Lenders to exercise any right
under any Loan Document shall impair such right or be construed to be a waiver
of any Event of Default or an acquiescence therein, and any single or partial
exercise of any such right shall not preclude other or further exercise thereof
or the exercise of any other right, and no waiver, amendment or other variation
of the terms, conditions or provisions of the Loan Documents whatsoever shall
be valid unless in a writing signed by Agent after obtaining written approval
thereof or the signature thereon of those Lenders (in their own capacities and,
to the extent that the consent of Designated Bid Lenders may be required, as
administrative agents for their respective Designated Bid Lenders) required to
approve such waiver, amendment or other variation, and then only to the extent
in such writing specifically set forth. All remedies contained in the Loan
Documents or by law afforded shall be cumulative and all shall be available to
Agent, Lenders and Designated Bid Lenders until the Obligations have been paid
in full, the Commitments have expired or terminated and this Agreement has been
terminated.
10.3 RESCISSION. If at any time after acceleration of the maturity
of the Loans, Borrower shall pay all arrears of interest and all payments on
account of principal of the Loans which shall have become due otherwise than by
acceleration (with interest on principal and, to the extent permitted by law,
on overdue interest, at the rates specified in this Agreement) and all Events
of Default and Unmatured Events of Default (other than nonpayment of principal
of and accrued interest on the Loans due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to Section 12.4, then by
written notice to Borrower, the Requisite Lenders may elect, in their sole
discretion, to rescind and annul the acceleration and its consequences; but
such action shall not affect any subsequent
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Event of Default or Unmatured Event of Default or impair any right or remedy
consequent thereon. The provisions of the preceding sentence are intended
merely to bind Lenders and Designated Bid Lenders to a decision which may be
made at the election of the Requisite Lenders; they are not intended to benefit
Borrower and do not give Borrower the right to require Lenders or Designated
Bid Lenders to rescind or annul any acceleration hereunder, even if the
conditions set forth herein are met.
ARTICLE XI
AGENCY PROVISIONS
11.1 APPOINTMENT.
11.1.1 Each Lender hereby (i) designates and appoints Wells
Fargo as Agent of such Lender under this Agreement and the Loan Documents, (ii)
for itself and on behalf of and as administrative agent for its Designated Bid
Lender (if any), authorizes and directs Agent to enter into the Loan Documents
other than this Agreement for the benefit of Lenders and Designated Bid
Lenders, and (iii) for itself and on behalf of and as administrative agent for
its Designated Bid Lender (if any), authorizes Agent to take such action on its
behalf and on behalf of its Designated Bid Lender under the provisions of this
Agreement and the Loan Documents and to exercise such powers as are set forth
herein or therein, together with such other powers as are reasonably incidental
thereto, subject to the limitations referred to in Sections 11.10.1, 11.10.2
and 11.10.3. Agent agrees to act as such on the express conditions contained
in this Article XI.
11.1.2 The provisions of this Article XI are solely for the
benefit of Agent, Lenders and Designated Bid Lenders, and Borrower shall not
have any rights to rely on or enforce any of the provisions hereof (other than
as expressly set forth in Sections 11.3, 11.9 and 11.12), provided, however,
that the foregoing shall in no way limit Borrower's obligations under this
Article XI. In performing its functions and duties under this Agreement, Agent
shall act solely as Agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for Borrower or any other Person.
11.2 NATURE OF DUTIES. Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement or in the
Loan Documents. The duties of Agent shall be administrative in nature.
Subject to the provisions of Sections 11.5 and 11.7, Agent shall administer the
Loans in the same manner as it administers its own loans. Promptly following
the effectiveness of this Agreement, Agent shall send to each Lender its
originally executed Loan Note and the executed original, to the extent the same
are available in sufficient numbers, of each other Loan Document other than the
Loan Notes in favor of other Lenders and filed or recorded security document or
instruments, with the
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latter to be held and retained by Agent for the benefit of all Lenders and
Designated Bid Lenders. Agent shall not have by reason of this Agreement a
fiduciary relationship in respect of any Lender or Designated Bid Lender.
Nothing in this Agreement or any of the Loan Documents, expressed or implied,
is intended or shall be construed to impose upon Agent any obligation in
respect of this Agreement or any of the Loan Documents except as expressly set
forth herein or therein. Each Lender and Designated Bid Lender shall make its
own independent investigation of the financial condition and affairs of the
REIT, Borrower, each UPP Subpartnership and each Unencumbered Pool Property in
connection with the making and the continuance of the Loans hereunder and shall
make its own appraisal of the creditworthiness of the REIT, Borrower and each
Guarantor Subpartnership, and, except as specifically provided herein, Agent
shall not have any duty or responsibility, either initially or on a continuing
basis, to provide any Lender or Designated Bid Lender with any credit or other
information with respect thereto, whether coming into its possession before the
Closing Date or at any time or times thereafter.
11.3 LOAN DISBURSEMENTS.
11.3.1 Promptly following receipt of a Notice of Borrowing,
Agent shall send a copy thereof by facsimile to each other Lender and shall
otherwise notify each Lender of the proposed Borrowing and the Funding Date.
Agent shall notify each Lender having an offer to make a Bid Loan accepted (in
whole or in part) of the amount of the Bid Loan(s) to be made by it (or its
Designated Bid Lender) on a particular Funding Date in accordance with Section
2.1.3(f). (a) Each Lender shall make available to Agent (or the funding bank
or entity designated by Agent) (i) in the case of a Borrowing consisting of
Committed Loans, the amount of such Lender's Pro Rata Share of such Borrowing,
or (ii) in the case of a Borrowing consisting of one or more Bid Loans, the
amount of the Bid Loans to be made by such Lender in connection therewith; and
(b) each Designated Bid Lender electing to fund one or more Bid Loans that
would otherwise have been made by its Designating Lender with respect to an
accepted Competitive Bid (or, if such Designated Bid Lender fails to do so, its
Designating Lender) shall make the aggregate amount of such Bid Loan(s)
available to Agent (or the funding bank or entity designated by Agent); in each
case, in immediately available funds not later than the times designated in
Section 11.3.2. Unless Agent shall have been notified by any Lender prior to
such time for funding in respect of any Borrowing that (1) such Lender does not
intend to make available to Agent such Lender's Pro Rata Share of such
Borrowing, or (2) in the case of a Bid Loan, neither such Lender nor its
Designated Bid Lender intends to make available to Agent the amount of such
Lender's Bid Loan(s), as the case may be, Agent may assume that such Lender
(or, if applicable, its Designated Bid Lender) has made such amount available
to Agent. In any case where, for any reason, neither a Lender nor (if
applicable) its Designated Bid Lender makes available to Agent the amount so
required to be made available by such Lender or its Designated Bid Lender,
Agent, in its sole discretion, may, but shall not be obligated to, fund to
Borrower such amount; provided, however, that Agent shall first have obtained
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Borrower's concurrence in such funding by Agent if the same is to be made later
than the Funding Date for the subject Borrowing. If the amount so funded by
Agent is not in fact made available to Agent by the responsible Lender or its
Designated Bid Lender, then Borrower agrees to repay to Agent such amount,
together with interest thereon at the Base Rate for each day from the date such
amount is made available to Borrower until the date such amount is repaid to
Agent, not later than three (3) Business Days following Agent's demand to
Borrower that such repayment be made. In addition, such Lender agrees to pay
to Agent forthwith on demand such corresponding amount, together with interest
thereon at the Federal Funds Rate. If such Lender shall pay to Agent such
corresponding amount, such amount so paid shall constitute such Lender's Pro
Rata Share of such Borrowing (or such Lender's Bid Loan(s), as the case may
be), and if both such Lender and Borrower shall have paid and repaid,
respectively, such corresponding amount, Agent shall promptly return to
Borrower such corresponding amount in same day funds; interest paid by Borrower
in respect of such corresponding amount shall be prorated, as of the date of
payment thereof by such Lender to Agent. In the event that Agent shall not
have funded any amount to be funded by a Lender or its Designated Bid Lender
under this Section 11.3.1, then Borrower shall not be obligated to accept a
late funding of such Lender's Pro Rata Share or Bid Loan(s), as the case may
be, if such funding is made more than two (2) Business Days following the
applicable Funding Date. If Borrower declines to accept such delinquent
funding, Agent shall promptly return to such Lender the amount of such funding.
Nothing in this Section 11.3.1 shall alter the respective rights and
obligations of the parties hereunder in respect of a Defaulting Lender or a Non
Pro Rata Loan.
11.3.2 Requests by Agent for funding by Lenders or
Designated Bid Lenders of Loans will be made by telecopy. Each Lender shall
make the amount it is required to fund in respect of any Loan, and each
Designated Bid Lender shall make the amount of any Bid Loan that it elects to
fund, available to Agent in Dollars and in immediately available funds, to such
bank and account, in El Segundo, California (or to such bank and account in
such other place) as Agent may designate, not later than 10:00 a.m. (San
Francisco time) on the Funding Date designated in the Notice of Borrowing or
Competitive Bid with respect to such Loan, but, in the case of a Committed
Loan, in no event earlier than two (2) Business Days following Lender's receipt
of the applicable Notice of Borrowing. If any Bid Loan is funded by a
Designated Bid Lender, its Designating Lender shall provide Agent with notice
to that effect on the relevant Funding Date.
11.3.3 Nothing in this Section 11.3 shall be deemed to
relieve any Lender of its obligation hereunder to make its Pro Rata Share of
Loans, or to make any Bid Loan, on any Funding Date, nor, except to the extent
expressly provided (a) in Section 11.3.1 with respect to the obligation of any
Designating Bank to fund Bid Loans that are not funded by its Designated Bid
Lender or (b) in Section 11.12.3(b), shall any Lender or Designated Bid Lender
be responsible for the failure of any other Lender or Designated Bid Lender to
perform its obligations to make any Loan hereunder, and the Commitment of any
Lender
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shall not be increased or decreased as a result of the failure by any other
Lender or Designated Bid Lender to perform its obligation to make a Loan.
11.4 DISTRIBUTION AND APPORTIONMENT OF PAYMENTS.
11.4.1 Subject to Section 11.4.2, payments actually received
by Agent for the account of Lenders and Designated Bid Lenders shall be paid to
Lenders (for their own accounts and, in their capacities as administrative
agents for their respective Designated Bid Lenders, for the accounts of such
Designated Bid Lenders) promptly after receipt thereof by Agent, but in any
event within two (2) Business Days, provided that Agent shall pay to Lenders
(for their own accounts and, in their capacities as administrative agents for
their respective Designated Bid Lenders, for the accounts of such Designated
Bid Lenders) interest thereon, at the lesser of (i) Federal Funds Rate and (ii)
the rate of interest applicable to such Loans, from the Business Day following
receipt of such funds by Agent until such funds are paid in immediately
available funds to Lenders (for their own accounts and, in their capacities as
administrative agents for their respective Designated Bid Lenders, for the
accounts of such Designated Bid Lenders). Subject to Section 11.4.2, (x) all
payments of principal and interest in respect of outstanding Committed Loans,
all payments of the fees described in this Agreement, and all payments in
respect of any other Obligations relating to the Committed Facility, shall be
allocated among such of Lenders as are entitled thereto, in proportion to their
respective Pro Rata Shares or otherwise as provided herein; and (y) all
payments of principal, interest or any other amount in respect of any Bid Loan
shall be paid to the Lender to whom, or whose Designated Bid Lender to whom,
such amount is due (for such Lenders' own accounts and, in their capacities as
administrative agents for their respective Designated Bid Lenders, for the
accounts of such Designated Bid Lenders), or otherwise as provided herein.
Agent shall promptly distribute, but in any event within two (2) Business Days,
to each Lender at its primary address set forth on the appropriate signature
page hereof or on the Assignment and Assumption, or at such other address as a
Lender may request in writing, such funds as it or its Designated Bid Lender
may be entitled to receive, provided that Agent shall in any event not be bound
to inquire into or determine the validity, scope or priority of any interest or
entitlement of any Lender or Designated Bid Lender and may suspend all payments
and seek appropriate relief (including, without limitation, instructions from
the Requisite Lenders or all Lenders and Designated Bid Lenders, as applicable,
or an action in the nature of interpleader) in the event of any doubt or
dispute as to any apportionment or distribution contemplated hereby. The order
of priority herein is set forth solely to determine the rights and priorities
of Lenders and Designated Bid Lenders as among themselves and may at any time
or from time to time be changed by Lenders and Designated Bid Lenders as they
may elect, in writing in accordance with Section 12.4, without necessity of
notice to or consent of or approval by Borrower or any other Person. All
payments or other sums received by Agent for the account of Lenders or
Designated Bid Lenders shall not constitute property or assets
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of Agent and shall be held by Agent, solely in its capacity as agent for itself
and the other Lenders, subject to the Loan Documents.
11.4.2 Notwithstanding any provision hereof to the contrary,
until such time as a Defaulting Lender (or, in the case of a Defaulting Lender
that is a Designated Bid Lender, its Designating Lender) has funded (i) its Pro
Rata Share of a Committed Loan or its Bid Loan (in either such case, that was,
until such payment, a Non Pro Rata Loan) or all other Lenders and Designated
Lenders have received payment in full (whether by repayment or prepayment) of
the principal and interest due in respect of such Non Pro Rata Loan, such
Defaulting Lender's right to receive principal in respect of any Loan owing to
such Defaulting Lender hereunder (but not such Lender's or Designated Bid
Lender's right to receive payment of any other Obligation due to it) shall be
subordinated in right of payment, as provided in the following sentence, to the
prior payment in full of all principal, interest and fees in respect of all Non
Pro Rata Loans in which the Defaulting Lender has not funded the full amount it
was required to have funded with respect thereto (such principal, interest and
fees being referred to as "Senior Loans"). All amounts paid by Borrower and
otherwise due to be applied to the principal of Obligations owing to the
Defaulting Lender pursuant to the terms hereof (i) if due with respect to the
Committed Loans, shall be distributed by Agent to the other Lenders in
accordance with their respective Pro Rata Shares (recalculated for purposes
hereof to exclude the Defaulting Lender's Commitment), until all Senior Loans
constituting Committed Loans have been paid in full, and (ii) if due with
respect to any Bid Loan, shall be distributed by Agent to the other Lenders who
have (or whose Designated Bid Lenders have) Bid Loans then due and payable (for
such Lenders' own accounts and, in their capacities as administrative agents
for their respective Designated Bid Lenders, for the accounts of such
Designated Bid Lenders), in accordance with their respective pro rata shares
(based on the ratio of the aggregate amount due each such other Lender or
Designated Bid Lender to the aggregate amount then due and payable to all
Lenders and Designated Bid Lenders, but calculated for purposes hereof to
exclude amounts due to the Defaulting Lender with respect to the Bid Loans),
until all Senior Loans constituting Bid Loans then due and payable have been
paid in full. This provision governs only the relationship among Agent, each
Defaulting Lender, and the other Lenders and Designated Bid Lenders; nothing
hereunder shall limit the obligation of Borrower to repay all Loans in
accordance with the terms of this Agreement. The provisions of this section
shall apply and be effective regardless of whether an Event of Default occurs
and is then continuing, and notwithstanding (i) any other provision of this
Agreement to the contrary, (ii) any instruction of Borrower as to its desired
application of payments or (iii) the suspension of such Defaulting Lender's
right to vote on matters which are subject to the consent or approval of the
Requisite Lenders, the Majority Lenders or all Lenders and Designated Bid
Lenders. In addition, until any Lender's or Designated Bid Lender's failure to
reimburse Agent for any Liabilities and Costs as herein provided has been cured
(which, in the case of any failure to pay by a Designated Bid Lender, may be
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cured by its Designating Bank), Agent shall be entitled to (1) withhold or
setoff, and to apply to the payment of the defaulted amount and any related
interest, any amounts to be paid to such Defaulting Lender under this
Agreement, and (2) (A) if such Defaulting Lender is a Lender, bring an action
or suit against such Defaulting Lender, or (B) if such Defaulting Lender is a
Designated Bid Lender, bring an action or suit against such Defaulting Lender's
Designating Lender (or, subject to the provisions of Section 11.12.3(e), such
Defaulting Lender) in a court of competent jurisdiction to recover the
defaulted amount and any related interest. In addition, the Defaulting Lender
(and, in the case of a Defaulting Lender that is a Designated Bid Lender, its
Designating Bank) shall indemnify, defend and hold Agent and each of the other
Lenders harmless from and against any and all Liabilities and Costs, plus
interest thereon at the Default Rate, which they may sustain or incur by reason
of or as a direct consequence of the Defaulting Lender's failure or refusal to
abide by its obligations under this Agreement.
11.5 RIGHTS, EXCULPATION, ETC. Neither Agent, any Affiliate of
Agent, nor any of their respective officers, directors, employees, agents,
attorneys or consultants, shall be liable to any Lender or Designated Bid
Lender for any action taken or omitted by them hereunder or under any of the
Loan Documents, or in connection herewith or therewith, except that Agent shall
be liable for its gross negligence or willful misconduct, or willful misconduct
in the performance of its express obligations hereunder. In the absence of
gross negligence or willful misconduct, Agent shall not be liable for any
apportionment or distribution of payments made by it in good faith pursuant to
Section 11.4, and if any such apportionment or distribution is subsequently
determined to have been made in error the sole recourse of any Person to whom
payment was due, but not made, shall be to recover from the recipients of such
payments any payment in excess of the amount to which they are determined to
have been entitled. Agent shall not be responsible to any Lender or Designated
Bid Lender for any recitals, statements, representations or warranties herein
or for the execution, effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this Agreement or any of the other Loan
Documents, or any of the transactions contemplated hereby and thereby; or for
the financial condition of the REIT, Borrower, any UPP Subpartnership or any of
their Affiliates. Agent shall not be required to make any inquiry concerning
either the performance or observance of any of the terms, provisions or
conditions of this Agreement or any of the Loan Documents or the financial
condition of the REIT, Borrower, any UPP Subpartnership or any of their
Affiliates, or the existence or possible existence of any Unmatured Event of
Default or Event of Default.
11.6 RELIANCE. Agent shall be entitled to rely upon any written
notices, statements, certificates, orders or other documents, telecopies or any
telephone message believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person, and with respect to all
matters pertaining to this Agreement or any of the Loan Documents and its
duties hereunder or thereunder, upon advice of legal counsel
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(including counsel for Borrower), independent public accountant and other
experts selected by it.
11.7 INDEMNIFICATION. To the extent that Agent is not reimbursed
and indemnified by Borrower, Lenders will reimburse, within ten (10) Business
Days after notice from Agent, and indemnify and defend Agent for and against
any and all Liabilities and Costs which may be imposed on, incurred by, or
asserted against it in any way relating to or arising out of this Agreement or
any of the other Loan Documents or any action taken or omitted by Agent or
under this Agreement or any of the other Loan Documents, in proportion to each
Lender's Pro Rata Share; provided that no Lender shall be liable for any
portion of such Liabilities and Costs resulting from Agent's gross negligence
or willful misconduct or in respect of normal administrative costs and expenses
incurred by Agent (prior to any Event of Default or any Unmatured Event of
Default) in connection with its performance of administrative duties under this
Agreement and the other Loan Documents. The obligations of Lenders under this
Section 11.7 shall survive the payment in full of all Obligations and the
termination of this Agreement. In the event that after payment and
distribution of any amount by Agent to Lenders or Designated Bid Lenders, any
Lender or third party, including Borrower, any creditor of Borrower or a
trustee in bankruptcy, recovers from Agent any amount found to have been
wrongfully paid to Agent or disbursed by Agent to Lenders or Designated Bid
Lenders, then Lenders and Designated Bid Lenders, in proportion to their
respective allocable shares of such distribution, shall reimburse Agent for all
such amounts; provided, however, that the foregoing provisions shall not
prohibit any Designating Lender from agreeing with its Designated Bid Lender
that, as between such Designating Lender and Designated Bid Lender, such
Designating Lender shall be responsible for any reimbursement due to Agent
hereunder by its Designated Bid Lender, and such Designated Bid Lender's
obligations under this Section 11.7 shall be discharged to the extent that its
Designating Lender so reimburses Agent.
11.8 AGENT INDIVIDUALLY. With respect to its Pro Rata Share of the
Commitments hereunder and the Loans made by it, Agent shall have and may
exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender. The terms "Lenders", "Majority Lenders", or "Requisite Lenders", or
any similar terms, may include Agent in its individual capacity as a Lender or
one of the Requisite Lenders, but neither "Majority Lenders" nor "Requisite
Lenders" shall include Agent solely in its capacity as Agent and neither such
term shall necessarily include Agent in its capacity as a Lender. Agent and
any Lender or Designated Bid Lender, and any Affiliate of any of the foregoing,
may accept deposits from, lend money to, and generally engage in any kind of
banking, trust or other business with Borrower or any of its Affiliates as if
it were not acting as Agent or Lender pursuant hereto.
11.9 SUCCESSOR AGENT; RESIGNATION OF AGENT; REMOVAL OF AGENT.
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11.9.1 Agent may resign from the performance of all its
functions and duties hereunder at any time by giving at least thirty (30)
Business Days' prior written notice to Lenders and Borrower, and shall
automatically cease to be Agent hereunder in the event a petition in bankruptcy
shall be filed by or against Agent or the Federal Deposit Insurance Corporation
or any other Governmental Authority shall assume control of Agent or Agent's
interests under the Loan Documents. Further, the Requisite Lenders may remove
Agent at any time, for good cause, by giving at least thirty (30) Business
Days' prior written notice to Agent, Borrower and all other Lenders. Such
resignation or removal shall take effect upon the acceptance by a successor
Agent of appointment pursuant to Section 11.9.2 or 11.9.3; immediately
following the effectiveness of such appointment, Borrower shall pay to the
retiring or removed Agent any accrued and unpaid agency fee, or Agent shall
refund to Borrower any prepaid agency fee, in each case prorated to the
effective date of such appointment of a successor Agent.
11.9.2 Upon any such notice of resignation by or removal of
Agent, the Requisite Lenders shall appoint a successor Agent with the consent
of Borrower, which consent shall not be unreasonably withheld or delayed and
which consent shall not be required if there shall then exist any Event of
Default. Any successor Agent must be a Lender (i) the senior debt obligations
of which (or such Lender's parent's senior unsecured debt obligations) are
rated not less than BBB (or its equivalent) by one of the Rating Agencies, by
Moody's Investors Service, or by Duff & Phelps Credit Rating Co., and (ii)
which has total assets in excess of Ten Billion Dollars ($10,000,000,000).
Such successor Agent shall separately confirm in writing with Borrower the fee
to be paid to such Agent pursuant to Section 2.5.2.
11.9.3 If a successor Agent shall not have been so appointed
within said thirty (30) Business Day period, the retiring or removed Agent,
with (unless an Event of Default has occurred and is continuing) the consent of
Borrower (which may not be unreasonably withheld or delayed), shall then
appoint a successor Agent who shall meet the requirements described in Section
11.9.2 and who shall serve as Agent until such time, if any, as the Requisite
Lenders, with the consent of Borrower, appoint a successor Agent as provided
above.
11.10 CONSENT AND APPROVALS.
11.10.1 Each of the following shall require the approval or
consent of the Majority Lenders:
(a) Approval of a new rating agency in place of
Fitch Investors Service, L.P. (per the definition of "Rating Agency");
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(b) Approval of any new Unencumbered Pool
Property that does not meet the UPP Eligibility Criteria (Section
3.1.3);
(c) Approval of any amendment of organizational
documents that would have a material adverse effect on the ability of
Borrower or the REIT to perform their obligations under the Loan
Documents (Section 8.2); and
(d) Approval of any new UPP Subpartnership (per
the definition of that term).
11.10.2 Each of the following shall require the approval or
consent of the Requisite Lenders:
(a) Acceleration following an Event of Default
(Section 10.2.1) or rescission of such acceleration (Section 10.3);
(b) Approval of the exercise of rights and
remedies under the Loan Documents following an Event of Default
(Section 10.2.1);
(c) Removal of Agent and appointment of a
successor (Section 11.9);
(d) Approval of certain changes in GAAP affecting
calculation of financial covenants (Section 12.3); and
(e) Except as referred to in Section 11.10.3,
approval of any amendment, modification or termination of this
Agreement or any other Loan Document, or waiver of any provision
herein or therein (Section 12.4).
11.10.3 (i) Approval of (A) additional types of properties
that will constitute Approved Property Types for purposes of the UPP
Eligibility Criteria (Section 3.1.2(a)(ii) and (B) additional markets that will
constitute Approved Markets for purposes of the UPP Eligibility Criteria
(Section 3.1.2(a)(iv)), and (ii) each amendment, modification or waiver
specifically enumerated in Section 12.4.1, shall require the consent of all
Lenders.
11.10.4 In addition to the required consents or approvals
referred to in Section 11.10.1 or 11.10.2, Agent may at any time request
instructions from the Requisite Lenders or the Majority Lenders, as the case
may be, with respect to any actions or approvals which, by the terms of this
Agreement or of any of the Loan Documents, Agent is permitted or required to
take or to grant without instructions from any Lenders, and if such
instructions are promptly requested, Agent shall be absolutely entitled to
refrain from taking any action or to withhold any approval and shall not be
under any liability whatsoever to any Person for refraining from taking any
action or withholding any approval under any of
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the Loan Documents until it shall have received such instructions from the
Requisite Lenders or the Majority Lenders, as applicable. Without limiting the
foregoing, no Lender or Designated Bid Lender shall have any right of action
whatsoever against Agent as a result of Agent acting or refraining from acting
under this Agreement or any of the other Loan Documents in accordance with the
instructions of the Requisite Lenders or, where applicable, the Majority
Lenders or all Lenders. Agent shall promptly notify each Lender at any time
that the Majority Lenders or the Requisite Lenders, as the case may be, have
instructed Agent to act or refrain from acting pursuant hereto.
11.10.5 Each Lender and Designated Bid Lender agrees that any
action taken by Agent at the direction or with the consent of the Majority
Lenders or the Requisite Lenders in accordance with the provisions of this
Agreement or any Loan Document, and the exercise by Agent at the direction or
with the consent of the Majority Lenders or the Requisite Lenders, as
applicable, of the powers set forth herein or therein, together with such other
powers as are reasonably incidental thereto, shall be authorized and binding
upon all Lenders and Designated Bid Lenders, except for actions specifically
requiring the approval of a greater number of Lenders or of Lenders holding a
greater aggregate interest in the Commitments or the outstanding Loans, as the
case may be. All communications from Agent to Lenders requesting Lenders'
determination, consent, approval or disapproval (i) shall be given in the form
of a written notice to each Lender (in its own capacity and, if such Lender is
a Designating Lender, in its capacity as administrative agent for its
Designated Bid Lender), (ii) shall be accompanied by a description of the
matter or thing as to which such determination, approval, consent or
disapproval is requested, or shall advise each Lender where such matter or
thing may be inspected, or shall otherwise describe the matter or issue to be
resolved, (iii) shall include, if reasonably requested by a Lender and to the
extent not previously provided to such Lender, written materials and a summary
of all oral information provided to Agent by Borrower in respect of the matter
or issue to be resolved, and (iv) shall include Agent's recommended course of
action or determination in respect thereof. Each Lender shall reply (on its
own behalf and on behalf of and as administrative agent for its Designated Bid
Lender, if any) promptly, but in any event within ten (10) Business Days (the
"Lender Reply Period"). Unless a Lender shall give written notice to Agent
that it (or, if applicable, its Designated Bid Lender) objects to the
recommendation or determination of Agent (together with a written explanation
of the reasons behind such objection) within the Lender Reply Period, such
Lender or its Designated Bid Lender, as the case may be, shall be deemed to
have approved of or consented to such recommendation or determination. With
respect to decisions requiring the approval of the Majority Lenders, the
Requisite Lenders or all Lenders, Agent shall submit its recommendation or
determination for approval of or consent to such recommendation or
determination to all Lenders and upon receiving the required approval or
consent shall follow the course of action or determination recommended to
Lenders by Agent or such other course of action recommended by the Requisite
Lenders or the
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Majority Lenders, as applicable, and each non-responding Lender, and its
Designated Bid Lender, if any, shall be deemed to have concurred with such
recommended course of action.
11.10.6 Nothing contained in this Article XI, or in any other
provision of the Loan Documents, is intended to confer upon any Designated Bid
Lender the right to approve or consent to any matter other than a matter on
which Designated Bid Lenders are entitled to vote as described in Section
11.12.3.
11.11 AGENCY PROVISIONS RELATING TO CERTAIN ENFORCEMENT ACTIONS.
Should Agent (i) employ counsel for advice or other representation (whether or
not any suit has been or shall be filed) with respect to any of the Loan
Documents, or (ii) commence any proceeding or in any way seek to enforce its
rights or remedies under the Loan Documents, each Lender, upon demand therefor
from time to time, shall contribute its share (based on its Pro Rata Share) of
the reasonable costs and/or expenses of any such advice or other
representation, enforcement or acquisition, including, but not limited to, fees
of receivers, court costs and fees and expenses of attorneys to the extent not
otherwise reimbursed by Borrower; provided that Agent shall not be entitled to
reimbursement of its attorneys' fees and expenses incurred in connection with
the resolution of disputes between Agent and other Lenders or Designated Bid
Lenders unless Agent shall be the prevailing party in any such dispute. Any
loss of principal and interest resulting from any Event of Default shall be
shared by Lenders and Designated Bid Lenders in accordance with their
respective pro rata shares (determined on the basis of its outstanding Bid
Loans and on its Pro Rata Share of all outstanding Committed Loans) of all
Loans outstanding as of the date the Termination Date has occurred and all
outstanding Loans become, or are declared to be, due and payable in accordance
with the Loan Documents (subject to the provisions of Section 11.13); provided,
however, that the foregoing provisions shall not prohibit any Designating
Lender from agreeing with its Designated Bid Lender that, as between such
Designating Lender and Designated Bid Lender, such Designating Lender shall
bear any losses otherwise allocable to its Designated Bid Lender, and such
Designating Lender shall be permitted to pay over to its Designated Bid Lender
any amount to which such Designating Lender would be entitled hereunder.
11.12 ASSIGNMENTS AND PARTICIPATIONS.
11.12.1 Subject to Section 2.9, after first obtaining the
approval of Agent and (unless any Unmatured Event of Default or Event of
Default has occurred and is continuing) Borrower, which approval will not be
unreasonably withheld, each Lender may assign, to one or more Eligible
Assignees, all or a portion of its rights and obligations under this Agreement
(including without limitation all or a portion of its Commitment and the
Committed Loans owing to it) and other Loan Documents other than with respect
to outstanding Bid Loans made by such Lender; provided, however, that (i) each
such assignment shall be of a constant, and not a varying, percentage of the
assigning Lender's
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rights and obligations under this Agreement and other Loan Documents (excluding
any rights or obligations with respect to outstanding Bid Loans), and the
assignment shall cover the same percentage of such Lender's Commitment and
Committed Loans, (ii) unless Agent and (unless an Unmatured Event of Default or
Event of Default has occurred and is continuing) Borrower otherwise consent,
the aggregate amount of the Commitment of the assigning Lender being assigned
pursuant to each such assignment (determined as of the date of the Assignment
and Assumption with respect to such assignment) shall in no event be less than
Fifteen Million Dollars ($15,000,000) and shall be an integral multiple of One
Million Dollars ($1,000,000), (iii) unless such assignment is an assignment of
the assigning Lender's entire remaining Commitment: after giving effect to
such assignment, the aggregate amount of the Commitment retained by the
assigning Lender shall in no event be less than Ten Million Dollars
($10,000,000), (iv) at all times prior to its resignation or replacement,
Agent's Commitment shall be equal to or exceed the Commitment of each other
Lender, (v) if, upon giving effect to any assignment by Morgan Guaranty of any
portion of its interest in the Loans, Morgan Guaranty's Pro Rata Share is no
longer at least as great as the Pro Rata Share of each Lender other than Agent,
Morgan Guaranty shall cease, upon Borrower's written request, to be
Documentation Agent (without any need to appoint a successor Documentation
Agent), (vi) the parties to each such assignment shall execute and deliver to
Agent, for its approval and acceptance (and, unless an Unmatured Event of
Default or Event of Default has occurred and is continuing, for acknowledgement
by Borrower), an Assignment and Assumption, and (vii) Agent shall receive from
the assignor a processing fee of Three Thousand Dollars ($3,000). Unless Agent
or Borrower gives written notice to the assigning Lender that it objects to the
proposed assignment (together with a written explanation of the reasons behind
such objection) within ten (10) Business Days following receipt of the
assigning Lender's written request for approval of the proposed assignment,
Agent or Borrower, as the case may be, shall be deemed to have approved such
assignment. Upon such execution, delivery, approval and acceptance, and upon
the effective date specified in the applicable Assignment and Assumption, (X)
the assignee thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to (and assumed by) it pursuant to
such Assignment and Assumption, have the rights and obligations of a Lender
hereunder, and (Y) the assigning Lender thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it (and assumed by its
assignee) pursuant to such Assignment and Assumption, relinquish its rights and
be released from its obligations under this Agreement.
11.12.2 By executing and delivering an Assignment and
Assumption, the assigning Lender thereunder and the assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (i)
other than as provided in such Assignment and Assumption, such assigning Lender
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
this Agreement or any other Loan Document or the execution, legality,
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validity, enforceability, genuineness, sufficiency or value of this Agreement
or any other Loan Document or any other instrument or document furnished
pursuant hereto; (ii) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
REIT, Borrower or any UPP Subpartnership or the performance or observance by
the REIT, Borrower or any Guarantor Subpartnership of any of their respective
obligations under any Loan Document or any other instrument or document
furnished pursuant hereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Article V or delivered pursuant to Article VI to the date of
such assignment and such other Loan Documents and other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Assumption; (iv) such assignee will,
independently and without reliance upon Agent, such assigning Lender or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee appoints and
authorizes Agent to take such action as Agent on its behalf and to exercise
such powers under this Agreement and the other Loan Documents as are delegated
to Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the
terms of this Agreement are required to be performed by it as a Lender.
11.12.3
(a) Any Lender may at any time, with the prior
written consent of Borrower and Agent, which consent shall not be
unreasonably withheld, designate one Designated Bid Lender to fund Bid
Loans on behalf of such Designating Lender subject to the terms of
this Section 11.12.3, and the provisions of Sections 11.12.1 and
11.12.2 shall not apply to such designation, except that no
Designating Lender shall enter into any agreement under which its
Designated Bid Lender has rights to approve any amendment, consent or
waiver with respect to any Loan Document, except to the extent such
amendment, consent or waiver would amend any right of Designated Bid
Lenders or would (i) increase the amount of the Bid Loan Facility at
any time while any Bid Loan made by such Designated Bid Lender is
outstanding, (ii) extend the maturity date of any Bid Loan made by
such Designated Bid Lender, or (iii) decrease the interest rate
applicable to any Bid Loan made by such Designated Bid Lender. No
Lender may designate more than one Designated Bid Lender at any one
time, and, following the termination of a designation with respect to
one Designated Bid Lender, no new Designated Bid Lender may be
designated until all outstanding Bid Loans made by the prior
Designated Bid Lender have been paid in full. The parties to each
such designation shall execute and deliver to Borrower and Agent for
their acceptance a Designation Agreement, and, upon Agent's receipt of
(A) an appropriately completed Designation Agreement (1)
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executed by a Designating Lender and a designee representing that it
is a Designated Bid Lender and (2) accepted by Borrower, and (B) a
processing fee in the amount of One Thousand Five Hundred Dollars
($1,500), Agent shall accept such Designation Agreement and register
such Designated Bid Lender as a Designated Bid Lender, and give prompt
notice thereof to Borrower, whereupon: from and after the effective
date specified in the Designation Agreement, the Designated Bid Lender
shall become a party to this Agreement, as a Designated Bid Lender,
with (X) a right to make Bid Loans on behalf of its Designating Lender
pursuant to Section 2.1.1(b)(iii) with respect to any Competitive Bid
of such Designating Lender that is accepted in whole or in part by
Borrower, and (Y) the other rights, and the obligations, provided
herein and therein, subject to the limitation, however, that,
notwithstanding the assumption by a Designated Bid Lender of certain
of the obligations of its Designating Lender (but without limiting the
Designating Lender's obligations under the following paragraph (b)),
no Designated Bid Lender shall be required to make payments with
respect to any of its obligations under this Agreement or any other
Loan Document except to the extent of excess cash flow of such
Designated Bid Lender (i.e., cash that is not otherwise required to
repay obligations of such Designated Bid Lender that are then due and
payable).
(b) Notwithstanding any other provision of this
Agreement or any other Loan Document: regardless of any designation
of a Designated Bid Lender hereunder, the Designating Lender making
such designation (i) shall be and remain obligated to Borrower, Agent
and each of the other Lenders and other Designated Bid Lenders for
each and every one of the obligations of the Designating Lender and
its Designated Bid Lender with respect to this Agreement or any other
Loan Document (including, without limitation, any indemnification
obligations and any other obligation to pay any amount otherwise
payable to Borrower by the Designated Bid Lender); and (ii) shall
indemnify, defend and hold Agent, Borrower, each Lender and each
Designated Bid Lender harmless from and against any and all losses,
costs, expenses (including reasonable attorneys' fees and the cost of
any services of in-house counsel) and liabilities incurred by any such
Person in connection with or arising from (A) (1) the non-performance
by such Designating Lender's Designated Bid Lender of any obligation
assumed by the Designated Bid Lender under its Designation Agreement,
(2) any other act or omission of the Designated Bid Lender committed
in violation of the provisions of any Loan Document, or (3) the
failure of any representation or warranty made by such Designating
Lender's Designated Bid Lender for the benefit of Agent, Borrower, any
other Lender or any other Designated Bid Lender to be true and correct
in all material respects, or (B) such Designating Lender's
nonperformance of any obligation owed to its Designated Bid Lender
under the Designation Agreement or
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any other agreement between such Designating Lender and its Designated
Bid Lender with respect to the transactions contemplated hereby.
(c) Notwithstanding any designation hereunder,
Borrower and Agent shall continue to deal solely and directly with the
Designating Lender in connection with the Loans (including any Bid
Loans made by such Designating Lender's Designated Bid Lender) and the
Loan Documents. Each Designating Lender shall serve as the
administrative agent of its Designated Bid Lender and shall on behalf
of the Designated Bid Lender: (i) receive any and all payments made
for the benefit of the Designated Bid Lender (and Borrower's and
Agent's obligation to make any payment to the Designated Bid Lender
shall be satisfied upon payment of such amount to its Designating
Lender for the benefit of such Designated Bid Lender, without any duty
to see to the application thereof by such Designating Lender), and
(ii) give and receive all communications and notices and take all
actions under any Loan Document, including, without limitation, votes,
approvals, waivers, consents and amendments under or relating to this
Agreement and the other Loan Documents; and any notice or other
communication so delivered to a Designating Lender shall be deemed
validly delivered to its Designated Bid Lender, without any duty on
the part of Borrower or Agent to verify whether such notice or other
communication is actually delivered by such Designating Lender to its
Designated Bid Lender. Agent shall have no responsibility for, and
shall not incur liability to any Designated Bid Lender arising out of,
the disposition by such Designated Bid Lender's Designating Lender of
any funds or notice or other communication delivered to such
Designating Lender for the account of such Designated Bid Lender in
accordance herewith. Any notice, communication, vote, approval,
waiver, consent or amendment of or with respect to any Loan Document
that is delivered or executed on behalf of any Designated Bid Lender
shall be signed by its Designating Lender as administrative agent for
the Designated Bid Lender (whether or not noted as such thereon), and
need not be signed by the Designated Bid Lender on its own behalf.
Borrower, Agent, Lenders and the other Designated Bid Lenders may rely
thereon without any requirement that the Designated Bid Lender sign or
acknowledge the same. No Designated Bid Lender may assign or transfer
all or any portion of its interest hereunder or under any other Loan
Documents, other than (X) an assignment to the Designating Lender
which originally designated such Designated Bid Lender, or (Y) in
accordance with the provisions of Section 11.12.6 or Section 11.12.8.
(d) A Designated Bid Lender shall not have any
right to the payment of any amount under the Loan Documents other
thanwith respect to (i) principal of and interest (including, to the
extent, interest at the Default Rate) on Bid Loans made by such
Designated Bid Lender, (ii) the indemnity obligations of Borrower
under Section 12.2, and (iii) compensatory amounts payable by Borrower
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pursuant to Section 2.4.8(c) in respect of Bid Loans made by such
Designated Bid Lender that are paid prior to the last day of the Bid
Loan Interest Period applicable thereto; and all other amounts payable
by Borrower hereunder or under any other Loan Document shall be
determined as if such Designated Bid Lender's Designating Lender had
not made such designation.
(e) Each of Borrower, Lenders, Designated Bid
Lenders and Agent hereby agrees that it will not institute against any
Designated Bid Lender, or join with any other Person in instituting
against any Designated Bid Lender, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding under any federal or
state bankruptcy or similar law, at any time prior to the date that is
one year and one day after payment in full of the latest maturing
commercial paper note issued by such Designated Bid Lender.
11.12.4 Agent shall maintain, at its address referred to on
the counterpart signature pages hereof, a copy of each Assignment and
Assumption and Designation Agreement delivered to and accepted by it and shall
record in the Loan Account the names and addresses of (i) each Lender and the
Commitment of, and principal amount of the Loans owing to, such Lender from
time to time and (ii) each Designated Bid Lender and the principal amount of
the Bid Loans owing to such Designated Bid Lender from time to time. Borrower,
Agent, Lenders and Designated Bid Lenders may treat each Person whose name is
recorded in the Loan Account as a Lender or Designated Bid Lender, as the case
may be, as such hereunder for all purposes of this Agreement.
11.12.5
(a) Upon its receipt of an Assignment and
Assumption executed by an assigning Lender and an assignee, Agent
shall, if such Assignment and Assumption has been properly completed
and is in substantially the form of Exhibit A, (i) accept such
Assignment and Assumption and (unless an Unmatured Event of Default or
Event of Default has occurred and is continuing) obtain the
acknowledgment of Borrower, (ii) record the information contained
therein in the Loan Account, and (iii) give prompt notice thereof to
Borrower. Upon request, Borrower will execute and deliver to Agent an
appropriate replacement promissory note or replacement promissory
notes in favor of each assignee (and assignor, if such assignor is
retaining a portion of its Commitment and Loans) reflecting such
assignee's (and assignor's) Pro Rata Share(s) of the Committed
Facility, as well as any then outstanding Bid Loans made by the
assigning Lender and any Bid Loans made in the future, by the
assigning Lender or its assignee, respectively; and Agent shall
promptly send each such replacement note to the relevant payee. Upon
execution and delivery of such replacement promissory notes the
original
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promissory note or notes evidencing all or a portion of the
Commitments and Loans being assigned shall be cancelled and returned
to Borrower.
(b) Upon its receipt of a Designation Agreement
executed by a Designating Lender and its Designated Bid Lender and
accepted by Borrower, Agent shall, if such Designation Agreement has
been properly completed and is in substantially the form of Exhibit K,
(i) accept such Designation Agreement, (ii) record the information
contained therein in the Loan Account, and (iii) give prompt notice
thereof to Borrower.
11.12.6 Each Lender and Designated Bid Lender may sell
participations to one or more banks or other entities in or to all or a portion
of its rights and obligations under this Agreement (including without
limitation all or a portion of its Commitment (if applicable) and the Loans,
including Bid Loans, owing to it) and other Loan Documents; provided, however,
that (subject to the provisions of Section 11.12.3 with respect to dealings
between Agent and Lenders and any Designated Bid Lender): (i) such Lender's or
Designated Bid Lender's obligations under this Agreement (including without
limitation, in the case of a Lender, its Commitment to Borrower hereunder)
shall remain unchanged; (ii) (A) such Lender or (B) in the case of a
participation by a Designated Bid Lender, such Designated Bid Lender and its
Designating Lender, shall remain solely responsible to the other parties hereto
for the performance of such obligations; (iii) Borrower, Agent and the other
Lenders and Designated Bid Lenders shall continue to deal solely and directly
with such Lender or Designated Bid Lender in connection with such Lender's or
Designated Bid Lender's rights and obligations under this Agreement (including
with respect to any matters on which such participant may be entitled to vote
in accordance with this Section 11.12.6, and with regard to any and all
payments to be made under this Agreement; (iv) the governing participation
agreement shall not entitle the holder of any such participation to vote with
respect to any matter under this Agreement or any other Loan Document except
for (A) in the case of a participation by a Lender that includes an interest in
such Lender's Commitment, (1) increases in the Committed Facility or the Bid
Loan Facility, (2) extensions of the Termination Date or of the maturity date
of any Bid Loan in which such participant holds an interest, and (3) decreases
in the interest rates described in this Agreement; and (B) in the case of a
participation that is limited to an interest in one or more Bid Loans, (1)
increases in the amount of the Bid Loan Facility at any time while any Bid Loan
in which such participant has an interest is outstanding, (2) extensions of the
maturity date of any Bid Loan in which such participant holds an interest, and
(3) decreases in the interest rate applicable to any Bid Loan in which such
participant has an interest.
11.12.7 Borrower will use reasonable efforts to cooperate
with Agent, Lenders and Designated Bid Lenders in connection with the
assignment of interests under this Agreement, the designation of Designated Bid
Lenders or the sale of participations
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herein; provided, however, that Borrower shall have no obligation to pay the
processing fees due Agent in respect of any assignment or designation.
11.12.8 Anything in this Agreement to the contrary
notwithstanding, and without the need to comply with any of the formal or
procedural requirements of this Agreement, including this Section 11.12, (i)
any Lender or Designated Bid Lender may at any time and from time to time
pledge and assign all or any portion of its rights under all or any of the Loan
Documents to a Federal Reserve Bank, and (ii) any Designated Bid Lender may at
any time and from time to time pledge its interest in Borrower's obligations
under the Loan Documents in respect of any Bid Loan in favor of any Liquidity
Provider qualifying as such with respect to the Bid Loan so pledged; provided,
in any such case, that no such pledge or assignment shall release such Lender
or Designated Bid Lender (or its Designating Bank), as the case may be, from
its obligations thereunder. To facilitate any such pledge or assignment to a
Federal Reserve Bank, Agent shall, at the request of such Lender or Designated
Bid Lender, enter into a letter agreement with the Federal Reserve Bank in
substantially the form of the exhibit to Appendix C to the Federal Reserve Bank
of New York Operating Circular No. 12.
11.12.9 Anything in this Agreement to the contrary
notwithstanding, any Lender may assign all or any portion of its rights and
obligations under this Agreement (including, without limitation, with respect
to outstanding Bid Loans, but only if such assignee is also being assigned, or
has previously been assigned, all or some portion of such Lender's Commitment),
to another branch or Affiliate of such Lender without first obtaining the
approval of Agent and Borrower, provided that (i) at the time of such
assignment such Lender is not a Defaulting Lender, (ii) such Lender gives Agent
and Borrower at least fifteen (15) days' prior written notice of any such
assignment, (iii) the parties to each such assignment execute and deliver to
Agent an Assignment and Assumption (modified as necessary to reflect any
assignment of an interest in Bid Loans), and (iv) Agent receives from assignor
a processing fee of Three Thousand Dollars ($3,000).
11.12.10 No Lender or Designated Bid Lender shall be
permitted to assign or sell all or any portion of its rights and obligations
under this Agreement to Borrower or any Affiliate of Borrower.
11.13 RATABLE SHARING. Subject to Sections 11.3 and 11.4, Lenders
and Designated Bid Lenders agree among themselves that (a) (i) unless the
Termination Date has occurred and all outstanding Loans have become, or have
been declared, due and payable in full: with respect to all amounts received
by them (whether received by voluntary payment, by counterclaim or cross action
or by the enforcement of any or all of the Obligations) which are applicable to
the payment of the principal, interest, fees or any other amount payable under
the Loan Documents, equitable adjustment will be made so that, in effect, all
such amounts will be shared among them ratably in accordance with their
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pro rata shares of the amount to be so applied, based, in each case, on the
ratio of (A) the principal, interest, fees or other amount then due and payable
to each Lender or Designated Bid Lender, to (B) the aggregate amount then due
and payable to all of Lenders and Designated Bid Lenders in respect of
principal, interest, fees or such other amount, as the case may be (and, for
purposes of the allocation of payments of principal in respect of the Committed
Loans, a portion of such payment equal to each Lender's Pro Rata Share thereof
shall be deemed to be due and payable to such Lender as of the date of any such
payment); and (ii) if the Termination Date has occurred and all outstanding
Loans have become, or have been declared, due and payable in full: with
respect to all amounts received by them (whether received by voluntary payment,
by counterclaim or cross action or by the enforcement of any or all of the
Obligations) which are applicable to the payment of the Obligations, equitable
adjustment will be made so that, in effect, all such amounts will be shared
among them ratably in accordance with their pro rata shares of the amount to be
so applied, based, in each case, on the ratio of the aggregate principal amount
of all outstanding Loans owed to each Lender or Designated Bid Lender to the
aggregate principal amount of all of the outstanding Loans; and (b) if any of
them shall, by voluntary payment or by the exercise of any right of
counterclaim or otherwise, receive payment of a proportion of the aggregate
amount of the Obligations held by it which is greater than its share of the
payments on account of the Obligations (determined in accordance with the
preceding clause (a)), the one receiving such excess payment shall purchase,
without recourse or warranty, an undivided interest and participation (which it
shall be deemed to have done simultaneously upon the receipt of such payment)
in such Obligations owed to the others so that all such recoveries with respect
to such Obligations shall be applied ratably in accordance with the preceding
clause (a); provided, that if all or part of such excess payment received by
the purchasing party is thereafter recovered from it, those purchases shall be
rescinded and the purchase prices paid for such participations shall be
returned to that party to the extent necessary to adjust for such recovery, but
without interest except to the extent the purchasing party is required to pay
interest in connection with such recovery. Borrower agrees that any Lender or
Designated Bid Lender so purchasing a participation from another Lender or
Designated Bid Lender pursuant to this Section 11.13 may, to the fullest extent
permitted by law, exercise all its rights of payment with respect to such
participation as fully as if such Lender or Designated Bid Lender were the
direct creditor of Borrower in the amount of such participation.
11.14 DELIVERY OF DOCUMENTS. Agent shall as soon as reasonably
practicable distribute to each Lender (for itself or for transmittal to its
Designated Bid Lender, as applicable) at such Lender's primary address set
forth on the appropriate counterpart signature page hereof, or at such other
address as a Lender may request in writing, (i) all documents to which such
Lender or its Designated Bid Lender is a party or of which such Lender or its
Designated Bid Lender is a beneficiary set forth in Section 4.1, (ii) all
documents of which Agent receives copies from Borrower pursuant to Sections 6.1
and
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12.6, (iii) all other documents or information which Agent is required to send
to Lenders and Designated Bid Lenders pursuant to the terms of this Agreement,
(iv) other information or documents received by Agent at the request of any
Lender (on its own behalf or on behalf of, and as administrative agent for, its
Designated Bid Lender), and (v) all notices received by Agent pursuant to
Section 6.2. In addition, within fifteen (15) Business Days after receipt of a
request in writing from a Lender for written information or documents provided
by or prepared by Borrower, the REIT or any UPP Subpartnership or Majority
Partnership, Agent shall deliver such written information or documents to such
requesting Lender if Agent has possession of such written information or
documents in its capacity as Agent or as a Lender.
11.15 NOTICE OF EVENTS OF DEFAULT. Agent shall not be deemed to
have knowledge or notice of the occurrence of any Unmatured Event of Default or
Event of Default (other than nonpayment of principal of or interest on the
Loans) unless Agent has received notice in writing from a Lender or Borrower
referring to this Agreement or the other Loan Documents, describing such event
or condition and expressly stating that such notice is a notice of an Unmatured
Event of Default or Event of Default. Should Agent receive such notice of the
occurrence of an Unmatured Event of Default or Event of Default, or should
Agent send Borrower a notice of Unmatured Event of Default or Event of Default,
Agent shall promptly give notice thereof to each Lender.
ARTICLE
MISCELLANEOUS
12.1 EXPENSES.
12.1.1 GENERALLY. Borrower agrees upon demand to pay, or
reimburse Agent for, all of Agent's reasonable external audit, legal,
appraisal, valuation and investigation expenses and for all other reasonable
out-of-pocket costs and expenses of every type and nature (including, without
limitation, the reasonable fees, expenses and disbursements of Agent's internal
appraisers, environmental advisors or legal counsel) incurred by Agent at any
time (whether prior to, on or after the date of this Agreement) in connection
with (i) its own audit and investigation of Borrower and the Unencumbered Pool
Properties; (ii) the negotiation, preparation and execution of this Agreement
(including, without limitation, the satisfaction or attempted satisfaction of
any of the conditions set forth in Article IV) and the other Loan Documents and
the making of the Loans; (iii) the review and, if applicable, acceptance of
additional Unencumbered Pool Properties, including reasonable attorneys' fees
and costs incurred in connection therewith; (iv) administration of this
Agreement, the other Loan Documents and the Loans, including, without
limitation, consultation with attorneys in connection therewith; and (v) the
protection, collection or enforcement of any of the Obligations.
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12.1.2 AFTER EVENT OF DEFAULT. Borrower further agrees to
pay, or reimburse Agent and Lenders, for all reasonable out-of-pocket costs and
expenses, including without limitation reasonable attorneys' fees and
disbursements incurred by Agent or Lenders after the occurrence of an Event of
Default (i) in enforcing any Obligation or exercising or enforcing any other
right or remedy available by reason of such Event of Default; (ii) in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or in any
insolvency or bankruptcy proceeding; (iii) in commencing, defending or
intervening in any litigation or in filing a petition, complaint, answer,
motion or other pleadings in any legal proceeding relating to Borrower, the
REIT or any UPP Subpartnership and related to or arising out of the
transactions contemplated hereby; or (iv) in taking any other action in or with
respect to any suit or proceeding (whether in bankruptcy or otherwise).
12.2 INDEMNITY. Borrower further agrees to defend, protect,
indemnify and hold harmless Agent, each and all of Lenders and Designated Bid
Lenders, each of their respective Affiliates and participants and each of the
respective officers, directors, employees, agents, attorneys and consultants
(including, without limitation, those retained in connection with the
satisfaction or attempted satisfaction of any of the conditions set forth in
Article IV) of each of the foregoing (collectively called the "Indemnitees")
from and against any and all Liabilities and Costs imposed on, incurred by, or
asserted against such Indemnitees (whether based on any federal or state laws
or other statutory regulations, including, without limitation, securities and
commercial laws and regulations, under common law or in equity, and based upon
contract or otherwise, including any Liabilities and Costs arising as a result
of a "prohibited transaction" under ERISA to the extent arising from or in
connection with the past, present or future operations of the REIT, Borrower or
any UPP Subpartnership or their respective predecessors in interest) in any
manner relating to or arising out of this Agreement or the other Loan
Documents, or any act, event or transaction related or attendant thereto, the
making of and participation in the Loans and the management of the Loans, or
the use or intended use of the proceeds of the Loans (collectively, the
"Indemnified Matters"); provided, however, that Borrower shall have no
obligation to (i) an Indemnitee hereunder with respect to (A) matters for which
such Indemnitee has been compensated pursuant to or for which an exemption is
provided in Section 2.4.7 or any other provision of this Agreement, and (B)
Indemnified Matters to the extent caused by or resulting from the willful
misconduct or gross negligence of that Indemnitee, as determined by a court of
competent jurisdiction; or (ii) any Designating Lender or Designated Bid Lender
(or other Indemnitee who is an Indemnitee solely by reason of its relationship
with such Designating Lender or Designated Bid Lender) in respect of any matter
with respect to which Borrower is entitled to be indemnified pursuant to
Section 11.12.3(b) or in respect of any act or omission by such Designating
Lender or its Designated Bid Lender under their Designation Agreement or any
other agreement entered into between them in connection therewith. To the
extent that the undertaking to
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indemnify, pay and hold harmless set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, Borrower
shall contribute the maximum portion which it is permitted to pay and satisfy
under applicable law, to the payment and satisfaction of all Indemnified
Matters incurred by the Indemnitees.
12.3 CHANGE IN ACCOUNTING PRINCIPLES. Except as otherwise provided
herein, if any changes in accounting principles from those used in the
preparation of the most recent financial statements delivered to Agent pursuant
to the terms hereof are hereinafter required or permitted by the rules,
regulations, pronouncements and opinions of the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) and are adopted by the REIT,
Borrower or any UPP Subpartnership with the agreement of its independent
certified public accountants and such changes result in a change in the method
of calculation of any of the financial covenants, standards or terms found
herein, the parties hereto agree to enter into negotiations in order to amend
such provisions so as to equitably reflect such changes with the desired result
that the criteria for evaluating the financial condition of Borrower shall be
the same after such changes as if such changes had not been made; provided,
however, that no change in GAAP that would affect the method of calculation of
any of the financial covenants, standards or terms shall be given effect in
such calculations until such provisions are amended, in a manner satisfactory
to Agent and the Requisite Lenders, to so reflect such change in accounting
principles.
12.4 AMENDMENTS AND WAIVERS. (i) No amendment or modification of
any provision of this Agreement shall be effective without the written
agreement of the Requisite Lenders (after notice to all Lenders) and Borrower
(except for amendments to Section 11.4.1 or Section 11.4.2, which do not
require the consent of Borrower), and (ii) no termination or waiver of any
provision of this Agreement, or consent to any departure by Borrower therefrom,
shall in any event be effective without the written concurrence of the
Requisite Lenders (after notice to all Lenders), which the Requisite Lenders
shall have the right to grant or withhold at their sole discretion, except
that:
12.4.1 The following amendments, modifications or waivers
shall require the consent of all Lenders:
(a) increasing the Commitments or any Lender's
Commitment;
(b) changing the principal amount or final
maturity of the Committed Loans or of any Bid Loan;
(c) reducing the interest rates applicable to any
of the Loans;
(d) reducing the rates on which fees payable
pursuant hereto are determined;
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(e) forgiving or delaying any amount payable or
receivable under Article II (other than late fees);
(f) changing the definition of "Requisite
Lenders", "Committed Facility", "Bid Loan Limit", "Loan Availability",
"Majority Lenders", "Pro Rata Shares" or "Unencumbered Pool Value";
(g) changing any provision contained in this
Section 12.4;
(h) releasing any obligor under any Loan
Document;
(i) consent to assignment by Borrower of all of
its duties and Obligations hereunder pursuant to Section 12.14;
(j) amending the ratio of Total Liabilities to
Gross Asset Value that Borrower is required to maintain pursuant to
Section 9.2; waiving any failure of Borrower to maintain such ratio;
or amending the definitions of "Total Liabilities", "Gross Asset
Value", "Cash Equivalents", "EBIDA", any defined term used in the
definition of "EBIDA", or "Permitted Excess Period"; and
(k) amending the definition of "Unsecured
Liabilities" or "Net Operating Income", or of any defined term used in
any of the foregoing definitions; amending the Aggregate Occupancy
Rate that Borrower is required to maintain with respect to the
Unencumbered Pool Properties pursuant to Section 9.7 or waiving any
failure of Borrower to maintain such Aggregate Occupancy Rate; or
amending or waiving any portion of Section 2.1.1 or Section 2.1.3.
12.4.2 No amendment, modification, termination or waiver of
any provision of Article XI or any other provision referring to Agent shall be
effective without the written concurrence of Agent, but only if such amendment,
modification, termination or waiver alters the obligations or rights of Agent.
Any waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given. No notice to or demand on
Borrower in any case shall entitle Borrower to any other further notice or
demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 12.4
shall be binding on each assignee, transferee or recipient of Agent's or any
Lender's Commitment under this Agreement or the Loans at the time outstanding.
12.5 INDEPENDENCE OF COVENANTS. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of an Event of Default or
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Unmatured Event of Default if such action is taken or condition exists, and if
a particular action or condition is expressly permitted under any covenant,
unless expressly limited to such covenant, the fact that it would not be
permitted under the general provisions of another covenant shall not constitute
an Event of Default or Unmatured Event of Default if such action is taken or
condition exists.
12.6 NOTICES AND DELIVERY. Unless otherwise specifically provided
herein, any consent, notice or other communication herein required or permitted
to be given shall be in writing and may be personally served, telecopied or
sent by courier service or United States mail and shall be deemed to have been
given when delivered in person or by courier service, upon receipt of a
telecopy (or on the next Business Day if such telecopy is received on a
non-Business Day or after 5:00 p.m. (at the office of the recipient) on a
Business Day) or four (4) Business Days after deposit in the United States mail
(registered or certified, with postage prepaid and properly addressed).
Notices to Agent pursuant to Article II shall not be effective until received
by Agent. For the purposes hereof, the addresses of the parties hereto (until
notice of a change thereof is delivered as provided in this Section 12.6) shall
be as set forth below each party's name on the signature pages hereof, or, as
to each party, at such other address as may be designated by such party in a
written notice to all of the other parties. All deliveries to be made to Agent
for distribution to Lenders (or their respective Designated Bid Lenders) shall
be made to Agent at Lenders' respective addresses specified for notice on the
signature page hereto and in addition, a sufficient number of copies of each
such delivery shall be delivered to Agent for delivery to each Lender at the
address specified for deliveries on the signature page hereto or such other
address as may be designated by Agent in a written notice.
12.7 SURVIVAL OF WARRANTIES, INDEMNITIES AND AGREEMENTS. All
agreements, representations, warranties and indemnities made or given herein
shall survive the execution and delivery of this Agreement and the other Loan
Documents and the making and repayment of the Loans hereunder, and such
indemnities shall survive termination hereof.
12.8 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No
failure or delay on the part of Agent, any Lender or any Designated Bid Lender
in the exercise of any power, right or privilege under any of the Loan
Documents shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. All rights and
remedies existing under the Loan Documents are cumulative to and not exclusive
of any rights or remedies otherwise available.
12.9 PAYMENTS SET ASIDE. To the extent that Borrower makes a
payment or payments to Agent, Lenders or Designated
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Bid Lenders, or Agent, Lenders or Designated Bid Lenders exercise their rights
of setoff, and such payment or payments or the proceeds of such setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such recovery, the Obligation or part
thereof originally intended to be satisfied, and all rights and remedies
therefor, shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred. Each Lender
severally agrees to pay to Agent upon demand (i) in the case of an amount
received in respect of a Bid Loan, its allocable share of any amount so
recovered from or repaid by Agent, and (ii) in the case of any other amount
received under the Loan Documents, its Pro Rata Share of any amount so
recovered from or repaid by Agent; and each Designated Bid Lender agrees to pay
such Designated Bid Lender's allocable share of any amount so recovered from or
repaid by Agent in respect of any Bid Loan made by such Designated Bid Lender;
provided, however, that the foregoing clause shall not prohibit any Designating
Lender from agreeing with its Designated Bid Lender that, as between such
Designating Lender and Designated Bid Lender, such Designating Lender shall pay
to Agent any amount that would otherwise be due to Agent under this Section
12.9, and such Designated Bid Lender shall not be liable for any payment of any
such amount to the extent that its Designating Lender makes such payment.
12.10 SEVERABILITY. In case any provision in or obligation under
this Agreement or the other Loan Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby,
provided, however, that if the rates of interest or any other amount payable
hereunder, or the collectibility thereof, are declared to be or become invalid,
illegal or unenforceable, Lenders' obligations to make Loans shall not be
enforceable.
12.11 HEADINGS. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose or be given any substantive effect.
12.12 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
CALIFORNIA.
12.13 LIMITATION OF LIABILITY. To the extent permitted by
applicable law, no claim may be made by Borrower, any Lender or Designated Bid
Lender or any other Person against Agent, Documentation Agent or any Lender or
Designated Bid Lender, or the affiliates, directors, officers, employees,
attorneys or agents of any of them, for any special, indirect, consequential or
punitive damages in respect of any claim for breach of contract or any other
theory of liability arising out of or related to the transactions contemplated
by this
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Agreement, or any act, omission or event occurring in connection therewith; and
Borrower and each Lender and Designated Bid Lender hereby waive, release and
agree not to sue upon any claim for any such damages, whether or not accrued
and whether or not known or suspected to exist in its favor, provided that if a
Lender or Designated Bid Lender refuses to fund a Loan and a court of competent
jurisdiction finds that such refusal was without justification and in bad
faith, such Lender or Designated Bid Lender (and, in the case of a Designated
Bid Lender, its Designating Lender) may be liable to Borrower for Borrower's
reasonable and foreseeable damages resulting from such refusal to fund.
12.14 SUCCESSORS AND ASSIGNS. This Agreement and the other Loan
Documents shall be binding upon the parties hereto and their respective
successors and assigns and shall inure to the benefit of the parties hereto and
the successors and permitted assigns of Agent, Lenders and Designated Bid
Lenders. The terms and provisions of this Agreement shall inure to the benefit
of any assignee or transferee of the Loans and the Commitments of Lenders under
this Agreement, and in the event of such transfer or assignment, the rights and
privileges herein conferred upon Agent and Lenders shall automatically extend
to and be vested in such transferee or assignee, all subject to the terms and
conditions hereof. Borrower's rights or any interest therein hereunder, and
Borrower's duties and Obligations hereunder, shall not be assigned without the
consent of all Lenders.
12.15 CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY
TRIAL. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST BORROWER WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE, AND ALL JUDICIAL PROCEEDINGS
BROUGHT BY BORROWER WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
SHALL BE, BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
HAVING SITUS WITHIN THE BOUNDARIES OF THE FEDERAL COURT DISTRICT OF THE
NORTHERN DISTRICT OF CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, BORROWER ACCEPTS, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS, AND
IRREVOCABLY AGREES TO BE BOUND BY ANY FINAL JUDGMENT RENDERED THEREBY FROM
WHICH NO APPEAL HAS BEEN TAKEN OR IS AVAILABLE. BORROWER IRREVOCABLY CONSENTS
TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO ITS NOTICE ADDRESS SPECIFIED ON THE
SIGNATURE PAGES HEREOF. BORROWER, AGENT AND LENDERS EACH IRREVOCABLY WAIVES
(i) TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, AND (ii) ANY OBJECTION (INCLUDING, WITHOUT LIMITATION,
ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
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FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE
RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT OF AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST BORROWER IN THE
COURTS OF ANY OTHER JURISDICTION.
12.16 COUNTERPARTS; EFFECTIVENESS; INCONSISTENCIES. This Agreement
and any amendments, waivers, consents or supplements may be executed in
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such together shall constitute but one and the same
instrument. This Agreement shall become effective when Borrower, the initial
Lenders and Agent have duly executed and delivered execution pages of this
Agreement to each other (delivery by Borrower to Lenders and by any Lender to
Borrower and any other Lender being deemed to have been made by delivery to
Agent). Agent shall send written confirmation of the Closing Date to Borrower
and each other Lender promptly following the occurrence thereof. Effective as
of the Closing Date, the commitments of the Original Lenders under the Existing
Facility shall terminate, and all accrued and unpaid obligations of Borrower
under the Existing Facility shall be due and payable in full. This Agreement
and each of the other Loan Documents shall be construed to the extent
reasonable to be consistent one with the other, but to the extent that the
terms and conditions of this Agreement are actually and directly inconsistent
with the terms and conditions of any other Loan Document, this Agreement shall
govern.
12.17 CONSTRUCTION. The parties acknowledge that each party and its
counsel have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any amendments or exhibits hereto.
12.18 OBLIGATIONS UNSECURED. It is the intent of the parties that
the Obligations, and the obligations of the REIT and the Guarantor
Subpartnerships under their respective Guaranties, shall constitute unsecured
obligations of Borrower, the REIT and each Guarantor Subpartnership,
respectively. Neither the restrictions and prohibitions set forth herein with
respect to the creation, incurrence, assumption or existence of any Lien on any
Property of Borrower or any other Person (including, without limitation,
Unencumbered Pool Properties and interests in Persons owning any Unencumbered
Pool Property), nor those set forth in any other Loan Document, are intended to
create or constitute a Lien of any nature upon any Property of Borrower, the
REIT or any other Person, and no such restriction or prohibition shall be
deemed to constitute any such Lien. This Section 12.18 shall not be deemed to
prevent Agent, any Lender or any Designated Bid Lender from obtaining a Lien as
security for the Obligations at any time hereafter pursuant to a mutual
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agreement among the parties hereto expressly providing for such Lien or during
the continuance of any Event of Default.
12.19 ENTIRE AGREEMENT. This Agreement, taken together with all of
the other Loan Documents and all certificates and other documents delivered by
Borrower to Agent (including documents incorporating separate agreements
relating to the payment of fees), embodies the entire agreement and supersede
all prior agreements, written and oral, relating to the subject matter hereof.
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IN WITNESS WHEREOF, this Agreement has been duly executed on the date
set forth above.
BORROWER: SPIEKER PROPERTIES, L.P., a
California limited partnership
By: SPIEKER PROPERTIES, INC.,
a Maryland corporation, its
general partner
By_________________________
Its_______________________
ADDRESS FOR NOTICE AND DELIVERY:
2180 Sand Hill Road, Suite 200
Menlo Park, CA 94025
Attn: Craig Vought
Executive Vice President and
Chief Financial Officer
Tel: (415) 854-5600
Fax: (415) 859-6594
with a copy to:
2180 Sand Hill Road, Suite 200
Menlo Park, CA 94025
Attn: General Counsel
Tel: (415) 854-5600
Fax: (415) 234-1396
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AGENT/LENDER: WELLS FARGO BANK, NATIONAL ASSOCIATION
By______________________________
Lawrence Andow
Vice President
ADDRESS FOR NOTICE AND DELIVERY:
Real Estate Industries Group
420 Montgomery Street, 6th Floor
San Francisco, CA 94163
Attn: Lawrence Andow
Vice President
Tel: (415) 394-4056
Fax: (415) 956-7238
Pro Rata Share: 12.0%
Revolving Loan
Commitment: $30,000,000
LIBOR OFFICE:
Real Estate Group Disbursement Center
2120 East Park Place, Suite 100
El Segundo, CA 90245
Attn:Ozzie Barron
Telephone: (310)335-9406
Telecopy: (310)615-1014
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DOCUMENTATION
AGENT/LENDER: MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By______________________________
Michael M. Errichetti
Vice President
ADDRESS FOR NOTICE AND DELIVERY:
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, NY 10260-0060
Attn: Michael M. Errichetti
Vice President
Telephone: (212) 648-8127
Telecopy: (212) 648-5249
Pro Rata Share: 11.0%
Revolving Loan
Commitment: $27,500,000
LIBOR OFFICE:
Morgan Guaranty Trust Company of New York
c/o J.P. Morgan Services, Inc.
Loan Operations, 3rd Floor
500 Stanton Christiana Road
Newark, DE 19713
Attn: Jennifer VanLandingham
Telephone: (302) 634-1829
Telecopy: (302) 634-1092
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OTHER LENDERS: BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
doing business as SEAFIRST BANK
By______________________________
Gary Teague
Vice President
ADDRESS FOR NOTICE AND DELIVERY:
Seafirst Bank
Commercial Real Estate Group
701 Fifth Avenue, Floor 15
Seattle, WA 98104
Attn: Gary Teague
Telephone: (206) 358-3476
Telecopy: (206) 358-3487
Pro Rata Share: 11.0%
Revolving Loan
Commitment: $27,500,000
LIBOR OFFICE:
Seafirst Bank
Commercial Real Estate Group
701 Fifth Avenue, Floor 15
Seattle, WA 98104
Attn: Barb Johnson
Telephone: (206) 358-3469
Telecopy: (206) 358-3487
Note: the given addresses are for manual/courier delivery. For mail (to
either office), use the following:
Seafirst Bank
Commercial Real Estate Group, CSC-15
P.O. Box 3686
Seattle, WA 98124-3686
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UNION BANK OF CALIFORNIA, N.A.
By______________________________
Gary L. Roberts
Vice President
ADDRESS FOR NOTICE AND DELIVERY:
Capital Markets Division
350 California St. 7th Floor
San Francisco, CA 94104
Attn: Gary L. Roberts
Vice President
Telephone: (415) 705-7442
Telecopy: (415) 433-7438
Pro Rata Share: 11.0%
Revolving Loan
Commitment: $27,500,000
LIBOR OFFICE:
200 Pringle Avenue, Suite 200
Walnut Creek, CA 94526
Attn: Hertha Warren
Telephone: (510) 947-2492
Telecopy: (510) 947-2497
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COMMERZBANK AKTIENGESELLSCHAFT,
LOS ANGELES BRANCH
By_________________________________
Name_______________________________
Title______________________________
By_________________________________
Name_______________________________
Title______________________________
ADDRESS FOR NOTICE AND DELIVERY:
Commerzbank AG, Los Angeles Branch
633 West Fifth Street, Suite 6600
Los Angeles, CA 90071
Attn: Steven F. Larsen
Telephone: (213) 623-8223
Telecopy: (213) 623-0039
Pro Rata Share: 11.0%
Revolving Loan
Commitment: $27,500,000
LIBOR OFFICE:
Commerzbank AG, Los Angeles Branch
633 West Fifth Street, Suite 6600
Los Angeles, CA 90071
Attn: Steven F. Larsen
Telephone: (213) 623-8223
Telecopy: (213) 623-0039
133
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BANKERS TRUST COMPANY
By______________________________
Alex Johnson
Managing Director
ADDRESS FOR NOTICE AND DELIVERY:
130 Liberty Street
New York, NY 10006
Attn: Kathleen McCabe
Associate
Telephone: (212) 250-4241
Telecopy: (212) 669-0752
Pro Rata Share: 11.0%
Revolving Loan
Commitment: $27,500,000
LIBOR OFFICE:
130 Liberty Street, 14th Floor
New York, NY 10006
Attn: Aileen Mosier
Assistant Vice President
Telephone: (212) 250-6968
Telecopy: (212) 250-7351
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THE FIRST NATIONAL BANK OF CHICAGO
By________________________________
Name______________________________
Title_____________________________
ADDRESS FOR NOTICE AND DELIVERY:
The First National Bank of Chicago
One First National Plaza
Suite 0151
Chicago, IL 60670
Attn: Kevin L. Gillen
Telephone: (312) 732-1486
Telecopy: (312) 732-1117
Pro Rata Share: 11.0%
Revolving Loan
Commitment: $27,500,000
LIBOR OFFICE:
The First National Bank of Chicago
One First National Plaza
Suite 0318
Chicago, IL 60670
Attn: Sonia Swire
Telephone: (312) 732-5462
Telecopy: (312) 732-1158
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UNION BANK OF SWITZERLAND
New York Branch
By_____________________________
Name___________________________
Title___________________________
By_____________________________
Name___________________________
Title___________________________
ADDRESS FOR NOTICE AND DELIVERY:
Union Bank of Switzerland
(New York Branch)
Real Estate Finance Group
299 Park Avenue
New York, New York 10171-0026
Attn: Xiomara Martez
Telephone: (212) 821-3872
Telecopy: (212) 821-4138
Pro Rata Share: 11.0%
Revolving Loan
Commitment: $27,500,000
LIBOR OFFICE:
Union Bank of Switzerland
(New York Branch)
Real Estate Finance Group
299 Park Avenue
New York, New York 10171-0026
Attn: Xiomara Martez
Telephone: (212) 821-3872
Telecopy: (212) 821-4138
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U.S. BANK NATIONAL ASSOCIATION,
fka FIRST BANK NATIONAL ASSOCIATION
By____________________________________
Name__________________________________
Title_________________________________
ADDRESS FOR NOTICE AND DELIVERY:
U.S. Bank National Association
First Bank Place, MPFP0802
601 Second Avenue South
Minneapolis, Minnesota 55402-4302
Attn: Stephen Bailey/
Michael Raarup
Telephone: (612) 973-0562/
(612) 973-2102
Telecopy: (612) 973-0830
Pro Rata Share: 11.0%
Revolving Loan
Commitment: $27,500,000
LIBOR OFFICE:
U.S. Bank National Association
First Bank Place, MPFP0802
601 Second Avenue South
Minneapolis, Minnesota 55402-4302
Attn: Nouk Haschka
Telephone: (612) 973-1987
Telecopy: (612) 973-0830
137
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LIST OF EXHIBITS AND SCHEDULES
Exhibits:
A - Form of Assignment and Assumption
B - Form of Unencumbered Pool Certificate
C - Form of Annual Operating Report
D - Form of Compliance Certificate
E - Form of Loan Notes
F - Form of Notice of Borrowing
G - Form of Fixed Rate Notice
H - Form of Competitive Bid Request
I - Form of Competitive Bid
J - Form of UPP Eligibility Certification
K - Form of Designation Agreement
Schedules:
1 - List of Unencumbered Pool Properties
5.1.3 - General Partners and Limited Partners of Borrower and
Each Guarantor Subpartnership
5.1.20 - Environmental Matters
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.2 Computation of Time Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
1.3 Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE II
LOANS
2.1 Loan Advances and Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.2 Authorization to Obtain Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.3 Lenders' Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.4 Interest on the Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
2.5 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
2.6 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
2.7 Increased Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
2.8 Notice of Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
2.9 Option to Replace Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE III
UNENCUMBERED POOL PROPERTIES
3.1 Designation/Acceptance of Unencumbered Pool Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
3.2 Termination of Designation as Unencumbered Pool Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE IV
CONDITIONS TO LOANS
4.1 Conditions to Initial Disbursement of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
4.2 Conditions Precedent to All Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties as to Borrower, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
5.2 Representations and Warranties as to each UPP Subpartnership, Etc . . . . . . . . . . . . . . . . . . . . . . . . 70
5.3 Representations and Warranties as to the REIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
</TABLE>
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ARTICLE VI
REPORTING COVENANTS
6.1 Financial Statements and Other Financial and Operating Information . . . . . . . . . . . . . . . . . . . . . . . . 76
6.2 Environmental Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
6.3 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
ARTICLE VII
AFFIRMATIVE COVENANTS
7.1 With Respect to Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
7.2 With Respect to UPP Subpartnerships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
7.3 With Respect to the REIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
ARTICLE VIII
NEGATIVE COVENANTS
8.1 With Respect to all Parties: Neither Borrower, the REIT nor any UPP Subpartnership shall . . . . . . . . . . . . 88
8.2 Amendment of Constituent Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
8.3 Disposal of UPP Subpartnership Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
8.4 Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
8.5 Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
8.6 Organization of Borrower, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
8.7 With Respect to each UPP Subpartnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
8.8 With Respect to the REIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
ARTICLE IX
FINANCIAL COVENANTS
9.1 Minimum Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
9.2 Total Liabilities to Gross Asset Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
9.3 Secured Debt to Gross Asset Value Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
9.4 EBIDA to Interest Expense Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
9.5 EBIDA to Debt Service and Capital Expenditures Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
9.6 Unencumbered NOI to Unsecured Interest Expense Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
9.7 Aggregate Occupancy Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
9.8 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
9.9 Permitted Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
9.10 Construction in Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
</TABLE>
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9.11 Calculation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
ARTICLE X
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
10.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
10.2 Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
10.3 Rescission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
ARTICLE XI
AGENCY PROVISIONS
11.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
11.2 Nature of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
11.3 Loan Disbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
11.4 Distribution and Apportionment of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
11.5 Rights, Exculpation, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
11.6 Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
11.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
11.8 Agent Individually . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
11.9 Successor Agent; Resignation of Agent; Removal of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
11.10 Consent and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
11.11 Agency Provisions Relating to Certain Enforcement Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
11.12 Assignments and Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
11.13 Ratable Sharing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
11.14 Delivery of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
11.15 Notice of Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
ARTICLE XII
MISCELLANEOUS
12.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
12.2 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
12.3 Change in Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
12.4 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
12.5 Independence of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
12.6 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
12.7 Survival of Warranties, Indemnities and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
12.8 Failure or Indulgence Not Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
12.9 Payments Set Aside . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
12.10 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
</TABLE>
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12.11 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
12.12 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
12.13 Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
12.14 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
12.15 Consent to Jurisdiction and Service of Process; Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . 127
12.16 Counterparts; Effectiveness; Inconsistencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
12.17 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
12.18 Obligations Unsecured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
12.19 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
</TABLE>
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EXHIBIT E TO CREDIT AGREEMENT
LOAN NOTE
______________, 1997
FOR VALUE RECEIVED, SPIEKER PROPERTIES, L.P., a California
limited partnership ("Borrower"), HEREBY PROMISES TO PAY to the order of
______________________________________ ("Lender") (for Lender's own account and,
in its capacity as administrative agent for its "Designated Bid Lender" (if
any), for the account of its Designated Bid Lender with respect to "Bid Loans"
funded by such Designated Bid Lender): the principal sum of (i)
_______________________ Million Dollars ($_______________) or if less, the
aggregate unpaid principal amount of all "Committed Loans" disbursed by Lender
pursuant to Lender's "Commitment" (as such terms are defined in the Credit
Agreement dated as of August __, 1997 (as amended, supplemented or restated from
time to time the "Credit Agreement"), among Borrower, Lender, certain other
Lenders and Designated Bid Lenders named therein or made parties thereto and
Wells Fargo Bank, National Association, as Agent and Morgan Guaranty Trust
Company of New York, as Documentation Agent), plus (ii) the aggregate unpaid
principal amount of all Bid Loans disbursed by Lender or its Designated Bid
Lender pursuant to the Loan Agreement, in each case, together with interest on
the unpaid principal balance of each such Committed Loan and Bid Loan at the
rate (or rates) determined in accordance with Section 2.4 of the Credit
Agreement from the date such principal is advanced until it is paid in full. It
is contemplated that there will be advances and payments under this Loan Note
from time to time, but no advances or payments under this Loan Note (including
payment in full of the unpaid balance of principal hereof prior to maturity)
shall affect or impair the validity or enforceability of this Loan Note as to
future advances hereunder.
This Loan Note is one of the Loan Notes referred to in and
governed by the Credit Agreement, which Credit Agreement, among other things,
contains provisions for the acceleration of the maturity hereof and for the
payment of certain additional sums to Lender upon the happening of certain
stated events. Capitalized terms used in this Loan Note without definition have
the same meanings as in the Credit Agreement.
The principal amount of each Bid Loan made by Lender or its
Designated Bid Lender, unless accelerated in accordance with the provisions of
the Credit Agreement as described below, is due and payable at the end of the
Bid Loan Interest Period applicable thereto. The principal amount of this Loan
Note, if not sooner paid, will be
<PAGE> 144
due and payable, together with all accrued and unpaid interest and other amounts
due and unpaid under the Credit Agreement, on the Termination Date. Borrower may
make voluntary prepayments of all or a portion of the Committed Loans evidenced
by this Loan Note, upon prior written notice, in accordance with the provisions
of Section 2.6.1 or Section 2.9 of the Credit Agreement. Borrower may not make
voluntary prepayments of any Bid Loan.
Interest on the Loans is payable in arrears on the first
Business Day of each month during the term of the Credit Agreement, commencing
with the first Business Day of the first calendar month to begin after the date
of this Loan Note. Interest will be computed on the basis of the actual number
of days elapsed in the period during which interest accrues and a year of three
hundred sixty (360) days. The Credit Agreement provides for the payment by
Borrower of various other charges and fees, in addition to the interest charges
described in the Credit Agreement, as set forth more fully in the Credit
Agreement.
All payments of any amount becoming due under this Loan Note
shall be made in the manner provided in the Credit Agreement, in Dollars. Lender
may (and is hereby authorized, but shall not be obligated, to) attach to this
Note a schedule showing the amount of each Committed Loan or Bid Loan made by
Lender or its Designated Bid Lender pursuant to the Credit Agreement, the
Funding Date (and, in the case of a Bid Loan, maturity date) thereof, the rate
of interest applicable thereto from time to time, and each payment of principal
thereof or interest thereon. Such schedule, if so attached, shall be presumptive
evidence of the information set forth thereon, absent manifest error; provided,
however, that Lender's failure to attach such schedule or, if a schedule is
attached, to record all such information with respect to the Committed Loans and
Bid Loans evidenced hereby, shall not impair Borrower's obligation to pay in
full, in accordance with the Credit Agreement, all amounts due in respect of
such Loans.
Upon and after the occurrence of an Event of Default, unless
such Event of Default is waived as provided in the Credit Agreement, this Loan
Note may, at the option of Requisite Lenders and without demand, notice or legal
process of any kind, be declared by Agent, and in such case immediately shall
become, due and payable. Upon and after the occurrence of certain Events of
Default, this Loan Note shall, without any action by Lenders and without demand,
notice or legal process of any kind, automatically and immediately become due
and payable.
Demand, presentment, protest and notice of nonpayment and
protest, notice of intention to accelerate maturity, notice of acceleration of
maturity and notice of dishonor are hereby waived by Borrower. Subject to the
terms of the Credit Agreement, Lender (on its own behalf or as administrative
agent for, and on behalf of, its Designated Bid Lender, with respect to Bid
Loans funded by its Designated Bid Lender) may extend
2
<PAGE> 145
the time of payment of this Loan Note, postpone the enforcement hereof, grant
any indulgences, release any party primarily or secondarily liable hereon or
agree to any subordination of Borrower's obligations hereunder without affecting
or diminishing Lender's (or its Designated Bid Lender's) right of recourse
against Borrower, which right is hereby expressly reserved.
This Loan Note has been delivered and accepted at San
Francisco, California. This Loan Note shall be interpreted in accordance with,
and the rights and liabilities of the parties hereto shall be determined and
governed by, the laws of the State of California.
In no contingency or event whatsoever shall interest charged
in respect of the Loans evidenced hereby, however such interest may be
characterized or computed, exceed the highest rate permissible under any law
that a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. If such a court determines that Lender (or its Designated Bid
Lender) has received interest hereunder in excess of the highest rate applicable
hereto, Lender or its Designated Bid Lender, as the case may be shall, at
Lender's (or, if applicable, such Designated Bid Lender's) election, either (a)
promptly refund such excess interest to Borrower or (b) credit such excess to
the principal balance of the Loans funded by such Person. This provision shall
control over every other provision of all agreements between Borrower and Lender
or its Designated Bid Lender.
Whenever possible each provision of this Loan Note shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Loan Note shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Loan Note.
SPIEKER PROPERTIES, L.P.,
a California limited partnership
By: SPIEKER PROPERTIES, INC., a
Maryland corporation,
its general partner
By____________________________
Its_________________________
3
<PAGE> 1
EXHIBIT 10.17
[EXECUTION COPY]
AGREEMENT OF PURCHASE AND SALE
BETWEEN
SELLERS
IDENTIFIED IN SCHEDULE 1 ATTACHED HERETO,
AS SELLERS
AND
SPIEKER PROPERTIES, L.P.
AS BUYER
SEPTEMBER 15, 1997
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TABLE OF CONTENTS
<TABLE>
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ARTICLE I
DEFINITIONS
Section 1.1 Definitions.............................................................1
Section 1.2 Terms Generally.........................................................8
ARTICLE II
PURCHASE AND SALE OF PROPERTIES
Section 2.1 Sale....................................................................8
Section 2.2 Purchase Price.........................................................10
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions to Buyer's Obligation to Purchase...........................14
Section 3.2 Conditions to Sellers' Obligations to Sell.............................15
Section 3.3 Termination............................................................16
Section 3.4 Waiver by Buyer........................................................16
Section 3.5 Excluded Consent Properties............................................16
ARTICLE IV
REPRESENTATIONS AND WARRANTIES;
BUYER'S EXAMINATION OF THE PROPERTIES
Section 4.1 Representations and Warranties of Sellers..............................18
Section 4.2 Deposit After Due Diligence Period.....................................20
Section 4.3 Estoppels..............................................................20
</TABLE>
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Section 4.4 Limitation on Claims; Survival of Representations and Warranties.......21
Section 4.5 Representations and Warranties of Buyer................................23
Section 4.6 Buyer's Independent Investigation......................................24
Section 4.7 Entry and Indemnity; Limits on Government Contacts.....................27
Section 4.8 Release................................................................29
ARTICLE V
TITLE
Section 5.1 Conveyance of Title....................................................30
Section 5.2 Evidence of Title......................................................31
ARTICLE VI
BROKERS AND EXPENSES
Section 6.1 Brokers................................................................32
Section 6.2 Expenses...............................................................32
ARTICLE VII
INTERIM OPERATION OF THE PROPERTIES
Section 7.1 Interim Operation of the Properties....................................32
Section 7.2 Tenant Improvement Costs, Leasing Commissions and Free Rent............34
Section 7.3 Sellers' Maintenance of the Properties.................................35
Section 7.4 Lease Enforcement......................................................35
Section 7.5 Lease Termination Prior to Closing.....................................35
Section 7.6 Tenant Notices.........................................................35
Section 7.7 Risk of Loss and Insurance Proceeds....................................35
Section 7.8 Notifications..........................................................36
</TABLE>
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ARTICLE VIII
CLOSING AND ESCROW
Section 8.1 Escrow Instructions....................................................37
Section 8.2 Closing................................................................37
Section 8.3 Deposit of Documents...................................................37
Section 8.4 Estoppel Certificates..................................................40
Section 8.5 Prorations.............................................................41
Section 8.6 Discharge of Sellers' Bonds............................................45
Section 8.7 Tax Certiorari Proceedings.............................................45
Section 8.8 Tenant Obligations.....................................................46
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices................................................................46
Section 9.2 Entire Agreement.......................................................47
Section 9.3 Time...................................................................48
Section 9.4 Attorneys' Fees........................................................48
Section 9.5 No Merger..............................................................48
Section 9.6 Assignment.............................................................48
Section 9.7 Counterparts...........................................................49
Section 9.8 Governing Law; Jurisdiction and Venue..................................49
Section 9.9 Waiver of Trial by Jury................................................49
Section 9.10 Confidentiality and Return of Documents...............................50
Section 9.11 Interpretation of Agreement...........................................52
Section 9.12 Amendments............................................................52
Section 9.13 No Recording..........................................................52
Section 9.14 No Third Party Beneficiary; Sellers' Obligations Several..............52
Section 9.15 Severability..........................................................52
Section 9.16 Drafts not an Offer to Enter into a Legally Binding Contract..........53
Section 9.17 Further Assurances....................................................53
Section 9.18 Statutory Disclosure for Properties Located in the State of Oregon....53
Section 9.19 Statutory Disclosure Regarding Boca Colonnade.........................53
</TABLE>
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<TABLE>
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Section 9.20 Special Provisions Regarding Properties Located in the
Commonwealth of Pennsylvania..........................................54
Section 9.21 Special Provision Regarding Broadbent Business Park...................54
Section 9.22 Special Provisions Regarding Properties Located in the State
of Colorado...........................................................55
Section 9.23 SEC Compliance........................................................55
Section 9.24 No Marketing..........................................................55
Section 9.25 Security for Sellers' Obligations.....................................55
Section 9.26 Section 1031 Exchange.................................................56
Section 9.27 Kruse Woods-Land Option...............................................57
Section 9.28 Partnership Option....................................................57
Section 9.29 Consolidation of Pool A Properties and Pool B Properties..............58
EXHIBITS
EXHIBIT A REAL PROPERTY DEEDS
EXHIBIT B ASSIGNMENTS OF GROUND LEASES
EXHIBIT C LEASEHOLD IMPROVEMENTS DEED
EXHIBIT D ASSIGNMENT OF PARTNERSHIP INTERESTS
EXHIBIT E BILL OF SALE
EXHIBIT F ASSIGNMENT OF LEASES
EXHIBIT G ASSIGNMENT OF CONTRACTS, WARRANTIES AND
GUARANTEES AND OTHER INTANGIBLE PROPERTY
EXHIBIT H DESIGNATION AGREEMENT
EXHIBIT I BUYER'S AS-IS CERTIFICATE
EXHIBIT J TENANT ESTOPPEL CERTIFICATE
EXHIBIT K INTENTIONALLY OMITTED
EXHIBIT L SELLERS' AFFIDAVIT
EXHIBIT M GROUND LEASE ESTOPPEL CERTIFICATE
SCHEDULES
SCHEDULE 1 SELLERS
SCHEDULE 2.1.1 PROPERTY DESCRIPTIONS
SCHEDULE 2.1.2 LEASEHOLD ESTATES
SCHEDULE 2.1.3 EXISTING LEASES
SCHEDULE 2.1.4 INTENTIONALLY OMITTED
SCHEDULE 2.1.5 TENANT PURCHASE RIGHTS
SCHEDULE 2.1.6 POOL A PROPERTIES [SPIEKER]
SCHEDULE 2.1.7 POOL B PROPERTIES [BANKERS TRUST]
SCHEDULE 2.2.1 WIRING INSTRUCTIONS
</TABLE>
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SCHEDULE 2.2.2 SUMMARY OF TERMS OF PREFERRED PARTNERSHIP UNITS
SCHEDULE 4.1.1 REQUIRED CONSENTS
SCHEDULE 4.1.2 NON-TERMINABLE CONTRACTS
SCHEDULE 4.1.3 PENDING LITIGATION
SCHEDULE 7.2 LEASING COSTS
SCHEDULE 8.1.1 TRANSFER TAXES
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AGREEMENT OF PURCHASE AND SALE
AGREEMENT OF PURCHASE AND SALE, dated as of September 15, 1997
(this "Agreement"), between the parties identified on Schedule 1 attached
hereto, each a Delaware limited partnership (each, a "Seller," and collectively,
the "Sellers"), and Spieker Properties, L.P., a California limited partnership
("Buyer").
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, the following
terms shall have the meanings set forth below, which meanings shall be
applicable equally to the singular and plural of the terms defined:
"Additional Rents" shall have the meaning set forth in Section
8.5(a).
"Affiliate" shall mean with respect to any Person (i) any other
Person that directly or indirectly through one or more intermediaries
controls or is controlled by or is under common control with such
Person, (ii) any other Person owning or controlling 10% or more of the
outstanding voting securities of or other ownership interests in such
Person, (iii) any officer, director or partner of such Person, (iv) if
such Person is an officer, director or partner, any other company for
which such Person acts in any such capacity, (v) with respect to Bankers
Trust, any Person in which Bankers Trust directly or indirectly owns or
controls ten percent (10%) or more of the ownership interests or (vi)
with respect to Spieker Properties, L.P., Spieker Northwest, Inc. or any
Affiliate of Spieker Northwest, Inc.
"Agreement" shall have the meaning set forth in the first
paragraph of this Agreement.
"Allocated Purchase Price" shall have the meaning set forth in
Section 8.5(f).
"Assignment of Partnership Interest" shall have the meaning set
forth in Section 5.1.
"Assignment of Contracts" shall have the meaning set forth in
Section 8.3(a).
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"Assignment of Ground Lease" shall have the meaning set forth in
Section 5.1(b).
"Assignment of Leases" shall have the meaning set forth in
Section 8.3(a).
"Bankers Trust" shall mean Bankers Trust New York Corporation, a
New York corporation,
"Beneficiary" shall have the meaning set forth in Section 2.2(b).
"Bill of Sale" shall have meaning set forth in Section 8.3(a).
"Business Day" shall mean any day other than a Saturday, a
Sunday, or a federal holiday recognized by the Federal Reserve Bank of
New York.
"Buyer" shall have the meaning set forth in the first paragraph
of this Agreement and shall include any assignee of Buyer (including,
without limitation, any Permitted Assignee).
"Buyer Party" or "Buyer Parties" shall have the meaning set forth
in Section 4.7.
"Capital City Agreement" shall have the meaning set forth in
Section 3.5(b).
"Capital City Plaza" shall have the meaning set forth in Section
3.5(b).
"Cash Deposit" shall mean the cash, if any, funded by Buyer
pursuant to clause (A) of Section 2.2(b)(i) as part of the Deposit.
"Claim Notice" shall mean a written notice delivered by Buyer or
a Permitted Assignee to Sellers setting forth (i) the identity of the
Property with respect to which a breach or inaccuracy of a
representation or warranty is alleged to have occurred, (ii) a
reasonably detailed description of the claimed breach or inaccuracy,
including reasonably detailed information as to the adverse effect on
the value of the Property to which such claimed breach relates, (iii)
the specific provision of this Agreement under which such breach is
claimed and (iv) complete and detailed evidence of the satisfaction of
the conditions to Buyer's or a Permitted Assignee's recovery set forth
in Section 4.4.
"Claims" shall have the meaning set forth in Section 4.4(a).
"Closing" shall have the meaning set forth in Section 2.2(b).
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"Closing Date" shall have the meaning set forth in Section 8.2.
"Closing Documents" shall have the meaning set forth in Section
4.4(a).
"Closing Month" shall have the meaning set forth in Section
8.5(a).
"Code" shall mean the Internal Revenue Code of 1986, as amended,
or any corresponding provision(s) of any succeeding law.
"Confidential Information" shall have the meaning set forth in
Section 9.10(c).
"Confidentiality Agreement" shall mean the Confidentiality
Agreement, dated April 24, 1997, between Spieker Properties, Inc. and Goldman,
Sachs & Co.
"Consent Properties" shall mean, collectively, (i) Broadbent
Business Park, Albuquerque, NM; (ii) Stadium Towers Plaza, Anaheim, CA;
(iii) Milwaukie Marketplace, Lake Oswego, OR; (iv) 5000 Meadows, Lake
Oswego, OR; (v) 4900 Meadows, Lake Oswego, OR; (vi) Kruse Woods III,
Lake Oswego, OR; and
(vii) Capital City Plaza, Atlanta, GA.
"Contracts" shall have the meaning set forth in Section 2.1(e).
"December Properties" shall have the meaning set forth in Section
2.2(c).
"Deed" shall have the meaning set forth in Section 5.1(a).
"Deposit" shall mean the Cash Deposit (if any) and the Deposit
L/Cs taken together.
"Deposit Date" shall mean October 10, 1997.
"Deposit L/C" and "Deposit L/Cs" shall have the meaning set forth
in Section 2.2(b).
"Designation Agreement" shall have the meaning set forth in
Section 8.3(a).
"Due Diligence Materials" shall mean all of the documents and
other materials delivered to Buyer, its Permitted Assignees and their
representatives during the Due Diligence Period, including, without
limitation, the materials referenced in the two- volume set delivered to
Buyer and its representatives entitled "WCB Properties Due
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Diligence Index" (as last updated on or before October 9, 1997), but
excluding material contained in the "Dyna-Lease" computer diskettes to
the extent not otherwise included in other documents or materials
comprising the Due Diligence Materials.
"Due Diligence Period" shall mean the period commencing on August
22, 1997 and ending at 1:00 P.M. (San Francisco time) on October 10,
1997 (as such period may be extended by written notice from Sellers to
Buyer), during which period Buyer shall conduct the due diligence
activities contemplated by Section 4.6 of this Agreement.
"Effective Date" shall mean the date of this Agreement.
"Evaluation Material" shall have the meaning set forth in Section
9.10(a).
"Exchange" shall have the meaning set forth in Section 9.26.
"Excluded Consent Property" shall have the meaning set forth in
Section 3.5.
"Existing Leases" shall mean those leases, license agreements and
occupancy agreements identified on Schedule 2.1.3, as the same may be
amended or modified from time to time in accordance with the terms of
this Agreement.
"Fee Parcel" shall have the meaning set forth in Section 2.1(a).
"Fee Property" or "Fee Properties" shall have the meaning set
forth in Section 2.1(a).
"Goldman" shall have the meaning set forth in Section 6.1.
"Governmental Authority" shall mean any federal, state, county or
municipal government, or political subdivision thereof, any governmental
agency, authority, board, bureau, commission, department,
instrumentality, or public body, or any court or administrative
tribunal.
"Ground Lease" shall have the meaning set forth in Section
4.6(b).
"Guarantor" shall have the meaning set forth in Section 9.25.
"Hazardous Materials" shall mean materials, wastes or substances
that are (A) included within the definition of any one or more of the
terms "hazardous substances," "hazardous materials," "toxic substances,"
"toxic pollutants" and "hazardous waste" in
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the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended (42 U.S.C. Sections 9601, et seq.), the Resource
Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901, et seq.),
the Clean Water Act (33 U.S.C. Section 1251, et seq.), the Safe Drinking
Water Act (14 U.S.C. Section 1401, et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801, et seq.), and the Toxic
Substance Control Act (15 U.S.C. Section 2601, et seq.) and the
regulations promulgated pursuant to such laws, (B) regulated, or
classified as hazardous or toxic, under federal, state or local
environmental laws or regulations, (C) petroleum, (D) asbestos or
asbestos-containing, (E) polychlorinated biphenyls, (F) flammable
explosives or (G) radioactive materials.
"Improvements" shall have the meaning set forth in Section
2.1(a).
"Indemnified Party" shall have the meaning set forth in Section
6.1.
"Intangible Property" shall have the meaning set forth in Section
2.1(h).
"Leasehold Estate" or "Leasehold Estates" shall have meaning set
forth in Section 2.1(b).
"Leasehold Improvements" shall have the meaning set forth in
Section 2.1(b).
"Leasehold Improvements Deed" shall have the meaning set forth in
Section 5.1(c).
"Leasehold Property" or "Leasehold Properties" shall have the
meaning set forth in Section 2.1(b).
"Leases" shall mean all Existing Leases and New Leases,
collectively.
"Leasing Costs" shall have the meaning set forth in Section
7.2(a).
"Licenses and Permits" shall have the meaning set forth in
Section 2.1(h).
"Major Leases" shall have the meaning set forth in Section 7.1.
"New Leases" shall mean those leases, license agreements and
occupancy agreements encumbering any Real Property which are entered
into after the Effective Date in accordance with the terms of this
Agreement, as the same may be amended or modified from time to time in
accordance with the terms of this Agreement.
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"Non-Terminable Contracts" shall have the meaning set forth in
Section 4.1(g).
"Option Agreement" shall have the meaning set forth in Section
9.27.
"Order" shall mean an order or decree of any Governmental
Authority.
"Partnership Interest" shall have the meaning set forth in
Section 2.1(i).
"Partnership" shall mean Park Lane Associates L.P., a
Pennsylvania limited partnership.
"Partnership Agreement" shall mean the Second Amended and
Restated Agreement of Limited Partnership of Park Lane Associates, L.P.,
dated as of December 2, 1994, by and among WCB Twelve, Inc., WCB Twelve
Limited Partnership, Henry L. Hillman, Elsie Hilliard Hillman and C.G.
Grefenstette, Trustees of the Henry L. Hillman Trust U/A dated November
18, 1985, Venhill Limited Partnership and Parklane Properties, Inc.
"Permitted Assignee" shall have the meaning set forth in Section
9.6.
"Permitted Exceptions" shall have the meaning set forth in
Section 5.1.
"Person" shall mean any individual, partnership, corporation,
limited liability company, trust or other legal entity.
"Personal Property" shall have the meaning set forth in Section
2.1(c).
"Pool A Properties" shall mean those Properties listed on
Schedule 2.1.6 attached hereto.
"Pool B Properties" shall mean those Properties listed on
Schedule 2.1.7 attached hereto.
"Prescribed Form" shall have the meaning set forth in Section
8.4.
"Prime Rate" shall mean the prime (or base) rate of interest
publicly announced by Citibank, N.A. or its successors from time to
time.
"Property" or "Properties" shall have the meaning set forth in
Section 2.1.
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"Purchase Price" shall have the meaning set forth in Section
2.2(a).
"Real Estate Taxes" shall have the meaning set forth in Section
4.6(b).
"Real Property" or "Real Properties" shall have the meaning set
forth in Section 2.1.
"Records and Plans" shall have the meaning set forth in Section
2.1(g).
"Rent Rolls" shall have the meaning set forth in Section 4.1(f).
"Representatives" shall have the meaning set forth in Section
9.10(a).
"Required Deletion Items" shall have the meaning set forth in
Section 3.1(c).
"Required Percentage" shall have the meaning set forth in Section
8.4(a).
"Schedule of Contracts" shall have the meaning set forth in
Section 4.1(g).
"Seller" or "Sellers" shall have the meaning set forth in the
first paragraph of this Agreement.
"Seller Party" or "Seller Parties" shall have the meaning set
forth in Section 4.8(a).
"Sellers' Affidavit" shall have the meaning set forth in Section
3.1(c).
"Sellers' Bonds" shall have the meaning set forth in Section 8.6.
"Significant Tenant" shall mean any Tenant occupying space equal
to ten percent (10%) or more of the rentable square footage of any
Property.
"Significant Transaction" shall have the meaning set forth in
Section 7.1(b).
"Survey" shall have the meaning set forth in Section 4.6(b).
"Tenant" shall mean the tenant, occupier or licensee under any
lease, license agreement or occupancy agreement encumbering any Real
Property.
"Title Agreement" shall have the meaning set forth in Section
3.1(c).
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"Title Commitment" shall have the meaning set forth in Section
3.1(c).
"Title Company" shall have the meaning set forth in Section
2.2(b).
"Title Policy" shall have the meaning set forth in Section 5.2.
"Warranties" shall have the meaning set forth in Section 2.1(f).
"WCB Entities" shall mean, collectively, (i) WCB Holdings Limited
Partner ship, (ii) WCB Holdings II, L.L.C., (iii) WCB Holdings III,
L.L.C. and (iv) WCB Holdings IV, L.L.C.
"WCB Holdings" shall mean WCB Holdings Limited Partnership, a
Delaware limited partnership.
Section 1.2 Terms Generally. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(b) the words "including" and "include" and other words of
similar import shall be deemed to be followed by the phrase "without
limitation"; and
(c) any consent, determination, election or approval required to
be obtained, or permitted to be given, by or of any party hereunder, shall be
granted, withheld or made (as the case may be) by such party in the exercise of
such party's sole and absolute discretion.
ARTICLE II
PURCHASE AND SALE OF PROPERTIES
Section 2.1 Sale. Each Seller agrees to sell to Buyer, and Buyer
agrees to purchase from each such Seller, subject only to the Permitted
Exceptions and to all other terms, covenants and conditions set forth herein,
all of such Seller's right, title and interest in and to the following: (a) each
parcel of land described in Schedule 2.1.1 attached hereto (each, a "Fee
Parcel") identified as being owned by such Seller on Schedule 2.1.1, together
with any and all rights, privileges and easements appurtenant thereto owned by
such Seller (including
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any rights of such Seller as declarant), together with all buildings,
improvements and fixtures (other than fixtures owned or removable by any Tenant
or third party) located thereon (collectively, the "Improvements"; each Fee
Parcel, together with the Improvements thereon, a "Fee Property" and,
collectively, the "Fee Properties"); (b) each leasehold estate described in
Schedule 2.1.2 attached hereto identified as being owned by such Seller on
Schedule 2.1.2, together with any and all rights appurtenant thereto owned by
such Seller (each, a "Leasehold Estate" and, collectively, the "Leasehold
Estates"), together with all buildings, improvements and fixtures (other than
fixtures owned or removable by any Tenant or third party) located thereon
(collectively, the "Leasehold Improvements;" each Leasehold Estate, together
with the Leasehold Improvements thereon, a "Leasehold Property" and,
collectively, the "Leasehold Properties"); (c) all tangible personal property
not owned or removable by any Tenant or third party, if any, located on the Real
Properties and used in the operation or maintenance of any one or more of the
Real Properties (the "Personal Property"); (d) (i) such Seller's interest, as
landlord, owner or licensor, in each of the Existing Leases, (ii) such Seller's
interest, as landlord, owner or licensor, in any New Leases and (iii) to the
extent assignable, such Seller's rights under any guarantees, letters of credit
or other instruments that secure or guarantee the performance of the obligations
of each Tenant; (e) to the extent assignable, all service contracts, maintenance
contracts, operating contracts, warranties, guarantees, listing agreements,
parking contracts and like contracts and agreements relating to the Real
Properties, and commission agreements, equipment leases, contracts, subcontracts
and agreements relating to the construction of any unfinished tenant
improvements (collectively, the "Contracts"), provided, that the term
"Contracts" shall not include any management agreements or contracts, all of
which Sellers shall terminate as of the Closing Date; (f) to the extent
assignable, all warranties and guaranties made by or received from any third
party with respect to any building, building component, structure, fixture,
machinery, equipment or material situated on any Real Property, or contained in
any or comprising a part of any Improvement or Leasehold Improvement
(collectively, the "Warranties"); (g) to the extent such Seller currently has
such items in its possession, all (i) preliminary, final and proposed building
plans and specifications (including "as-built" floor plans and drawings) and
tenant improvement plans and specifications for the Improvements and the
Leasehold Improvements and (ii) surveys, grading plans, topographical maps,
architectural and structural drawings and engineering, soils, seismic, geologic
and architectural reports, studies and tests relating to any Real Property
((g)(i) and (g)(ii) collectively, the "Records and Plans"); (h) to the extent
trans ferable, any intangible personal property now or hereafter owned by such
Seller and used in the ownership, use or operation of any one or more of the
Real Properties and/or the Personal Property, excluding the names "WCB
Properties," "WCB Holdings," "WCB Properties Limited Partnership" and related
names and proprietary computer equipment, software and systems, but including
all (i) licenses, permits, building inspection approvals, certificates of
occupancy, approvals, subdivision maps and entitlements issued, approved or
granted by Governmental Authorities in connection with a Real Property, (ii)
unrecorded covenants, conditions and
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restrictions, reciprocal easement agreements, area easement agreements and other
common or planned development agreements or documents affecting any Real
Property and (iii) licenses, consents, easements, rights of way and approvals
obtained from private parties to make use of utilities and to ensure vehicular
and pedestrian ingress and egress for any Real Property ((h)(i), (h)(ii) and
(h)(iii) collectively, the "Licenses and Permits") or other rights relating to
the ownership, use or operation of any of the Real Properties or the Personal
Property (col lectively, the "Intangible Property"); and (i) partnership
interests (the "Partnership Interest") aggregating seventy-nine percent (79%) of
all outstanding interests in the Partnership. Sellers will deliver written
notice to their property managers requesting that they deliver any of the
foregoing materials in such property managers' possession to Buyer. Each (i) Fee
Property, (ii) Leasehold Property or (iii) real property owned by the
Partnership, is referred to herein individually as a "Real Property" and all of
the foregoing are referred to herein collectively as the "Real Properties." Each
Fee Property and Leasehold Property, together with the Personal Property, the
Leases, the Contracts, the Warranties, the Records and Plans and the Intangible
Property relating thereto and the Partnership Interest, are referred to herein
as a "Property" and, collectively, as the "Properties."
Section 2.2 Purchase Price.
(a) The purchase price of the Properties is SEVEN HUNDRED TWENTY-
FIVE MILLION AND NO/100 DOLLARS ($725,000,000.00) (the "Purchase Price"),
subject to prorations, credits and adjustments as set forth herein.
(b) The Purchase Price shall be paid by Buyer as follows:
(i) By 3:00 P.M. (San Francisco time) on the Deposit Date,
Buyer shall either (A) deposit by wire transfer (made in accordance with the
wiring instructions set forth on Schedule 2.2.1 attached hereto) of immediately
available funds, in escrow with Commonwealth Land Title Insurance Company, 525
Market Street, Suite 1560, San Francisco, California 94105 (Attn: Carol Carroza)
(the "Title Company") a cash payment in the amount of $36,250,000.00 less the
face amount of any Deposit L/Cs issued pursuant to clause (B) of this Section
2.1(b)(i) and/or (B) deliver to the Title Company one or two irrevocable, clean,
stand-by letters of credit (each, a "Deposit L/C") and together, the "Deposit
L/Cs") in the amount of $36,250,000.00 less the Cash Deposit amount. For the
avoidance of doubt, the sum of the Cash Deposit, if any, plus the face amount of
any Deposit L/Cs shall equal $36,250,000.00. Each Deposit L/C shall (w) be in a
form reasonably acceptable to Sellers, (x) be issued in favor of the Title
Company (as escrow holder under this Agreement (in such capacity, the
"Beneficiary")) and (y) be issued by a bank that has a long-term unsecured debt
rating of A+ by Standard & Poor's Rating Services and that is otherwise
reasonably satisfactory to Sellers (it being understood that even if two Deposit
L/Cs are delivered, both
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shall be issued by the same bank). Each Deposit L/C (and any replacement thereof
furnished in accordance with the provisions of this Section 2.2(b)) shall have
an expiration date no earlier than the first anniversary of the date of issuance
thereof and shall be automatically renewed from year to year unless stated not
to be so renewed by the issuer thereof in a written notice given to Sellers not
less than 30 days prior to the expiration thereof. In the event of the
termination of any Deposit L/C (and any replacement thereof furnished in
accordance with the provisions of this Section 2.2(b)), Buyer shall deliver to
the Beneficiary a replacement letter or letters of credit in lieu thereof no
later than 30 days prior to the expiration of the preceding letter of credit. If
Buyer shall fail to obtain any replacement of any Deposit L/C (and/or any
replacement thereof furnished in accordance with the provisions of this Section
2.2(b)), then the Beneficiary (at Sellers' direction) shall draw down the full
amount of the existing letter of credit and retain the same as security for the
covenants, agreements and obligations of Buyer under this Agreement. Any such
cash proceeds not applied in payment or performance of any covenants, agreement
or obligation of Buyer under this Agreement shall be held by the Beneficiary,
with any interest earned thereon to be treated in the same manner as interest on
the Cash Deposit. Any replacement of any Deposit L/C shall be in a form
reasonably acceptable to Sellers. At Closing, provided that Buyer has fully
performed all of its covenants, agreements and obligations under this Agreement,
including, without limitation, the payment of the Purchase Price, any Deposit
L/Cs (or any replacement thereof furnished in accordance with the provisions of
this Section 2.2(b)) shall be returned to Buyer, provided that in the event
Sellers are entitled to retain the Cash Deposit in accordance with the terms
hereof, the Beneficiary (at Sellers' direction) shall draw down the full amount
of any Deposit L/Cs and treat the proceeds as part of the Cash Deposit. Sellers
acknowledge that Buyer, upon two (2) Business Days' prior written notice to
Sellers, shall have the right to deposit with the Title Company (in accordance
with clause (A) of this Section 2.2(b)(i)) an amount in cash equal to the face
amount of any Deposit L/Cs, and upon receipt by the Title Company of such
payment, Beneficiary shall immediately return to Buyer the Deposit L/C (or
Deposit L/Cs) to which such cash payment relates (and the Cash Portion for
purposes of this Agreement shall thereafter be deemed to equal the original Cash
Portion plus the amount of any such payment). Buyer acknowledges that Sellers
have agreed to accept the Deposit L/Cs in lieu of a cash downpay ment against
the Purchase Price solely as an accommodation to Buyer. Accordingly, as a
material inducement to Sellers to enter into this Agreement, Buyer hereby
irrevocably waives any and all rights, claims and causes of action of any nature
whatsoever, whether now existing or hereafter arising, seeking to enjoin, delay
or otherwise interfere with any attempt by the Beneficiary to draw upon any
Deposit L/Cs or any replacement thereof provided to the Beneficiary in
accordance with this Section 2.2(b).
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(ii) The Cash Deposit shall be held in an interest bearing
account reasonably designated by Buyer and all interest thereon shall be deemed
a part of the Cash Deposit. If the sale of the Properties as contemplated
hereunder is consummated, then the Cash Deposit (including the interest accrued
on the Cash Deposit) shall be paid to Sellers at the consummation of the
purchase and sale of the Properties contemplated hereunder (the "Closing") and
credited against the Purchase Price. Notwithstanding anything that may be
construed to the contrary herein, Buyer and Sellers understand and agree that
Buyer shall have no obligation to fund the Cash Deposit or to deliver the
Deposit L/Cs on the Deposit Date unless Buyer has completed and is satisfied in
its sole and absolute discretion with its independent due diligence
investigation as contemplated by Section 4.6. The parties hereto acknowledge and
agree that (A) Buyer shall have the right in its sole and absolute discretion
and for any or no reason whatsoever to terminate this Agreement without
liability (other than for Buyer's indemnity obligations set forth in Sections
4.7(a), 6.1 and 9.4 and Buyer's indemnity and confidentiality obligations set
forth in Section 9.10(a)) at any time prior to its posting the Deposit and (B)
by posting the Deposit, Buyer will evidence and acknowledge its complete
satisfaction with and approval of all of the Due Diligence Materials and its due
diligence investigation.
(iii) The balance of the Purchase Price over and above the
Cash Deposit (each as may be adjusted in respect of any Excluded Consent
Property pursuant to Section 3.5), as adjusted pursuant to Section 8.5, shall be
deposited by Buyer, by wire transfer (made in accordance with the wiring
instructions set forth on Schedule 2.2.1 attached hereto) of immediately
available funds, with the Title Company and paid to Sellers at the Closing.
(c) Notwithstanding anything to the contrary herein, Buyer and
Sellers agree that prior to the Deposit Date they shall agree (i) on a list of
Properties (the "December Properties") that will be conveyed to Buyer by the
applicable Sellers at the December 3, 1997 Closing and (ii) on the Allocated
Purchase Prices for such December Properties. The aggre gate Allocated Purchase
Prices of all December Properties shall be not less than $75 million and not
more than approximately $150 million (as determined by Buyer). The portion of
the Purchase Price equal to the total Allocated Purchase Prices of the December
Properties, shall not be paid in cash as provided in Section 2.2(b)(iii) at
Closing, but rather shall be paid in preferred partnership units of Spieker
Properties, L.P. having the terms set forth in Schedule 2.2.2 and such other
terms as the parties shall mutually agree before the Deposit Date. If the
aggregate Allocated Purchase Prices of the December Properties exceed $150 mil
lion, such excess shall be payable in cash in accordance with the terms of
Section 2.2(b)(iii). The parties shall negotiate in good faith to agree prior to
the Deposit Date on forms of the
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amendment to the limited partnership agreement of Spieker Properties, L.P. and
of the registration rights agreement contemplated by Schedule 2.2.2.
(d) (i) IF THE SALE OF THE PROPERTIES IS NOT CONSUMMATED DUE TO
THE FAILURE OF ANY CONDITION TO BUYER'S OBLIGATION TO PURCHASE OR SELLERS'
INABILITY TO PERFORM OR DEFAULT HEREUNDER, THEN THE CASH DEPOSIT AND ANY DEPOSIT
L/CS SHALL BE RETURNED TO BUYER, AND BUYER'S SOLE REMEDY, AT LAW OR IN EQUITY,
SHALL BE THE RETURN OF THE DEPOSIT, PROVIDED, THAT IF THE SALE OF THE PROPERTIES
IS NOT CONSUMMATED BECAUSE OF A DEFAULT UNDER THIS AGREEMENT ON THE PART OF
SELLERS, BUYER MAY EITHER (A) TERMINATE THIS AGREEMENT BY WRITTEN NOTICE OF
TERMINATION TO SELLERS, WHEREUPON THE DEPOSIT SHALL BE IMMEDIATELY RETURNED TO
BUYER OR (B) CONTINUE THIS AGREEMENT PENDING BUYER'S ACTION FOR SPECIFIC
PERFORMANCE, IN WHICH LATTER EVENT BUYER, AS A CONDITION TO SUCH ACTION, SHALL
NOT ACCEPT RETURN OF THE CASH DEPOSIT AND ANY DEPOSIT L/CS AND SHALL PLACE THE
FULL AMOUNT OF THE PURCHASE PRICE ABOVE THE DEPOSIT INTO ESCROW. (ii) IF THE
SALE OF THE PROPERTIES IS NOT CONSUMMATED AS A RESULT OF A DEFAULT BY BUYER
HEREUNDER, THEN, AS ITS SOLE AND EXCLUSIVE REMEDY, SELLERS SHALL RETAIN THE CASH
DEPOSIT (INCLUDING THE PROCEEDS OF EACH DEPOSIT L/C, WHICH THE BENEFICIARY (AT
SELLERS' DIRECTION) IS HEREBY AUTHORIZED TO DRAW DOWN) AS LIQUIDATED DAMAGES.
THE PARTIES HAVE AGREED THAT SELLERS' ACTUAL DAMAGES, IN THE EVENT OF A FAILURE
TO CONSUMMATE THIS SALE DUE TO BUYER'S DEFAULT, WOULD BE EXTREMELY DIFFICULT OR
IMPRACTICABLE TO DETERMINE. AFTER NEGOTIATION, THE PARTIES HAVE AGREED THAT,
CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT, THE
AMOUNT OF THE DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES THAT SELLERS WOULD
INCUR IN SUCH EVENT. BY PLACING THEIR INITIALS BELOW, EACH PARTY SPECIFICALLY
CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY
WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME THIS AGREEMENT WAS MADE,
THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION. THE FOREGOING IS NOT
INTENDED TO LIMIT BUYER'S INDEMNITY OBLIGATIONS UNDER SECTIONS 4.7(a), 6.1, 9.4
AND 9.10(a).
INITIALS: SELLERS ___________ BUYER ___________
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(e) In the event that Buyer fails to fund on the Deposit Date
(with time being of the essence) the full amount of the Deposit for any or no
reason whatsoever in accordance with the terms of Section 2.2(b)(i), this
Agreement shall immediately and automatically terminate. Upon any termination of
this Agreement pursuant to this Section 2.2(e), no party shall have any further
rights or obligations hereunder, except as provided in Sections 4.7(a), 6.1, 9.4
and 9.10(a).
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions to Buyer's Obligation to Purchase. Buyer's
obligation to purchase the Properties is conditioned upon the satisfaction (or
Buyer's written waiver) on or prior to the Closing Date of the following
conditions:
(a) There shall exist on the Closing Date no pending Order
prohibiting, enjoining or restraining any Seller from consummating the
transactions contemplated hereby with respect to any Property.
(b) Except as set forth in Section 3.5, all consents required to
be obtained from, or filing required to be made with, any Governmental Authority
or third party in connection with the execution and delivery of this Agreement
by Sellers or the consummation by Sellers of the transactions contemplated
hereby shall have been obtained or made.
(c) The Title Company shall have issued or shall have committed
to issue, upon payment of the applicable premium therefor, a 1970 ALTA Owner's
Policy of Title Insurance (provided, that in jurisdictions where local
regulations require a form of policy other than a 1970 ALTA Owner's Policy, such
other required form shall be used) with respect to each Real Property in the
form of the title insurance commitment or preliminary title report issued by the
Title Company and delivered to Buyer prior to the date hereof (each, a "Title
Commitment"), showing title to such Real Property vested in Buyer or the
Partnership, subject only to the Permitted Exceptions. It shall not be a
condition to Closing that Buyer obtain any endorsements or coverages not set
forth in the applicable Title Commitment. Nothing contained herein shall require
any Seller to bring any action or proceeding or otherwise to incur any expense
to correct, discharge or otherwise remove title exceptions or defects with
respect to any Property or to remove, remedy or comply with any other grounds
for Buyer's refusing to approve title, provided that the applicable Seller shall
be obligated to remove or discharge, or otherwise cause the Title Company to
omit as an exception to title or to insure against collection thereof from or
against any Property any mortgages created by such Seller,
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any mechanics' liens or judgment liens that are the obligation of such Seller
(as opposed to any Tenant or other third party) and any liens and encumbrances
voluntarily created by such Seller in violation of Section 7.1 (collectively,
the "Required Deletion Items"). If on the Closing Date there are any liens or
encumbrances affecting any Real Property subject to which Buyer is not obligated
to accept title, the applicable Seller may use any portion of the Purchase Price
payable pursuant to Section 2.2(b) to satisfy same, provided the Title Company
shall omit such lien or encumbrance as an exception to title, and provided
further that such Seller shall apply the Purchase Price payable pursuant to
Section 2.2(b) to satisfy all Required Deletion Items. In furtherance of the
foregoing provisions of this Section 3.1(c), the parties shall use reasonable
efforts to enter into, prior to October 1, 1997, a three-party agreement with
the Title Company (a "Title Agreement"), in a form mutually acceptable to Buyer
and Sellers, pursuant to which the Title Company irrevocably agrees to issue on
the Closing Date a title insurance policy for each Property meeting the
requirements of this Section 3.1(c), subject only to (i) delivery of a Sellers'
affidavit in the form of Exhibit L attached hereto (the "Sellers' Affidavit"),
(ii) payment of the applicable premiums, (iii) confirmation that no new lien or
encumbrance has been filed of record after the date of such Title Agreement and
(iv) such other matters as are acceptable to Sellers and Buyer.
(d) Buyer shall have received estoppel certificates for each Real
Property to the extent required by Section 8.4.
(e) Each of the documents required to be delivered by Sellers
pursuant to Section 8.3 shall have been delivered as provided therein and
Sellers shall not otherwise be in material default of their material obligations
hereunder, and all of Sellers' representations and warranties contained herein
shall be true and correct in all material respects as of the Closing Date.
(f) Buyer shall not have previously terminated this Agreement
pursuant to and in accordance with Section 7.7.
Section 3.2 Conditions to Sellers' Obligations to Sell. Each
Seller's obligation to sell the Properties is conditioned upon the satisfaction
(or such Seller's written waiver) on or prior to the Closing Date of the
following conditions:
(a) There shall exist on the Closing Date no pending Order
prohibiting, enjoining or restraining Buyer from consummating the transactions
contemplated hereby with respect to any Property.
(b) Except as set forth in Section 3.5, all consents required to
be obtained from, or filings required to be made with, any Governmental
Authority or third party in
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connection with the execution and delivery of this Agreement by Buyer or the
consummation by Buyer of the transactions contemplated hereby shall have been
obtained or made.
(c) Buyer shall have paid the balance of the Purchase Price.
(d) Buyer shall not otherwise be in material default of its
material obligations hereunder, it being understood and agreed that Sellers are
acting jointly in selling the Properties, and that a failure of Buyer to
purchase any Property (other than as provided in Section 3.5) shall be deemed a
material breach by Buyer of this Agreement, excusing performance by any or all
of the Sellers.
(e) Each of the documents required to be delivered by Buyer
pursuant to Section 8.3 shall have been delivered as provided therein, and all
of Buyer's representations and warranties contained herein shall be true and
correct in all material respects as of the Closing Date.
Section 3.3 Termination. In the event that any condition set
forth in Section 3.1 or Section 3.2 is not satisfied on or prior to the Closing
Date, then the party to this Agreement whose obligations are conditioned upon
the satisfaction of such condition may in its sole and absolute discretion
terminate this Agreement, subject to Section 2.2(d), by written notice delivered
to the other party at or prior to the occurrence of the Closing. Upon any
termination of this Agreement pursuant to this Section 3.3, no party shall have
any further rights or obligations hereunder, except as provided in Sections
2.2(d), 4.7(a), 6.1, 9.4 and 9.10(a).
Section 3.4 Waiver by Buyer. If Buyer and/or its Permitted
Assignees, with actual knowledge of (i) a default in any of the covenants,
agreements or obligations to be performed by any Seller under this Agreement
and/or (ii) any breach of or inaccuracy in any representation or warranty of any
Seller made in this Agreement, nonetheless elects to proceed to Closing, then,
upon the consummation of the Closing, Buyer and/or its Permitted Assignees shall
be deemed to have waived any such default and/or breach or inaccuracy and shall
have no claim against any Seller with respect thereto.
Section 3.5 Excluded Consent Properties. (a) In the event that on
the Closing Date, the conditions set forth in Section 3.1(b) shall not have been
satisfied by the applicable Seller(s) or if a Tenant purchase option has been
exercised under a Lease with respect to any Consent Property (such Consent
Property, an "Excluded Consent Property"), and but for such failure to satisfy
Section 3.1(b) (or the exercise by such Tenant of such purchase option) the
conditions to Closing set forth in Section 3.1 otherwise would be satisfied on
the Closing Date, (i) Buyer shall be obligated to purchase, and Sellers shall be
obligated to sell, the Properties
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other than such Excluded Consent Property in accordance with the terms of this
Agreement, and (ii) Buyer and the applicable Seller(s) shall use their
commercially reasonable efforts (without incurring any additional expense) to
satisfy such unsatisfied conditions as soon as reasonably possible; provided
that in such circumstances "Properties" and the other defined terms used herein
shall be construed to mean the Properties excluding such Excluded Consent
Property, the applicable Seller(s) shall retain a pro rata portion of the
Deposit with respect to such Excluded Consent Property (i.e., five percent (5%)
of the Allocated Purchase Price attributable to such Excluded Consent Property),
and the Purchase Price shall be reduced by the Allocated Purchase Price
attributable to such Excluded Consent Property. If within thirty (30) days after
the Closing Date, the conditions to Closing set forth in Section 3.1(b) with
respect to such Excluded Consent Property shall have been satisfied, Buyer shall
be obligated to purchase, and the applicable Seller(s) shall be obligated to
sell, such Excluded Consent Property in accordance with the terms of this
Agreement (but with prorations under Section 8.5 being calculated as of the date
such purchase and sale is closed, rather than the Closing Date) for a Purchase
Price equal to the Allocated Purchase Price attributable to such Excluded
Consent Property. The closing of such Excluded Consent Property shall occur on
the date which is ten (10) Business Days after the date either Buyer or the
applicable Seller(s) notifies the other of the satisfaction of the conditions in
Section 3.1(b).
(b) Buyer and Sellers agree that within five (5) Business Days
after the Effective Date, Buyer and WCB Fourteen Limited Partnership shall enter
into a separate "Agreement of Purchase and Sale" (the "Capital City Agreement")
relating to the Property known as Capital City Plaza, Atlanta, GA ("Capital City
Plaza"). The Capital City Agreement shall be identical in all material respects
to this Agreement, and the Capital City Agreement shall be cross-defaulted to
this Agreement (i.e., Buyer's performance of its obligations under the Capital
City Agreement shall be deemed a condition to Sellers' obligation to consummate
the transactions contemplated by this Agreement, and WCB Fourteen Limited
Partnership's performance of its obligations under the Capital City Agreement
shall be deemed a condition to Buyer's obligation to consummate the transactions
contemplated by this Agreement). From and after the execution and delivery of
the Capital City Agreement, "Properties" and the other defined terms used herein
shall be construed to mean the Properties excluding Capital City Plaza, a pro
rata portion of the Deposit shall be allocated to Capital City Plaza (i.e., an
amount equal to five percent (5%) of the "Purchase Price" set forth in the
Capital City Agreement), and the Purchase Price shall be reduced by the
"Purchase Price" set forth in the Capital City Agreement.
(c) Buyer and Sellers agree that within five (5) Business Days
after the Effective Date, Buyer and Sellers shall in good faith reach an
agreed-upon "Allocated Purchase Price" for each Consent Property.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES;
BUYER'S EXAMINATION OF THE PROPERTIES
Section 4.1 Representations and Warranties of Sellers. Subject to
(i) the provisions of Sections 4.2, 4.3 and 4.4 and (ii) with respect to each of
the representations and warranties set forth below, except for those in clauses
(a), (b), (c) and (d) of this Section 4.1, to the information disclosed in the
Due Diligence Materials, each Seller hereby makes the following representations
and warranties as to itself and its own Properties:
(a) Such Seller has not (i) made a general assignment for the
benefit of creditors, (ii) filed any voluntary petition in bankruptcy or
suffered the filing of any involun tary petition by such Seller's creditors,
(iii) suffered the appointment of a receiver to take possession of any of the
Properties or all, or substantially all, of such Seller's other assets, (iv)
suffered the attachment or other judicial seizure of any of the Properties or
all, or substantially all, of such Seller's other assets, (v) admitted in
writing its inability to pay its debts as they come due, or (vi) made an offer
of settlement, extension or composition to its creditors generally.
(b) Such Seller is not a "foreign person" as defined in Section
1445 of the Code and any related regulations.
(c) Such Seller is duly organized and validly existing and in
good standing under the laws of its state of formation. Such Seller further
represents and warrants that this Agreement and all documents executed by such
Seller that are to be delivered to Buyer at Closing (i) are, or at the time of
Closing will be, duly authorized, executed and delivered by such Seller, (ii) do
not, and at the time of Closing will not, violate any provision of any agree
ment or judicial order to which such Seller is a party or to which such Seller
or any Property owned by such Seller is subject and (iii) constitute (or in the
case of Closing documents will constitute) a valid and legally binding
obligation of such Seller, enforceable in accordance with its terms.
(d) Such Seller has full and complete power and authority to
enter into this Agreement and, subject to obtaining any consents or waivers
required to be obtained prior to Closing, to perform its obligations hereunder.
(e) No Seller is aware of any consents required for the
performance of such Seller's obligations hereunder except as set forth on
Schedule 4.1.1.
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(f) The Due Diligence Materials contain true, correct and
complete copies of all Existing Leases, Ground Leases, the Partnership
Agreement, all material Contracts and all material environmental and structural
reports in the possession of any Seller and, to each Seller's knowledge, the Due
Diligence Materials delivered to or otherwise made available to Buyer prior to
the Deposit Date contain or will contain complete copies of the documents in
Sellers' possession or control that Sellers purport to provide to Buyer. This
representation shall not be deemed breached by virtue of any Leases or Contracts
entered into after the Effective Date in accordance with Section 7.1.
(g) Except as included in the Due Diligence Materials (including
the rent rolls, dated August 22, 1997, delivered to Buyer (the "Rent Rolls")),
(i) there are to such Seller's knowledge no leases, license agreements or
occupying agreements (or any amendments or supplements thereto) encumbering, or
in force with respect to, any Property (except for any New Leases entered into
after the Effective Date in accordance with Section 7.1) and (ii) as of the
Effective Date, such Seller has not received written notice from any Significant
Tenant that such Seller has not performed its material obligations under such
Significant Tenant's Lease.
(h) To such Seller's knowledge, the only Contracts and amendments
thereto that will be in effect on the Closing Date that are not terminable
without cause or penalty within sixty (60) days with respect to any Property
owned by such Seller (the "Non-Terminable Contracts") are as set forth in
Schedule 4.1.2 (the "Schedule of Contracts") or as entered into in accordance
with Section 7.1.
(i) As of the Effective Date, such Seller has not received any
written notice of any pending or threatened condemnation of all or any portion
of any Property.
(j) Such Seller has not received written notice of any litigation
that is pending or threatened with respect to any Property owned by such Seller,
except (i) litigation fully covered by insurance policies (subject to customary
deductibles) or (ii) litigation set forth in Schedule 4.1.3.
(k) As of the Effective Date, except as set forth in the Due
Diligence Materials, such Seller has not received any written notice from any
Governmental Authority that all or any portion of any Property is in material
violation of any applicable building codes or any applicable environmental law
(relating to clean-up or abatement), zoning law or land use law, or any other
applicable local, state or federal law or regulation relating to any Property,
which material violation has not been cured or remedied prior to the Effective
Date.
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(l) Except as set forth in Schedule 2.1.5 or Schedule 4.1.1
attached to this Agreement, such Seller has not granted any option or right of
first refusal or first opportunity to any party to acquire any fee or ground
leasehold interest in any portion of any Property.
(m) The applicable Sellers hold valid title to the Partnership
Interest, free from all liens, claims and interests of third parties.
(n) Such Seller is not in material default under any Ground
Lease, and, to such Seller's knowledge, each Ground Lease is in full force and
effect.
Each of the representations and warranties of each Seller
contained in this Section 4.1: (1) is made as of the Effective Date (subject to
the information disclosed in the Due Diligence Materials); (2) other than
clauses (i) and (k) above (which, in the case of clause (i) above, the parties
acknowledge shall be governed by Section 7.7 with respect to events occurring
after the Effective Date) shall be deemed remade by such Seller, and shall be
true in all material respects, as of the Closing Date, subject to (A) the
information disclosed in the Due Diligence Materials, (B) litigation that is not
reasonably likely to have a material adverse effect on any Property, and (C)
other matters expressly permitted in this Agreement or otherwise specifically
approved in writing by Buyer; and (3) shall survive the Closing only as and to
the extent expressly provided in Section 4.3 and Section 4.4. If prior to the
Deposit Date, Buyer discovers the existence of any option or right of first
refusal or first opportunity to acquire any fee or ground leasehold interest in
any portion of any Property other than those disclosed on Schedule 2.1.5 or
Schedule 4.1.1 to this Agreement, Buyer shall promptly provide Sellers written
notice thereof so that the same may be disclosed to the Title Company in
Sellers' Affidavit.
Section 4.2 Deposit After Due Diligence Period. At any time prior
to the expiration of the Due Diligence Period, Buyer shall be free, in its sole
and absolute discretion, and for any or no reason whatsoever either to (i) post
the Deposit as required by Section 2.2(b) or (ii) terminate this Agreement by
written notice to Sellers delivered on or prior to the Deposit Date. If the
Deposit is posted on the Deposit Date, Buyer shall be deemed to have reviewed,
accepted and approved (and all representations and warranties of any Seller made
herein shall be subject to and qualified by) all of the Due Diligence Materials.
Notwithstand ing anything to the contrary herein, no Seller shall have any
liability whatsoever to Buyer with respect to any matter disclosed to or
discovered by Buyer or its agents prior to the Closing Date.
Section 4.3 Estoppels. The representations and warranties of each
Seller regarding Leases in Section 4.1(f) or 4.1(g) or in any estoppel delivered
by such Seller pursuant to Section 8.4 shall cease to survive the Closing to the
extent specifically confirmed
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by a tenant estoppel certificate delivered by a Tenant. The representation in
Section 4.1(n) shall cease to survive the Closing to the extent specifically
confirmed by an estoppel certificate by the ground lessor under the applicable
Ground Lease.
Section 4.4 Limitation on Claims; Survival of Representations and
Warranties.
(a) Notwithstanding any provision to the contrary herein or in
any document or instrument (including, without limitation, any deeds or
assignments) executed by any Seller and delivered to Buyer or any Permitted
Assignee at or in connection with the Closing (collec tively, "Closing
Documents"), no Seller shall have liability whatsoever with respect to any
suits, actions, proceedings, investigations, demands, claims, liabilities,
fines, penalties, liens, judgments, losses, injuries, damages, expenses or
costs, including, without limitation, attorneys' and experts' fees and costs and
investigation, and remediation costs (collectively "Claims") under any of the
representations and warranties contained in this Agreement or in any Closing
Document, except to the extent (and only to the extent) that (i) with respect to
Claims for breach of representations and warranties relating to a specific
Property, the amount of such Claims exceed one hundred thousand dollars
($100,000) with respect to such single Property and (ii) (x) with respect to the
Pool A Properties, the aggregate amount of all Claims (exclusive of Claims with
respect to any estoppel certificates delivered by Sellers pursuant to Section
8.4(a)) for breach of Sellers' representations and warranties exceeds
$6,138,000.00 (and, in such case, such Claims shall only be valid (and the
Sellers shall only be liable) for the portion that exceeds $6,138,000.00) and
(y) with respect to the Pool B Properties, the aggregate amount of all Claims
(exclusive of Claims with respect to any estoppel certificates delivered by
Sellers pursuant to Section 8.4(a)) for breach of Sellers' representations and
warranties exceeds $3,862,000.00 (and, in such case, such Claims shall only be
valid (and the Sellers shall only be liable) for the portion that exceeds
$3,862,000.00); provided, however, notwithstanding any provision to the contrary
herein or in any Closing Document, the (i) total liability of all Sellers for
any or all Claims (inclusive of Claims with respect to any estoppel certificates
delivered by Sellers pursuant to Section 8.4(a)) with respect to any or all Pool
A Properties shall not exceed $12,276,000.00 and (ii) the total liability of all
Sellers for any or all Claims (inclusive of Claims with respect to any estoppel
certificates delivered by Sellers pursuant to Section 8.4(a)) with respect to
any or all Pool B Properties shall not exceed $7,724,000.00. Further
notwithstanding any provision to the contrary herein or in any Closing Document,
Sellers shall have no liability with respect to any Claim under any of the
represen tations and warranties contained in this Agreement or in any Closing
Document, which Claim relates to or arises in connection with (1) any Hazardous
Materials (except solely to the extent that the applicable Seller has breached
its representation in Section 4.1(k)), (2) the physical condition of any
Property (except solely to the extent that the applicable Seller has breached
its representation in Section 4.1(k)) or (3) any other matter not expressly set
forth in the Sellers' representations and warranties set forth in Section 4.1.
Buyer shall not make any Claim or
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deliver any Claim Notice unless it in good faith believes the Claims would
exceed the minimum thresholds to recovery provided in this Section 4.4(a).
(b) Except as otherwise specifically set forth in this Agreement,
the representations and warranties of Sellers contained herein or in any Closing
Document shall survive only until June 30, 1998. Any Claim that Buyer may have
at any time against a Seller for a breach of any such representation or
warranty, whether known or unknown, with respect to which a Claim Notice has not
been delivered to Sellers on or prior to June 30, 1998 shall not be valid or
effective, and the party against whom such Claim is asserted shall have no
liability with respect thereto. For the avoidance of doubt, on June 30, 1998,
each Seller shall be fully discharged and released (without the need for
separate releases or other documenta tion) from any liability or obligation to
Buyer, any Permitted Assignee and/or their successors and assigns with respect
to any Claims or any other matter relating to this Agreement, any Closing
Document or the Properties, except solely for those matters that are then the
subject of a pending Claim Notice delivered by Buyer to such Seller. Any Claim
that Buyer may have at any time against a Seller for a breach of any such
representation or warranty, whether known or unknown, with respect to which a
Claim Notice has been delivered to Sellers on or prior to June 30, 1998 may be
the subject of subsequent litigation brought by Buyer against such Seller,
provided that such litigation is commenced against such Seller on or prior to
December 31, 1998. For the avoidance of doubt, on December 31, 1998, each Seller
shall be fully discharged and released (without the need for separate releases
or other documentation) from any liability or obligation to Buyer and/or its
successors and assigns with respect to any Claims or any other matter relating
to this Agreement, any Closing Document or the Prop erties, except solely for
those matters that are the subject of a litigation by Buyer against such Seller
that is pending on December 31, 1998.
(c) In connection with this Section 4.4, but only to the extent
specifically provided in this Section 4.4, Buyer expressly waives the benefits
of Section 1542 of the California Civil Code (or any similar provision or
principle of law which may apply in any other state where any Property is
located) which provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR EXPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN TO HIM MUST HAVE MATERIALLY AFFECTED THE
SETTLEMENT WITH THE DEBTOR."
(d) This Section 4.4 shall survive the Closing.
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Section 4.5 Representations and Warranties of Buyer. Buyer hereby
makes the following representations and warranties:
(a) Buyer is a limited partnership duly organized and validly
existing and in good standing under the laws of the State of California. Buyer
further represents and warrants to Sellers that this Agreement and all documents
executed by Buyer that are to be delivered to Sellers at Closing (i) are, or at
the time of Closing will be, duly authorized, executed and delivered by Buyer,
(ii) do not, and at the time of Closing will not, violate any provision of any
agreement or judicial order to which Buyer is a party or to which Buyer or any
property owned by Buyer is subject and (iii) constitutes (or in the case of
Closing documents will constitute) a valid and legally binding obligation of
Buyer, enforceable in accordance with its terms.
(b) Buyer has not (i) made a general assignment for the benefit
of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing, of any involuntary petition by Buyer's creditors, (iii) suffered the
appointment of a receiver to take possession of all, or substantially all, of
Buyer's assets, (iv) suffered the attachment or other judicial seizure of all,
or substantially all, of Buyer's assets, (v) admitted in writing its inability
to pay its debts as they come due, or (vi) made an offer of settlement,
extension or composition to its creditors generally. As of the Closing Date,
Buyer will have sufficient funds to pay the Purchase Price and consummate the
transactions contemplated by this Agreement.
(c) Buyer has full and complete power and authority to enter into
this Agreement and to perform its obligations hereunder.
(d) Buyer (i) is a sophisticated investor, (ii) is represented by
competent counsel and (iii) understands the assumptions of risk and liability
set forth in this Agreement.
(e) No consents are required to be obtained from, and no filings
are required to be made with, any Governmental Authority or third party in
connection with the execution and delivery of this Agreement by Buyer or the
consummation by Buyer of the transactions contemplated hereby.
Each of the representations and warranties of Buyer contained in
this Section (i) is made on the Effective Date; (ii) shall be deemed remade by
Buyer and/or its assignee(s), as applicable and appropriate, and shall be true
in all material respects, as of the Closing Date; and (iii) shall survive the
Closing until June 30, 1998.
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Section 4.6 Buyer's Independent Investigation.
(a) Buyer, for itself and any successors or assigns (including
any Permitted Assignees), acknowledges and agrees that it is being given the
full opportunity during the Due Diligence Period to inspect and investigate each
and every aspect of each Property, either independently or through agents,
representatives or experts of Buyer's choosing, as Buyer considers necessary or
appropriate, and the funding of the Deposit will conclusively evidence Buyer's
complete satisfaction with such independent investigation (but will not
constitute a waiver of any breach of representation or warranty set forth in
Section 4.1 (other than Sec tion 4.1(a)-(d)) unless such breach is disclosed in
the Due Diligence Materials or is otherwise actually known by Buyer and/or any
Permitted Assignee before the Closing Date and Buyer and/or such Permitted
Assignee(s) elect to proceed with the Closing). Such independent investigation
by Buyer shall include, without limitation:
(i) all matters relating to title to such Property;
(ii) all matters relating to governmental and other legal
requirements with respect to such Property, such as taxes, assessments, zoning,
use permit requirements and building codes;
(iii) all zoning, land use, building, environmental and other
statutes, rules, or regulations applicable to each Real Property;
(iv) the physical condition of each Real Property, including,
without limitation, the interior, the exterior, the square footage of the
Improvements or the Leasehold Improvements and of each tenant space therein, the
structure, the roof, the paving, the utilities, and all other physical and
functional aspects of such Real Property, including the presence or absence of
Hazardous Materials;
(v) any easements and/or access rights affecting such Real
Property;
(vi) the Leases with respect to such Real Property and all
matters in connection therewith, including, without limitation, the ability of
the Tenants thereto to pay the rent;
(vii) the Contracts and any other documents or agreements of
signifi cance affecting such Property;
(viii) all matters that would be revealed by an ALTA as-built
survey, a physical inspection or an environmental site assessment of such Real
Property;
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(ix) all matters relating to the income and operating or
capital expenses of the Properties and all other financial matters; and
(x) all other matters of significance affecting, or otherwise
deemed relevant by Buyer with respect to, such Property.
(b) The Due Diligence Materials heretofore delivered to Buyer for
its review and approval include:
(i) a Title Commitment for each Real Property (and one or
more updates thereto), together with copies of the underlying documents, and a
copy of a survey of each Real Property sufficient to support the issuance of an
ALTA policy of title insurance for such Real Property (each, a "Survey");
(ii) a Rent Roll for each Real Property, listing for any
Tenant the name, rent, amount of deposit and prepaid rent, if any, and lease
term and copies of the Existing Leases;
(iii) the Schedule of Contracts;
(iv) (A) annual operating, income and expense statements for
each Real Property for calendar years 1995 and 1996 and (B) operating, income
and expense statements for each Real Property for the period ending July 31,
1997, but in each case only for the period after acquisition of such Real
Property by such Seller;
(v) copies of all Licenses and Permits in the possession of
the applicable Seller;
(vi) reports, studies, assessments, investigations and other
materials related to the presence of Hazardous Materials at, on or under each
Real Property and the compliance of such Real Property with all environmental
laws, including recent Phase I (and, in some cases, Phase II) environmental
surveys;
(vii) to the extent in the possession of the applicable
Seller or such Seller's property managers, copies of (i) the bills issued for
the most recent year for each Real Property for all real estate taxes and
assessments, water rates, water meter charges, sewer rates, sewer charges, and
similar matters, imposed by any Governmental Authority ("Real Estate Taxes") and
personal property taxes and (ii) all notices or documents for any assess ments
or bonds relating to each Real Property;
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(viii) the ground lease creating each Leasehold Estate (each,
a "Ground Lease"); and
(ix) the Partnership Agreement and certificate of limited
partnership for the Partnership, as amended or modified through and in effect on
the date hereof.
(c) Buyer acknowledges and agrees that (i) on or prior to the
Deposit Date it will have completed its independent investigation of the
Properties and the Due Diligence Materials, (ii) it is acquiring the Properties
based on such independent investigation and subject to all information disclosed
in the Due Diligence Materials (and also in reliance on Sellers' representations
and warranties contained herein) and (iii) shall have no right after the Deposit
Date to terminate this Agreement based on any further investigations of the
Properties or the Due Diligence Materials. The funding of the Deposit on the
Deposit Date by Buyer shall conclusively constitute Buyer's approval of each and
every aspect of such Properties. The preceding sentence is not intended to
relieve, and shall not relieve, any Seller from any of its obligations under
Section 4.1, if any.
(d) BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT (i) EACH
SELLER SHALL SELL AND BUYER SHALL PURCHASE EACH PROPERTY "AS IS, WHERE IS AND
WITH ALL FAULTS," (ii) EXCEPT AS EXPRESSLY SET FORTH IN SECTION 4.1, BUYER IS
NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, WHETHER
ORAL OR WRITTEN, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, FROM ANY SELLER,
NOR ANY PARTNER, OFFICER, EMPLOYEE, ATTORNEY, AGENT OR BROKER OF ANY SELLER, AS
TO ANY MATTER, CONCERNING ANY PROPERTY, OR SET FORTH, CONTAINED OR ADDRESSED IN
THE DUE DILIGENCE MATERIALS (INCLUDING WITHOUT LIMITATIONS, THE COMPLETENESS
THEREOF), INCLUDING WITHOUT LIMITATION: (i) the quality, nature, habitability,
merchantability, use, operation, value, marketability, adequacy or physical
condition of any Property or any aspect or portion thereof, including, without
limitation, structural elements, foundation, roof, appurtenances, access,
landscaping, parking facilities, electrical, mechanical, HVAC, plumbing, sewage,
and utility systems, facilities and appliances, soils, geology and groundwater,
(ii) the dimensions or lot size of any Real Property or the square footage of
the Improvements or Leasehold Improve ments thereon or of any tenant space
therein, (iii) the development or income potential, or rights of or relating to,
any Real Property, or any Real Property's use, habitability, merchanta bility,
or fitness, or the suitability, value or adequacy of such Real Property for any
particular purpose, (iv) the zoning or other legal status of any Real Property
or any other public or private restrictions on the use of such Real Property,
(v) the compliance of any Real Property or its operation with any applicable
codes, laws, regulations, statutes, ordinances, covenants, conditions and
restrictions of any Governmental Authority or of any other person or entity
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(including, without limitation, the Americans with Disabilities Act), (vi) the
ability of Buyer to obtain any necessary governmental approvals, licenses or
permits for Buyer's intended use or development of any Real Property, (vii) the
presence or absence of Hazardous Materials on, in, under, above or about any
Real Property or any adjoining or neighboring property, (viii) the quality of
any labor and materials used in any Improvements or Leasehold Improvements, (ix)
the condition of title to any Real Property, (x) the Leases, Contracts or any
other agreements affecting any Real Property or the intentions of any party with
respect to the negotiation and/or execution of any lease or contract with
respect to any Real Property, (xi) any Seller's ownership of any Property or any
portion thereof or (xii) the economics of, or the income and expenses, revenue
or expense projections or other financial matters, relating to, the operation of
any Real Property. Without limiting the generality of the foregoing, Buyer
expressly acknowledges and agrees that Buyer is not relying on any
representation or warranty of any Seller, nor any partner, officer, employee,
attorney, agent or broker of any Seller, whether implied, presumed or expressly
provided at law or otherwise, arising by virtue of any statute, common law or
other legally binding right or remedy in favor of Buyer. Buyer further
acknowledges and agrees that no Seller is under any duty to make any inquiry
regarding any matter that may or may not be known to such Seller or any partner,
officer, employee, attorney, agent or broker of such Seller. This Section 4.6(d)
shall survive the Closing, or, if the Closing does not occur, beyond the
termination of this Agreement.
(e) ANY REPORTS, REPAIRS OR WORK REQUIRED BY BUYER ARE THE SOLE
RESPONSIBILITY OF BUYER, AND BUYER AGREES THAT THERE IS NO OBLIGATION ON THE
PART OF ANY SELLER TO MAKE ANY CHANGES, ALTERATIONS OR REPAIRS TO ANY PROPERTY
OR TO CURE ANY VIOLATIONS OF LAW OR TO COMPLY WITH THE REQUIREMENTS OF ANY
INSURER. BUYER IS SOLELY RESPONSIBLE FOR OBTAINING ANY CERTIFICATE OF OCCUPANCY
OR ANY OTHER APPROVAL OR PERMIT NECESSARY FOR TRANSFER OR OCCUPANCY OF ANY
PROPERTY AND FOR ANY REPAIRS OR ALTERATIONS NECESSARY TO OBTAIN THE SAME, ALL AT
BUYER'S SOLE COST AND EXPENSE.
Section 4.7 Entry and Indemnity; Limits on Government Contacts.
(a) In connection with any entry by Buyer, its Permitted
Assignee(s) or any of their agents, employees or contractors (collectively, the
"Buyer Parties" and each a "Buyer Party") onto a Real Property, Buyer shall give
the applicable Seller reasonable advance notice of such entry and shall conduct
such entry and any inspections in connection therewith so as to minimize, to the
greatest extent possible, interference with such Seller's business and the
business of the Tenants and otherwise in a manner reasonably acceptable to such
Seller. Without limiting the foregoing, prior to any entry to perform any
necessary on-site testing, Buyer shall give the applicable Seller written notice
thereof, including the identity of the
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company or persons who will perform such testing and the proposed scope of the
testing and the party performing the testing. Such Seller shall approve or
disapprove any proposed testing and the party performing the same within three
(3) Business Days after receipt of such notice. If a Buyer Party takes any
sample from a Real Property in connection with any such approved testing, Buyer
shall provide to the applicable Seller, at such Seller's additional expense, a
portion of such sample being tested to allow such Seller, if it so chooses, to
perform its own testing. The applicable Seller or its representative may be
present to observe any testing, or other inspection performed on any Real
Property. Buyer shall promptly deliver to the applicable Seller copies of any
reports relating to any testing or other inspection of any Real Property
performed by or on behalf of any Buyer Party. Buyer shall maintain, and shall
ensure that its contractors maintain, public liability and property damage
insurance insuring the Buyer Parties against any liability arising out of any
entry or inspections of any Real Property pursuant to the provisions hereof.
Such insurance maintained by Buyer shall be in the amount of Ten Million Dollars
($10,000,000) combined single limit for injury to or death of one or more
persons in an occurrence, and for damage to tangible property (including loss of
use) in an occurrence. The policy maintained by Buyer shall insure the
contractual liability of Buyer covering the indemnities herein and shall (i)
name such Seller and the WCB Entities (and their successors, assigns and
Affiliates) as additional insureds, (ii) contain a cross-liability provi sion,
and (iii) contain a provision that "the insurance provided by Buyer hereunder
shall be primary and noncontributing with any other insurance available to [such
Seller]." Buyer shall provide such Seller with evidence of such insurance
coverage prior to any entry or inspection of any Real Property. Buyer shall
indemnify and hold the Seller Parties harmless from and against any Claims
arising out of or relating to any entry on any Real Property by any Buyer Party,
in the course of performing any inspections, testings or inquiries (excluding
any decrease in the value of a Property resulting solely from the discovery of
any environmental or physical condition on or about such Property). The
foregoing indemnity shall survive the Closing, or, if the Closing does not
occur, beyond the termination of this Agreement.
(b) Notwithstanding any provision in this Agreement to the
contrary, neither Buyer nor any other Buyer Party shall contact any Governmental
Authority regarding any Hazardous Materials on or the environmental condition of
any Real Property without the applicable Seller's prior written consent thereto,
which consent shall not be unreasonably withheld. In addition, if the applicable
Seller's consent is obtained by Buyer, such Seller shall be entitled to receive
at least five (5) Business Days prior written notice of the intended contact and
to have a representative present when Buyer has any such contact with any
governmental official or representative.
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Section 4.8 Release.
(a) Without limiting the provisions of Section 4.6, Buyer, for
itself and any successors and assigns of Buyer (including, without limitation,
any Permitted Assignee), waives its right to recover from, and forever releases
and discharges, and covenants not to sue, Sellers, Sellers' Affiliates, The
Hillman Company and its Affiliates, Sellers' asset manager, any lender to any
Seller or Sellers (in their capacity as lender), the partners, trustees,
shareholders, controlling persons, directors, officers, attorneys, employees and
agents of each of them, and their respective heirs, successors, personal
representatives and assigns (each a "Seller Party", and collectively, the
"Seller Parties") with respect to any and all Claims, whether direct or
indirect, known or unknown, foreseen or unforeseen, that may arise on account of
or in any way be connected with any Property including, without limitation, the
physical, environmental and structural condition of the related Real Property or
any law or regulation applicable thereto, including, without limitation, any
Claim or matter relating to the use, presence, discharge or release of Hazardous
Materials on, under, in, above or about any Real Property; provided, however,
Buyer does not waive its rights, if any, to recover from, and does not release
or discharge or covenant not to sue any Seller or any Seller Party (including
Guarantor to the extent provided in Section 9.25) for (i) any act of such Seller
that is found by a court of competent jurisdiction to constitute fraud, (ii) any
breach of such Seller's representations or warranties set forth in Section 4.1
or in any Seller's estoppel certificate delivered pursuant to Section 8.4,
subject to the limitations and conditions provided herein, (iii) any breach of
such Seller's obligations set forth in this Agreement, (iv) Claims covered by
Sellers' or such Seller Party's policies of insurance and (v) litigation
actually commenced against any Seller or such Seller Party by one or more
third-parties prior to Closing.
(b) In connection with this Section 4.8, but only to the extent
specifically provided in this Section 4.8, Buyer expressly waives the benefits
of Section 1542 of the California Civil Code (or any similar provision or
principle of law which may apply in any other state where any Property is
located) which provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR EXPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN TO HIM MUST HAVE MATERIALLY AFFECTED THE
SETTLEMENT WITH THE DEBTOR.
(c) This Section 4.8 shall survive the Closing indefinitely.
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ARTICLE V
TITLE
Section 5.1 Conveyance of Title. At the Closing, Sellers shall
deliver to Buyer (a) a deed for each Fee Property in the form of Exhibit A for
the applicable jurisdiction (each, a "Deed"), (b) an assignment and assumption
for each Leasehold Estate in the form of Exhibit B (each, an "Assignment of
Ground Lease") and (c) a deed for each Leasehold Improvement in the form of
Exhibit C (each, a "Leasehold Improvements Deed"), each subject to no exceptions
other than the following (the "Permitted Exceptions"):
(i) Interests and rights of Tenants in possession under
Leases and New Leases, including, without limitation, those Tenant purchase
rights listed on Schedule 2.1.5;
(ii) Liens for Real Estate Taxes that are apportioned as
provided in Sec tion 8.5, including special assessments and special improvement
district or local improvement district bonds;
(iii) Any exceptions, exclusions and other matters set forth
or disclosed by the Title Commitment for such Real Property or other documents
made available to Buyer pursuant to Section 4.6 prior to the Deposit Date, and
any other exceptions to title that would be disclosed by an inspection and/or
survey of such Real Property, including those disclosed on the applicable
Survey;
(iv) Any and all present and future laws, ordinances,
restrictions, requirements, resolutions, orders, rules and regulations of any
Governmental Authority, as now or hereafter existing or enforced (including,
without limitation, those related to zoning and land use), and all notes or
notices of violation of any such laws, ordinances, rules or regulations set
forth in the Due Diligence Materials or in any title reports, commitments or
updates delivered to Buyer prior to the Deposit Date;
(v) Any liens that are the obligation of a Tenant to
discharge, provided that such liens do not exceed (x) $1,000,000 as to all
Properties or (y) $250,000 as to any Property, or, with respect to any amounts
in excess thereof, the applicable Seller provides an indemnity or such other
assurance as the Title Company may require to insure over same (provided, that
if such Seller is required to pay under an indemnity or otherwise with respect
to any such liens, such Seller shall be fully subrogated to Buyer's rights
against the Tenant(s) that were obligated to discharge such liens);
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(vi) Any lien or encumbrance encumbering such Property as to
which the applicable Seller shall deliver to Buyer, or the Title Company, at or
prior to the Closing, proper instruments, in recordable form, canceling such
lien or encumbrance, together with funds to pay the cost of recording and
canceling the same;
(vii) Such other exceptions as the Title Company shall commit
to insure over in a manner reasonably satisfactory to Buyer, without any
additional cost to Buyer, whether such insurance is made available in
consideration of payment, bonding or indemnity by Sellers or otherwise;
(viii) Uniform Commercial Code filings that have expired or
terminated by operation of law on or prior to the Closing Date;
(ix) Any exceptions caused by Buyer, its agents,
representatives or employees; and
(x) Any other matters affecting title to such Property that
have been approved or waived by Buyer pursuant to the terms hereof.
In addition, at the Closing, the applicable Sellers shall convey the Partnership
Interest to Buyer free and clear of any defects, liens, encumbrances or claims
of any kind, by an assignment and assumption in the form of Exhibit D (the
"Assignment of Partnership Interest"). The acceptance by Buyer of the Deeds, the
Assignments of Ground Leases, the Leasehold Improvements Deeds and the
Assignment of Partnership Interest shall be deemed to be a full performance and
discharge of every obligation on the part of Sellers to be performed under this
Agreement with respect to the applicable Property, other than those that are
specifically stated herein to survive the Closing.
Section 5.2 Evidence of Title. Delivery of title in accordance
with the fore going shall be evidenced by the Title Company issuing, or to
committing to issue, at Closing, upon payment of the applicable premium
therefor, one or more 1970 ALTA Owner's Policies of Title Insurance (provided,
that in jurisdictions where local regulations require a form of policy other
than a 1970 ALTA Owner's Policy, such other required form shall be used) in the
aggregate amount of the Purchase Price for the Properties showing title to each
Property vested in Buyer or its Permitted Assignee or designee, subject only to
the Permitted Exceptions (the "Title Policy").
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ARTICLE VI
BROKERS AND EXPENSES
Section 6.1 Brokers. Sellers and Buyer represent and warrant to
each other that no broker or finder, other than Goldman, Sachs & Co. and certain
of its affiliates ("Goldman"), whose fees will be the responsibility of Sellers
pursuant to a separate agreement between Goldman and Sellers, was instrumental
in arranging or bringing about this transaction and that there are no claims or
rights for brokerage commissions or finders' fees in connection with the
transactions contemplated hereby by any person or entity other than Goldman. If
any person brings a claim for a commission or finder's fee based upon any
contact, dealings or communi cation with Buyer or any Seller, then the party
through whom such person makes its claim shall defend the other party (the
"Indemnified Party") from such claim, and shall indemnify the Indemnified Party
and hold the Indemnified Party harmless from any and all costs, damages, claims,
liabilities or expenses (including without limitation, reasonable attorneys'
fees and disbursements) incurred by the Indemnified Party in defending against
the claim. The provisions of this Section 6.1 shall survive the Closing or, if
the Closing does not occur, any termination of this Agreement.
Section 6.2 Expenses. Except as provided in Section 8.5(e), each
party hereto shall pay its own expenses incurred in connection with this
Agreement and the transactions contemplated hereby.
ARTICLE VII
INTERIM OPERATION OF THE PROPERTIES
Section 7.1 Interim Operation of the Properties.
(a) Except as otherwise contemplated or permitted by this
Agreement or approved by Buyer in writing, from the Effective Date to the
Closing Date, each Seller agrees that it will (and, with respect to the
Partnership, the applicable Seller will cause the Partnership to) operate,
maintain, repair and lease the Real Property owned by it in a prudent manner, in
the ordinary course, on an arm's-length basis and consistent with such Seller's
past practices and will not dispose of or encumber any Property, except for
dispositions of personal property in the ordinary course of business or as
otherwise permitted by Section 7.1 or Section 7.3. Without limiting the
foregoing, Sellers shall, in the ordinary course, negotiate with prospective
Tenants and enter into New Leases (on terms that Sellers believe, in their good
faith business judgment, to be market terms), enforce Leases in all material
respects, perform in all material
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respects all of landlord's obligations under the Leases (other than Leases that
are or that are in the process of being terminated due to Tenant's default
thereunder, provided that this provision shall not be deemed breached by virtue
of Sellers' failure to perform under Leases expiring on or before November 30,
1997), and the ground lessee's obligations under the Ground Leases and pay all
costs and expenses of the Properties, including without limitation debt service
and Real Estate Taxes.
(b) Sellers shall provide Buyer with reasonably prompt notice of
(i) any New Lease entered into from and after the Effective Date, (ii) any
modification of or amendment to any Lease entered into from and after the
Effective Date and (iii) any termination by a Seller of any Lease from and after
the Effective Date and prior to its stated expiration date. Further, Sellers
shall also notify Buyer (in reasonable detail) of any of the following (each, a
"Significant Transaction") which may occur from and after the Deposit Date and
prior to the Closing Date, at least three (3) Business Days prior to becoming
legally bound with respect thereto:
(i) the execution, termination or material modification of
any Lease covering in excess of 5,000 square feet (collectively, "Major
Leases"); or
(ii) the entry into, execution or termination of any
operating agreement or any lease, contract, agreement or other commitment of any
sort (including any contract for capital items or expenditures, but excluding
any liens or other encumbrances on title other than Permitted Exceptions), with
respect to any one or more of the Properties that (A) requires payments to or by
a Seller in excess of $50,000 per annum, or the performance of services by a
Seller the value of which is in excess of $50,000 per annum and (B) is not
terminable without cause and without penalty on thirty (30) days' notice or
less; provided that the applicable Seller, in its good faith but sole
discretion, believes such contract is on market terms and will benefit the
applicable Property.
(c) At least three (3) Business Days prior to becoming legally
bound with respect to any Significant Transaction, the applicable Seller shall
consult with and seek the consent of Buyer, and shall provide reasonable detail
to Buyer (including, at Buyer's request, copies of the relevant documentation),
with respect thereto. Any consent to be given by Buyer pursuant to this Section
7.1(c) shall not be unreasonably withheld or delayed and shall be deemed granted
if Buyer does not respond in writing to Sellers' request for consent within
three (3) Business Days. With regard to any New Lease covering in excess of
5,000 square feet entered into before the Deposit Date, the applicable Seller
shall in good faith consult with Buyer regarding such Lease at least three (3)
Business Days prior to becoming legally bound with respect thereto (but such
Seller shall nevertheless be free to enter such New Lease without Buyer's
approval subject to the provisions of Section 7.1(a)).
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(d) Except for New Leases or other agreements entered into in
accordance with this Section 7.1, no Seller shall enter into any agreement to
create a lien or encumbrance on any Property without Buyer's prior written
consent (which consent shall not be unreasonably withheld or delayed with
respect to any utility or similar easement necessary for the operation of a
Property, and which shall be deemed granted if Buyer does not respond in writing
to a Seller's request for consent within three (3) Business Days).
(e) Prior to the Closing Date or the earlier termination of this
Agreement, no Seller shall sell any Property or portion thereof without Buyer's
prior written consent. For the avoidance of doubt, Sellers shall be free to sell
to Western Wireless the "F-2B-1 parcel", located at the Broadbent Property.
(f) Prior to Closing, Sellers shall (with reasonable promptness)
provide Buyer with copies of all Contracts entered into by a Seller affecting
any Property (other than Contracts terminable on 30 days' notice or less), and
all operating statements, rent rolls, receivable aging reports, leasing reports
and other periodic reports prepared by or delivered to such Sellers.
(g) Prior to the Closing Date, Sellers shall not enter into any
amendment, modification or termination of the Partnership Agreement or any
Ground Lease.
Section 7.2 Tenant Improvement Costs, Leasing Commissions and
Free Rent. If the Closing occurs, Buyer shall be responsible and shall pay for
the costs of tenant improvement work or allowances, third-party leasing
commissions and other leasing costs (collectively, "Leasing Costs") relating to
or arising from (i) those Leases or modifications of Leases entered into on or
after September 11, 1997, (ii) the exercise by a Tenant of a renewal, expansion
or extension option contained in any Lease, which renewal or extension period
commences, or which expansion space such Tenant first has the right to occupy,
on or after September 11, 1997 (notwithstanding that such Tenant may have
exercised such option prior to September 11, 1997) and (iii) any items set forth
on Schedule 7.2.1, and any amounts paid by Sellers in respect of such Leasing
Costs shall result in an upward adjustment to the Purchase Price at Closing
equal to the amounts so paid. Sellers shall be responsible and shall pay for all
other Leasing Costs and any such other Leasing Costs otherwise remaining unpaid
by Sellers shall result in a downward adjustment to the Purchase Price at
Closing. Free rent periods provided for in Leases entered into by a Seller prior
to September 11, 1997 that occur, in whole or in part, after the Closing Date
shall be for the account of, and borne by, Sellers (and shall be an adjustment
to the Purchase Price at Closing), unless and except to the extent such free
rent periods were disclosed to Buyer in the materials delivered to Buyer on or
prior to July 8, 1997. All other free rent periods (i) shall be for the account
of, and borne by, Sellers to the extent such periods occur prior to the Closing
Date and (ii) shall be for the account of,
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and borne by, Buyer to the extent such periods occur on or after the Closing
Date. The provisions of this Section 7.2 shall survive the Closing until June
30, 1998.
Section 7.3 Sellers' Maintenance of the Properties. Between the
Effective Date and the Closing Date, the applicable Seller shall (a) maintain
each Real Property in substan tially the same manner as prior hereto pursuant to
such Seller's normal course of business, subject to reasonable wear and tear and
further subject to the occurrence of any damage or destruction to such Real
Property by casualty or other causes or events beyond the control of such
Seller; provided, however, that such Seller's maintenance obligations under this
Sec tion 7.3 shall not include any obligation to make capital expenditures not
incurred in such Seller's normal course of business or any other expenditures
not incurred in such Seller's normal course of business; (b) continue to
maintain its existing insurance coverage; and (c) not grant any voluntary liens
or encumbrances affecting such Property other than Permitted Exceptions of the
type described in clauses (i) and (ix) of Section 5.1.
Section 7.4 Lease Enforcement. Subject to the provisions of
Section 7.1, prior to the Closing Date, the applicable Seller shall have the
right, but not the obligation (except to the extent that such Seller's failure
to act shall constitute a waiver of such rights or remedies), to enforce the
rights and remedies of the landlord under any Lease or New Lease, by summary
proceedings or otherwise, and to apply all or any portion of any security
deposits then held by such Seller toward any loss or damage incurred by such
Seller by reason of any defaults by any Tenant, provided, that (i) with respect
to delinquent rents, such Seller may apply Tenant security deposits held by such
Seller only to rents that are thirty (30) days or more past due and (ii) with
respect to any application by such Seller of Tenant security deposits held by
such Seller, such Seller will deliver, in connection with any such application,
written notice to the affected Tenant(s) indicating that their security deposits
have been or are being so applied).
Section 7.5 Lease Termination Prior to Closing. The bankruptcy or
default of any Tenant or the termination of any Lease or New Lease or the
removal of any Tenant by reason of a default by such Tenant (by summary
proceedings or otherwise) or by operation of the terms of such Lease or New
Lease shall not affect the obligations of Buyer under this Agreement in any
manner or entitle Buyer to a reduction in, or credit or allowance against, the
Purchase Price or give rise to any other claim on the part of Buyer.
Section 7.6 Tenant Notices. At the Closing, each Seller shall
furnish Buyer with a signed notice to be given to each Tenant. Such notice shall
disclose that the applicable Property has been sold to Buyer and that, after the
Closing, all rents should be paid to Buyer.
Section 7.7 Risk of Loss and Insurance Proceeds. Buyer shall be
bound to purchase the Properties for the full Purchase Price as required by the
terms hereof, without
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regard to the occurrence or effect of any damage to the related Real Properties
or destruction of any improvements thereon or condemnation of any portion of any
Property, provided that upon the Closing, there shall be a credit against the
Purchase Price due hereunder equal to the amount of any insurance proceeds or
condemnation awards collected by the applicable Seller as a result of any such
damage or destruction or condemnation, plus the amount of any insurance
deductible or any uninsured amount or retention, less any sums reasonably
expended by such Seller prior to the Closing for the restoration or repair of
any Property or in collecting such insurance proceeds or condemnation awards.
Sellers have provided Buyer with a certificate of insurance for Sellers'
casualty insurance policy so that Buyer can confirm its satisfaction with such
policy. Sellers agree that they will maintain such policy in full force and
effect until the Closing. If the proceeds or awards have not been collected as
of the Closing, then such proceeds or awards shall be assigned to Buyer, except
to the extent needed to reimburse the applicable Seller for sums it reasonably
expended prior to the Closing for the restoration or repair of such Property or
in collecting such insurance proceeds or condemnation awards. Notwithstanding
the foregoing, (i) Sellers shall not settle, compromise or otherwise stipulate
any award or recovery in connection with any damage, destruction or
condemnation, in each case if such damage, destruction or condemnation impairs
the value of a Property by at least $250,000 and occurs after the Deposit Date,
without the prior written approval of Buyer, which approval shall not be
unreasonably withheld, (ii) following the Deposit Date, Buyer shall have the
right to participate in any such settlement or other proceedings, and (iii) if
the amount of the damage or destruction as described in this Section 7.7 exceeds
ten percent (10%) of the aggregate Allocated Purchase Prices of either the Pool
A Properties or the Pool B Properties, then Buyer may, at its option to be
exercised within five (5) Business Days of Sellers' written notice of the
occurrence of the damage or destruction, either terminate this Agreement or
consummate the purchase for the full Purchase Price as required by the terms
hereof. If Buyer elects to terminate this Agreement, then the Deposit shall be
immediately returned to Buyer and neither party shall have any further rights or
obligations hereunder except to the extent set forth in Sections 4.7(a), 6.1,
9.4 and 9.10(a). If Buyer elects to proceed with the purchase, then upon the
Closing, Buyer shall be entitled to a credit against the Purchase Price and
shall receive an assignment of any uncollected proceeds or awards, all as set
forth in this Section 7.7 above. Further, without limitation of the foregoing,
with respect to the environmental condition at the Wilsonville Business Park
that Sellers have disclosed to Buyer, Sellers will assign to Buyer upon the
Closing any insurance proceeds recovered (or uncollected proceeds recoverable)
by Sellers in connection with such matter under Sellers' environmental insurance
policy (that have not previously been applied by Sellers to remediate such
condition). The provisions of this Section 7.7 shall survive the Closing.
Section 7.8 Notifications. Between the Effective Date and the
Closing, each Seller shall promptly notify Buyer of any condemnation,
environmental, zoning or other land- use regulation proceedings relating to any
of the Properties of which such Seller obtains
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knowledge, any notices of violations of any legal requirements relating to any
of the Properties received by such Seller, any litigation of which such Seller
obtains knowledge that arises out of the ownership of any of the Properties
unless fully covered by insurance (subject to customary deductibles), and any
other matters that would materially affect any of Sellers' representations and
warranties hereunder.
ARTICLE VIII
CLOSING AND ESCROW
Section 8.1 Escrow Instructions. Upon execution of this
Agreement, the parties hereto shall deposit an executed counterpart of this
Agreement with the Title Company, and this instrument shall serve as the
instructions to the Title Company as the escrow holder for consummation of the
purchase and sale contemplated hereby. Sellers and Buyer agree to execute such
reasonable additional and supplementary escrow instructions as may be appro
priate to enable the Title Company to comply with the terms of this Agreement;
provided, however, that in the event of any conflict between the provisions of
this Agreement and any supplementary escrow instructions, the terms of this
Agreement shall control, unless a contrary intent is expressly indicated in such
supplementary instructions.
Section 8.2 Closing. The Closing hereunder shall be held and
delivery of all items to be made at the Closing under the terms of this
Agreement shall be made at the offices of Sellers' counsel (or such other
location as the parties may agree) at 9:00 A.M. (San Francisco Time), on
November 15, 1997 or such earlier or later date and time as Buyer and Sellers
may mutually agree upon in writing (the "Closing Date"), in either case, with
time being of the essence. Notwithstanding the foregoing, (i) Sellers and Buyer
shall each have the right in its good faith business judgment (relating to
consummation of the subject transaction or the financing thereof) to postpone
the Closing Date until not later than November 24, 1997 (with time being of the
essence) so long as Buyer or Sellers, as the case may be, delivers written
notice to the other party not less than two (2) Business Days prior to the then
scheduled Closing Date and (ii) the Closing Date for the December Properties
shall be December 3, 1997 (with time being of the essence). Except as otherwise
permitted under this Agreement, such date and time may not be extended without
the prior written approval of both Sellers and Buyer.
Section 8.3 Deposit of Documents.
(a) At or before the Closing, Sellers shall deposit into escrow
the following items:
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(i) a duly executed and acknowledged Deed for each Fee
Property;
(ii) four (4) duly executed and acknowledged counterparts of
an Assignment of Ground Lease for each Leasehold Estate;
(iii) a duly executed and acknowledged Leasehold Improvements
Deed for the Leasehold Improvements on each Leasehold Estate;
(iv) four (4) duly executed counterparts of the Assignment of
Partnership Interests;
(v) four (4) duly executed counterparts of a Bill of Sale for
each Fee Property and each Leasehold Property in the form attached hereto as
Exhibit E (each, a "Bill of Sale");
(vi) four (4) duly executed counterparts of an Assignment and
Assumption of Leases for each Fee Property and each Leasehold Property in the
form attached hereto as Exhibit F (each, an "Assignment of Leases");
(vii) four (4) duly executed counterparts of an Assignment
and Assumption of Contracts, Warranties and Guaranties and Other Intangible
Property for each Fee Property and each Leasehold Property in the form attached
hereto as Exhibit G (each, an "Assignment of Contracts");
(viii) four (4) duly executed counterparts of an agreement
designating the Title Company as the "Reporting Person" for the transaction
contemplated hereby pursuant to Section 6045(e) of the Federal Code and the
regulations promulgated thereunder, substantially in the form of Exhibit H
attached hereto (the "Designation Agreement");
(ix) four (4) duly executed counterparts of such disclosures
and reports (including withholding certificates) as are required by applicable
state and local law in connection with the conveyance of the Properties; and
(x) the Sellers' Affidavit; and
(xi) an affidavit pursuant to Section 1445(b)(2) of the Code,
and on which Buyer is entitled to rely, that no Seller is a "foreign person"
within the meaning of Section 1445(f)(3) of the Code.
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(b) At or before Closing, Buyer shall deposit into escrow the
following items:
(i) the Purchase Price;
(ii) four (4) duly executed and acknowledged counterparts of
an Assign ment of Ground Lease for each Leasehold Estate;
(iii) four (4) duly executed counterparts of each Assignment
of Partner ship Interests;
(iv) four (4) duly executed counterparts of each Bill of
Sale;
(v) four (4) duly executed counterparts of each Assignment of
Leases;
(vi) four (4) duly executed counterparts of each Assignment
of Contracts;
(vii) four (4) duly executed counterparts of the Designation
Agreement
(viii) two (2) duly executed counterpart of Buyer's As-Is
Certificate and Agreement, substantially in the form of Exhibit I attached
hereto; and
(ix) four (4) duly executed counterpart of such disclosures
and reports as are required by applicable state and local law in connection with
the conveyance of the Properties.
(c) Buyer and Sellers shall endeavor in good faith to agree on
the final, execution form of all of the documents referred to above on or before
October 31, 1997. Buyer and Sellers shall each deposit such other instruments as
are reasonably required by the Title Company or otherwise required to close the
escrow and consummate the purchase and sale of the Properties in accordance with
the terms hereof; provided, that Sellers shall not be required to provide any
indemnities or affidavits or to escrow any funds other than the Sellers'
Affidavit.
(d) Sellers shall deliver to Buyer originals of the Leases (or,
if originals are not available, copies certified by the applicable Seller to be
true and correct to such Seller's knowledge), copies (or, if available,
originals) of the tenant correspondence files of the Real Properties in Sellers'
possession, a set of keys to each Real Property and originals (or copies, if
originals are not available) of any other items in Sellers' possession relating
to the use,
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ownership, operation, maintenance, leasing, repair, alteration, management or
development of the Real Properties, all within five (5) Business Days after the
Closing Date. Following the Closing, Buyer shall make all Leases, Contracts,
other documents, books, records and any other materials in its possession, to
the extent the same relate to the period of Sellers' ownership of the
Properties, available to Sellers or their representatives for inspection and/or
copying at reasonable times and upon reasonable notice.
Section 8.4 Estoppel Certificates. (a) Sellers shall use their
reasonable efforts (without incurring any additional expense) to obtain prior to
the Deposit Date (and, if not by then, as soon as reasonably practicable
thereafter) tenant estoppel certificates from each Tenant in the form attached
hereto as Exhibit J; provided, however, that if a form of estoppel certificate
is attached to or otherwise prescribed in a particular lease document, that form
(the "Prescribed Form") shall be deemed to be acceptable to Buyer in the event
that any Tenant is unwilling to sign the form attached hereto as Exhibit J. It
shall be a condition to Buyer's obligation to close the sale and purchase of a
Property that on or before the Closing the applicable Seller delivers to Buyer
tenant estoppel certificates substantially in the form attached hereto as
Exhibit J (or in the Prescribed Form, if applicable) from (i) Tenants occupying
seventy-five percent (75%) of the total leased square footage of the aggregate
Pool A Proper ties; (ii) Tenants occupying seventy-five percent (75%) of the
total leased square footage of the aggregate Pool B Properties; (iii)
Significant Tenants occupying seventy-five percent (75%) of the total leased
square footage covered by such Significant Tenants' Leases with respect to the
aggregate Pool A Properties and (iv) Significant Tenants occupying seventy-five
percent (75%) of the total leased square footage covered by such Significant
Tenants' Leases with respect to the aggregate Pool B Properties (75%, with
respect to each of preceding clauses (i)-(iv), the "Required Percentage");
provided, however, if such Seller is unable to obtain the aforesaid tenant
estoppel certificates from Tenants or Significant Tenants (as the case may be)
occupying the Required Percentage, such Seller may, but shall not be obligated
to, provide a certificate to Buyer, with respect to such missing estoppel
certificates, as chosen by such Seller, represent ing those Tenants or
Significant Tenants (as the case may be) whose Leases cover not more than ten
percent (10%) of the total leased square footage to equal or exceed the
difference between the Required Percentage and the percentage of the gross
leaseable area covered by the estoppel certificates received by Buyer as to all
other Tenants or Significant Tenants (as the case may be) to the effect that
(except as disclosed in the Due Diligence Materials or in the Leases to which
such estoppels relate): (i) to such Seller's knowledge the Leases for those
Tenants or Significant Tenants (as the case may be) are in full force and
effect; (ii) the amount of the Tenants' or Significant Tenants' security
deposits; (iii) the dates through which rent has been paid; (iv) neither such
Seller nor, to such Seller's knowledge, any of those Tenants or Significant
Tenants (as the case may be) is in default thereunder; (v) a true, correct and
complete copy of the Leases are attached; (vi) the Leases expire on the dates
specified and are not subject to any renewal or extension options, except as
specified, and (viii) there are no
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options to purchase or rights of first refusal except as specified. Buyer shall
be obligated to accept such Seller's certification in lieu of any missing
estoppel certificates up to such ten percent (10%) level. Such Seller's
representations and warranties in the certificate shall survive the Closing,
provided that (i) Buyer must give such Seller a Claim Notice with respect to any
claim it may have against such Seller for a breach of any such representation
and warranty by June 30, 1998, and must commence litigation (if any) relating to
such Claim Notice not later than December 31, 1998 (and any claim that Buyer may
have that is not so asserted, or litigation by Buyer that is not so commenced,
shall not be valid or effective and such Seller shall have no liability
whatsoever with respect thereto) and (ii) any certificate delivered by such
Seller pursuant to this Section 8.4 shall cease to survive the Closing to the
extent specifically confirmed by a tenant estoppel certificate delivered by a
Tenant or a Significant Tenant. In no event shall the minimum thresholds to
Buyer's recovery set forth in Section 4.4(a) apply to any certificates delivered
by any Seller (but Buyer's recovery under any such certificates shall be limited
by the maximum limitations set forth in Section 4.4(a)).
(b) Sellers shall use all reasonable efforts (without incurring
any additional expense) to obtain prior to the Deposit Date (and, if not by
then, as soon as reasonably practicable thereafter) estoppel certificate from
the ground lessor of each Ground Lease, substantially in the form attached
hereto as Exhibit M..
Section 8.5 Prorations.
(a) Rents, including, without limitation, percentage rents,
escalation charges for Real Estate Taxes, parking charges, marketing fund
charges, operating expenses, main tenance escalation rents or charges,
cost-of-living increases or other charges of a similar nature ("Additional
Rents"), and any additional charges and expenses payable under Leases, all as
and when actually collected (whether such collection occurs prior to, on or
after the Closing Date); Real Estate Taxes and personal property taxes,
including refunds with respect thereto, if any; the current installment (only)
of any improvement bond or assessment that is a lien on any Property or that is
pending and may become a lien on any Property; water, sewer and utility charges;
amounts payable under any existing Contract, Contract entered into after the
Effective Date and in accordance with this Agreement or Ground Lease; annual
permits and/or inspec tion fees (calculated on the basis of the period covered);
and any other income or expenses relating to the operation and maintenance of
each Property (other than any Leasing Costs and free rent which shall be
prorated as provided in Section 7.2), shall all be prorated as of 12:01 a.m.
Eastern Standard Time on the Closing Date, on the basis of a 365-day year, with
Buyer deemed the owner of the Properties on the entire Closing Date. Any
delinquent rents or expense reimbursements collected after the Closing shall be
applied as follows: (i) first, to the current month in which such rents or
reimbursements are collected; (ii) second, to the calendar month in which the
Closing occurs (the "Closing Month"); (iii) third, to the month immediately
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preceding the Closing Month; (iv) fourth, to the month immediately succeeding
the Closing Month; (v) fifth, to the month immediately preceding the month
specified in clause (iii); (vi) sixth, to the month immediately succeeding the
month specified in clause (iv); (vii) seventh, to all remaining post-Closing
delinquencies; and (viii) thereafter, to all remaining pre-Closing
delinquencies, provided that in no event will Buyer be entitled to receive any
payments on or under the promissory notes or other agreements referred to in
Section 8.8. Buyer shall use reasonable efforts until June 30, 1998 to collect
any delinquent rents that accrued prior to the Closing Date, provided that in no
event shall Buyer be required to sue any Tenant, terminate any Lease or threaten
to do same (but Sellers shall have the right to commence and pursue litigation
against any Tenant to collect delinquent rents and/or expense reimbursements,
provided that (i) Sellers may not seek as a remedy in any such litigation the
termination of any Leases or the dispossession of any Tenant, (ii) Sellers may
not initiate such litigation prior to June 30, 1998 and (iii) Sellers shall not
initiate litigation with respect to any Tenant where the amount in dispute is
less than $25,000.00). Each Seller agrees to forward any rents received by it
after the Closing Date to Buyer for application in accordance with the
provisions hereof. The amount of any security deposits that are required to be
returned to Tenants under Leases shall be credited against the Purchase Price
(and Sellers shall be entitled to retain such security deposits).
Notwithstanding the foregoing terms of this Section 8.5(a), no Seller shall have
any obligation to pay (and Buyer shall not receive a credit at Closing for) any
Real Estate Taxes, personal property taxes or any other expense relating to the
operation and maintenance of any Property, to the extent that Buyer is entitled
after Closing to reimbursement of such amounts from Tenants under the Leases,
regardless of whether Buyer actually collects such reimbursements from such
Tenants, it being understood and agreed by Buyer and Sellers that the burden of
collecting such reimbursements shall be solely on Buyer. With respect to all
expense reimbursements and recoveries from Tenants, to the extent that any
Seller has collected from the Tenants amounts in excess of that owed by the
Tenants under the terms of their Leases with respect to the period prior to the
Closing Date, Buyer shall receive a credit at Closing in the amount of such
over-collection. In the event any Property has been assessed for property taxes
purposes at such rates as would result in reassessment (i.e., "escape
assessment" or "roll-back taxes") based upon the change in land usage or
ownership of such Property resulting from or after the consummation of the
transactions described in this Agreement, as between Buyer and Sellers, Buyer
hereby agrees to pay all such taxes and to indemnify and save Sellers harmless
from and against all claims and liability for such taxes.
Such indemnity shall survive the Closing.
(b) With respect to the Partnership Interest, the prorations
contemplated under subparagraph (a) of this Section 8.5 shall be calculated as
if the Real Property and the Personal Property owned by the Partnership (rather
than the Partnership Interest) were being sold as of the Closing, except that
(i) the net amount of all credits that would be applicable under such
subparagraphs shall be determined in accordance with such subparagraphs and then
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multiplied by seventy-nine percent (79%), which reduced amount shall be used in
lieu of the amount otherwise determined under such subparagraphs, and (i) the
applicable Sellers shall receive a credit at the Closing for seventy-nine
percent (79%) of the amount, as of 12:01 a.m. Eastern Standard Time on the
Closing Date, by which the value of the Partnership's assets in the nature of
working capital (excluding all Real Property owned by the Partnership and the
Personal Property and any receivables or other assets taken into account as part
of the calculation pursuant to subparagraph (a) of this Section 8.5, for the
Partnership) exceeds its liabilities (excluding any expenses payable or other
liabilities (such as security deposits) which are taken into account as part of
the calculations pursuant to subparagraph (a) of this Section 8.5).
(c) Sellers and Buyer hereby agree that if any of the aforesaid
prorations cannot be calculated accurately on the Closing Date (including,
without limitation, if any supplemental assessments are issued after the Closing
as a result of events occurring prior to the Closing), then the same shall be
calculated as soon as reasonably practicable after the Closing Date, and that if
any Tenant is required to pay Additional Rents and such Additional Rents are not
finally adjusted between the landlord and tenant under the applicable Lease
until after the end of the 1997 calendar year, then such prorations shall be
calculated as soon as reasonably practicable after such Additional Rents have
been finally adjusted. Either party owing the other party a sum of money based
on proration(s) calculated after the Closing Date shall promptly pay said sum to
the other party, together with interest thereon at the rate of two percent (2%)
per annum over the Prime Rate from the Closing Date to the date of payment, if
payment is not made within ten (10) days after delivery of a bill therefor. If
the real estate and/or personal property tax rate and assessments have not been
set for the calendar year in which the Closing occurs, then the proration of
such taxes shall be based upon the rate and assessments for the preceding
calendar year, and such proration shall be adjusted between the applicable
Seller and Buyer as soon as reasonably practicable after such tax rate or
assessment has been set.
(d) Buyer shall calculate the prorations contemplated by Section
8.5(c). Sellers and their representatives and auditors shall be afforded the
opportunity to review all underlying financial records and work papers
pertaining to the preparation of Buyer's proration statements, and Buyer shall
permit Sellers and their representatives and auditors during regular business
hours and upon reasonable prior written notice to have reasonable access to the
books and records in the possession of Buyer or any party to whom Buyer has
given custody of the same relating to the Properties to permit Sellers to review
Buyer's proration statements. Buyer's proration statements shall be final and
binding for purposes of this Agreement unless a Seller shall in good faith give
written notice to Buyer of disagreement with the prorations contained therein
within sixty (60) days following its receipt of Buyer's proration statements,
specifying in reasonable detail the nature and extent of such disagreement;
provided that if all
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such good faith disagreements with all Sellers total less than $25,000 in the
aggregate, no further adjustments will be made. If Buyer and the applicable
Seller are unable to resolve any disagreement with respect to Buyer's proration
statements within ten (10) Business Days following receipt by Buyer of the
notice referred to above and the total amount remaining in dispute is greater
than $25,000, either party may pursue any remedy available for the resolution of
such dispute. If the total amount remaining in dispute is no more than $25,000,
the dispute shall be deemed to have been resolved in favor of Buyer's proration
statements prepared by Buyer and as modified to reflect the resolution of the
disputes, if any, upon which the parties have agreed.
(e) Sellers shall pay one-half of recording and escrow fees.
Buyer shall pay the costs of the Title Commitments, Title Policies and all
endorsements thereto and all PTRs, and Survey updates, one-half of recording and
escrow fees and all costs of any appraisal, engineering and environmental
reports not delivered by Sellers. Sellers and Buyer shall allocate and pay for
transfer, excise and deed taxes in accordance with local custom (as set forth on
Schedule 8.1.1 attached hereto). Sellers and Buyer shall each be responsible for
paying their respective attorneys' fees and costs. Buyer and Sellers agree that,
given the de minimis amount of Personal Property included within the Properties,
no portion of the Purchase Price is allocable or attributable to such Personal
Property.
(f) Not later than 5:00 P.M. (San Francisco time) on October 1,
1997, Sellers will provide Buyer with Sellers' proposed "Allocated Purchase
Price" for each Property, and the parties shall in good faith arrive at an
agreed-upon "Allocated Purchase Price" for each Property (as so agreed, the
"Allocated Purchase Price"). In the event that the parties have not agreed upon
the Allocated Purchase Price by the Deposit Date, but Buyer funds the Deposit on
the Deposit Date, Buyer will be deemed to have agreed to the Allocated Purchase
Prices on which agreement has been reached and to Sellers' last proposed
Allocated Purchase Price prior to the Deposit Date as to which agreement has not
been reached. Buyer agrees that for purposes of any appeals relating to Real
Estate Taxes after the Closing Date, Buyer shall not value the Properties in a
manner (or otherwise take a position) inconsistent with the relative Allocated
Purchase Prices set forth herein. The aggregate Allocated Purchase Prices in
respect of the Pool A Properties shall equal $445,000,000 and the aggregate
Allocated Purchase Prices in respect of the Pool B Properties shall equal
$280,000,000.
(g) Notwithstanding anything to the contrary herein, to the
extent set forth in Section 8.7 Sellers reserve the right to protest any Real
Estate Taxes relating to the period prior to the Closing Date and to receive and
retain any refunds on account of such Real Estate Taxes.
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(h) The obligations of Sellers and Buyer under this Section 8.5
shall survive the Closing until June 30, 1998.
Section 8.6 Discharge of Sellers' Bonds. With respect to any
performance bonds or other bonds relating to work in progress at a Property
(collectively, "Sellers' Bonds") that were paid for or otherwise procured by a
Seller or its Affiliates and remains in effect after the Closing Date, Buyer
shall within thirty (30) days after the Closing Date replace such Sellers' Bonds
with equivalent bonds procured by Buyer and cause Sellers to be fully discharged
and released from any and all liability or obligation under the Sellers' Bonds.
Section 8.7 Tax Certiorari Proceedings. Sellers are hereby
authorized, but not obligated, to (a) commence (prior to the Closing Date) or
continue (after the Effective Date and after the Closing Date) any proceeding
for the reduction of the assessed valuation of any Property for any tax year
which, in accordance with the laws and regulations applicable to such Property,
requires that, to preserve the right to bring a tax certiorari proceeding with
respect to such tax year, such proceeding be commenced prior to the Closing Date
and (b) endeavor to settle any such proceeding in Sellers' discretion; provided,
however, that if such proceeding is (i) for a tax year in which the Closing Date
occurs or would affect such tax year or any subsequent tax year, such settlement
shall not be made without Buyer's prior consent, which consent shall not be
unreasonably withheld or delayed, and (ii) for a tax year which commences after
the Closing Date, the right to continue and settle such proceeding, including,
without limitation, any contracts or agreements with tax certiorari counsel with
respect to any such tax year, shall be deemed assigned to and assumed by Buyer
at the Closing. After the Closing, with respect to any Property, (i) Sellers
shall retain all rights (subject to any rights of Tenants under their Leases)
with respect to any tax year ending prior to the tax year (and all refunds
relating thereto) in which the Closing Date occurs, and shall have the sole
right to participate in and settle any proceeding relating thereto (provided,
that such settlement does not affect the assessed tax value for any subsequent
tax year), and (ii) Buyer shall have all rights (subject to any rights of
Tenants under their Leases) with respect to any tax year (and all refunds
relating thereto) which ends after the Closing Date; provided, however, that if
the proceeding is for a tax year in which the Closing Date occurs, such
settlement shall not be made without Buyer's prior consent, which consent shall
not be unreasonably withheld or delayed. With respect to any such proceeding for
a tax year in which the Closing Date occurs (whether commenced by Sellers or
Buyer), any refund or credit of taxes for such tax year shall be applied first
to the unreimbursed out-of-pocket expenses, including reasonable counsel fees,
necessarily incurred in obtaining such refund or credit, and second, to any
Tenant entitled to same, and the balance shall be apportioned between Sellers
and Buyer as of the Closing Date in accordance with the proportion of the
applicable tax year occurring before and after the Closing Date. In each case,
the party which prosecuted the proceeding shall deliver to the other copies of
receipted tax bills and any decision or settlement agreement evidencing the
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reduction in taxes. If any refund shall be received by Sellers which is for the
account of Buyer as provided in this Section 8.7, then Sellers shall hold
Buyer's share thereof in trust for Buyer and, promptly upon receipt thereof, pay
such share to Buyer or any other party entitled to same as provided above. If
any refund shall be received by Buyer which is for the account of Sellers as
provided in this Section 8.7, then Buyer shall hold Sellers' share thereof in
trust for Sellers and, promptly upon receipt thereof, pay such share to Sellers
or any other party entitled to same as provided above. Each party shall execute
any and all consents or other documents as may be reasonably necessary to be
executed by such party so as to permit the other party to commence or continue
any tax certiorari proceeding which such other party is authorized to commence
or continue pursuant to the terms of this Section 8.7, or to collect any refund
or credit with respect to any such tax proceeding. The provisions of this
Section 8.7 shall survive the Closing.
Section 8.8 Tenant Obligations. Notwithstanding anything herein
that may be construed to the contrary (including, without limitation, Section
8.5), promissory notes or other agreements (other than the Leases) delivered to
a Seller that evidence, deal with or otherwise relate solely to a Tenant's
rental or expense reimbursement obligations under its Lease that, as of the
Closing Date, are or were past due, shall not be conveyed to Buyer and shall be
retained by Sellers. Sellers agree that in enforcing their rights against
Tenants under any such promissory notes or other agreements, Sellers will not
seek to exercise any remedies that may be available to them under the affected
Leases.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices. Any notices required or permitted to be
given hereunder shall be given in writing and shall be delivered (a) in person,
(b) by certified mail, postage prepaid, return receipt requested, (c) by a
commercial overnight courier that guarantees next day delivery and provides a
receipt, or (d) by legible facsimile (followed by hard copy delivered in
accordance with preceding subsections (a)-(c)), and such notices shall be
addressed as follows:
To Buyer: Spieker Properties, L.P.
2180 Sand Hill Road, Suite 200
Menlo Park, California 94025
Attn: Craig Vought
Sara Reynolds
Facsimile No. (415) 233-3838
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with copies to: Orrick, Herrington & Sutcliffe LLP
Old Federal Reserve Bank Building
400 Sansome Street
San Francisco, California 94111-3143
Attn: David S. Fries
Facsimile No. (415) 773-5759
Bankers Trust Company
130 Liberty Street
New York, New York 10006
Attn: Bromme H. Cole
Facsimile No. (212) 669-0790
Morrison & Foerster LLP
555 W. 5th Street
Los Angeles, California 90013
Attn: Donald Berger
Facsimile No. (213) 892-5454
To Sellers: WCB Holdings Limited Partnership
450 Newport Center Drive
Suite 304
Newport Beach, California 92660-7640
Attn: Robert V. Neary, Esq.
Facsimile No.(714) 640-8399
with a copy to: Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attn: Anthony J. Colletta, Esq.
Facsimile No. (212) 558-3588
or to such other address as either party may from time to time specify in
writing to the other party. Any notice shall be effective only upon receipt (or
refusal by the intended recipient to accept delivery).
Section 9.2 Entire Agreement. This Agreement, together with the
Exhibits and Schedules hereto, contains all representations, warranties and
covenants made by Buyer and Sellers and constitutes the entire understanding
between the parties hereto with respect to the subject matter hereof. Any
correspondence, memoranda or agreements between the parties,
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including, without limitation, the Confidentiality Agreement, or any oral or
written statements made by a Seller, its Affiliates, employees or agents, are
not binding on or enforceable against any party, and are superseded and replaced
in total by this Agreement together with the Exhibits and Schedules hereto.
Section 9.3 Time. Time is of the essence in the performance of
each of the parties' respective obligations contained herein.
Section 9.4 Attorneys' Fees. If either party hereto fails to
perform any of its obligations under this Agreement or if any dispute arises
between the parties hereto concerning the meaning or interpretation of any
provision of this Agreement, then the defaulting party or the party not
prevailing in such dispute, as the case may be, shall pay any and all costs and
expenses incurred by the other party on account of such default and/or in
enforcing or establishing its rights hereunder, including, without limitation,
court costs (including costs of any trial or appeal therefrom) and reasonable
attorneys' fees and disbursements.
Section 9.5 No Merger. The obligations contained herein, the
performance of which is contemplated after the Closing, shall not merge with the
transfer of title to the Properties but shall remain in effect until fulfilled.
Section 9.6 Assignment. Buyer's rights and obligations hereunder
shall not be assignable, directly or indirectly, without the prior written
consent of Sellers; provided, that Buyer may, by written notice delivered to
Sellers not less than ten (10) Business Days prior to the Closing, designate any
Affiliate of Buyer and/or Bankers Trust and/or any of its Affiliates
(collectively, "Permitted Assignees") as grantee or assignee, as the case may
be, of one or more of the Properties and the applicable Sellers shall convey at
Closing such Property or Properties (on behalf of Buyer) in accordance with such
written instructions, and such Permitted Assignees shall be entitled to enforce
Sellers' post-Closing obligations with respect to such assigned Properties
(including, without limitation, the assertion of any breaches of representations
or warranties or covenants that survive Closing) independent of Buyer or any
other Permitted Assignee (and as to Buyer's post-Closing obligations (e.g., to
collect delinquent rent and to settle prorations) with respect to Properties
purchased by Permitted Assignees, Sellers shall look to the Permitted
Assignees). Nothing contained in the preceding sentence shall be deemed to
diminish or otherwise affect the obligations of Buyer hereunder, including the
obligations to pay the Purchase Price at Closing and to indemnify Sellers and
the other Seller Parties in accordance with the terms hereof. Subject to the
limitations described herein, this Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors and assigns.
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Section 9.7 Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument.
Section 9.8 Governing Law; Jurisdiction and Venue.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE PARTIES RECOGNIZE THAT,
WITH RESPECT TO SOME OF THE PROPERTIES, IT MAY BE NECESSARY FOR THE PARTIES TO
COMPLY WITH CERTAIN ASPECTS OF THE LAWS OF OTHER STATES IN ORDER TO CONSUMMATE
THE PURCHASE AND SALE OF SUCH PROPERTIES PURSUANT HERETO. THE PARTIES AGREE TO
COMPLY WITH SUCH OTHER LAWS TO THE EXTENT NECESSARY TO CONSUMMATE THE PURCHASE
AND SALE OF SUCH PROPERTIES. IT IS THE PARTIES' INTENT THAT THE PROVISIONS OF
THIS AGREEMENT BE APPLIED TO EACH PROPERTY IN A MANNER THAT RESULTS IN THE
GREATEST CONSISTENCY POSSIBLE.
(b) For the purposes of any suit, action or proceeding involving
this Agreement, Buyer hereby expressly submits to the jurisdiction of all
federal and state courts sitting in the State of New York and consents that any
order, process, notice of motion or other application to or by any such court or
a judge thereof may be served within or without such court's jurisdiction by
registered mail or by personal service, provided that a reasonable time for
appearance is allowed, and Buyer agrees that such courts shall have the
exclusive jurisdiction over any such suit, action or proceeding commenced by any
party. In furtherance of such agreement, Buyer agrees upon the request of any
Seller to discontinue (or agree to the discontinuance of) any such suit, action
or proceeding pending in any other jurisdiction.
(c) Buyer hereby irrevocably waives any objection that it may now
or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement brought in any federal or state
court sitting in the State of New York and hereby further irrevocably waives any
claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.
Section 9.9 Waiver of Trial by Jury. EACH PARTY HEREBY WAIVES,
IRREVOCABLY AND UNCONDITIONALLY, TRIAL BY JURY IN ANY ACTION BROUGHT ON, UNDER
OR BY VIRTUE OF OR RELATING IN ANY WAY TO THIS AGREEMENT OR ANY OF THE DOCUMENTS
EXECUTED IN CONNECTION HEREWITH, THE PROPERTIES, OR ANY CLAIMS, DEFENSES, RIGHTS
OF SET-OFF OR OTHER ACTIONS PERTAINING HERETO OR TO ANY OF THE FOREGOING.
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Section 9.10 Confidentiality and Return of Documents.
(a) As a condition to Sellers' agreement to furnish and/or
disclose Evaluation Material (as defined below) to Buyer, any Permitted
Assignee(s) and their Affiliates and representatives for review and inspection,
Buyer (on behalf of itself, any Permitted Assignee(s), and their respective
Affiliates and representatives) hereby agrees to be bound by the terms set forth
in this Section 9.10(a).
(i) "Evaluation Material" shall include all documents, and
other written or oral information, as well as diskettes and other forms
of electronically transmitted data, furnished to Buyer, a Permitted
Assignee, or their respective officers, directors, employees, agents,
advisors, Affiliates or representatives (collectively "Representa
tives") by Sellers or their Affiliates relating to the Properties, as
well as written memoranda, notes, analyses, reports, compilations, or
studies prepared by Buyer or its Representatives (in whatever form of
medium) that contain, or are derived from, such information provided by
Sellers. Notwithstanding the foregoing, information provided by Sellers
shall not constitute "Evaluation Material" if such information (i) is or
becomes generally available to the public other than as a result of a
disclosure by or through Buyer or its Representatives in contravention
of this Section 9.10(a) or (ii) is or becomes available to Buyer from a
source (other than Sellers) not bound, to the knowledge of Buyer, by any
legal or contractual obligation prohibiting the disclosure of Evaluation
Material by such source to Buyer.
(ii) Buyer agrees that it and its Representatives will use
the Evaluation Material exclusively for the purpose of evaluating the
merits of a possible purchase of the Properties as contemplated by this
Agreement and not for any other purpose whatsoever. Buyer (on behalf of
itself and its Representatives) further agrees that it will not disclose
any Evaluation Material or use it to the detriment of Sellers or their
Affiliates; provided, however, that Buyer may without liability disclose
Evaluation Material (x) to any Representative of Buyer who needs to know
such Evaluation Material for the purpose of evaluating the transactions
described in this Agreement involving Sellers and the Properties and
Buyer or its Permitted Assignee(s) (it being understood and agreed that
Buyer shall be fully responsible for any disclosures by any such Person)
and (y) pursuant to administrative order or as otherwise required by
law.
(iii) In the event that Buyer desires to disclose Evaluation
Material under the circumstances contemplated by clause (y) of the
preceding paragraph, Buyer will (x) provide Sellers with prompt notice
thereof, (y) consult with Sellers on the advisability of taking steps to
resist or narrow such disclosure, and (z) cooperate with Sellers (at
Sellers' cost) in any attempt that Sellers may make to obtain an order
or
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other reliable assurance that confidential treatment will be accorded to
designated portions of the Evaluation Material.
(iv) Buyer agrees that, in the event this Agreement is
terminated prior to the consummation of the purchase and sale
contemplated hereunder, all written Evaluation Material and all copies
thereof will be returned to Sellers promptly upon Sellers' request. All
analyses, compilations, studies or other documents prepared by or for
Buyer and reflecting Evaluation Material or otherwise based thereon will
be (at Buyer's option) either (x) destroyed or (y) retained by Buyer in
accordance with the confidentiality restrictions set forth in this
Section 9.10(a).
(v) Buyer acknowledges that significant portions of the
Evaluation Material are proprietary in nature and that Sellers and their
Affiliates would suffer sig nificant and irreparable harm in the event
of the misuse or disclosure of the Evaluation Material. Without
affecting any other rights or remedies that either party may have, Buyer
acknowledges and agrees that Sellers shall be entitled to seek the
remedies of injunction, specific performance and other equitable relief
for any breach, threatened breach or anticipatory breach of the
provisions of this agreement by Buyer or its Representatives.
(vi) Buyer agrees to indemnify and hold harmless Sellers from
and against all loss, liability, claim, damage and expense arising out
of any breach of this Section 9.10(a) by Buyer or any of its
Representatives.
(vii) This Section 9.10(a) shall survive, if the Closing does
not occur, any termination of this Agreement, but shall terminate upon
the Closing.
(b) Each Seller and Buyer hereby covenant that (i) prior to the
Closing it shall not issue any press release or public statement (a "Release")
with respect to the transactions contemplated by this Agreement without the
prior consent of all parties to this Agreement, except to the extent required by
law or the regulations of the Securities and Exchange Commission, and (ii) after
the Closing, any Release issued by any Seller or Buyer shall be subject to the
review and approval of all such parties (which approval shall not be
unreasonably withheld). If any Seller or Buyer is required by law to issue a
Release, such party shall, at least two (2) Business Days prior to the issuance
of the same, deliver a copy of the proposed Release to the other parties for
their review.
(c) Each Seller agrees for a period of one (1) year after the
Closing Date not to disclose capitalization rates and rates of return relating
to the Properties (the "Confidential Information"), provided that such
disclosure may be made (a) to any Person who is a member,
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partner, officer, director or employee of such Seller or counsel to or
accountants of such Seller solely for their use and on a need-to-know basis,
provided that such Persons are notified of Sellers' confidentiality obligations
hereunder, (b) with the prior consent of Buyer, or (c) sub ject to the next
sentence, pursuant to legal, regulatory or administrative process. In the event
that a Seller shall receive a request to disclose any Confidential Information
under clause (c) of the preceding sentence, such Seller shall (i) promptly
notify Buyer thereof, (ii) consult with Buyer on the advisability of taking
steps to resist or narrow such request and (iii) if disclosure is required or
deemed advisable, reasonably cooperate with Buyer (at no cost to such Seller) in
any attempt it may make to obtain an order or other assurance that confidential
treatment will be accorded such Confidential Information.
Section 9.11 Interpretation of Agreement. The article, section
and other headings of this Agreement are for convenience of reference only and
shall not be construed to affect the meaning of any provision contained herein.
Where the context so requires, the use of the singular shall include the plural
and vice versa and the use of the masculine shall include the feminine and the
neuter. The term "person" shall include any individual, partnership, joint
venture, corporation, trust, limited liability company, unincorporated
association, any other entity and any government or any department or agency
thereof, whether acting in an individual, fiduciary or other capacity.
Section 9.12 Amendments. This Agreement may be amended or
modified only by a written instrument signed by each of Buyer and Sellers (and,
to the extent required, Guarantor).
Section 9.13 No Recording. Neither this Agreement nor any
memorandum or short form thereof may be recorded by Buyer.
Section 9.14 No Third Party Beneficiary; Sellers' Obligations
Several.
(a) The provisions of this Agreement are not intended to benefit
any third parties.
(b) The obligations of each Seller under this Agreement are
several and no Seller shall have any liability for the obligations of any other
Seller hereunder.
Section 9.15 Severability. If any provision of this Agreement, or
the application thereof to any person, place or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other persons,
places and circumstances shall remain in full force and effect.
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Section 9.16 Drafts not an Offer to Enter into a Legally Binding
Contract. The parties hereto agree that the submission of a draft of this
Agreement by one party to another is not intended by either party to be an offer
to enter into a legally binding contract with respect to the purchase and sale
of the Properties. The parties shall be legally bound with respect to the
purchase and sale of the Properties pursuant to the terms of this Agreement only
if and when the parties have been able to negotiate all of the terms and
provisions of this Agreement in a manner acceptable to each of the parties in
their respective sole discretion, including, without limitation, all of the
Exhibits and Schedules hereto, and each of each Seller and Buyer have fully
executed and delivered to each other a counterpart of this Agreement, including,
without limitation, all Exhibits and Schedules hereto.
Section 9.17 Further Assurances. Each party shall, whenever and
as often as it shall be requested to do so by the other party, execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
any and all such other documents and do any and all other acts as may be
necessary to carry out the intent and purpose of this Agreement.
Section 9.18 Statutory Disclosure for Properties Located in the
State of Oregon. With respect to the Real Properties located in the State of
Oregon, Sellers make the following statutory disclosure:
THE PROPERTY DESCRIBED IN THIS INSTRUMENT MAY NOT BE WITHIN A FIRE
PROTECTION DISTRICT PROTECTING STRUCTURES. THE PROPERTY IS SUBJECT TO
LAND USE LAWS AND REGULA TIONS, WHICH, IN FARM OR FOREST ZONES, MAY NOT
AUTHORIZE CONSTRUCTION OR SITING OF A RESIDENCE AND WHICH LIMIT LAWSUITS
AGAINST FARMING OR FOREST PRACTICES AS DEFINED IN OREGON REVISED
STATUTES 30.930 IN ALL ZONES, BEFORE SIGNING OR ACCEPTING THIS
INSTRUMENT, THE PERSON ACQUIR ING FEE TITLE TO THE PROPERTY SHOULD CHECK
WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY
APPROVED USES AND EXISTENCE OF FIRE PROTECTION FOR STRUCTURES.
Section 9.19 Statutory Disclosure Regarding Boca Colonnade. With
respect to the Real Property identified as Boca Colonnade, Sellers makes the
following statutory disclosure:
RADON GAS: Radon is a naturally occurring radioactive gas that, when it
has accumulated in a building in sufficient quantities, may present
health risks to persons who are exposed to it over time. Levels of radon
that exceed federal
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and state guidelines have been found in buildings in Florida. Additional
information regarding radon and radon testing may be obtained from your
county public health unit.
This clause does not represent a part of the agreement between
the parties but is included in this Agreement for the sole purpose of complying
with Section 404.056 of Florida Statutes which requires that any contract for
sale and purchase of any building or execution of a rental agreement for any
building contain the following notification.
Section 9.20 Special Provisions Regarding Properties Located in
the Commonwealth of Pennsylvania.
(a) With respect to the Properties located in the Commonwealth of
Pennsylvania, under the terms of the Pennsylvania Sewage Facilities Act of
January 24, 1966, No. 537, P.L. 12535 as amended, Sellers make no representation
or warranty that a tie-in or tap to a community sewage system currently exists
or is available or that such system or any other utility systems or facilities
are presently adequate for Buyer's use of such Properties, and Buyer agrees to
assume full responsibility for contacting any agencies or utility companies in
order to obtain service to such Properties and for any fee incurred or payment
required in connection therewith.
(b) WITH RESPECT TO THE PROPERTIES LOCATED IN THE COMMONWEALTH OF
PENNSYLVANIA, THIS DOCUMENT MAY NOT SELL, CONVEY, TRANSFER, INCLUDE OR INSURE
THE TITLE TO THE COAL AND RIGHT OF SUPPORT UNDERNEATH THE SURFACE LAND DESCRIBED
OR REFERRED TO HEREIN, AND OTHER OWNER OR OWNERS OF SUCH COAL MAY HAVE THE
COMPLETE LEGAL RIGHT TO REMOVE ALL OF SUCH COAL, AND, IN THAT CONNECTION, DAMAGE
MAY RESULT TO THE SURFACE OF THE LAND AND ANY HOUSE, BUILDING OR OTHER STRUCTURE
ON OR IN SUCH LAND, THE INCLUSION OF THIS NOTICE DOES NOT ENLARGE OR RESTRICT OR
MODIFY ANY LEGAL RIGHTS OR ESTATES OTHERWISE CREATED, TRANSFERRED, EXCEPTED OR
RESERVED BY THIS INSTRUMENT. (This notice is set forth in the
manner provided in Section 1 of the Act of July 17, 1957, Pennsylvania Law 984,
as amended, and is not intended as notice of unrecorded instruments, if any.)
Section 9.21 Special Provision Regarding Broadbent Business Park.
With respect to the Property identified as Broadbent Business Park, to the
extent, if at all, Section 56-7-1 New Mexico Statutes Annotated 1978 is
applicable to this Agreement, no indemnity obligation provided in this Agreement
with respect to such Property shall extend to liability, claims, damages, losses
or expenses, including attorney fees, relating to the construction,
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installation, alteration, modification, repair, maintenance, servicing,
demolition, excavation, drilling, reworking, grading, paving, clearing, site
preparation or development of any real property or of any improvement on, above
or under real property and arising out of (a) the preparation or approval of
maps, drawings, opinions, reports, surveys, change orders, designs or
specifications by the indemnitee, or the agents or employees of the indemnitee,
or (b) the giving of or the failure to give directions or instructions by the
indemnitee, or the agents or employees of the indemnitee, where the giving of or
failure to give directions or instructions is the primary cause of bodily injury
to persons or damage to property.
Section 9.22 Special Provisions Regarding Properties Located in
the State of Colorado. Special taxing districts may be subject to general
obligation indebtedness that is paid by revenues produced from annual tax levies
on the taxable property within such districts. Property owners in such districts
may be placed at risk for increased mill levies and excessive tax burdens to
support the servicing of such debt where circumstances arise resulting in the
inability of such a district to discharge such indebtedness without such an
increase in mill levies. Buyer should investigate the debt financing
requirements of the authorized general obligation indebtedness of such
districts, existing mill levies of such district servicing such indebtedness,
and the potential for an increase in such mill levies.
Section 9.23 SEC Compliance. If it becomes reasonably necessary
to do so in order to comply with applicable securities laws or the rules or
regulations of the Securities and Exchange Commission, for a period of four (4)
years after the Closing Date, Buyer and its agents shall have the right, at
Buyer's sole cost and expense, to inspect and obtain copies of Sellers' books
and records supporting the operation of the Properties for the period of three
(3) full calendar years preceding the calendar year which includes the Closing
Date. Buyer shall give reasonable prior written notice to Sellers when Buyer
wishes to exercise its right to inspect such books and records. Such inspection
shall take place at the office of Sellers during normal business hours on a date
and at a time reasonably convenient to Sellers and Buyer. The provisions of this
Section 9.23 shall survive the Closing.
Section 9.24 No Marketing. Prior to the Closing Date or the
earlier termina tion of this Agreement, Sellers shall not list any Property with
any broker or otherwise, make or accept any offers to sell any Property, or
enter into any contracts or agreements (whether binding or not) regarding any
disposition of any Property.
Section 9.25 Security for Sellers' Obligations. Sellers' payment
obligations under Section 4.4, Section 8.4(a) and Section 8.5 are hereby
guaranteed by Whitehall Street Limited Partnership V, a Delaware limited
partnership ("Guarantor"). Notwithstanding anything herein that may be construed
to the contrary, the aggregate liability of Sellers and Guarantor shall not
under any circumstances exceed (i) $12,276,000.00 with respect to the
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Pool A Properties and (ii) $7,724,000.00 with respect to the Pool B Properties
(and any and all defenses to liability available to Sellers (other than as
described below) shall also be available to Guarantor). Neither Guarantor's
obligation to make payment or render performance in accordance with the terms of
this Section 9.25 nor any remedy for the enforcement thereof shall be impaired,
modified, stayed, released, limited, terminated or discharged in any manner
whatsoever by any impairment, modification, change, release, limitation or stay
of the liability of any Seller or its estate in bankruptcy or any remedy for the
enforcement thereof, to the extent resulting from the operation of any present
or future provision of the Bankruptcy Code of the United States or from the
decision of any court interpreting any of the same, and Guarantor shall remain
obligated under this Section 9.25 as if no such impairment, stay, modification,
change, release or limitation had occurred. Guarantor waives any defense arising
by reason of any disability or lack of capacity of any Seller. In any litigation
between Buyer and Guarantor seeking a declaration of rights under this Section
9.25, damages for breach or any other remedy, the prevailing party shall recover
its reasonable attorneys' fees and court costs.
Guarantor acknowledges that it will benefit financially from the
acquisition by Buyer of the Properties pursuant to the terms of the Agreement,
that Buyer has informed Sellers that Buyer will not enter into the Agreement
without Guarantor's executing this Sec tion 9.25, that Guarantor's executing of
this Section 9.25 is a material inducement to Buyer's execution of, and
performance of its obligations under, the Agreement, and that Buyer is relying
on this Section 9.25 in entering into and performing its obligations under the
Agree ment. The provisions of this Section 9.25 shall survive the Closing and
shall terminate in all respects upon the expiration of Sellers' payment
obligations under Section 4.4(b), Section 8.4(a) and Section 8.5.
Section 9.26 Section 1031 Exchange. It is presently contemplated
that Buyer may desire to effectuate a tax-deferred exchange (also known as a
"1031" exchange) (an "Exchange") in connection with the purchase of a Property.
Each applicable Seller hereby agrees to cooperate with Buyer in connection with
one or more such Exchanges (including, without limitation, by executing
documents consenting to the assignment of this Agreement to an exchange
facilitator), provided that:
(i) All documents executed by any Seller in connection with an
Exchange shall be subject to the prior approval of such Seller and shall
recognize that such Seller is acting and is making no representation or warranty
that the transactions qualify as a tax-free exchange under Section 1031 of the
Code or any applicable state or local laws and such Seller (or any other Seller
Party) shall have no liability whatsoever if any such transactions fails to so
qualify.
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(ii) Such Exchange shall not result in such Seller (or any Seller
Party) incurring, assuming or otherwise becoming responsible for any additional
costs, obligations or liabilities. Such Exchange shall not in any way delay the
Closing.
(iii) In no event shall such Seller be obligated to acquire any
property or otherwise be obligated to take title, or appear in the records of
title, to any property in connection with such Exchange.
(iv) In no event shall Buyer's consummation of such Exchange
constitute a condition precedent to Buyer's obligations under this Agreement,
and Buyer's failure or inability to consummate such Exchange for any reason or
for no reason at all shall not be deemed to excuse or release Buyer from its
obligations under this Agreement.
(v) In consideration of Sellers' agreement to provide to Buyer
the accommodation described in this Section 9.26, Spieker Properties, L.P. (and
all Permitted Assignees) hereby agree to indemnify Sellers for, and hold Sellers
harmless against, any and all costs (including attorneys' fees), expenses,
damages, claims and liabilities directly or indirectly arising out of any
Exchange.
Section 9.27 Kruse Woods-Land Option. (a) Sellers have disclosed
to Buyer that Hayden Corporation and Broadbent Development Company have the
right pursuant to Section 8 of the Second Amendment to Option Agreement (Kruse
Woods-Land), dated as of May 30, 1996 (the "Option Agreement"), by and between
Hayden Corporation, Broadbent Development Company and WCB Holdings, to cause WCB
Holdings to purchase the Storm Water Parcel (as defined in the Option
Agreement). Buyer and Sellers hereby agree to work together in good faith to
structure a mutually acceptable plan of action in the event that Hayden
Corporation and Broadbent Development Company retain or exercise the "put right"
described in the preceding sentence.
(b) In connection with the Kruse Woods Property, Buyer agrees
that Buyer, as declarant, shall not unreasonably withhold or delay its approval
of any request for declarant's consent submitted by Sellers or any WCB Entity,
or otherwise unreasonably enforce its rights, as declarant, with respect to
Sellers or the WCB Entities. This Section 9.27(b) shall survive the Closing.
Section 9.28 Partnership Option. (a) The applicable Sellers
hereby covenant and agree at Sellers' sole cost and expense with Buyer (i) to
deliver an Exercise Notice (as defined in the Partnership Agreement) with
respect to the Purchase Option (as defined in the Partnership Agreement) as soon
as reasonably practicable on or after December 10, 1997 (but in any event, prior
to the end of the Purchase Option Exercise Period (as defined in the
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Partnership Agreement)); (ii) to effect the Purchase Option closing as soon as
reasonably practicable after delivery of the Exercise Notice (but in any event,
prior to the end of the Purchase Option Closing Period (as defined in the
Partnership Agreement)); and (iii) immedi ately following the Purchase Option
closing (and without payment of further consideration from Buyer), to execute
and deliver to Buyer an Assignment of Partnership Interest conveying to Buyer a
ten percent (10%) interest in the Partnership free and clear of any defects,
liens, encumbrances or claims of any kind (and Buyer agrees to execute and
deliver to such Sellers such Assignment of Partnership Interest and to grant any
waivers under the Partnership Agreement that are necessary to permit such
assignment).
(b) Effective immediately after the completion of the
transactions described in Section 9.28(a), the applicable Sellers agree with
Buyer to amend Section 18 of the Partner ship Agreement so as to grant to Buyer
a "purchase option" (with respect to such Sellers' then remaining interest in
the Partnership), exercisable by Buyer not sooner than the date three (3) years
after the closing contemplated by Section 9.28(a)(ii) and on substantially the
same terms and conditions as the Purchase Option held by WCB (as defined in the
Partnership Agreement) as of the Effective Date.
Section 9.29 Consolidation of Pool A Properties and Pool B
Properties. Buyer and Sellers agree that, notwithstanding anything to the
contrary in this Agreement, in the event that Buyer fails to designate a
Permitted Assignee as permitted by (and in accordance with) Section 9.6, this
Agreement shall thereafter be deemed amended in the following respects: (a)
existing Section 4.4(a)(ii) shall be deleted and replaced with the following:
"(ii) with respect to the Properties, the aggregate amount of all Claims
(exclusive of Claims with respect to any estoppel certificates delivered by
Sellers pursuant to Section 8.4(a)) for breach of Sellers' representations and
warranties exceeds $10,000,000.00 (and, in such case, such Claims shall only be
valid (and the Sellers shall only be liable) for the portion that exceeds
$10,000,000.00); provided, however, notwithstanding any provision to the
contrary herein or in any Closing Document, the total liability of all Sellers
for any or all Claims (inclusive of Claims with respect to any estoppel
certificates delivered by Sellers pursuant to Section 8.4(a)) with respect to
any or all Properties shall not exceed $20,000,000.00."; (b) existing Section
7.7(iii) shall be deleted and replaced with the following: "(iii) if the amount
of the damage or destruction as described in this Section 7.7 exceeds ten
percent (10%) of the Purchase Price ..."; (c) the portion of the second sentence
of Section 8.4(a) preceding the proviso shall be deleted and replaced with the
following: "It shall be a condition to Buyer's obligation to close the sale and
purchase of a Property that on or before the Closing the applicable Seller
delivers to Buyer tenant estoppel certificates substantially in the form
attached hereto as Exhibit J (or in the Prescribed Form, if applicable) from (i)
Tenants occupying seventy-five percent (75%) of the total leased square footage
of the aggregate Properties; and (ii) Significant Tenants occupying seventy-five
percent (75%) of the total leased square footage
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covered by such Significant Tenants' Leases with respect to the aggregate
Properties (75%, with respect to each of preceding clauses (i)-(ii), the
"Required Percentage");" (d) the final sentence of Section 8.5(f) shall be
deleted; and (e) the second sentence of Section 9.25 shall be deleted and
replaced with the following: "Notwithstanding anything herein that may be
construed to the contrary, the aggregate liability of Sellers and Guarantor
shall not under any circumstances exceed $20,000,000.00 with respect to the
Properties (and any and all defenses to liability available to Sellers (other
than as described below) shall also be available to Guarantor)."
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The parties hereto have executed this Agreement as of the date
first written above.
BUYER: SPIEKER PROPERTIES, L.P.,
a California limited partnership
By: Spieker Properties, Inc., a Maryland
corporation, its General Partner
By:_________________________________
Name:
Title:
SELLERS: 3000 PARK LANE
WCB TWELVE, INC.,
a Delaware corporation
By: _____________________________________
Name:
Title:
WCB TWELVE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB TWELVE, INC.,
a Delaware corporation,
General Partner
By: _________________________________
Name:
Title:
<PAGE> 67
PARKLANE LAND
WCB NINETY-NINE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB NINETY-NINE, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
ACADEMY POINT II
WCB II MORE Limited Partnership,
a Delaware limited partnership
By: WCB II MORE, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
AEROTECH R & D
WCB II MORE Limited Partnership,
a Delaware limited partnership
By: WCB II MORE, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
<PAGE> 68
CAPITAL CITY PLAZA
WCB FOURTEEN LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB FOURTEEN, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
BLACK CANYON TECH CENTER
WCB II MORE Limited Partnership,
a Delaware limited partnership
By: WCB II MORE, Inc.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
<PAGE> 69
BOCA COLONNADE
WCB EIGHTEEN LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB EIGHTEEN, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
BOCA LAND
WCB EIGHTEEN LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB EIGHTEEN, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
BROADBENT BUSINESS PARK
WCB ONE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB ONE, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
<PAGE> 70
BROADBENT LAND
WCB TWENTY-ONE LIMITED
PARTNERSHIP,
a Delaware limited partnership
By: WCB TWENTY-ONE, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
MILWAUKIE MARKETPLACE
WCB SEVEN LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB SEVEN, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
MOUNTAIN TOWER
WCB II MOUNTAIN TOWER L.P.,
a Delaware limited partnership
By: WCB II MOUNTAIN TOWER, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
<PAGE> 71
OLD CITY HALL
WCB THREE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB THREE, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
PIONEER PLAZA
WCB SIX LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB SIX, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
POWELL VALLEY
WCB SIX LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB SIX, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
<PAGE> 72
SHUTE PARK PLAZA
WCB SIX LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB SIX, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
SMITH'S HOME FURNISHINGS
WCB SIX LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB SIX, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
SUMMIT PARK
WCB ONE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB ONE, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
<PAGE> 73
SUMMIT PARK LAND
WCB NINETY-NINE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB NINETY-NINE, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
TUCSON TECH CENTER
WCB II MORE Limited Partnership,
a Delaware limited partnership
By: WCB II MORE, Inc.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
VICTOR CORPORATE PARK
WCB THREE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB THREE, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
<PAGE> 74
WESTBOROUGH II
WCB TWENTY-TWO LIMITED
PARTNERSHIP,
a Delaware limited partnership
By: WCB TWENTY-TWO, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
WESTBOROUGH III & IV
WCB TWENTY LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB TWENTY, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
WESTBOROUGH LAND
WCB TWENTY-FOUR LIMITED PARTNERSHIP,
a Delaware limited partnership
BY: WCB TWENTY-FOUR, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
<PAGE> 75
CENTERPOINTE IRVINE
WCB II MORE Limited Partnership,
a Delaware limited partnership
By: WCB II MORE, Inc.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
COMMERCE POINTE A/B/D
WCB NINETEEN LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB NINETEEN, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
COMMERCE POINTE LAND
WCB NINETEEN LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB NINETEEN, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
<PAGE> 76
EAST HILLS OFFICE PARK
WCB THREE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB THREE, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
EAST HILLS OFFICE LAND
WCB NINETY-NINE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB NINETY-NINE, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
FREMONT 3
WCB II-S BRD Limited Partnership,
a Delaware limited partnership
By: WCB II-S BRD Gen-Par, Inc.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
<PAGE> 77
GREENHAVEN OFFICE PARK
WCB TWENTY-THREE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB TWENTY-THREE, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
GREENHAVEN LAND
WCB NINETY-NINE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB NINETY-NINE, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
KRUSE WOODS CORPORATE PARK
WCB FIFTEEN LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB FIFTEEN, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
<PAGE> 78
KRUSE WOODS III
WCB THIRTY-TWO LIMITED PARTNERSHIP,
a Delaware limited partnership,
doing business in Oregon as:
WCB THIRTY-TWO LIMITED PARTNERSHIP,
A LIMITED
PARTNERSHIP OF DELAWARE
By: WCB THIRTY-TWO, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
KRUSE WOODS IV
WCB TWENTY-NINE LIMITED PARTNERSHIP,
a Delaware limited partnership
BY: WCB TWENTY-NINE, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
<PAGE> 79
LSI LOGIC
WCB II-S BRD Limited Partnership,
a Delaware limited partnership
BY: WCB II-S BRD Gen-Par, Inc.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
NORTH MARKET
WCB TEN LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB TEN, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
OAK CREEK I
WCB II-S BRD Limited Partnership,
a Delaware limited partnership
BY: WCB II-S BRD Gen-Par, Inc.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
<PAGE> 80
OAK CREEK II
WCB II-S BRD Limited Partnership,
a Delaware limited partnership
By: WCB II-S BRD Gen-Par, Inc.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
ONE PACIFIC SQUARE
WCB FOUR LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB FOUR, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
OVERLAND COURT I
WCB TEN LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB TEN, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
<PAGE> 81
OVERLAND COURT II
WCB TEN LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB TEN, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
OVERLAND COURT LAND
WCB NINETY-NINE LIMITED PARTNERSHIP,
a Delaware limited partnership
BY: WCB NINETY-NINE, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
PACIFIC CORPORATE PARK
WHAMC Real Estate Limited Partnership,
a Delaware limited partnership
By: WHAMC Gen-Par, Inc.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
<PAGE> 82
PORT PLAZA I
WCB TEN LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB TEN, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
PORT PLAZA II
WCB TEN LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB TEN, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
PORT PLAZA LAND
WCB NINETY-NINE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB NINETY-NINE, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
<PAGE> 83
SANTA CLARA COUNTY OFFICE BUILDING
WCB II-S BRD Limited Partnership,
a Delaware limited partnership
By: WCB II-S BRD Gen-Par, Inc.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
SORRENTO TECH CENTER
WCB II-S BRD Limited Partnership,
a Delaware limited partnership
By: WCB II-S BRD Gen-Par, Inc.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
STADIUM TOWERS PLAZA
WCB THIRTEEN LIMITED PARTNERSHIP,
a Delaware limited partnership
BY: WCB THIRTEEN, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
<PAGE> 84
STADIUM TOWERS LAND
WCB TWENTY-SIX LIMITED PARTNERSHIP,
a Delaware limited partnership
BY: WCB TWENTY-SIX, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
THE COMPLEX OFFICE
WCB TWENTY-FIVE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB TWENTY-FIVE, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
THE COMPLEX R&D
WCB TWENTY-FIVE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB TWENTY-FIVE, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
<PAGE> 85
VINTAGE PARK OFFICE
WCB SIXTEEN LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB SIXTEEN, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
AND
WCB SEVENTEEN LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB SEVENTEEN, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
VINTAGE PARK R&D
WCB SIXTEEN LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB SIXTEEN, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
AND
<PAGE> 86
WCB SEVENTEEN LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB SEVENTEEN, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
WESTRIDGE
WCB II-S BRD Limited Partnership,
A Delaware limited partnership
BY: WCB II-S BRD Gen-Par, Inc.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
WILSONVILLE BUSINESS PARK
WCB NINE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB NINE, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
<PAGE> 87
WILSONVILLE LAND
WCB TWENTY-SEVEN LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB TWENTY-SEVEN, INC.,
a Delaware corporation
General Partner
By: _________________________________
Name:
Title:
SOLELY FOR THE
PURPOSE OF SECTION 9.25
WHITEHALL STREET REAL ESTATE
LIMITED PARTNERSHIP V
By: WH ADVISORS, L.P. V,
General Partner
By: WH ADVISORS, INC. V,
General Partner
By: _________________________________
Name:
Title:
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this current report on Form 8-K of Spieker Properties, Inc. dated
September 22, 1997, of our reports dated September 9, 1997, on the statements of
revenues and certain expenses of the Kennedy Portfolio for the year ended
December 31, 1996.
San Francisco, California ARTHUR ANDERSEN LLP
September 22, 1997
